financial insights – benchmarking the four strategies lisa pentland & craig heath
TRANSCRIPT
![Page 1: Financial Insights – Benchmarking the Four Strategies Lisa Pentland & Craig Heath](https://reader037.vdocument.in/reader037/viewer/2022110321/56649cfa5503460f949cbcfd/html5/thumbnails/1.jpg)
Financial Insights – Benchmarking the Four Strategies
Lisa Pentland & Craig Heath
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Why Benchmark?
▪ Property management is known to be a cash flow stabiliser - but is that the sum of it?
▪ Do more managements = more profit in your business?
▪ Is profit opportunity being lost?
▪ Can Property Management be a profit centre in its own right?
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Collecting Accurate Financial Data
▪Different revenue streams of the business
▪Understanding cost per management & water-levels
▪ Staffing structures
▪Details around overheads
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Business Profiles 130 Offices
Number of Managements 23 Avg 460 2000
Weekly Rent $214 Avg 400 $700
Management Fee 4.75% Avg
6.82% 8.30%
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Actual Data
Management Fees84%
Letting Fees11%
Lease Renewals1%
Lease Preparation Fees1%
Admin Fees2%
Other1%
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Optimisation
Management Fees75%
Letting Fees15%
Lease Renewals4%
Lease Preparation Fees2%
Admin Fees2%
Other2%
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Revenue Optimisation
▪ Increase revenue by 14.3%▪ Average equivalent to $106,535▪ Equivalent to the average annual income of 69 properties
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What is our cost of business?
48.6%
31.7%
19.7%
Staffing Structure Desk Costs Profit
Desk Costs - Premises Costs - Promotions & Marketing - Technology & Subscriptions - Professional Costs - Operating Costs
Average cost per management
$1,136
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What do we know?
▪ We now know the average cost for each property▪ We know what income is needed to make desired
profit So...▪ Do we know if our business is profitable and when to
say no to bad business?
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Waterlevels
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Staffing Structure – Avg 460 properties
• Total Headcount – 6 FTE’s
• Leadership Team – 0.8• Property Management Team – 3.5• Administration Team – 1.2• Business Development Team – 0.5
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Staffing Structure - Business Strategies
Data Collected Hyper Growth Machine Run Lean
No. of Managements 460 500 500 500
Leadership Team 0.8 0.5 1.5 0.3
Property Management Team 3.5 5 4 4
Administration Team 1.2 2 2 2
Business Development Team 0.5 4 2 0
Total Number Staff 6 11.5 9.5 6.3
Properties per person 77 43 53 79
Properties per PM Team 131 100 125 125
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Staff per management
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Four Business Strategies – 500 Managements
Hyper Growth Machine Run Lean Other Priorities
Revenue 100% 100% 100% 100%
Staff Costs 65% 55% 35% 20% - 60%
Growth Costs 12% 5% 2% 0% - 10%
Desk Costs 32% 30% 28% 30%
Total Costs 109% 90% 65% 100% - 50%
Profit -9% 10% 35% 0% - 50%
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Regarding PM as an independent profit centre for your business
Reviewing & monitoring your business vs benchmarks
Losing Money