Archives for July 2015

Imagine you and I are walking through the centre of Portsmouth. Someone calls out from a car, “I need to get the Isle of Wight Ferry! I am in a hurry!” If someone called through their car window asking for directions, we may just simply tell them how to get to the ferry and that’s all the advice we need to give.

But, let’s unpick this a little and pretend for a moment that we’re experts in getting to the Isle of Wight. Have we met the driver’s needs? We answered their question and they might be entirely satisfied. Job done. But have we really done the best job we can for them, as experts in our field?

The driver has stated they are in a hurry.  Because we are experts in getting to the Isle of Wight, we actually know there are many ways to do that.  All different and each one ‘the best’ in certain contexts.  So we take a moment to find out what the driver’s ultimate objective is and what their needs are, beyond finding the ferry terminal.  We find they have a meeting in Cowes and then they’re coming back. We then find we are able to advise on the best way to reach that ultimate goal. It turns out the ‘best way’ for them is, in fact, to catch the hovercraft.  It is quicker to cross and by leaving the car behind, cheaper too.

If a business comes to me with a specific request – please help me buy this building to put my business in – and all I do is help them buy the building then I am a service provider. What can I offer a client as an expert in commercial property that will do more than simply point them in the right direction? I can enquire into the reasons behind the purchase and challenge the assumptions and motivations behind the request. I would inform the client whilst building their understanding of the implications and consequences of purchasing a property. I would also help the client to use the right mechanisms for owning the property and then leasing it back to the business. In doing so, I have shown myself to be an expert and an expert is in fact what the business owner needed, rather than a service provider.

I have not just met the client’s needs but have guided them towards a significantly better solution; perhaps one they had not contemplated. Even though they had all the data, they didn’t have the skills, knowledge and experience to point themselves in the right direction.

Experts add value – that’s what experts do.

There are so many factors to consider in relation to the space a business occupies. People tend to look at it only from their own perspective. What it really comes down to is whether you, as a business owner/operator, view your premises as an asset or as a cost. If you look at your premises in the same way you would a member of your staff, then simply put, you get out what you put in.

To begin with, you have to make the right decisions at the time you acquire (lease or buy) space. Allow plenty of time for this analytical stage to avoid having to make compromises you may live to regret. It forms the basis for everything else you do. How big, where, what specification and more subtle things like natural light, parking and mobile signal – think of it like a ‘job spec’ for the property. What does the business need? It requires interrogation of the business plan, which is not always an easy exercise from within the business.

Then, once you have committed your business, during the period it occupies the property you may need to adapt and alter to suit the changing requirements of the business so it can make the best use of what it has; moving internal walls, for example, or even just decoration and carpets. The comparison is training a staff member to keep them fresh and relevant.

Lastly, there needs to be an exit strategy which has been ‘planned-for’ and which does not disrupt the business with unforeseen costs and upheaval. This is the same as when it is time for an employee to move to pastures new. You don’t want a big bust-up or worse, for it to go legal!

Look upon your business accommodation as you do a member of your staff and it will become an asset, adding value to the business and facilitating its growth; and not just a high cost, inflexible business overhead.

Don’t have business premises unless you absolutely need them.  That is one of my mantras. I recently had my windscreen replaced.  The process was interesting but the really interesting thing was to hear from the guy on the tools, how the screen replacement company has changed working practices and so reduced its property overhead quite dramatically.

Instead of having a portfolio of industrial units across the country for fitting glass, at a cost of millions every year, they all operate from vans.  The orders are sent to the van and the materials are picked up from a sort of oversized safe-deposit box.  There is an office somewhere dealing with the administration but, for that business, the industrial units are a thing of the past.

The rationale is that carrying a vast property estate makes the business cost heavy and therefore vulnerable.  Better to run vans you can sell if you need to and flex the headcount to meet demand.

The main point being the company profits are increased by not carrying the massive liability premises represents, some of it unquantifiable, and using innovation and technology to deliver the service.

So, think about it – don’t have premises unless you absolutely need them!  If you do, have the right premises in the right location, on the right commercial terms.