Inflation can have a very negative impact on property maintenance businesses.
In fact, any company that’s reliant on complex supply chains is at risk during times when spending power decreases faster than they can raise prices.
A sudden spike in the cost of essential materials, the unexpected loss of a reliable subcontractor or employee, longer sales cycles… these are all very realistic risks when your world is at the mercy of volatile market forces.
Fortunately, smart business owners know that survival and success isn’t entirely out of their hands. They know that there’s always an intelligent way to respond to a crisis.
Regardless of how this period of rising inflation is affecting your business, it’ll pay to consider adjusting various aspects of your operations.
Whether your company is in the middle of a financial crisis or not, the reality is that Australia is facing an economic scenario that only comes around once in a generation. And it would be extremely unwise to consider yourself immune to its impact.
Here are eight ways you can shield (or save) your property maintenance company from inflation by adjusting the way you run your company.
Ensure Work Is Completed On Time
The sooner you finish work, the sooner you get paid. Getting cash into your account as quickly as possible is critical during times when costs are on the rise.
Are Subcontractors Taking Too Long To Complete A Job?
Property maintenance subcontractors, like you, are also facing the effects of rising costs. This means they’re extremely unlikely to turn work away, even if they have limited capacity for it.
Their reluctance to be transparent about delays could cause you a headache, though. Especially as you’re trying to shorten the lifespan of open job orders.
Your goal when trying to solve this problem isn’t necessarily to find “more reliable” subcontractors. A more realistic approach would be to gain better insight into the operational and scheduling constraints your subcontractors are facing.
Build trust with your subcontractors. Make it clear to them that you understand their situation and that you value clarity over unrealistic delivery promises. The result: a relationship where your most important resources understand and accommodate your priorities.
And it’s not just about expected completion dates. Encourage your subcontractors to get in touch as soon as they suspect there might be a delay in an open job. This knowledge allows you to proactively manage your clients’ expectations and also create the sense that your company values communication and transparency.
Greater transparency also gives you the information you need to make more informed work-allocation decisions. If you have a network of subcontractors, you’ll be able to gauge their respective capacities and allocate work accordingly.
Close High-Priority Sales
The sooner you finalise a deal, the sooner you can start working and earning money. Getting cash into your bank account is crucial now and your sales team’s focus should be on making this happen.
Do You Know The Status Of All Your Open Sales Leads?
Even the most diligent organisations can sometimes lose track of where they are with all their open sales leads. Putting systems and processes in place to make sure this doesn’t happen is critical.
At any point in time, your team should be able to look at the status of all sales leads and be confident that the data is correct. This will help them to (amongst other things) prioritise tasks, allocate work appropriately, and understand where they have a shortfall of manpower.
The Importance Of Customer Relationship Management
The most important step is to implement a CRM (customer relationship management) system for your business. This will help keep track of the progress made with bringing new customers on board.
There are an enormous amount of CRM systems in the marketplace, so it’s important that you consider your options very carefully.
- Only consider a CRM whose sales team is willing to speak to you and discuss your company’s unique requirements.
- It’s also very important to choose a CRM that can scale with your company. You do not want to invest in a tool that you’ll outgrow in 3 years.
- Look for a solution that suits your staff’s relationship with technology. An intuitive user interface that’s easy to learn is sometimes as important as impressive features.
- If you’re already using software and databases, you’ll probably need to choose a CRM that has flexible integration capabilities.
Stay On Top Sales Admin
Like any department in your business, enabling your sales staff with helpful technology is only half the battle. When you really need your sales team to focus on closing, it might be worthwhile to use some additional strategies
Here are some suggestions:
Set up regular check-ins and follow-up tasks: For example, you can schedule weekly or bi-weekly team meetings to discuss the status of all open leads and assign specific team members to be responsible for following up on certain leads. Use these sessions to also make sure that all your leads are correctly captured and reflect an accurate status.
- Assign specific roles within the team: It may be beneficial to have team members take on specific roles, such as a lead tracker or follow-up specialist, to ensure that all leads are being pursued actively.
- Ensure there’s clear communication and accountability: Setting up clear expectations and holding team members accountable for their follow-up tasks can help to keep everyone on track and motivated to close high-priority sales.
- Utilise automated reminders and alerts: This will help the team members to stay on top of their follow-ups and avoid missing any important deadlines. It’s possible that your CRM will enable this, but if not, a shared Google Calendar could also work.
Expand Your Network of Subcontractors
When there’s an increased risk of subcontractors raising their prices, reducing their capacity, or even going out of business, the last thing you want is limited contingency options.
Are There Any Good Contractors You’re Not Working With?
Making contact with reliable subcontractors might be as simple as taking one (or more) of the following steps:
- Attend industry events: Trade shows, conferences, and networking events are great places to meet and connect with potential subcontractors.
- Ask for referrals: Ask your current subcontractors if they know any other qualified professionals who might be interested in working with your company.
- Reach out to local trade schools and vocational programs: Contact schools in your area that offer training in the trades and ask if they have any graduates who are looking for work.
- Join professional organisations: Joining a professional organisation, such as the Master Builders Association (MBA) or the Housing Industry Association (HIA), can provide you with access to a network of subcontractors who specialise in specific areas.
Reconsider Using Unreliable Subcontractors
Don’t make the mistake of sticking with unreliable contractors out of loyalty or habit. It’s possible that one (or more) of these relationships are preventing you from creating the stability you need right now.
Are Established Contractor Relationships Hurting Your Business?
Don’t worry if this is a question you can’t answer yet; it’s very likely that you don’t have the data necessary to make this call. It could even be possible that your subcontractors aren’t aware that you need them to start performing to a specified benchmark.
Here are some tips for solving this issue:
- Clearly communicate your expectations to your subcontractors in writing. This includes deadlines, quality of work, communication requirements, or any other parameters that you want to evaluate them on.
- Continuously monitor the quality of their work. It helps if you have a centralised operations or management platform that stores all work order details. Under normal circumstances, this kind of quality assurance might be overkill, but when seas are rough, you want to be in a boat with people you know you can trust.
- Observe their diligence with supplying supporting documentation. Reliable subcontractors lighten the load on your operations team’s admin tasks. Ideally, you want to partner with people who you don’t have to chase up for photos and other media that allow you to close off a job.
- Document any issues that arise. Keep records of any late deliveries, poor quality work, or any other issues that may impact the overall performance of your business. This will help you to identify patterns of non-performance and make decisions accordingly.
- Discuss poor subcontractor performance with your operations team. It’s possible that someone closer to the subcontractor might have insight into how the continued problems can be resolved, so make use of your staff’s experience and knowledge.
The final step would be t0 terminate a contract with a subcontractor that continues to put your business at risk. Don’t let sentiment get in the way of making a decision that benefits you, your company, and the staff that rely on you to keep their jobs safe.
Before doing this, however, ensure that the termination is valid and won’t result in a legal headache. Here are some considerations:
- Review the contract: Before terminating a contract, review the terms of the agreement to ensure that there are no clauses that prohibit termination or that require a specific process to be followed.
- Give notice: If the contract requires notice before termination, be sure to provide the required notice in writing. This will help to avoid any potential disputes over whether proper notice was given.
- Have a valid reason: Make sure that you have a valid reason for terminating the contract, such as breach of contract or non-performance. This is where your documentation of the subcontractor’s poor performance will be helpful.
- Consult with legal counsel: Before terminating a contract, it’s a good idea to consult with legal counsel to ensure that the termination is legal and to ensure that you have taken the necessary steps to avoid any potential legal issues.
Retain Valuable Members Of Staff
This is a critical time in your relationship with your staff. Some of them might feel that their salaries don’t cover the rising cost of living. Others might be worried about your company’s future and its ability to keep offering stable employment. Any combination of these feelings could motivate them to look for more stable, lucrative employment.
How Dependent Are You On Valuable Staff Members?
What are the costs to your company when someone with a wealth of institutional and industry knowledge leaves for a better opportunity?
Take a look at your three most valued employees and take some time to calculate the effort and cost involved in finding and training replacements who can do their job at the same level of quality and reliability.
How long will it take to get a replacement to this point and how much of your and your managers’ time will it consume? What are the implications on your existing workload? Will you lose earnings as a result?
Now compare this effort and cost to the resources you’ll spend in finding out how to keep these employees happy and implementing strategies to prevent their departure.
Here are some suggestions on how to approach this issue:
Get The Basics Right
We’re not going to delve too deeply into this section, but it’s still worth considering human resource best practices concerning staff retention.
- Conduct regular employee satisfaction surveys to gauge how staff members feel about their jobs, salaries, and benefits.
- Communicate openly and honestly with your staff about the company’s performance and future plans.
- Offer competitive salaries and benefits that match or exceed industry standards.
- Provide opportunities for professional development and career advancement. This will help to keep your staff members motivated and give them a sense of purpose.
- Recognize and reward employees for their contributions to the company.
- Consider being flexible with working arrangements such as remote work, flexible hours, and part-time working.
- Create a positive and supportive work culture that values diversity, inclusion, and respect.
Identify High-Value Staff Members And Engage With Them
Some employees are more valuable than others. There’s no point in denying this. Some people have been with you longer, have extremely niche skill sets, or are simply just exceptionally reliable and competent.
These are the people you need to work hard at keeping. And to be perfectly frank, there’s only one way to do it: Talk to them about their needs and expectations.
Don’t make the mistake of thinking money is the only solution to this potential problem. Yes, some of your key staff members will be motivated by remuneration and incentives, but others might want advancement opportunities or support in their own professional development.
So schedule some time for a meaningful one-on-one session with each of your star employees. Feel free to involve an HR specialist or a skilled manager. Not everyone is blessed with the empathy and communication skills necessary to make these sessions productive.
Expand Your Network Of Suppliers
During times when supply chains are disrupted and prices are volatile, it makes sense not to be overly dependent on a small number of material suppliers. Taking the time to explore doing business with additional suppliers will solve this problem.
How Reliable Are Your Current Equipment and Material Suppliers?
Just because you’ve never had much of an issue with your suppliers’ reliability, doesn’t mean that they’re immune to the risks of inflation and subsequent supply chain disruptions. Imagine a scenario where the supplier of a vital piece of equipment suddenly goes out of business or is forced to drastically raise their prices.
What are the operational and financial implications? Will you be able to find an alternative supplier before your timelines are compromised? Will you be able to pass this cost increase on to your own customers?
The best way to prepare for this possibility is to put yourself in a position where you never need to answer these questions – to expand your network of suppliers now, while you’re not at risk.
Here are some suggestions on how to do this:
- Researching and networking can help your company find new equipment and material suppliers. Utilise industry resources such as trade magazines, websites, and associations to stay informed about new suppliers and learn about their products and services. Attend trade shows, events, and conferences to meet new suppliers in person and establish relationships. This can also be a good opportunity to ask questions, compare prices and quality, and negotiate deals.
- Online marketplaces and e-commerce platforms can provide a convenient and cost-effective way to find new suppliers. These platforms typically allow suppliers to showcase their products and services and provide information about prices, quality, and delivery times. This can help your company compare suppliers and find the best deals for the materials and parts they need.
- Request Referrals. Reaching out to existing suppliers, industry associations, and colleagues can help your business find new equipment and material suppliers. Ask existing suppliers for referrals to other suppliers they have worked with and trust. This can help ensure that the new suppliers are reliable and provide high-quality products and services.
- Utilising procurement services can help streamline the process of finding new suppliers and negotiating prices and terms. Procurement services can help you find new suppliers, compare prices and quality, and negotiate deals.
- Utilising social media platforms like LinkedIn can help you connect with new suppliers and engage with them online. These platforms allow suppliers to showcase their products and services and provide information about prices, quality, and delivery times.
Build A Stock Of Frequently Used Inventory
If a large percentage of your property maintenance company’s income is generated from executing work orders, it makes sense to secure your supply of critical materials. As we mentioned in the previous section, diversifying your network of suppliers is one way to safeguard this source of income. Another method is to keep an inventory of these items in stock at all times.
What Will Happen if Crucial Materials Become Unavailable?
Regardless of how large your network of suppliers is, there’s still a possibility that vital materials will become unavailable or unaffordable. This is especially true during times of economic and supply-chain volatility.
The more reliant you are on access to certain parts, equipment, or other materials, the more important it becomes to implement reliable contingencies. In this case, we’re discussing the feasibility of maintaining your own supply of these kinds of materials.
Here are some important insights and considerations to bear in mind if your business could benefit from this tactic.
- Assess the demand: Assessing the demand for each item is crucial when building your stock of inventory. This will help you determine the quantity of each item you need to keep in stock, and minimise the costs associated with storage and inventory management. Consider the frequency of use, seasonal trends, and the criticality of each item. For example, items that are used frequently and are critical to your business should be kept in higher quantities compared to those used less frequently or are less critical.
- Use an inventory management system: An effective inventory management system is crucial to keeping track of your stock levels and usage. This system should allow you to monitor the quantity of each item in stock, track usage patterns, and automatically reorder items when they reach a minimum threshold. Having an inventory management system in place helps ensure that you always have the right amount of materials available when needed, avoiding stock shortages and overstocking.
- Consider the costs: Building a stock of frequently used inventory comes with costs, such as storage and inventory management. It’s important to consider these costs and balance them with the benefits of having a steady supply of essential materials. You may need to consider the cost of rent for storage space, the cost of insurance for your inventory, and the cost of labour for inventory management.
Audit Existing Supply Chains For Risk
It is absolutely vital that your company’s management team stay on top of global and domestic events that affect the ecosystem of supply chains that affect your ability to deliver great quality work for your customers. Doing so puts you in a position where you can see potential issues coming and allows you to be proactive about contingencies and strategies that’ll safeguard you, your staff, your contractors, and your customers.
How Prepared Is Your Business For Supply Chain Disruptions?
The only way to have an answer to this question is to know what kind of disruptions you are likely to face. And the only way to know this, is to have remarkable insight into the moving parts that affect the flow of materials and money that underpin the property maintenance industry.
Here’s some insight into your options if you want to understand the many moving parts that affect your industry.
Establish Relationships with Suppliers:
- Schedule regular meetings with suppliers to discuss performance, identify areas for improvement, and negotiate better terms.
- Encourage open communication with suppliers and encourage them to raise any concerns they have. This helps in understanding their capabilities and limitations, and helps in resolving any issues before they become major disruptions.
- Provide clear specifications and lead times to suppliers to minimise the likelihood of supply chain disruptions. This helps in ensuring that suppliers understand what is required and when it is required.
- Consider offering incentives to suppliers for meeting or exceeding delivery and quality targets. This helps in encouraging suppliers to prioritise your orders and improve performance.
Stay Up to Date with Market Events:
- Subscribe to industry newsletters and follow industry experts to stay informed of market trends and changing regulations.
- Attend industry conferences and trade shows to network with other professionals and learn about new technologies and best practices.
- Regularly review market research reports and competitor analysis to identify potential risks and opportunities.
- Utilise social media and online forums to gather information about customer preferences, market trends, and competitor activities.
- Conduct regular surveys and focus groups to gather feedback from customers and suppliers about their experiences and expectations. This helps in staying ahead of customer needs and expectations and improving the overall supply chain experience.