Business tips
Advice and ideas from leading residential property experts aimed at estate and letting agents.
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A great time to buy
Many of my letting agency clients are at a crossroads, says Adam Walker. The dichotomy that they are facing is whether to sell up now or whether instead to expand by buying another business. So is now a good time to buy?
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Increasing the value of your business
A great deal of my consultancy work these days involves helping business owners to increase the value of their businesses prior to a sale in a few years’ time. Letting businesses used to be valued on a multiple of turnover so my job was to identify various ways to do this. More recently however, the profitability of the letting business has become a much more important factor in determining its value. As a consequence, I now have to consider cost control and efficiency improvements as part of my brief. Salaries should not be more than 40% of turnover but many businesses are spending 50 or even 60% on staff. Cost control is a subject that is often misunderstood. It is not about saving a few pounds by buying cheaper stationery, nor is it about making swingeing cuts to the staff or advertising budgets which can reduce the turnover of a business by an amount that exceeds the saving. Most costs, such as rent, rates and utilities are fixed and most variable costs only make up a small percentage of the expenditure, so the only area in which significant savings can be made is staffing. Salaries should not be more than…
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