What makes a high profit Strata Management business?
The strata management industry is growing rapidly. Yet not all businesses are benefitting from a rising market.
Our Strata benchmarking results reveal the distinctive practices that have enabled some businesses to achieve exceptional profit margins.
Let's look at the numbers
High profit businesses earned profits of 30% or higher.
Lower profit businesses earned less than 30% profit.
Who's leading the market?
The high profit group included businesses of every size in every state.
The average high profit business had 3424 lots across 224 plans.
They also had an average of 9.4 full-time staff - including 2.7 strata managers
These businesses were more likely to specialise in either large or small schemes.
In general, high profit businesses didn't owe their success to greater size or higher turnover. They simply operated more efficiently than their lower profit competitors.
As a result, they achieved higher median profits even while earning lower median gross revenue.
High profit businesses were more likely to point to revenue growth and improved efficiency as key growth drivers.
Strong systems enable them to scale up while keeping costs under control.
How did you increase profits?
Strata managers in high profit businesses oversaw an average of 1,235 lots each, compared to the 901 in lower profit businesses.
High profit businesses have higher numbers of administration staff, freeing up managers to focus on relationship management, not day-to-day service delivery.
The result? Improved productivity and a lower overall salary spend.
Skills over experience
High profit businesses are more concerned about hiring people with the right skills, and less focused on salaries or experience.
By building robust systems and separating client management from service delivery, you can simplify recruitment and develop people with specific skills in each area.
Planning for future growth
44% of businesses plan to add new services over the next three years.
But high and lower profit businesses often have a different focus.
What services do you plan to introduce in the next three years?
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