Cast your mind back to the late 1980s and a business deal that has gone down in Australian folklore.
It was 1987, and Alan Bond made Kerry Packer an offer he couldn’t refuse. The deal at hand was for Packer’s prized Nine Network, and $1 billion was on the table.
It was a negotiation between two titans where Bond walked away with the goods. But, it was only made possible and so jaw-droppingly profitable because Packer ran a tight ship and Nine was in a position to sell.
It begs the question, is your business Bond-ready? Could you sell it now if you were tapped on the shoulder by a titan and the offer was too good to refuse?
So, what does it take to be in a position to sell at a moment’s notice, and why should this be top of your business list?
Before the gloss fades
Think about the prospect of selling your business and it feels like a problem for the you of the future. But it’s not. Selling your business should never be an afterthought.
The best time to sell a business is when it’s at its peak, before the gloss fades and you no longer have the enthusiasm or go-getting ambition you once did.
As something that you invest so much time and energy into, you should always consider it an asset. As such, it should be running at peak efficiency, peak profitability, and peak performance at all times.
And if it is, it allows you to walk away with maximum profit when you choose.
So, let’s break down each element of a real estate business and how you can be Bond-ready.
How to be Bond-ready
Every real estate business has a lot of moving parts. Being Bond-ready involves embracing best-practice across each of those elements. And here are just some examples of how that’s done:
A solid, profitable rent roll is a huge benefit when it comes to selling a real estate business. After all, this is ongoing income that is not dependent on the market or individual salesperson. It’s an income-producing asset with tangible value.
To ensure your rent roll is up to par:
Consider your rental agreements – Are the I’s dotted and the T’s crossed on every single rental management? Do you know when renewals need to take place, is there a system in place for this? Do inspections occur when they should? How great a lag is there between maintenance requests and action?
Processes and procedures – On that note, good systems, processes, and procedures are the backbone of a top-performing property management department. Each year, you should be conducting an audit of your systems and procedures to establish whether there’s a better way or if anything is slipping between the cracks.
Good systems and procedures allow a prospective buyer to quickly ascertain what’s going on in the business and how profitable it really is.
Rental arrears – If your property management department is running at optimum efficiency, there should be minimal rental arrears and a system in place for addressing any that occur.
Ensure the way you handle rental arrears is up to par, because arrears indicate poor management and represent a liability for a real estate business.
Sales and general business
The sales side of the business is all about considering the assets you have and whether they are secure.
Here, we are talking about the asset of your database and the asset that is your salespeople.
This means paying attention to your employment agreements and ensuring the right type are in place for your staff – whether that’s salespeople, property managers, or your administration team.
It also involves looking at the processes and procedures involved in the sales side of the business, including every step that occurs – from hiring people, to how they prospect for property and the way they finalise sales.
Meanwhile, your database should be impeccable, with comprehensive insight into every contact your business has made with potential buyers and sellers and where they are on their journey now.
It’s just good business
You may not intend to sell your real estate business now; perhaps you would knock back a Bond-style offer because you simply love what you do. But when your business is Bond-ready, it is a best practice operation.
It’s more profitable, more efficient, and more enjoyable to be a part of.
And perhaps most importantly, if you have a Bond-ready mentality throughout the life of your agency, you will be in the best possible position to sell when the time feels right.
There will be no scrambling to plug leaks or fix any holes. The asset you have worked so hard to build will command the price it really deserves.
Basically, it will be a much better and more alluring investment for a potential buyer when they come knocking or whenever you choose to sell.
Manos Findikakis is the chief executive of Agents’Agency