Understanding Responsible Property Management Growth
Eric Wetherington from New Heights Property Management has more than 25 years of experience starting, acquiring, and managing dozens of companies. He is joining The Property Management Show today to discuss responsible property management growth. We talk about what that is, and how to maintain it when you’re growing a property management company.
Introduction to Eric Wetherington
Eric is the director and broker in charge of New Heights Property Management, which he started 10 and a half years ago in partnership with a large real estate firm in the Charleston area. The real estate agents realized they didn’t have a solution for the homeowners who couldn’t sell their houses during the last recession. So, he began the property management company and it quickly grew.
In addition to starting and growing New Heights Property Management, Eric has helped to develop and grow other companies. He got into the real estate services industry 25 years ago, and he has helped to build business entities like joint ventures and title companies, giving him a lot of start-up experience. He likes to see growth happen and he’s learned to think on his feet.
Defining Responsible Property Management Growth
Responsible growth requires three things:
- An engaged team.
- Great services offered to clients.
This is what responsible growth looks like.
If all of these things are happening in your company, then you’re growing. It starts with your great team, and that team has to provide valuable services that keep your customers happy.
Profit is also important. If you think you have a business but it’s not making any money, then what you really have is a hobby.
You might seem to be growing year over year, or month over month, but if no profit is increasing the bottom line, you don’t fit the definition of responsible growth.
If your team members hate what they’re doing and they don’t enjoy coming to work every day, you’re not embracing responsible growth. Check out our episode on how to build a great property management team with Melissa Prandi for more information on this.
Property management is a service industry, so if you’re not providing value to your clients and they aren’t happy or they’re in a hurry to leave you, then you’re not growing.
Team, service, and profit. These are the things that define responsible property management growth.
How to Balance and Master the Responsible Property Management Growth Elements
Every entrepreneur makes mistakes, and one of the things Eric learned from his mistakes is that your business and your team will only grow to the level that you’re growing as a leader. You’re the cap of your business. So, whether you learn best by reading books or listening to podcasts or attending conferences – get comfortable with the three growth elements (team, service and profit), and learn how to balance them.
Much of your understanding as a business leader will come to you through trial and error. You learn and grow by making mistakes. Don’t be afraid of that, and don’t be afraid to shift perspectives and make responsible growth a priority for your property management business.
Leading a Team Towards Responsible Property Management Growth
Every good leader knows that the team has to come first. You have to hire the right people and put them in the right seats on the bus. If you put your team first, your team will take care of your customers. When your customers are well cared for, you naturally become more profitable.
Everyone is accountable for responsible growth, but the leader of the company is ultimately responsible for it. A good leader will ensure the team has bought into this growth plan. Standing up in front of the team to say “we’re going to double sales this year” is not a great way to lead. If you want to set that goal, you need to be prepared to have a plan that will support it. More importantly, you’ll need to show your team members where they fit into that goal and how it benefits them.
Show your team what winning looks like and how it’s going to benefit them. When your team members are being asked to put in the time and energy that’s required to reach a certain goal, they want to know why the company is going in that direction. And, they want to know why it’s good for them individually. A good leader will cover all of that and be ready to personalize the goal for each team member’s level. Let them know how they’re impacted. That will build engagement.
In the staff meeting Eric recently held, his Business Development Managers (BDMs) were sharing how easy it has become to sell their property management services. Most of the potential clients they’re calling on have already read the great reviews that the company has received online. Those prospective owners feel like they know the company already, so the BDMs don’t have to spend a lot of time making a hard sell.
Those reviews are achieved by the team that’s delivering great service.
You see how this is working? Everyone understands their role in producing happy customers. That makes the growth a lot easier.
Think of your team as a pyramid.
Each part of the pyramid is critical to its balance. You can’t remove the middle piece of the pyramid without it collapsing, and you cannot take a piece from the side without it toppling. Each team member must understand his or her unique role in creating and maintaining a stable company.
Everything Starts with a Plan
The planning process takes a lot of work. Leaders cannot unleash an idea and then leave the team to plan and execute it. You’ll need to have conversations and you’ll need to map out the goals and how to reach them. You’ll need large meetings, small meetings, and one-on-one meetings. You’ll need to provide constant reinforcement. In business, you have to say things seven times before people really start to hear it and understand it and buy into it.
You also have to say it in different ways. Whatever the growth or the goal you’re trying to accomplish, be sure it’s a consistent message. Your team needs to hear the same thing in meetings, company newsletters, internal video messages, or whatever you’re doing to communicate. Keep the message consistent so everyone understands its value.
As a leader, you need to understand the highest and best use of your time. Unless you’re the only person in the company, someone else can probably be responding to tenant complaints and calling back owners. You need to create space in your schedule to think and plan.
Not a lot of property management leaders are good at this.
They don’t go into that quiet room and set aside the devices and shut down the potential interruptions. Eric gets out of the office to make time for his planning, thinking, and strategizing. Leaders need to protect this planning time whether you’re thinking through growth opportunities or defining the best way to maintain your current business.
Put yourself in a position where you won’t be distracted. Brainstorm. Think about the best ways to accomplish an objective. This is one of the most important uses of your time as a leader. So make the space.
Eric dedicates one afternoon a week to this practice. He also has a monthly and quarterly practice where he’ll go somewhere quiet and catch up on industry reading and spend time thinking and planning. This is a critical part of his success. He’ll look at numbers and analyze metrics and determine what seems to be working and what needs help. It’s a mini strategic review.
Customer Happiness (or Unhappiness) is a Red Flag
During your planning and thinking time, you need to be sensitive to any red flags that might show you that things need to be re-worked.
For Eric, the most important example of this is customer happiness. If there are complaints from customers that calls aren’t being returned, it’s an indicator that something is wrong.
First, he’ll evaluate whether it’s a problem with a system. Perhaps there’s a technical reason that customers aren’t getting what they need.
Then, he’ll take a look at the process to determine whether there’s a problem with time management or workflow. Perhaps property managers are spending too much time out of the office and cannot be responsive to their clients.
If it’s not the system or the process, there may be a problem with people. Perhaps someone on the team doesn’t understand the importance of getting back to owners and tenants with a sense of urgency. Or, maybe they’re burned out and overworked. They could be struggling with issues in their personal lives and are therefore distracted.
This is one example of a red flag – but customer complaints is a pretty big flag, and one you should respond to immediately as a leader.
Practice Explaining Your “Why”
Not all companies are run by one decision-maker.
Perhaps you have a partner and you are usually aligned but one of you wants to pursue fast growth and the other wants to maintain the business where it currently is.
The important thing here is to communicate and to understand why you and your partner feel the way that you do.
The growth-oriented person might see new opportunities. The maintenance-focused person might want to enjoy the freedom and the success of a successful business.
Partnerships can be great, but they can also be challenging. Ultimately, someone has to make the final decision and once that decision is made – it needs to come from a unified leadership presence. You cannot have your team feeling the division in opinions.
Some partners work with a rotating presidency. Maybe there are three or four decision-makers, and each of them will have a year where they serve as president and their role is to make these final and difficult decisions about the direction of the company. With the right people, this can work well.
You don’t have to be on the same page, always. Disagreement and debate among company leaders is healthy and it’s good. But, once you take something to the full team, all of you need to be behind it. You need one voice, saying one thing.
Growing to the Point of Leadership
Every business situation is different. Some owners are merely investors and they have a person in charge of the day-to-day business operations. That’s okay, and it can work.
When Eric started his company, he was the only one working the business and after six months, he was already slammed with referrals and a lot of business. He knew he wouldn’t be able to manage it for very long. He was going crazy with all the work, and he knew he didn’t want to spend his time hanging signs and putting lockboxes on doors.
His plan was to grow enough that he could hire someone to do all of the things he didn’t want to do. His idea was to surround himself with people who did want to do that work. Then, he could focus on strategic planning and business growth. He had to put in the work to get to the point where he could make those hires, but it was motivational.
If you’re still in the beginning stages of where Eric once was, you can make some time for your long-term thinking and business planning by hiring virtual assistants and taking advantage of technology. When you can offload or automate some of those tasks, you can get yourself closer to bringing on full-time staff.
Before you begin to build your staff, you need to have a good idea of what you want. Those new employees will not be able to read your mind. They’ll need the handbook. They’ll need the procedures. Give them the policy manual, and invest the time and resources to train them.
Otherwise, it’s a disaster. Smart people can figure things out, but that takes time. Save time by being prepared for them to work with you.
When it comes to growing your team, there’s a five-step process.
You don’t have to micromanage the right people. Just make sure they have what they need to do their job.
If something is not working with one person, you need to have the difficult conversations.
Talk to your employee about what’s not working. Don’t listen to the first answer; dig and dig until you get to the root of the problem. Maybe they simply didn’t know something critical to their job. Maybe they haven’t had enough training. Maybe they’re doing the wrong job.
Or, maybe they don’t belong in your company.
If you notice that someone isn’t a good fit, don’t prolong the firing process. That’s not fair to you, your company, your other employees, or the person who you aren’t interested in working with any longer. That person who isn’t working well at your company can probably find something that’s a better fit. Don’t keep him or her from pursuing a better opportunity.
Have the difficult discussion. Tell that employee that things aren’t working out, and why they are not likely to get better. Decide together that it’s best to shake hands and walk away as friends. That employee will find something more fulfilling and you can find someone who meets your needs.
Growing a Business Means Growing a Team
When property managers hear the word growth, they inevitably think of growing more doors.
But, to grow responsibly and sustainably, you have to grow your team.
Growing your team comes before growing your doors. This is why you have to invest in their training and their professional development. Encourage your team members to get better at what they do. Sometimes, leaders will worry that they’ll spend all this money training and improving their employees, and then those employees will leave in two years and go work for a competing company.
But, what if they stay with you for 10 years? What’s worse – losing a well-trained employee or retaining an employee who isn’t trained and improving professionally?
Invest in your team. Coach them. Provide opportunities to attend classes and do more.
Let them follow their own path. If Eric hires a team member who really wants to be a rocket scientist one day, that’s okay. Eric’s company is never going to do rocket science. But if he supports that employee’s ultimate goals, he’s going to get the best possible work out of that team member while they are with New Heights Property Management.
Responsible property management growth comes back to investing in your team. It leads to service and profitability.
You don’t have to be a huge property management company. When it comes to growth, too much emphasis is often put on being in multiple markets or managing 1,000 doors. You don’t have to do all that.
Don’t compare yourself to other companies and other entrepreneurs. Look at where you are and why you want to grow. Things change rapidly in the property management industry. A five-year plan used to be standard, but now you can really only plan for the next 24 months. That’s how quickly things can change.
If you have any questions about responsible property management growth, please contact us at Fourandhalf. We’d love to talk to you more about what we’ve discussed today with Eric or what we can do for your company.