5 Changes to Increase Your Business’s Overall Profitability
Profitability is essential to businesses. It’s a marker of success and it can always be improved. The more profits your property management company can drive, the more flexibility your business is capable of and the more opportunities for expansion you will encounter. Knowing where you can make small tweaks or big changes to your operation can help you derive a strategy that will help keep your company not just financially stable but profitable and booming.
Here are 5 tips and tricks for increasing your business’s profitability:
Customers looking to increase their profitability often consider raising their rates as their first option. Typically, this is a sure-fire way to ensure your income or revenue is not only covering business expenses but increasing cashflow to enable growth. Account managers should negotiate management fees that truly reflect their value but increasing those fees too drastically, frequently, or suddenly can cause customers to churn ultimately costing businesses more money in the long run. So, what else can property management companies do?
Your revenue doesn’t determine your profitability. Your costs account for significant chunk of your revenue impacting your overall productivity. Run reports continuously that track your waste in terms of energy, supplies, staff, and vendors and evaluate regularly if spending in those areas are offering the full payout. Consider introducing technology to compensate for costly services, often can cameras help monitor your properties better than large patrol teams. Also, salary is one the highest costs to a business, its often far more profitable for property management companies to leverage software to streamline accounting, maintenance, and CRM to manage heavy workloads without growing teams an investment.
Track how your team is using their time while on the clock, time is essential to productivity which directly impacts profitability. Give your staff an easy way to log how they’re using time which enables individuals to self-regulate. Additionally, source technology and software that can help your teams increase productivity by streamlining time-consuming and tedious tasks. Leveraging a property management ERP, accounting software, or even a maintenance management system can help with the heavy lifting and create more time.
Inventory is an investment which should be logged meticulously to avoid inventory shrinkage. Give your staff and especially maintenance teams the ability to log their material usage in real time to accurately track who is using which materials, for what project or workorder, as well as the quantity, time, and location of that usage. Accurate inventory logs help purchasing, and planning departments buy limit purchasing in excess.
Diversify your Market
Expanding businesses can look to new products or services that compliment their main service to help create one cohesive brand while adding an additional channel for revenue. One common option for property management companies is to add a maintenance service to their company which can help to retain profits from repairs and inspections that would otherwise be given to outside contractors. Every new venture is risky but can enable property management companies to reap valuable rewards.