The Property Manager’s Guide To The Galaxy: Effective Process Management 1


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This post is written by Wes Melton, Co-Founder and CTO of SmokyMountains.com, the fastest growing property management firm in the Great Smoky Mountains region. Wes’ post is the first in a series meant to empower Property Managers everywhere to run best-in-class, functional and profitable property management firms. This post originally appeared on VRMB.com and was re-published with permission of the Inner Circle Community.

 

If you’ve watched one or many episodes of CNBC’s ‘The Profit’ you’ll have undoubtedly heard the show’s star host, Marcus Lemonis, talk about the “Three P’s” of success: People, Processes & Product. A self-made multi-billionaire serial entrepreneur, Marcus has single-handedly brought the long heralded corporate lingo of ‘Business Process’ to the main stream.

Unfortunately, many property managers still erroneously think that documenting business processes and procedures for their business is a waste of time and see little value in the time/effort it would take to create them.

So I wanted to take the opportunity to share why, from personal experience, I believe PM’s who invest the time and effort in process creation and documentation are planting the seeds their own success.

 

What is a Business Process?

Property Manager Processes

If you are unfamiliar with the concept of a documented business process, you can generally think of a Process as such: A documented, structured group of tasks or activities that produce a single specific product or service once completed.

In layman’s terms, it’s a set of instructions to make a ‘thing’ happen in your company. A ‘thing’ may be checking in a guest, booking someone by phone, cutting a vendor check, programming a door lock, etc. Your business is made up of thousands of processes that can all be documented in step-by-step fashion.

Why Process?

In a recent conversation with a PM (we’ll call Sally) who had recently shut down her property management company after 10 years of business, we asked her, “What ultimately led you to decide to shut it down?”

Her response: “We couldn’t get away from the grind. We hired and expanded, but it was always us ultimately dealing with issues, and after 10 years, we were just exhausted.

While the benefits of running a tight ship through processes and procedures is nearly endless, there are some key takeaways from Sally’s unfortunate experience that would benefit all of us.

Processes help you be in two places at once

When growing a brand, quality and consistency of the brand experience are the deciding factors of your ultimate success or failure. Typically, this is one or a few driven individuals with a stake in the brand’s success who are basically killing themselves to make it happen.

A natural function of growth however, is the necessity for more bodies doing more tasks as you run out of the one asset you can’t get more of – time. Naturally, for your brand to continue its upward momentum, there must be a key framework in place that enables your staff to operate and make decisions like you would. Processes are that framework.

Processes rescue time

As stated previously, time is the only asset in life you cannot get more of. As a PM in the midst of busy season and a couple ‘crisis’ guest issues going on, stopping to explain to someone for the fifth time how to handle a missed cleaning for a guest is the last thing you need to be spending your time on.

A properly documented business processes for handling common situations saves you from the distraction of dealing with the same issues over and over again.

Processes improve guest experiences

How many towels should be placed in the unit? Soaps in which bathrooms? Housekeeping should count plates and silverware each clean? Kitchen towels placed exactly where again?

You can tell someone how to do something, but the human element will inevitably result in forgotten details which translates to lost quality. A proper process that is followed ensures each step is visited every single time it’s executed, even if there are staff turn-overs from one stay to the next.

Processes increase employee job satisfaction

Employees thrive in working conditions that lack clear direction about their job responsibilities without the ability to get answers to their questions without bugging their boss, right? WRONG.

Any good employee that’s honest will tell their boss they don’t want to have to bug them every time they’re unsure of the next thing they should do or how something should be done. By implementing documented processes and training them to always refer first to the process, the employee is actually enabled to be independent and to take ownership of their role.

A good employee will feel much more satisfied if they know how to get the answer on their own and then complete a job with confidence that it’s being done the correct way.

Processes simplify decisions

If we’re honest, getting screamed at on the phone by a guest because of their dissatisfaction with something they were informed of prior to arriving is emotionally exhausting for everyone.

Solid processes relieve you or the staff member handling that call from feeling any emotional burden to take the guest issue upon themselves. Instead, they can refer to the process, get pragmatic, and let the process make the decision for itself.

Do Processes Have Real ROI?

ROI Property Management Processes

“Okay, Okay” you may be thinking, “Processes may have operational value, but do they have real value for the bottom line?”

Abso-freaking-lutely.

While there are certainly a large variety of intrinsic paybacks that will never be truly measurable, here is a short list of measurable, tangible paybacks on investing the time and resources in developing Documented Business Processes and implementing them:

Training Costs: What hourly rate do you associate with yourself or the employee who will be training a new hire? If having documented processes in place reduced the interruptions to the trainer by 50%, and reduces the time to make a new-hire effective/self-sufficient in their role by even 30%, there are real tangible savings there.

On-boarding Overhead Reduction: All properties are different, but mostly the same. Having a set on-boarding process both increases efficiency of on-boarding, and saves bottom-line impacts by reducing refunds given due to poor on-boarding (think wrong bedding information, incorrect amenity representation, etc.)

Profit-by-the-hour: What repetitive tasks do you have in your business that require very little real “skill” to complete? If you are the highest paid person at your company it makes no logical sense for you to be the one performing any repetitive task. Assuming you perform even two hours a week of repetitive tasks (generating door codes, setting up owner stays, etc.), if you were to value your time at $100/hour to the business, that means by processing and giving to a $10/hour employee, you just saved the business almost $10k annually! That could be a raise, a third of another worker bee, or more marketing spend. It adds up.

Quality-Of-Life: Believe it or not, employers & employees who take ample vacation time are more productive and accomplish more than those who don’t. While this is less tangible for sure, it’s a reality of life that your bottom line will be stronger if you’re able to vacation and get some rest. Having documented processes that employees can follow while the boss is away is the key to keeping that phone on silent and soaking up the sun while you’re out on vacation.

Now the tricky part: Not all tangible ROI that will be realized from implementing a process-driven culture will be realized today or even this year. Sometimes the payoff is years to come, but it is there. If you plan on being in business for more than the next few weeks, it definitely makes sense to start investing in your future and the company’s bottom line by starting to build best-in-class processes and executing them as a brand. Not every great decision reaps profits today – but it will reap profits.

 

How To Create Property Management Processes Like A Boss

Boss Vacation Rental Marketing

At my company, SmokyMountains.com, we’ve leveraged very simple, easily-maintainable, and mostly free technological solutions to help us and our staff both in the creation and maintenance of our core business processes and procedures.

Before we dive into the details, I’d like to share our internal rules about process creation & maintenance at a high level:

  • Processes should be written with no assumptions made about the process. If there are core bits of information required to complete the process that exist outside the process itself, document those separately and reference them.
  • Processes should be sequential and procedural. Your problems and solutions inevitably live in a time-based reality. So your processes should too. Poorly written processes that aren’t structured are likely worse than having no processes at all.
  • Processes should include as many visuals as possible. Written directions are great. But with the complex, hands-on reality of the property management profession, visuals are a core instructive mechanism when explaining key steps to any process. With modern computer software, including photos or screen-grabs (like you’ll see below) in your processes should be a breeze.

Digging In

Property Management Business

So you’re all sold on the value of documented business processes for PM’s, but where do you create these mythical business gems and how do you disseminate that information to the team effectively?

For us, we’ve found WordPress to be a goldmine for information management when there aren’t stringent rules about how the data should be stored and a large feature list isn’t a requirement. Recognized by most as a blogging or website platform, WordPress is actually just a content management system and acts an especially good option for those who are less technologically inclined. Many affordable hosting services now offer ‘1-click’ WP install – no tech knowhow necessary!

Some great out of the box plugins for WordPress exist like WP-KnowledgeBase, which allows you to quickly set up an internal website that is searchable and easily organizable. If you don’t mind something less-free, Heroic is a great option with support that we personally leveraged to get off the ground quickly.

Image Elevator for Property Managers

Combine a great knowledge base WP plugin with another great plugin like Image Elevator, and now those of you using modern browsers can literally copy and paste images directly into your WP support article without having to stop and manually upload images each time you want to insert an image in the process.

Why a WordPress site you may ask? For us, it all comes down to doing away with big binders full of paper that are tied to a Word Doc somewhere that needs to be updated every time a change in the process happens or an error gets found.

 

Creating a sample process

Vacation Rental Excitement

Using the approach outlined above, creating a process in WordPress is extremely simple and not time intensive at all.

Example: Creating A Process For Lock Codes On Front Door

If you are using an electronic door lock system like Kaba, a common process for your team is to generate door codes for guests, vendors, fire inspectors, etc. on-demand.

Using this scenario as an example, this is how we would create a process for this in our new WordPress powered, available on the go, mobile-friendly, business processes & procedures system:

Step one – Go to that web address and login. (WordPress benefit → it’s a clickable link).

Smoky Mountain Property Management Process

Step two – Some screen shot action with an arrow of what to click (SnagIt to the rescue!)

Smoky Mountain Property Management Process

Step Three – More screenshot goodness and some instructions.

Smoky Mountain Property Management Process

Step Four – More of the same, but notice how every single action has its own step? This goes back to my previous point – a good process should assume nothing outside itself.

Smoky Mountain Property Management Process

Step Five - Did I mention how easy SnagIt makes it? If I could marry a piece of software, this one would be on my short list.

Smoky Mountain Property Management Process

Step Six – Just some ordinary, yet crucial, information. We could have easily skipped to the next step and let the user figure it out, but effective processes remove the element of doubt for the user improving both quality and efficiency.

Smoky Mountain Property Management Process

Step Seven - “Note:” sections can be a great educational tool for your staff members as well. Sure it’s not significant to understand why the time stamp looks like it does, but part of developing your team is giving them a broader understanding of the tools they’re using.

Smoky Mountain Property Management Process

Step Eight - We’re almost home!

Smoky Mountain Property Management Process

Step Nine - Profit!

Obviously all of this wouldn’t be broken up like this in your system. The end result would actually be all together, require some scrolling, and ultimately look something like this:

Smoky Mountain Property Management Process

Final Considerations

A note on organization

Vacation Rental Spock

As you’re creating this vast portfolio of processes and procedures, organizing them is going to be crucially important in order for them to reap maximum reward for your business.

Our general recommendation and what has been highly successful for us is to organize all business processes under the business function or business area they most directly serve. There will of course always be overlap, but in general, this should be a good structure for any PM.

Practically, that leaves us with our processes organized for example as, “Reservations”, “Accounting”, “Maintenance”, “Guest Services”, “IT”, etc. and so on.

A note on effectiveness

Like any good tool, a tool is only as effective as the person wielding said tool. To that end, here are some do’s and don’t’s that will help your processes and procedures be as successful as possible:

Do: Document every process for a task you would ever need to train an employee how to do.

Don’t: Try to create every process all at once. Instead, create them as you go and as they’re needed.

Do: Enforce documented processes as the first go-to resource for employees.

Don’t: Allow employees to come to you and ask you questions that are answered in the Knowledge Base. Unless it’s a true emergency, always point them back to the process and then ask them to let you know if they have questions.

Do: Encourage feedback and input to the processes that have been created from your staff. For trustworthy employees, encourage them to create processes that don’t exist but are needed.

Don’t: Create a process silo where you are the only person allowed to devise, create, and/or update processes. Ultimately it will not be you doing each task every day as you grow meaning your staff will actually be the resident expert, not you. Putting yourself in this role also slows down growth, damages quality, and stunts employee effectiveness.

Do: Include notes and subtexts about “normative truths”. This means, if there are options, but it’s normally ‘A’ and not ‘C’, educate the employee about this broader reality of the business.

Don’t: Put as little helpful information as possible in your process and invest little to no time in developing your staff’s global understanding of your business.

Wrapping Up

Vacation Rental Success

If you made it this far, then congrats! you did it! You’ve got the basic skills required to start creating business processes and procedures for fun and profit.

Our brand is undoubtedly 5-10 times more valuable with our ever-growing library of well documented business processes in place than it was before. We are doing the same tasks, but we’re systematically accomplishing the exact same brand goals and most importantly, the executive team could walk away tomorrow and the business could survive (and thrive!)

There are plenty of smarter people than me writing about this topic on the internet and in books that are great resources to consider as you continue your journey of building a top-notch, best-in-class property management agency…

But if you have any questions or feedback, feel free to use the comments area below and I’ll respond gladly.

Matt’s Takeaways

Thanks Wes for such thorough insight. I can tell you are really good at processes from reading your writing about your processes! The main points I gleaned from your wisdom are as follows:

  • Processes may not offer an immediate return on investment the way marketing does, but they do dramatically increase the overall value of your VR business
  • If you’re stuck doing menial or repetitive tasks, the sooner you can begin building processes into your business, the more valuable your “time per hour” becomes
  • Good processes reduce stress, eliminate grey areas, and give you “something to cling to” when things get kray kray
  • The VRMA Europe conference is taking place in Barcelona but this post is as good as anything you’ll find to help your PM firm scale

Thanks again to Wes and if anyone has questions or comments, feel free to use the comments area below where Wes is available for feedback or just adulation :)

  • Joanna Desseaux

    this is a message of adulation :O)
    Thank you very much for this very detailed and intelligent post.
    I have been running my VR business since 5 years now (13 aptmts in montreal) and am still a dinosaur working with excell spreadsheets (looking since a year at PMS and trying to find the one suiting my needs, that’s how i ended up on this blog) and a myriad of repetitive tasks. training a new employee takes months. i am realising how important this is to get a life. thank you very MUCH for taking the time to write it down and sharing your knowledge.
    I have checked out your website and am verry impressed. I still have a long road to the professionnalism and excellence of your company. congrats.
    i am very appreciative and impressed!
    let me know if you ever come to montreal, it would be a pleasure to chat and you could stay in exchange in one of my apartments for free.

    Joanna
    http://www.homeinmontreal.com