It was late 2007 and I’d spent two years planning & implementing the launch of my lettings business.
We’d launched as a cold start just a month earlier and had ever so slowly started to pick up a few properties.
Then I saw something in the news about queues of people lining up outside Northern Rock branches to get all their money out!
What was going on?
This was the start of the financial crisis and you don’t need me to tell you that the impact was felt in the UK and around the World for many years after this.
The immediate short term effect for a fledgling lettings business was that very quickly all the Estate Agents in town realised that they couldn’t sell any houses…so they needed to reconsider lettings!
They’d previously stayed well clear of lettings up to this point as they saw it as far too much hard work for not enough money!
Competition didn’t just double, it quadrupled overnight. The Estate Agents came in hard to buy up market share with ridiculous low fee or no fees offers.
What could I do?
I had a wife about to go off on maternity leave with a new baby due to arrive imminently!
I’d taken on a member of staff before I really could afford it – because I had the self awareness to know that I was the last person you wanted to deal with the property maintenance side of the business (short attention span, very little patience, DIY disaster area…it would have been ugly).
I couldn’t outspend the Estate Agents and I certainly wasn’t keen to get into a race to the bottom on fees.
If I can digress for a minute, the lettings business is a hard one but it does have it’s good points.
First, there’s no cashflow issues caused by late payment of you invoices (you take your fees from the rent before paying your Landlord clients).
Secondly, with the recurring management fees earned for months or years after the initial instruction it makes you realise very quickly that the real money is in the back end, not the initial transaction.
I’m pretty sure that quickly working this out saved my business!
I also worked out that we needed to focus on our current customers, even if we didn’t have a massive amount of them, and over-deliver on service at every opportunity. Most of the Estate Agents at the time didn’t have the first clue about lettings so it was easy to stand out, simply by offering a great service and knowing what we were doing!
I then made sure that we didn’t let an opportunity for a review, referral or testimonial pass us by and we would use this as the focus for all of our marketing efforts.
Systematically targeting our current clients to give us glowing Google reviews (years before it became common practice to do so) made us stand out from all of our local competition, with five star reviews into double figures long before any of our competitors had got even one review!
Our SEO went through the roof!!
Finally, it became clear that we needed to look at ways to maximise the revenues earned from each of our current Landlord or Tenant clients at every opportunity.
I’m pretty sure this combined approach saved us from joining the 1000’s of businesses that went under at the time of the financial crisis.
Looking back I’m just so glad that we were able to see the way out of the crisis was not to try and scoop up as many new clients as possible at loss making fees – like everyone else was doing!
Instead we focused our efforts on over-delivering for our current clients and leveraged our relationship with them to win new business.
At the same time explored ways to increase revenues through offering additional services wherever possible.
I’m continually surprised when talking to small business owners that current customers are pretty much forgotten about the minute they make their first (or certainly second) transaction…no system for generating reviews or referrals, no plan to communicate regularly and build the relationship, no focus on generating additional sales…
I’m well aware that everyone these days tells you that clients need to Know, Like and Trust you before they will work with you – I don’t dispute that.
But I’m always puzzled when so few businesses think it may be worth building that Trust a little bit more after the initial work is completed…
It’s only in recent years that books such as ‘Buying Customers’ by Bradley Sugars or ‘Oversubscribed’ by Daniel Priestley (both great books, you really should read them or get them on Audible…) have put in print the techniques that I was implementing day in day out to keep my business afloat…
You really should check out both books – here’s the Amazon links…
Buying Customers – Brad Sugars
Oversubscribed – Daniel Priestley
I’m pleased to say that the dark times of 2007 – 2009 gave way to slightly easier trading conditions and the foundations put in place at that time allowed us to continue our double-digit growth each year and further enhance our glowing reputation – until I eventually sold the business in 2017.
Sure, we had a rocky start but I bet every business owner has a range of similar tales to tell and that’s why the Small Business Big Ideas Hub on Facebook is so good – it’s a place where you can share your experiences, learn from each other and if you’re facing a challenge you don’t have to feel like you’re on your own – chances someone has been there and faced the challenge before you…
Click the link to join the group Small Business Big Ideas Hub