Devote time to working on your business
As we commence another financial year, it is timely we reflect on some of the key findings we are seeing in the management rights industry.
As many readers would be aware, banks generally review their commercial loans at least once a year. In the reviews we have completed at Bankwest over the past 12 months, one of our key learnings has been an increasing number of clients, particularly in the smaller complexes, that have a determined focus to reduce expenses rather than a focus on generating additional revenue.
Now, more than ever, business owners must dedicate time each day, to working ‘on their business’ and not be caught up ‘working in the business’. There is only a certain amount of expenses a business owner can reduce. If a business owner’s eye remains firmly fixed on cost cutting and not the top line, revenue will decrease over time and today’s woes will become tomorrow’s disasters.
The better performing complexes we have as our business partners are those who employ staff or contractors to do the mundane work. By paying $20 or so per hour for those room and common area cleans, maybe the pool maintenance and, if within your budget, the mowing and landscaping, the time saved can then be redirected to marketing initiatives. Review previous year-on-year monthly performances, tariffs, average stays, occupancy levels, where this business came from, what are your competitors doing to attract clients, etc.
Use the time saved wisely to seek out the thoughts and opinions of your key industry advisors (agents, accountants and bankers). Given the current market conditions faced within the tourism market, most are more than happy to chip in and offer ideas and successful strategies used by your peers. Treat this time preciously to ensure you are covering the expense of those staff/contractors you have engaged to enable the opportunity to ‘work on your business’.
It is no coincidence that those resident managers currently weathering this financial storm better than most, ensure they keep abreast of industry activities. As mentioned above, stay close to your trusted advisors, attend industry functions, subscribe to and reading industry newsletters and publications like Resort News.
Ask your banker, agent or accountant to introduce you to an experienced resident manager. I’m sure all those successful resident managers out there would only be too happy to provide an insight as to their marketing activities and provide you with some ongoing mentoring.
At a recent seminar, I saw a presentation slide which really resonated with me: It is not the strongest nor the smartest person but the person who embraces change will ultimately be declared the winner.
While those in the tourist market have faced frustrating times of late, the corporate and permanent sector are now enjoying their day in the sun, which is great to see. Those who were in management rights when the GFC onslaught began in late 2008 will recall the corporate market was decimated when the large companies stopped incurring employee travel and accommodation expenses. It wasn’t until January 2010, that these embargoes were lifted on most large companies and since, the corporate complexes have bounced backed with some record occupancies.
The other initial casualty of the GFC onslaught were the permanent complexes. As part of the federal government strategy to create jobs, the First Home Owners Grant was increased. Units and townhouses exited the letting pool as a vast number of first home buyers secured these properties with their increased deposit.
Tourism weathered the initial onslaught but that may be due to the weak Aussie dollar at that time, which was buying US$0.75.
The above highlights that the ‘planets’ of the corporate, tourism and permanent complexes are rarely aligned. There are always going to be good times and times which are not so good.
The highly acclaimed business owners, regardless of their industry, are regularly quoted saying you are best to focus on matters you can control. Interest rates, poor weather and a high Aussie dollar are not things any of us in the management rights industry can control. But, as business owners, we can control the time we dedicate to the key areas that make a real differences, and right at the top of that list is income.
Focus on what makes you money.
AccomNews is not affiliated with any government agency, body or political party. We are an independently owned, family-operated magazine.
