Owning a business in the property industry can be lucrative. However, along with all the benefits of being your own boss comes responsibilities for issues such as compliance, legislation and, of course, finances. Bindar Dosanjh, Author of Power Property Investing for Women, gives the 13 keys to starting a successful property business.
I have met hundreds of people who want to start a property business. Some have been motivated by money, but not all. Like any other business, it requires hard work, perseverance and a little bit of luck in order to achieve success in this industry. Here are the 13 essential key issues, questions and considerations that you need to take into account before deciding to launch a property business.
1 – What’s your Why?
What are your financial and personal goals and how do you consider property would assist and move you towards such goals?
2 – Get clear on your goals
The property industry is very broad, so it’s important to be specific about the niche that you are going to enter. The various opportunities include property management, running a letting and sales agency, commercial property, property development, investing property or sourcing properties for others.
Why does that niche interest you? It’s important to enjoy what you’re doing because, if you don’t, what’s the point? It’ll just become another job and, if you are not passionate about what you do, you may lose enthusiasm, drive and ultimately your time and money.
The next question relates to the size of projects you wish to undertake. If you want to be an investor, then consider what type of properties you wish to buy. Examples include buy-to-lets and HMOs (houses of multiple occupancy), which involves renting out individual rooms. Next, think about the type of tenants you wish to have. Will it be families, corporates, social housing tenants or students?
3 – How much time do you intend to devote to it?
Are you happy with the current business you are involved in? Or do you need a change of scenery or a break? If you decide to start a property business, be sure that you’re not just jumping ship because you don’t like your current business. Otherwise, it could be a very expensive mistake.
Are you currently a working employee and want to switch to becoming a business owner? If so, are you willing to accept the change in lifestyle? Starting your own business initially will mean long days and being able to switch off while you are on holiday – if you can get away – is unlikely. You will live and breathe your business – but you’ll be your own boss.
If you are you looking to do this on a part-time basis, what hours are you prepared to commit to this new venture? Are you doing this alone or with a business partner? If so, what will their level of commitment be? What will your roles be and what support would you require from that person?
4 – Research the demand for your business idea
Do a quick internet search to check that nobody else has thought of your great idea. You might need to set up in a different area or offer an extra service to increase your chances of success. Research your competition.
5 – What is the current level of knowledge in your chosen niche?
Even if you already have experience working in the property industry, there will always be room for more knowledge. That is why you need to do some research and be open to learning new things.
You have to keep in mind that this industry is constantly evolving and that some of the things you already know could become obsolete due to changes in the industry. Your knowledge is your greatest asset in this type of business.
6 – How well do you know your industry?
When you are new to an industry, you don’t have valuable contacts, relationships and insider knowledge. Make time to attend industry events and read the trade press to get a head start. In some areas, you may need qualifications, which you need to factor into your budget.
7 – Do a business plan
It is important to pull together your thoughts and put all your ideas and research into a properly written business plan. Set objectives, work the numbers and set timescales to measure your progress and to keep yourself focused.
8 – Capital
Once you have chosen a particular niche for your property business, then you have to secure a certain amount of money in order to jumpstart your business.
The money that you are going to need will depend on the type and size of the property business that you are planning. You need to calculate the costs involved beforehand. This includes the amounts that you are going to spend during the first few weeks of the business when there is no revenue coming in. Remember that property is not like a retail store where goods are easily sold and bought. It can take time for the money to start coming in.
9 – Business premises
What type of premises will you require? Whether you’re going to work from home or rent an office, it’s important to set yourself up properly.
10 – Your team of experts
The type of experts you will need is dependent on the type of property business you decide to start. Your team of experts need to possess qualities that can make your business efficient and productive.
Who is going to do your accounting, marketing, IT and legal work? If you want to manage your central office functions, research exactly what’s involved. Keeping up with taxes, marketing campaigns and compliance while doing your day job is not easy. Outsourcing this work puts it in expert hands and leaves you to focus on what you’re good at.
11 – Logistics and processes
You will need a business name and brand, company registration, domain name and a website. Make a list to ensure nothing gets missed and you give a professional first impression to clients.
12 – You must be ready for change
The property industry is constantly evolving, and it is important for you as a business owner in this industry to embrace change rather than avoid it. There are a lot of factors that can quickly cause change in this industry such as the economy and legislative changes. It is important to adapt in order to stay competitive.
13 – What does your support system look like?
Your network needs to extend beyond talking through your business idea with family and friends. Speak to industry professionals and business owners. Seek out a mentor. If you aren’t sure where to start, try local business networking groups and LinkedIn.
Bindar Dosanjh is author of Power Property Investing for Women and winner of the An Exceptional Book By a Woman category of the Business Book of the Year 2019. Entries for The Business Book Awards 2020 open in June. Find out more at businessbookawards.co.uk