Thursday 01 December 2016
The key to building a successful, sustainable business
Thursday 01 December 2016
The 2014 Residential Real Estate Report reveals balancing market opportunities with good business practices is key to success.
Sustaining a profitable business is a balance of maximising current market opportunities and maintaining good business practices.
According to Macquarie's 2014 Residential Real Estate Report, high-performing businesses have a strong focus on business management.
The report revealed a strong market cycle has led to increased revenue and profit growth for residential real estate agencies, with more than three quarters of agencies' gross revenues increasing over the last 12 months, and two-thirds of agencies becoming more profitable.
Regardless of what industry you're in, when there is growth, there is an increased sense of optimism, says David Gonano, National Head of Sales for Macquarie Business Banking.
"As businesses move quickly to capture the opportunities of a rising market, it's important they continue to focus on the essentials of good business practice," he says. "Otherwise they risk finding themselves unnecessarily exposed if the market changes again."
Use strong financial management
Disciplined cost control and a focus on continuous improvement across key areas of the business is essential. "In the intense competition for market share, you can still keep an eye on efficiencies and robust processes, such as strong financial management," Gonano says.
"By doing this, you can achieve above-market profit growth in the short-term, while preparing your business for future market cycles. The goal is continued and ongoing higher productivity and profitability."
One way businesses can build a foundation for sustainable success is to develop a strong value proposition.
"It's important to understand the needs of your clients by asking them what they value," Gonano says. "You can then measure how you are delivering on that and design an offering that directly addresses these values."
As businesses move quickly to capture the opportunities of a rising market, it's important they continue to focus on the essentials of good business practice.
Create a high performance culture
With businesses expanding rapidly in response to a booming market, competition for skilled employees is intensifying. This looks set to continue in the residential real estate industry, with 78 per cent of real estate businesses set to hire new staff in the next 12 months, according to the report.
"In all businesses, creating a high performance culture that seeks to nurture and reward talented individuals is key to developing your existing team. If your business can create a high performance culture from within, you will avoid being forced to compete for skilled staff in a tight marketplace," Gonano says.
It is good business practice to embrace opportunities to continually review and improve productivity and staff engagement levels.
Macquarie's benchmarking research provides in-depth industry information that allows you to measure your performance against your peers.
5 tips for sustained success in your business
- Have a clear understanding of what your business does and how it does it. Be clear on who is responsible for each part of the strategy
- Once you have a clear aim, set goals and KPIs for the next 12 months and use them to set a monthly goal
- Set clear targets for your staff and hold them to accountable for those targets
- Regularly benchmark your performance, both in terms of revenue and expenses, relative to your competitors, so you can see if you are growing ahead of or behind the market
- Learn from your mistakes, ask your clients for feedback and seek to improve your performance.
The real estate market is hot right now. But there’s no need to get caught up in heat and noise. Make this year the year you take a long-term strategic view of your options and work with us to choose the perfect path forward.
If you’d like to know how Macquarie’s Business Banking’s team of real estate experts can take your business further, contact us today on 1800 282 401 or complete the request a call form and we’ll call you back.
Find out more about the full suite of banking solutions you can access through Macquarie Bank.
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