Rental management companies can face strong competition, but you can keep your firm ahead of the pack by creating a culture of profitability. A culture of profitability is one where all processes and employees are geared toward supporting and advancing your company’s financial success. Your first step is ensuring all your processes are streamlined for optimizing your profit margins. The second step is helping your employees adopt a mindset and behaviors that do the same.
Streamlining your processes involves reviewing your operations to make sure your company has efficient management practices, effective project execution strategies and overall project profitability. Increasing the profit margin in this area can include ensuring you:
Avoid over-servicing: Customers should get what they pay for, with any requested extras mandating a renegotiation of the contract to include them for an additional cost. You want to deliver excellence, but you also want to keep company profits and new revenue streams intact. Over-servicing accounts can also set up future expectations that eventually result in loss of revenue for you.
Arm managers with necessary info: Bidding on contracts and negotiating terms require access to historical data and other information that give project managers a solid idea of how to best plan and price potential jobs.
Choose the right tool for the industry: Keeping your rental contracts and overall operations on track requires specialized technology designed specifically for the rental management industry. Your ideal ERP rental software will provide tools capable of integrated management of projects, contracts, reservations, inventory, financials and customer information.
The right system can help optimize profits by streamlining operations, providing access to crucial data and allowing employees to track and manage projects and related info from one central location.
Building a culture of profitability with your employees relies on getting them to embrace a profitability mindset and behaviors. This can be done by focusing on several key areas.
Attitude: Define the profitability attitude, and then do everything you can to guide, nurture and celebrate it moving forward. Since employees typically mimic the attitude they see in their leaders, the attitude must be both accepted and exhibited by your CEO and those holding management roles.
Employees aligned with the attitude will all have a shared goal, sense of purpose and common benefit, along with the drive to act as needed to help transform the goal into reality.
Awareness: An attitude of profitability should include a heightened awareness of opportunities to increase profitability. Your employees should already have access to historical data on the most profitable projects and contracts, and you can further enhance their ability to spot additional opportunities by reviewing top profit drivers.
Some may be small, like remembering to turn off the lights at night or adjust the thermostat. Others may be huge, such as eradicating employee theft, over-servicing and wasted materials and mistakes. Even the smaller adjustments can result in notable increases over time, particularly if you run across a multitude of them.
Employees can ponder questions like:
- What can I do to help us reach the goal of optimizing profits?
- What can my department do?
- How can my department work with other departments?
Accountability: Employees must be held accountable for upholding the standards you set, and those standards need to be outlined and stressed from the get-go. You also need to delegate tasks to specific individuals, who can then be held responsible for their successful completion.
Accountability should go one step further into the realm of monitoring and measuring of key performance indicators (KPIs). Recognition, rewards and consequences for performance should be made clear, then delivered as promised.
Authority: In order to successfully complete certain tasks, employees must be given some level of authority to make decisions, negotiate or otherwise have a say-so on select matters that can impact profitability at the transactional and ongoing level. Authority must be earned, of course, and employees must also have enough free rein to make mistakes and then learn from them.
Aims: Unless you have a clear idea of what you specifically want to achieve, you won’t know if you’re on the right track. And it will be even tougher to get the rest of your team on board. Instead of the general idea of “increasing profits,” go for more specific goals, such as an increase of 1 to 3 percent on a few key metrics. Attaining small victories can be extremely satisfying while building up the momentum you need to reach the bigger goals.
One more essential strategy is to show employees how a culture of profitability is beneficial to the company as a whole as well as to everyone who works there. Bonuses, pay raises, and additional perks can be attractive ways to instill a profitability mindset, behaviors and practices that help your entire organization thrive.