An important part of the entrepreneurial journey is understand what worked and what didn’t. To reflect on this, I completed a business postmortem, helping me better prepare for what’s next!
The business: Pocono Rentals & Management, a full-service property management business for individuals with homes in the Poconos. We step into your shoes and manage your home on your behalf. Owners didn’t have to be hands-on with managing their home, and we could use our time, tools, team and technology to maximize the returns while being local.
Successes:
- WOW Factor: we received a lot of referral activity. While we didn’t keep everyone happy, typically the homeowners who came from self-managing or other PM companies were very impressed by our solution and wanted to tell others about it!
- Pure-Players: most other PM’s were real-estate agents who were more focused on buying/selling homes rather than focusing their efforts on managing. We stepped in as “pure-players” and maintained that property management was a full-time job
- Positive-Sum Game: by operating on a % of revenue model, it was an easy sell to clients. “We don’t make money unless you make money”, and the goal was to make the pie bigger so we could offset our management fee by bringing more money in the door. We had the time, tools, technology and team to make our clients more money than they could make on their own.
- Tech-forward: There ended up being a lot of parallel lines between Ad Agencies and PM. We leaned in to tech-forward solutions (dynamic pricing, PMS, etc.) which spoke the language of our clients
- Leads and SEO: Originally “Pocono Rental Management”, not because it was sexy but because it made it very clear what we did (what’s “Evolve” do?) as well as ranked well in SEO. We ended up spending less than $5k in advertising in over 5 years, with our leads coming organically (the best kind! active hand-raisers finding us, not us convincing someone to consider us) which kept the pipeline full with 3-5 leads/week.
- Yes to Less: I learned how to not say yes to everyone. There were homes we chose not to manage. There were communities that we walked away from for employee happiness reasons (too much work, not enough reward). It wasn’t about pleasing everyone, but instead the right people.
- Delegating without Abdicating – by not being local, I couldn’t simply “do” and I was forced to create solutions, systems and processes to allow by team to operate without me. I stayed involved in the business, but made sure to delegate responsibilities to team members while creating “playbooks” for the next time similar situations arose.
- Sale!: I purposefully created a sell-able business. I made sure I didn’t do too much myself, delegated responsibilities to the team members, and if something were to happen to me the business would continue operating.
Note – I’d be remiss not to mention the timing. I was fortunate. We started right before COVID (Sept ’19) which posed some initial growth pains, but once the market normalized, people fled the cities, and interest rates hit historic lows (important for new clients/new homeowners) we were able to ride that momentum with a sound solution.
Challenges:
- Managing Remotely: The larger we got, the more I needed to be local. It became increasingly difficult to stay connected to the homes (and homeowners) when I wasn’t able to get into homes for months instead of weeks. I also owed more face-time to the local team, which I wasn’t able to provide with a growing family and moving father away.
- This also posed challenges to the culture we were building. I think we had about as strong of a culture that you could have in a remote environment, but it left more to be desired.
- Also not being in an office with the team meant I had to trust them more. Trust, but verify only got me so far, and I felt myself wondering fairly often if the team was actually working or if they were just taking it easy (i.e. I have to hire another team member? Are we maximizing our time or are we being lazy?)
- Hire, then Grow: We would have to hire before winning more clients, which always kept profitability as a lagging metric.
- For example, at 60 homes we might have 2 account managers and 2 maintenance managers, fully maxed out. So if we want to grow to 61 homes, I have to hire another AM and MM now, pay them a full salary, and not get back to this level of profitability until we hit 80 homes (one step back to go two steps forward)
- Seasonality: We made 35% of our money between Memorial Day and Labor Day. And we were buuuuusyyyy. This meant we had to hire a team for the busy months, but when the Fall came around we would be over-staffed (mostly was able to avoid this problem by always growing, but that can’t last forever).
- I tended to avoid seasonal help because so much of the business was trust-based for me (not being local) and I relied on the narrative of “we’re building something great together” to help motivate the team. My fear was temporary help wouldn’t share in that same vision and would thus prove unreliable.
- Contracts and Agreements:
- Lawsuits and Insurance:
Considerations for the next one…
Dave Emerson 