It may seem pretty straightforward, but making sure your property management company has more money coming in than going out is the fundamental foundation for success. As simple a concept as this may seem, however, it’s often easier said than done – especially when it comes to newer companies. Keeping tabs on income and expenses is the key to ensuring your business has the resources it needs to grow. That said, here are three specific tips for managing cashflow and reaching your goals.
Diversify whenever and wherever possible
The property management industry is one in which diversification is relatively easy to do. Whether it’s branching out to include commercial property management along with residential or expanding the types of services you offer to include additional value-added items. By diversifying, you can realize multiple revenue streams and also lay a more secure foundation because if one area begins to lag, the others can make up the difference.
Keep the cashflow conversation going
As a business leader, it’s essential that you have a clear and accurate idea of where your money is coming from, how much is coming in, what it’s being allocated toward and how much is going back out again. Cashflow isn’t something that you can simply set and forget. To really get a handle on where you are presently and what direction you’re headed in, you have to keep it top of mind. It can be helpful to run things like forecast reports, which can assist you in tracking accounts payable, accounts receivable and all other relevant factors in one central place.
Negotiate, set and stick with payment terms
Last, but certainly not least, exert your power over the things you can control, such as the payment terms of your accounts receivable. If you’re constantly chasing after monies owed, your business will never be able to make a leap forward. Likewise, always check to see if there is any wiggle room with your payables. Negotiating more attractive terms, such as extensions, better rates or even discounts for paying early can help you manage the cash you have on-hand so it can be better utilized in the meantime.
The goal of most property management companies is to achieve sustainable growth, and cash flow management is the key to realizing that goal. Following the three steps above should put your business in the right position for ongoing advancement well into the future.