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Maximizing Business Assets: Unlocking the Power of Property Management

This comprehensive guide reveals the vast potential of efficient property use for boosting business profitability. Learn how integrating property management into corporate strategy can save costs, release capital, and drive growth. Discover practical solutions and valuable insights for SME's to optimize their property assets effectively.

robert-pickett
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Maximizing Business Assets: Unlocking the Power of Property Management

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  1. PROPERTY ASSETSAssets you cannot afford to waste! Robert Chapman Robert Chapman & Company 12th February 2004

  2. Property:the Cinderella of business strategy • UK commercial property worth £400 Billion • Property and construction contribute 12% of GDP • Property represents 34% of total business assets • Second highest cost after salaries • Welsh businesses waste £1 Bn annually (UK £18 Bn) through inefficient use of property • Putting this right would boost gross profits by 13% Source: Property in Business: A Waste of Space? Roger Bootle, Capital Economics

  3. The Wasted billions:what goes wrong? • Few companies integrate property into corporate strategy • Not using property as an enabler for business objectives • Virtually no chartered surveyors on boards of major non-property companies • 1 in 4 blue chips had not even discussed property at Board level in three years (Boardroom blindness) • “Dark properties” – many don’t even know what they own • Owner-occupiers see property as “free” and waste space

  4. Missed Opportunities • Sale and leaseback could release capital to invest/reduce debt • Surplus space could be sold or sublet • Hot desking/tele-working can save money and attract staff - and save £6.5 Bn • A 10% reduction in FM costs is feasible and would save UK businesses £1.3 Bn a year • Owner-occupiers should emulate tenants, using 12% less space per employee, saving £9.5 Bn • Rates appeals could save £300m a year

  5. Relevance to SME’s: context • Entrepreneurship Action Plan Create culture and environment • SME’s represent 99.9% of 3.7M businesses • In Wales: 99.9% of 144,000 businesses are SME’s with approx. 76,000 VAT registered • New firms important for job creation:20% grow to 5 EE’s; only 2% grow to 50 EE’s • Research shows that 66% of SME’s in Wales have plans to grow Source:Small Business Service National Omnibus Survey Wales Autumn ‘02

  6. SME’s and Property • Property issues are low on the SME senior management agenda across all sectors • Property ownership has both costs (opportunity costs) and benefits • Property ties up large amounts of financial capital – money that could be more productively employed elsewhere • Managing property also ties up managerial time – its an SME problem Source: SFRU

  7. Important constraints ongrowth(Source: SFRU)

  8. SME’S – property solution checklist • Finding the right premises: it’s a jungle out there! • Buy or lease? • Building survey • Insurance: getting the right level of cover • Rates: possible reduction • Service charges: are you paying too much? • Rent reviews / lease renewals: what to do? • Construction and alterations:manage cost, time & quality • Planning:guidance through the maize • Sales, assignments, sublettings: exploring flexibility • Dilapidations: keeping the final bill down • Tax allowances: not a lot of people know that

  9. SME’S – property solution checklist • Millcroft Design Adco Print

  10. SME’s – property solution checklist • On Screen Productions Omnia Property

  11. Tackling Property IssuesWhat should senior managers consider? • Corporate strategy and vision • Strategic fall-back plan • Financial possibilities & constraints • Details on current use of property • Future accommodation requirements • Ideas about FM and EFC • Knowledge of the property market

  12. Business and property: the way forward • Property needs to be put on the agenda – not considered as an afterthought • Good leaders ‘do better things’ • Business education: MBA’s; business studies degrees etc • Not someone’s problem! • Know what you don’t know • Integrate into business planning • Not rocket science but increasingly complex

  13. Business and Property:Conclusion • It is important to seek good advice on those aspects of property that are not within the normal skills base of an SME manager • Remember the opportunity cost • …………..repent at leisure!!!!

  14. PROPERTY: the missing link • Thank you for your attention • Property Solutions: www.rics.org • www.rchapmanandco.com • Robert Chapman & Company • robert@rchapmanandco.com

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