Charles Spence of Spence Willard Estate Agents, Cowes
We opened our fourth office last year.
That doesn't sound like a big gamble, but every month you have to find the costs of the building, the staff and the equipment. That takes courage.
Duncan and I had started up in the recession six years ago. We believed that people will always buy and sell property. We concentrated on quality coastal and country houses across the Island.
We have stayed independent and have been growing steadily since we started.
But it has not always been plain sailing. Sometimes sales proceed more slowly than we envisage and this impacts our cashflow. When several deals have hiccups at the same time, we've had some lean months.
And then the next month can be unusually good, after we've found ways to iron out all the delays.
We had offices in Cowes, Yarmouth and Freshwater. We wanted to rebalance our presence by opening a new one in East Wight. But we aimed to do more than simply take over the work in that area from the Cowes office, otherwise it was simply an extra expense.
We spotted a suitable vacancy in Bembridge and I'm very pleased to say we have attracted new business over there, justifying the decision.
Commentary by Dave Simon
Bigger is better?
Bigger is better – or is it?
Business growth is a popular dream. Many people imagine it would only be wonderful.
But it can bring problems. Sometimes things can go terribly wrong.
Filling the order book can create an ambush. Waiting for payment can bring snowballing cashflow problems. If the staff can't be paid, the work won't get finished. And then everything stops.
Unfortunately, banks tend not to lend simply to pay the staff. They take it as a sign of mismanagement and steer clear. So the crazy situation is that the company cannot survive until it gets paid.
Steady steps is safer growth.
Smaller businesses can suffer late payment even then, when bigger companies put their own cashflow and profits first.
The top five ways to protect your business when faced with a large order are:
1. Credit-check the customer.
2. Ask for references from similar-sized suppliers.
3. Ask for a substantial down-payment, like 50%.
4. Require part-payments, and insist that you can delay delivery until the previous payments are completed.
5. Invoice promptly and accurately with payment dates large and clear.
For more advice on Preventing Late Payment Problems and Pursuing Late Payments Energetically When Prevention Fails, call Double-Your-Profits Consultancy 01983 614795
I've always worked in the property sector, but I hadn't considered becoming an estate agent. I started out by studying for a degree in Land Management. Later I qualified as a Chartered Surveyor and worked for several national firms on the mainland. I was usually working as a manager of large estates with long-term plans, although I helped in a few purchases and sales.
A Surprise Turn
I had expected my career to continue in roughly that direction. I hadn't been looking to make a career change. But one of my old bosses phoned me one day and told me about a job at an estate agency. “I think you might be interested”, he said.
It was a surprise – I wondered what he'd seen in me. But when I thought about it, maybe he was right. So I investigated, and applied successfully. Then I spent five years selling everything from bijou cottages to sprawling country estates.
I'm Island born and bred, and I returned in 2004 to a job here. In work with larger properties, there is often some sort of development angle and I found I enjoyed that aspect of the work. It's about recognising the value and the potential of the property.
Finding A People Focus
This can be quite creative work – finding that unique match between buyer and seller that works for both of them. Sometimes the answer is to offer a redesign idea, sometimes it is more about encouraging constructive dialogue. Occasionally the answer that works is not a compromise – both parties get more than they expected to!
So although we need to know about property, the job is actually a lot to do with people.
I find that it can be quite exciting, putting knowledge, creativity and enthusiasm into getting a deal through the various stages.
A Slow Pace
This is not really a cut and thrust industry. Things happen at a slow pace – sometimes to our frustration. In each deal, and in the overall housing market, most things proceed gently. There are obstacles to be responded to, but generally they evolve rather than ambush you.
So when we started, we had expected some difficulties. But we were pleasantly surprised at how well things went. I'm not saying it was easy but we really celebrated our first year in business! I was very relieved.
Values Are Vital
It confirmed to me that we had chosen the right values to work with. When Duncan and I discussed setting up the business, we wanted to work to a principle of getting the best value for the owner. In this industry there are certain choices you can make around this and we strongly preferred quality results rather than quick sales.
This freedom to choose how we did it was the motivation to start our own business. I had not necessarily thought I would be a business-owner when I was young. It was a need for self-expression that had slowly matured with experience.
We've been helped in this by a great team. They have helped us grow and play to our strengths.
Our growth has occurred in measured steps, consolidating our presence. I feel we provide a good service on a small Island. We are now a market leader in handling sales of quality property, large and small, principally to the mainland market.
The Island Economy
As an estate agency our business seems more influenced by the national economy than the Island economy. People's decision to sell or buy here is in many cases not dependent on prevailing local economic conditions.
But many businesses have properties, and keeping on top of maintenance is the best way to retain value. Particularly so in the tourism sector, where the appeal of the building is vital for attracting custom (even more than buyers). I see those who provide holiday accommodation on a more flexible basis, (allowing shorter term lets and keeping up with what holiday-makers want), doing better.
Beyond tourism... I could wish that we get the Island more firmly onto the map as a lifestyle choice. We work to attract tourists and businesses here: we should also try to attract people who want a better quality of life. Maybe they want to down-size to a smaller house, or a smaller mortgage. Or maybe they want to down-shift to a less hectic job or to work from home. These are people likely to bring money and business to the Island and if they feel the Island is a beautiful place like we do, everybody wins!