Spotting the right opportunities in lettings is key to any agency's business success, as Neil Baldock, Director at Charles David Casson, explains.
In any time of uncertainty, ensuring consistent revenue streams is essential for businesses. At the same time, letting agencies shouldn't rule out growth and investing in new ways to boost your income.
Recognising the right opportunities and when it's the time to act on them for your business is the key to success - so here are five of my top tips for doing just that, as we head into 2023.
1. Diversify your services in the right way
Lettings is a valuable part of our business as it represents recurring revenue, and is less susceptible to market fluctuations.
For each client, you get a certain amount of revenue a year, drip fed into your business. This can help give you a solid foundation on which to build out further opportunities.
However, you can also diversify without taking a big leap into something as in-depth as a full lettings department - such as offering insurance or moving services to your clients.
There are lots of ways to pick up new ideas and find what might work for your agency, e.g. podcasts, YouTube videos, estate agency Facebook groups you can join and ask for advice.
However, you should make sure you don't get too distracted with something that takes your eye off your core business.
There's always that 80 / 20 rule. If you're spending 80% of your time on your core business and 20% on new opportunities, you won't go far wrong.
2. Listen and learn from every conversation
When looking for these ways to diversify and create new revenue streams, you also need to keep your eyes and ears open at all times.
When I meet other agents I want to know what they're up to, how they're doing and why they've done it - if it's something that might work for you too, why reinvent the wheel?
Talk to everybody - and ask questions of your business too. Why or where did we find that last customer? Why did that one leave?
One of the biggest skills of an estate in a letting agent is listening, so we should be doing that in our own teams as well.
3. Acquire to accelerate growth
This isn't a new concept, but trying to build a lettings book organically - no matter how good you are - is a slow burn. If you can go out and buy 100 landlords at a time, you can turbocharge that growth and accelerate things.
But how can you identify an opportunity to acquire? They normally crop up through conversation, but you need to be aware of what's going on in your local market to recognise an opportunity.
Keep an eye on the lettings companies in your local area and see if they have any change in business activity - are they pulling back on advertising, for example? Is the business owner doing more front of house activities?
Don't be afraid to tell people you're looking to buy other businesses, and ask if that's something you could have a conversation about now or in the future. You never know, the answer might be yes.
4. Outsource some functions to keep your fixed costs down
In lettings, we've got to be open to partnerships and outsourcing.
Where you haven't got the skill set for it and you don't necessarily want to invest in having that skill set, that's where outsourcing fits in.
If you're doing an activity that distracts you from your business priorities, or if you find an area where income isn't guaranteed, it's not a bad time to outsource.
Some people will outsource their sales progression, for instance, because they haven't got a fixed cost and they'll only pay out when the sales money comes in, and we essentially outsource our referencing and tenancy onboarding to Goodlord.
Business owners should also consider outsourcing any high value tasks they're working on. If you're doing a £10 an hour task as a business owner, then you need to outsource that either to a member of your team or to a partnership company.
5. Refresh your branding
It's good to ask how your brand is perceived and what people think of you. We recently refreshed our brand and our website, at a time when we knew that we wanted to grow.
We were getting feedback that our brand and our website against what it's like to meet us were two different things.
We looked at our local market, which is very competitive, and there aren't many young and fresh brands. In our business, we have a young team - but our branding had fallen behind.
I heard that feedback a few times, and recognising opportunities is often about recognising patterns. If you start seeing a pattern in the feedback you get, then you need to do something about it - and the opportunities will grow from there.
