Often times when starting a rental management company or even simply managing a small operation, you quickly find yourself playing the part of all departments. In my case, I was the marketing agent, maintenance supervisor, housekeeping supervisor, owner liaison, bookkeeper and, well… the list goes on.
While it may be impossible to hire out different people (at least for now) for each task, if you don’t find a way to delegate some tasks, it will only take a couple of seasons to get burned out. I suggest taking a couple of months during your down time to regroup and look at ways to improve efficiency. Below are a few common sense suggestions, or merely reminders to most of you, to help get things back on track.
- Divide and conquer.
- Don’t be afraid of fees.
- Diversify for survival.
Let me start by saying that if we did not divide and conquer, I would already be out of business. Although I am highly involved with the business, it was taking all of my time just to be reactive to problems instead of being proactive to them. There was no time left for retention activities with my homeowners or to try and build a "wow" factor for repeat customer traffic. I was spending all of my time trying to address every problem and secure as many bookings as I could to pay the bills. I was glued to my cell phone and it was really starting to affect my work-life balance.
In our case, I created a board of directors for the company. I chose someone who was in management to help me with the day-to-day problems that come up, someone who knew and understood maintenance, and someone with a marketing background. Together, we meet once a month to discuss strategy, problems and opportunities. At times, I have our three employees sit in on the meetings so that we can delegate action items out to the most qualified employee for each task. Everyone has a voice and everyone gets involved.
I suggest creating an incentive-based business. Consider offering bonuses for reaching certain milestones in reservations, bonuses for a complaint-free month(s) for housekeeping staff and rewarding maintenance for identifying issues that generate additional revenue for the company. To go a step further, the manager or supervisor could be rewarded with a fractional bonus in all the categories they manage. If you are a small firm like us, you can consider contracting with an individual on a piece rate for social media posts, shares, etc. It only takes a few of these to begin to feel liberated which will boost your own morale and get you focused on building the business.
Don’t be afraid of fees.
Obviously, each market is different, but you can garner a considerable boost in your gross proceeds by initiating fees for each booking. Depending on your clientele, you may find that a percentage fee or a flat fee works better for you. These fees help to cover much of our overhead, including the incentives I mentioned previously. It is hard, if not impossible, to survive on commissions alone.
Diversify for survival.
Finally, it’s always good to re-evaluate your business model annually. Don’t shy away from looking at long term leases, property management for properties where you are already managing a few of the rentals and doing off-season routine maintenance and inspections for off-site owners who don’t rent their property. These are very good ways to help supplement the off season and improve cash flow. It also can help in employee retention by providing additional work hours in the off-season.
If you can find ways to diversify your business while funding it, at least in part through fees, and you can find ways to divide and conquer, you can start getting your life back. This is a very rewarding career field, but like any other business, finding a healthy balance is key. You have to trust your employees to do what they were hired to do and not always micromanage them. Results, in this business, are easily measurable which means as owners and managers, we need to be evaluating ourselves and our business routinely. In order to grow, you will have to find a way to get out of the trenches enough to see what is really going on. After all, as owners, we really need to be focused on working at the business and not just for the business.
Here's to a prosperous 2016!
VRMA member Rodney Archer is the founder and president of Vacations on the Water, which was founded in 2012. Based in Clinton, Tennessee, Vacations on the Water offers vacation rentals on Norris Lake, Panama City Beach and Myrtle Beach.
Since 2006, Rodney has served as the County Trustee for Anderson County, Tennessee. He recently served as President of the Tennessee Trustee's Association and is currently serving as Secretary of the National Association of County Collectors, Treasurers, and Finance Officers (NACCTFO). He graduated from the University of Tennessee with a BA in Economics in 2003.