Archive for March, 2009
This is the title of an interesting article I read in the Waikato Business News. As I read the article I could see some very valid points and recognize myself as a social butterfly rather than a competent networker with an objective for each function.
The jist of the article is that rather than networking being something that you do to someone it is an attitude. Instead of just showing up at the functions and enjoying the nibbles and refreshments you must go to the function with a business goal. People will make time to interact with someone who they can have a potentially beneficial relationship with but not many business people have time to waste on social butterflies.
Co-operation is a key principle to networking. This is when two businesses team up to leverage resources and build each others businesses with the sole purpose of creating greater value for their mutual clients. You remove the competition through co-operation and everyone- the two businesses and particularly the client- wins in this relationship. This co-operation concept is initially scary for some business owners and that’s because they come from a place of poverty thinking rather than abundance thinking. Poverty thinking is when you believe the amount of business in the market is finite and if you share the pie, your slice gets smaller. Abundance thinking sees the number of business opportunities as infinite. Therefore, as you share the pie, the pie grows and you share gets bigger.
Think about some of the functions you have attended and what if anything you have gained from them. Then think about other function where you have instigated a very mutually beneficial business relationship. How did that happen? There are many motels who work together and create a better business for each other as well as themselves. Networking does not necessarily have to be with a business which is different from your own. There is certainly truth in the old adage “we are in competition not opposition”
Another concept which relates more to customers is that of the six rung ladder relationship. Under this concept before you qualify someone as needing your business product or service they are termed a suspect. When you qualify them they become a prospect. When they buy your product they become a customer and when they buy a second time they become a client. Then when a person begins referring your business to others they become an advocate.
However your aspiration should be to create relationships with people to turn them in to evangelists for your business. An evangelist is a card carrying referrer who has the same passion for your business as you do. Evangelists are money in the bank. Think of a business or person who you are an evangelist for. What did they actually do to make you feel like that and can you recreate that for your customers. I know myself if I have a person or product I promote in this way I feel good in that I am supporting the person selling the product whom I believe is worthy of this support and also I am helping the person I am referring the product too as it is something they will benefit from. How can you make yourself part of this triangle?
Well the next time I am putting on my glad rags to go to a function I will be setting some goals and seeing how they work. Another of my favourite old sayings is “if you continue to do what you have always done you will continue to get what you have always got” I’m going to try something new and see if I can get more of the pie. Food for thought isn’t it.
Reference: Waikato Business News article by Debra Bell
March 20 2009 | Articles for current moteliers and Entering the Motel Industry and Uncategorized | No Comments »
Should I pay cash or borrow to get a bigger lease motel? This is a question I get asked a lot. Many people say oh I just want to pay cash for a lease business and it will make things easier. This is not necessarily the case.
The investment required or the cots of a motel will be reflective of the return derived from the motel. The return is usually assessed as a percentage cap rate and so a higher investment will achieve a higher dollar value return. This creates the basis for your decision to borrow or not to borrow.
As a very basic example (not allowing for any critical factors affecting the return) if you look at a motel lease requiring a $500 000 investment you would expect the return to be around $100 000 to $125 000 and comparatively a motel requiring a $750 000 investment you would expect around $150000 to $187 500. Using the lower of these figures it shows that the extra $250 000 invested could return an extra $50 000 per year. If you were to borrow the money to achieve this extra investment at 10% it would cost you $25000 per year in interest and you would retain the other $25 000 of it for yourself.
It is also important to remember that when you invest in a motel business it is not so much the amount of hours you put in but rather the type of work you do which is determined by the size of the business. For instance a small 10 unit motel may require you to do all the physical cleaning where a 20 unit motel may allow you to have cleaners working for you and your role to be more of a supervisory nature. Both businesses however will require you to be there 24 hours a day 7 days a week.
If you look at the dollar return and the labour implications it seems to make sense to borrow the extra $250 000, still work the same 24/7 hours and use the extra income to repay the debt and build on your equity. The current lower interest rates suggests now is a good time for this option. Check it out with your accountant and see what their views are.
March 13 2009 | Changes in Motel Trends and Entering the Motel Industry and Uncategorized | 2 Comments »
I feel like a person who has just been given an extra few hours in every day and it feels great. Mind you part of the feeling great is due to the fact that I have recently completed my National Diploma in Real Estate. This has taken me to a licensee level but more importantly has provided me with a large range of skills and knowledge which I can use every day to provide a better value service for my clients.
My specialist option was business broking and although much of it was second nature, due to past experience, in all education there are always extra elements you can pick up to broaden your level of expertise and this was true for the business broking options. It was good to formalize and fully explore the methodologies and practices used for business sales and I am sure this benefit will be passed on to my clients.
The completion of the diploma was hard work and took many hours of study but like I said was well worth it. It is amazing how much work you can fit in to one day when you have to. Now I have finished the study I feel like I have been given extra hours in the day but seem to be quickly managing to fill them up with “extras”
For those people looking to purchase real estate, be it a motel lease, commercial property or residential property it makes sense to choose someone who is an expert in the field and has made the extra effort to upskill as much as possible. Further education can be the point of difference between two agents seeking the same listing.
I would recommend to anyone thinking of furthering your Real Estate education to do so. It is long hours of hard work but balanced against the extra skills, knowledge and confidence you gain it is well worth the effort.
March 06 2009 | Articles for current moteliers and Entering the Motel Industry and Uncategorized | 5 Comments »