Issue No 149 June 2005
Property management properly planned
Ten years is a long time in business. Sustainability and growth over a decade indicates good business practice and wise decisions. From the initial stages Rental Property Management had a well-researched business plan and a growth strategy that was essential to its long-term direction. We look at how the business has developed and succeeded.
Duncan Drummond had come to a time in his life when he needed a new challenge. He had been in the police force for 27 years and knew that he didn't want to be there much longer. He wanted a business that he could be involved in, but one that didn't rule his life. "I wanted the business to work for me, not me work for the business."
Duncan and his wife Sally sat down with their accountant and looked at several options. They knew they would work together well so wanted to come up with an idea that they could both contribute to. "We had a few rental properties that we managed, so it was something that we already had experience in and we went away and researched the idea," says Duncan.
Duncan and Sally were aware of the high failure rate of small businesses and didn't want to become a statistic. Many months were spent going over the market, writing business plans and refining their idea. They point out that research and planning is crucial in the early stages. "It was important that the business had to provide us with an income — and it had to become self-sufficient. And, we had to be confident it would work before we started," Duncan adds.
Rental Property Management (RPM) began in Duncan and Sally's converted front room in their home with their daughter joining them as the company developed. They now employ 5.5 employees and have opened an office in the North Island. Further expansion plans are in the pipeline — even offices worldwide are contemplated.
Knowing RPM's strengths and employing specialists in areas of little expertise is a sound business practice, stresses Duncan. RPM has recently commissioned a design agency for a rebranding and advertisements. RPM also employed a general manager, Pru Morrall, with sales and marketing experience to look after the Christchurch office, so Duncan and Sally could concentrate on progressing the company.
As Pru points out she can bring in some new experience and enthusiasm to the office. " I can add to the company with previous experience in areas and viewpoints Duncan and Sally don't have. For example I am a tenant while they are landlords."
"We want to stand out from others in the field and are always seeking ways to improve and to learn. We know we are not the cheapest, but we are the best. We look at our business plan regularly — get advice and be prepared to learn. You never stop learning, the Business Centre in Christchurch Central Library is excellent as are the Canterbury Development Corporation courses," adds Duncan. "You don't know what you don't know."
To help RPM through the different stages of growth Duncan and Sally looked at how to progress to the next level. A chance conversation with a client led to a mentoring relationship being formed with Australian property tycoon, Bob Walters — illustrating the importance of good relationships and networking. "We have learnt a lot from him and how his company has grown. If I have some advice for anyone starting out, it would be to have a good financial buffer in the beginning and to take advice, research, do more research and listen to advice — and enjoy."
