The owner/manager of this successful Buyers’ Agency and Property Management business had a plan to aggressively grow the business and introduce processes that would provide for stable ongoing profitability.  His vision was that the business would be stable and robust enough to be run by an employed manager a number of years in the future, enabling him to take a less hands-on role.

EZ Consulting was approached to quantify the required compound annual growth rate to reach the 9-year profitability target and restructure the business to insure it against an often lumpy and volatile revenue profile. A detailed business plan was developed to give greater visibility on each component of the business, the key business metrics affecting unit performance and the contribution of business units to overall profitability targets. Key aspects of the plan and assistance provided included:

• Separating the budgets for the Buyers’ Agency and Property Management divisions to enable better decision making within each unit.
• Breaking down service offerings to enable devolved management responsibility and performance management.
• Transitioning agents to commission-only remuneration arrangements and systematising the timing of payments in accordance with revenue receipts to reduce the lumpiness of month-to-month cashflows.
• Introducing well-managed, inter-company buyers’ agency and property management referral fees and trailing commissions to properly incentivise staff.

At the time of writing, the business is 4 years into the 9-year plan, has increased profitability 350% over this period, is ahead of the targeted annual compound growth rate and (due to the implementation of streamlined processes) continues to reduce overheads as a percentage of revenue.  Most importantly, aligning revenues and expenses wherever possible has reduced cashflow volatility and reduced the risk around its earnings profile.