In this second installment of the article series on how to start a new management company, industry expert Jeff Hardy, founder of TOPS Software, guides you through the process of creating an action plan for your new property management company. The articles in this series discuss what you need to know to get started, highlight the pitfalls that can plague new management company and shows you how to avoid them.
You made the decision that the community management business looks appealing and you decide this is something you want to do. Now what? Well, like starting any business, the first step is to develop an action plan. Developing such a plan means figuring out the steps needed to start the business:
Determine your business strategy.
Find something to separate you from the competition. You don’t want to be just another face in the crowd, you want to find a competitive advantage, then build your company around that strategy. From surveying your local market and picking the brains of community officers in surrounding communities, you should have an idea what your basic business strategy should be.
Examples of strategies on which to build your management company are:
Concierge Services to residents
Cutting Edge Technology
Timely Financial Statements
Your skill or knowledge
Assess your Strengths and Weaknesses. Be honest with your self, do you have all the skills necessary to be able to handle all 3 areas of community management, accounting/bookkeeping, property management, support of community officers? If not, then maybe you need a partner that compliments your skill set in the areas where you are weak.
Settle on a Company Name. I think the name should say what you do. A name like Association Management Services or First Rate Community Management. I read an article about starting a company that recommended putting your name into your new company name. This is something to consider. Doing this puts your name on the door which not only gives you a source of pride which will make you more dedicated to doing a good job, but it will also help inspire you to weather the hard times that normally happen to a start-up business.
Write a company Mission Statement. This is important and should reflect the business strategy you decided on above. Mission Statements are meant to define the company and inspire the staff. They should be lofty in their language and goals. It should not be more then 2 – 3 paragraphs and should start with the goals you want to provide to customers and finish with the goals you want to provide to your staff.
Start reviewing Community Management Software. If you were a carpenter looking for work, you would have a tool chest, right? Well community management software is the main tool you will need to show prospective communities you want to manage that you are ready to do the job.
Software should be easy to use and give you efficiency and time-savings. Industry specific software, like TOPS, shows you are really prepared to manage communities rather than general purpose accounting software. The software you choose should give you these 3 basic benefits:
This is a critical decision for your new management company. The officers in the communities you manage won’t see how the software operates day-to-day, but they will be judging your performance as a management company largely based on what your software can do and how the reports look. The better the reports look, the more credibility you will have as their management company.
Develop a startup budget. Think small and cautious, not big and grand. Instead of renting office space, consider starting as a cottage industry working out of your house to hold down expenses. After making a decision on office space, you will need consider the costs of buying a desk, desk chair, phone system, smartphone, computer, copier/printer/fax and software. But you will also need smaller supplies like staplers, scissors, paper, etc which can add up to several hundred dollars.
Don’t forget to budget for letterhead, envelopes, business cards and the creation of an advertising brochure describing the services and benefits of your management business.
Finally, you will have some legal expense for incorporating your new management company. Add up the projected costs for these essentials.
Jeff Hardy was the owner of a very successful management company with a portfolio of over 90 community associations. Feeling that a better solution needed to be made available to serve Community Association Management, Jeff began work on Condo/HOA management software. Today, TOPS is the industry leading Community Management software solution. TOPS is in use in over 2,400 organizations to manage millions of homes. TOPS is a complete accounting and property management system that brings all facets of community management together into one, integrated system.