PM Collective - The ART of property management
The ART of property management with Ashleigh Goodchild is a leading platform supporting collaboration not competition through an online community and events throughout the year with one purpose: to create happier property managers. She creates connections for property managers looking to create momentum in their careers and personal life. Join Ashleigh and her guests as they discuss challenges, struggles, mental health, mindset and give advice to property managers and anyone in the industry. To get the support in your property management career, join our PM Collective Facebook and Instagram community.
PM Collective - The ART of property management
Agency Structure, Growth & Scale
Unlock the secrets to a thriving real estate business with Kristen Porter, the energetic founder of O*NO Legal. Kristen's unique journey of launching a virtual law firm amidst the global pandemic has equipped her with invaluable insights that she now shares with real estate agency owners. From establishing robust business foundations to planning for future growth, Kristen's expertise is complemented by her exciting collaboration with Sherry Storer for an upcoming masterclass. This episode promises to deliver essential legal insights and innovative growth strategies tailored for today's competitive landscape.
Prepare to rethink the future of your business as we discuss overlooked yet critical topics like business succession and estate planning. Discover why these documents require regular updates to align personal and business goals and how insurance can mitigate the loss of a partner. Kristen sheds light on the power of Enterprise Business Units (EBUs), a groundbreaking way to foster employee growth while ensuring the company's expansion. With practical advice on scaling a business, building effective teams, and embracing innovation
Sherrie Storor | The Principal's Masterclass | Agency Structure, Growth + Scale
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Today our guest is Kristen Porter, and she is from, oh no, legal, and I'm sure everybody knows you, but for those that don't, can you actually give us a little bit of a rundown about what you do and how you do it?
Speaker 2:Well, first, thanks for having me, ash. It's always great to have a chat with you and, um, I always love coming to to perth and how coffee catch-ups. But, um, for those that don't know me, um, I'm the principal and founder of ono legal and we're known as the real estate agents lawyers. We help real estate agency owners shield their assets, future-proof their relationships, expand faster and plan their exit. And the reason that I just love the real estate industry so much is because I'm third generation real estate. My grandfather started our family agency in regional New South Wales. It was 52 years ago and actually the family business sold last year, which is quite bizarre to not see the branding around my hometown anymore. But more recently I've actually opened an agency with my sister in Brisbane. So, yeah, entire family real estate agents. I was sent off to uni to do law, which I've been absolutely loving. But yeah, you just I think once you're in the real estate industry, you don't want to leave it.
Speaker 1:Yeah, do you know a funny story and I don't think one of my property managers is going to listen to this podcast, so I'm just going to say it here but she has had one of her kids that has actually chosen to go into real estate as well, and it's one of those funny things you know, you're one way or the other. As a parent, like I'm proud, like if my kids are going to real estate, I'd be so proud, but there's definitely people out there that would be like I don't want my children to get into real estate, I want them to be a lawyer, which is, I'm sure, you made one of your parents happy going down that road, even if it was a short time.
Speaker 2:Yeah, I'm pretty sure mum always wanted to be a lawyer herself and you know she's always talked about going to conveyancing and those sorts of things. But she loves real estate and she's very, very good at it.
Speaker 1:It's a very easy industry to love and I do love that about Ono Legal. So how long have you been, how long have you had this business for?
Speaker 2:Oh, about four years now. So you know it was a COVID baby launched during COVID. Nellie didn't, because, well, we all thought the whole world was going to end, but COVID really for us. I suppose before that everyone wanted to see their advisors in person in a bricks and mortar office, whereas we're an online virtual firm and I think people are now used to seeing their advisors on Zoom and even my local clients say to me do I have to come to the office? We just jump on zoom.
Speaker 1:So you know, we, we make it quite easy and we like to be accessible yeah, no, it's great and and the, the brand and what you guys are doing in the industry is great because it's not your traditional boring, you know law firm, it's um, it's like well, from a public, you know from the public, it's it's creative, it's personal, from a public, you know from the public, it's creative, it's personal, it's real estate relevant and it's very interactive with us as an industry, which I think is such a niche, and it's really great to have you in the industry as well. We're very lucky. So thank you for that. And those that don't know, own A Legal, go over and have a look at their website as well, because there's so much information on there. You know there's templates and bits and pieces, so I'll get Kristen to do a bit of a plug for that later on.
Speaker 1:But what we were going to talk about is and we've done a bit in this space before which is sort of around that scale and succession planning and really making sure businesses are set up really well. And I know you've got a masterclass coming up with Sherry Storer and a new program out which is a bit of a one of a kind for the industry, which is very exciting because there's a big lack of training and upskilling with business owners. And I was actually talking to Sherry about this the other day, saying I love upskilling with business owners, and I was actually talking to Sherry about this the other day saying, you know, I love upskilling property managers, I love upskilling BDMs, and what you guys are doing is upskilling principals and upskilling business owners in that space. Because the truth is, when you get into business, you sort of you don't know what to do. Sometimes you just do have to wing it quite a bit.
Speaker 1:So to have courses, programs, support in that area to make sure that you have got a really good, strong business is so important and definitely something that we, you know, push to the side a little bit. While we're so active in lead generation and bringing money into the business, where we're so hyper-focused, aren't we on that type of work, that we're not really looking at the foundations, and not only the foundations but the actual end goal, which is why we're in business as well. So can you share with me a little bit about the masterclass that you've got coming up and I'll make sure there's a link on this podcast as well if you're interested in joining but just give us a bit of an idea about what this one's about.
Speaker 2:Yeah, so it's about 18 months in the making. Sherry and I have been talking about this for a while, because we noticed, over a glass of wine, as you do and a few cocktails, that the problems that my clients were having, sherry's clients were having, and we decided that, instead of just attacking it either from the legal point of view or the growth point of view, we'd come together to provide a solution that was holistic. And so this free masterclass that we've put together is really around agency structure, growth and scale, because, like you mentioned, we do often and I'm guilty of this too we look at our leads, we look at our revenue, we look at our dollar productive tasks, but we don't often look at do we have the right structure? Are we ready for that next growth spurt? Will our client experience experience suffer? Is my team structured correctly? You know, do I actually need to be building an EBU? There's so many different options around that, and so that's why Sherry and I've teamed up to bring this masterclass to the industry.
Speaker 2:Because another thing I've found and you probably found these too, ash is in law and in real estate, we're taught to be good lawyers, we're taught to be good salespeople, we're taught to be good property managers or BDMs, and when you're good at that job, often you might be promoted into partnership or asked to become a shareholder or you go and start your own business. But we're not necessarily trained to be good business owners and we have to just wear so many hats, and it's why I always have a business coach. I'm always learning Don't pretend to know everything and just surrounding yourself with the right people. And we really saw that there's just a lack of training for agency owners, for principals. There's so much out there for frontline staff and that's absolutely fantastic. But that's why we put this together to really help upskill our agency principals and just make sure that they're protected and that they're ready for that next growth spurt, and we can help them with that.
Speaker 1:So one thing that I notice in my community is that there's a lot of business owners and you might be listening where you are a solopreneur, so it's just you in the business and in your mind you are thinking that you are going to, I'm just going to have 50 properties or 100 properties and it's just going to be me and I don't need to worry about that. Is there a need for the solopreneur people to be involved and understand all of this foundation work, or is it more for those bigger agencies that have got big teams?
Speaker 2:Both and I was having this conversation with a solopreneur the other day around. What happens if you get hit by a bus? What happens if you can't work anymore? What's going to happen to your business or what's going to happen to that nest egg? Because we know that the rent roll is the valuable asset and if there's not someone there to look after it, where does that go? Will your wealth that you've been trying to build evaporate? So I think it's actually even more important for the solopreneurs to also give them insight into how the bigger people are doing it and options out there for them, but really making sure they're protected and they've got their backup plan in place.
Speaker 1:Yeah, and you and I've just been through this where I recently approached you because we've had the business for nearly 20 years and we have been always pretty good with the, you know, the paperwork side and we've had the insurance and things like that. But after 20 years, we actually were, we actually were renewing our insurance and as the business value has increased and hold on, let me just quickly disclaim that this is no financial or insurance advice either. Um, this is my experience instead of what I've had. What's happened in my business. So we got to a stage where the business has grown so much and the insurance, when we've had this all reassessed, we are not sure whether it's really viable for us to continue with our insurance. So we were making decisions around that and at that time we also took the opportunity to go back and look at our shareholder agreement and our succession deed and things like that, and we hadn't done that for probably I think it was 2010. So what's that?
Speaker 1:14 years ago that we had that all written up and we went through it and I was like, oh my gosh, this is quite out of date. This is actually not where we both are mentally or from a business point of view this is not, and both of us agreed that we, you know, felt that this was needed to be updated and so we came to you and sort of said this is what we've got, this is what we want. We've had this verbal agreement that we're happy, in the event of one of us dying or, you know, having significant, you know, medical conditions, that this would be what we do. So we've had it all updated. But it definitely got me thinking that there are people out there that do not do that on a regular basis.
Speaker 1:Now, 14 years, I think, is a bit long. I think five years maybe, like every five years might be, I don't know too common, but really I mean in my mind I'm thinking between five and seven years, like if you haven't looked at it or updated it within five to seven years, it might be a really good opportunity to, number one, get on the masterclass, but number two, reach out to you. It might be a really good opportunity to, number one, get on the masterclass, but number two, reach out to you. Are you seeing that people are reassessing that paperwork more frequently, like, what does that look like?
Speaker 2:Yeah, I think a lot of people haven't even done the paperwork and the insurance that Ash is talking about here is, you know, in the event that someone does die or is totally and permanently disabled, there's actually insurance that can fund the buyout of your business partner. And I mean not only can it become cost prohibitive, like you're saying, ash, as your business grows, but also as we get older, it's harder and more expensive to get that insurance. And so a lot of people one, they don't even know there's insurance to fund these things. But, two, just a lot of people just don't have their shareholders agreement or their succession deed in place at all. So what I do find is those that are proactive and do have it.
Speaker 2:It sits in the bottom drawer, yeah, and it doesn't get looked at again.
Speaker 2:But, like you said, like every five material change in the business that it's suddenly bigger, or you might be wanting to bring in a new business partner, or has there been a life event, have one of you got divorced, like? Has someone you know? Has something else happened in the business? So I always recommend looking at that in parallel with when you're actually looking at your own personal wills and powers of attorney as well, because they should be updated regularly and they need to reflect what's in your personal like. Your personal estate planning needs to align with your business planning, because sometimes it doesn't quite align and you have one lawyer that does one and one that does the other, and what can happen in that instance is when someone does die, obviously the family or the estate just wants their money generally and you probably don't want to be in business with your business partner's spouse or children, um, so it's really important to make sure that all lines up yeah, I was just having a chuckle because you said you know just when you're doing your, your will and your family business.
Speaker 1:Like I can tell you right now, kristin, people are not doing that either. I know.
Speaker 2:I know it's been on my list for a year to update my will as well, so I totally understand I know, mine totally needs updating as well.
Speaker 1:Isn't that funny? Like it's like the most important things, like the one that we're talking about for business and your will, the most important thing that you could possibly do, and we just don't treat it like a priority?
Speaker 2:No, because we're focused on paying payroll, you know, recruiting because we've got turnover, like we've got so many other distractions and I get it like I'm the same we want to. You know, with the cost of everything going up, we're looking at our subscriptions. How do we cut them down?
Speaker 1:how do we get more revenue?
Speaker 2:in. So totally understand, but and and these things. Let's be honest, they're not sexy. It's not like the cool new app that you can help make your business run smoother. It's none of that. I'm not going to pretend it it's something. It's not, but it is. It's so important.
Speaker 1:They come with a ridiculous, ridiculous cost, but they come with a ridiculous, ridiculous cost. They come with a significant cost and the timing of just spending the money on something that's like not going to benefit me right now is like also the the issue, isn't it?
Speaker 2:oh yeah, absolutely, especially when things are a bit tight.
Speaker 1:I know Christmas is coming up and the whole, but anyway, that's a whole another story. But this is if, when you're listening to this, this is your reminder, stick it on your to-do list, check your will and review your business.
Speaker 1:If you do have a business succession plan and if you don't, absolutely, I'd be booking in a phone call with you to be sorting that out and having a look at what you need. Now can you just touch a little bit, because I was a little bit confused at sort of what types of things you'll be talking about when you talked about scale. So are you talking about scale with like staff and scale with the business and revenue? What's that referring to?
Speaker 2:Yeah. So it's making sure, really, that we've got the structures in place to be ready to scale and some strategies around scaling. So it's not we're not talking about lead generation. We're not talking about that. We're talking about making sure your team is structured correctly and we're going to be going through different ways you can do that. We will be going into a fair bit of detail about building EBUs. For those that don't know what EBBU stands, for can you explain that?
Speaker 2:Yeah, enterprise Business Unit or Effective Business Unit the two are used interchangeably. It's essentially a business within your business. So you might have a gun agent or a gun PM in your business and maybe they do want to start building something valuable of their own, or they do want their own business but they don't want to leave, or you don't want them to leave. They operate under your framework, they operate under your brand and use your systems, but essentially they're building their own little business or their own little empire within yours. And what is really good about building EBUs for scale is that you can pretty quickly grow and expand your business without a huge amount of capital outlay, because these people they're creating their own business and they have their own business expenses, just like you do, but theirs are theirs, and then you have a profit share arrangement, essentially.
Speaker 1:So I have heard about that in the sales market. Are you seeing it in property management space as well?
Speaker 2:Yeah, it's starting to pop up a lot more in property management. Actually, in the last probably about six weeks, we've set up two EBUs in property management and two different types of arrangements. So one we did again for some people in Perth as well. They wanted to have a equity and profit share arrangement with their senior property manager, but they didn't want to necessarily give up control or give away shares in the company. So it's a separate agreement that says okay, for the managements you bring in, you're going to own a percentage of that rent roll, not the whole business, just the ones that you bring in, and then you manage and we'll have a profit share arrangement around that.
Speaker 2:Now, when you're not issuing shares and you are having this cool kind of side arrangement, what becomes really, really important is tracking Really tracking which properties belong then in which portfolio or which EBU. Without the tracking, you will end up with fights, and because often we're using these strategies for retention reasons, we definitely don't want to be having any fights. We want to make sure that they're happy, that they want to stay, and you know we're helping them build an asset for their future as well so interesting.
Speaker 1:So ultimately, the business owner owns the business and they could potentially sell that business whenever they wish to anyway, and that's all fine. So we're just talking about that profit share and that trail and that little bonus inside. That is a very interesting space. We're not going to talk about that anymore right now because I feel like number one that will be a good one, specifically because I have a lot of property managers that listen to this. It would be a very interesting one to jump onto that masterclass and listen to. But I would actually love to do another whole podcast on that, because that is very interesting and I think we've done things with the same for so long.
Speaker 1:We have to expose ourselves to these different, new, modern ways that people are doing in their business, because I have seen a couple of agencies recently and it's so sad to see where you've got an older gentleman traditionally.
Speaker 1:These are the ones that I'm stories I've heard where they have had their business for 30, 40, maybe 50 years and they've had a good, strong business always and they've had, you know, been lucky to have some good, strong sales rep and property managers and then one of them's left and then, when one leaves, more of them leave, and I've seen one person actually lose his whole portfolio and his whole team when he was only probably, you know a year away from wanting to retire and sell his business, and I just thought you know what I feel for him.
Speaker 1:That's a really, really terrible, sad place for someone like that who's built such a great legacy, and it was because they didn't move with the times and they didn't stay up to date with what the industry is doing. So it's really something that I'm very passionate about staying up to date with what your competitors and what other people are doing, because if you don't I always say if you don't stay up to date, you might as well go backwards. So there's no point. I mean, sorry, if you're going to stand still, you might as well go backwards, because the world's moving pretty quickly.
Speaker 2:Yeah, and you hit the nail on the head, like if we know that attraction of staff and retention of staff is a massive, massive issue in the industry, and if your competitors are offering these cool, innovative arrangements to entice your people away, then you know you're going to have, you're going to struggle. So it's not only keeping up with the times, but it's also being like, okay, well, what can I do? That's just different, to even get ahead of my competitors.
Speaker 1:Yeah, totally. So. Last week I did a podcast with so the previous episode to this one, if you want to go back and listen to it, is with Deb Gidman, and it was about how can larger teams still have a personal service, and it was something that we were talking about. So this from a scale point of view, head over and listen to that guys, because it's also something that we found quite interesting. If you are scaling, it is still possible to have that personal service and not lose that base and foundation that you want to create. I believe you can have both. There'll be some people that say, no, you can't, but I think you can have both, and Deb and I actually talked about different ways to scale but still remain, still make the client feel that you know they're important, and in a smaller agency. So there's lots of good conversations around that. And what was the third piece of the masterclass?
Speaker 2:uh, structure, growth and scale. So, um, yeah, I think sherry will be diving into a little bit more detail on the the growth side. She's definitely the the guru on that. Um, and the scale is more like we said, setting up the right structures to make sure that in place, we will also be touching on you know when, when you should be using the organic rent roll growth strategy versus when you should be thinking about acquiring. So that's the part that I'll be talking about for the scale side.
Speaker 1:That'll be interesting, it's expanding faster. That'll be super interesting.
Speaker 2:Yeah, and, honestly, the people I talk to that really have the best agencies. They're using both organic and acquisition and in this market, especially at the moment, the acquisition strategy is working really well. Working really well. And I mean part of the reason you know, sherry, and I really started looking at this is you've probably seen the data that's been coming out of a lot of the different reports from the different banks about how many principals are looking to exit in the next couple of years. And it's not for retirement reasons necessarily, it's shrinking profits, it's all these sorts of things.
Speaker 2:And if those reports are accurate and that many agency principals are looking to exit at the same time and they don't have a formal succession plan in place and they think, oh well, when I'm ready to sell, there'll be someone to buy, there will be a flood of rent rolls on the market and we know what happens when supply outstrips demand. We don't want to see multiples and the value of these rent rolls falling just because a lot has hit the market at the same time. So that's another reason why we put this together to help agency principals, with our actual program that we'll be launching later in the year, really get the succession plan in place to really understand the different types of exit mechanisms available. To have that real plan in place to make sure that you get that maximum value when you do exit, so you don't end up like the gentleman that you've just spoken about.
Speaker 1:Yeah, that was so important.
Speaker 1:So I know that this is something that I keep in mind and I'm going to repeat it so that those listening also can keep this in mind is that we have had a flood of investors coming over. They've all come in one big hit and they are going to leave as quickly as they came. They came in in one wave, they're going to leave in a wave and I'm very conscious of that and I have strategies in place to really try and make sure that these clients' investment properties are super financial for them. I want them to hold on to them long term and I always say that my sole purpose is getting landlords to keep their property with me for as long as possible. So I need to make sure that it's headache free, it's financial, it's super easy for them to hold on to, because I don't want them flooding out as quickly as they came in, because that's going to be detrimental to the business and the cycle of investors because we see so many interstate investors. The same cycles happened all around same in Queensland, you know.
Speaker 1:Here now everyone's flocking to Melbourne so it's fine to have that great growth and take advantage of it, but making sure you know, like you're sort of saying with making sure you've got a plan in place to keep that in mind, like you don't own your clients, they can go at any time. You could lose your business, just like that. So it's just I can't stress enough how important it is to get timings of things right and really be moving forward, because people will, people will get caught out. I am positive, you know it'll be very, very interesting in the next three years, I think, where the agencies are all sitting and, yeah, it's going to be very clear who are the better run agencies versus the ones that had an ego and thought they had it all sorted Well.
Speaker 2:Even at the moment, a lot of agency principals principals we're talking- to, and maybe the ones that had an ego and thought they had it all sorted. Well, even at the moment, a lot of agency principals we're talking to, and maybe it's states other than Western Australia, but Victoria is certainly being affected quite badly. They're putting managements on left, right and centre, but it's not ahead of the churn. Yeah, you know, investors are leaving markets where there's massive residential tenancy reform because it's making it harder for owners and they're just going oh, stop this, I'm out. And so even some of the best agencies and the best BDMs. They just cannot keep up with the churn to keep the rent roll stable.
Speaker 1:Yeah, very, very interesting space. Can you just quickly finish off with letting me know what people can access on your website, like what do you have also available for clients?
Speaker 2:We have a lot of free resources on our website. We have checklists and super guides, especially in relation to buying, same rent rolls and privacy contractor arrangements. We've got free webinars on demand on the website as well. Now, separately, obviously, we're a full service law firm and we can help you on a custom basis, but what we have done is created an online template store where you can instead of having the expensive legal fees of us doing everything for you, there's guided DIY options where you can actually purchase templates, say for privacy, employment law, referrals, all of those sorts of things, and you get instructional videos of how to complete the templates.
Speaker 2:Because I don't believe in just selling templates and sending people on their merry way. I really want to make sure that you can actually understand how to use it. And, of course, we've got our booking portals online. You can just book straight into our diaries. We don't have reception gatekeepers. We've got free 10-minute chats Just if you wanted to see what services we had an offer and if we can help you with a certain problem, and we've got our slice of advice, which we created, which is just a one-off consultation you can book in through the website. There's no obligation to engage us for anything further, but sometimes you just need to have that chat or that quick piece of advice.
Speaker 1:Love it. Slice of advice. Is that actually what it's called? Yeah, it's just called a slice of advice. Not bad, love it, excellent. Well, thank you so much for coming on today. It was really always great chatting with you and really looking forward to the masterclass. So it is going to be the Masterclass for Sales and Property Management Principles who want to unchain themselves from their business, scale their teams and expand faster. I don't know anyone that that's not going to suit. So I expect there to be lots of people jumping on for that webinar. So I'll make sure that those details are on the show notes and they are also on the PM Collective socials as well. So I'll see you all in there. Look forward to finding out a lot more. Specifically for me, those EVUs and property management Super curious, so I can't wait to hear a little bit more about them as well. So that's it from us. We'll see you next week. Thank you so much, kristen. Thanks for having me, ash.