Back To Basics - Collecting The Rent
10 November 2011As a kiwi and avid rugby fan, I have watched the Rugby World Cup with great interest. While being biased but not hugely qualified, I have been impressed by the quality of the tournament. The passion, commitment and desire to win have made it an exciting spectacle.
Over the tournament, I have often asked myself how this quality has been achieved. No doubt, years of intense training and commitment have focused on the key elements of the game. Tom Fordyce writing for the BBC Sport web page asks similar questions. He concludes that influences such as starting early, establishing a culture, developing skills and aiming to be competitive are all key elements. However, I feel that he doesn’t quite hit the mark. I believe that all these elements boil down to doing the basics well, exceptionally well.
You are right to ask where this train of thought is going. Well, as you will know, sport is often cited as having lessons that can be applied to business. I am in the business of managing commercial property. So how does doing basic property management effectively relate to the topic at hand? I would like to explore briefly one or two ideas regarding how to do the basics exceptionally well.
To break property management down into its constituent parts can be challenging, as can identifying how those parts may be done exceptionally. In many situations, we often ask which of the balls that we are juggling today should be characterised by exceptional quality. Is it the service charge management for all those bills that need to be paid. Providing good facilities management? Risk management? Meeting statutory compliance requirements? Collecting rent? Reporting to clients?
The list goes on. These are all important and need a quality service underpinned with quality people and quality processes, both of which we are fortunate to have in abundance. However, which one needs to be done exceptionally every day?
I would like to narrow it down and focus on rent collection as needing to be exceptional every day. Why? Well firstly in a recession, efficient and effective collection of rent delivers funds to the client to keep his or her business viable. Secondly, it engages both owner and tenant in meaningful conversation, taking what is naturally an adversarial contractual relationship to a position of working towards mutual benefit. Don’t miss the point here: fundamentally, the owner wants as much money as possible and the tenant wants his costs as low as possible. These almost polar opposites can meet somewhere in between. Thirdly, we are all familiar with the saying "cash is king". In these austere times, those who have cash are in a stronger commercial position. Finally, an exceptional rent collection service keeps the property manager ahead of his competitors.
Overall, not much more different than collecting the ball at the base of a scrum and having an exceptional backline that moves the ball efficiently and effectively to the winger who scores and "collects the rent" in the corner!