Can the 80/20 rule save your business?
We’ve written before about the immense time pressure letting agents and property managers are under. Who couldn’t do with an extra pair of hands, more hours in the day or even an eight day week?
Let’s stop there. You may feel under resourced and overwhelmed by lettings compliance, management tasks and administration when the reality is you’re just not working smart enough.
Have you heard of the 80/20 rule? Summed up, it’s the notion that 20% of your activities account for 80% of your output. For instance, you may have thousands of email contacts but your best business will come from a small pool of people you interact with. Why waste time chasing the 80% who yield inconsequential amounts of business when you could focus on your biggest income generators instead?
So if 20% of your activities produce the best results, what’s happening with the other 80% of your time? This is where the ‘work smarter, not harder’ mantra comes in. Many agents will be grappling with time consuming tasks that don’t increase revenues. How long does it take you to complete the necessary pre tenancy administration? How many hours have you wasted leaving voicemails for plumbers, chasing gas engineers and arranging access?
The 80/20 principle is about identifying the daily activities that make up the 20% and really concentrating on them. We understand there are some tasks you need to keep in-house but off load anything you find difficult, draining or repetitive. If the administration and property management side of lettings isn’t filling you with passion, you’ll end up procrastinating and half heartedly attempting the tasks. It’s not the best use of time, especially when you can delegate to people who relish completing the jobs you loathe.
Adopters of the 80/20 rule believe you apply this way of working to all elements of your business and it’s true, even in lettings. Are there a small number of landlords from your portfolio who earn you the most revenue? I bet there are and it’s these clients who will potentially earn you most in the future. Spend time strengthening these relationships as part of your 20% and there will be a return on your investment of time. Maybe you can help them grow their portfolio and manage their new properties? Perhaps you’ll become so invaluable and trusted that they won’t flinch should you need to increase your fees.
At the extreme end of the spectrum is employment – the 80/20 rule translates to letting go your weakest members of staff in favour of keeping a smaller, higher functioning team who achieve the best results. It’s certainly food for thought in times where pressure on income is mounting. It is possible to streamline, reallocate tasks and grow your business in today’s lettings industry, and outsourcing can play a crucial role.
By Simon Duce, Managing Director, ARPM.