This week I would like to have a particular focus on the business side of property.
Quite often people talk of going into property business and I will talk generally about what makes a business a business and zero in on my personal experiences in property.
Unfortunately most people in South Africa do not grow up in an entrepreneurial home.
By that I mean that they have little or no idea of how and why a business operates.
Many people dream of having their own building but have no real idea how being in business works.
Unlike working for somebody else or being a civil servant, you have to do two key things all times: be willing to take risks and be able to make decisions.
Firstly, risk taking is an essential requirement to being a business person.
If you cannot take a risk, then you will never make it as a business person.
Taking risk is when you decide on a direction to go in and sometimes you fail.
For example, you want to have a market stall selling vegetables – nothing wrong with that but the risks you take will be important in shaping your future in business.
Are you buying vegetables that are fresh or not?
When you don’t know the people you buy from you may not know whether what you are buying is fresh or not.
Are you buying too much or too little vegetable?
If you buy too much you may have to sell at a loss or your vegetable will go rotten.
Are you buying the right vegetables?
Buying salads in winter when people want potatoes and cabbages may be the wrong move – it’s the risk that you take.
Every business is about risk, but the more you take risk the better you get at it and the fewer mistakes you make.
You have to understand your risks and learn from your mistakes.
The longer you have been doing it the more experience you will get, the better your contacts will be, the better the prices you will be able to get and, most importantly, the more that people will trust you and do business with you.
The reality is that customers tend not to trust young inexperienced people as much as older and wiser business people.
Often these older wiser people are just better at doing the work and have built up a large loyal customer base.
Secondly, business is about making decisions.
So many people cannot make decisions.
In my property business I make hundreds of decisions on the fly every day.
But I also am quite happy to take the consequences of my decisions.
Do I make mistakes?
Sure, but not as many as I did when I was new in my business.
You have to learn from experience.
But that’s not only learning from what happens in your business but being interested in everything that happens in an associated business.
For example, with our veggie seller who has a market stall, he/she should be interested in shop rentals, the weather and its effect on veggies and their likely prices, farming and farming methods, refrigeration, packaging, reusing of old veggies as pig food and much more.
If you are not interested in learning about your bigger business environment, your competition will eat you alive.
I have been in property for over 45 years.
How do I survive?
Actually it is quite simple: be 10 percent better and 10 percent different.
My company does its work in a totally different way from 90 percent of other estate agents and even in this down market, I must tell you that we have so much work that we are able to select what new work we take on.
Although we work in Bloemfontein, we do mentoring work in Australia and Hungary in Eastern Europe.
Although we are in our 70s, we are always looking for new and better ways of doing things and are currently working with computer programmers overseas to create a KISS (keep it simple stupid) property management programme.
Yes, if you really want to be in business you have to be prepared to take risks and make decisions.
- Mike Spencer is the founder and owner of Platinum Global. He is also a professional associated property valuer and consultant with work across the country as well as Eastern Europe and Australia.