Navigating market shifts & making hard decisions in business.

Yesterday I shared a video, explaining the current state of one of my businesses, Tall Poppy Real Estate. 

I’d like to acknowledge that the past few months have been a challenge for everyone. I see my team as my family. I genuinely care about how they’re doing and what’s going on in their life outside of the office. Knowing that this restructure has changed lives where people have to consider their future, families, mortgages and bills on the line has made it even more of a traumatic process. 

One of the most important pieces of advice I have is to make sure that you have an emotionally good attitude to support people through structural change like this - it is critical for a well run business. We have found the Employee Assistance Programme (EAP) to be the most valuable tool during this time and for reasons that you may not realise as a business owner. 

The market shifts that led us here have been going on for the last 18 months. In the real estate industry, we’ve had some really challenging conditions following a very good market. Initially, we forecast for a 30% drop, however the biggest issue we faced was inconsistent cash flow, where some weeks we saw up to a 50% drop in the market. 

The nature of the cash flow meant we had to make massive changes in two key areas. 

1. A full review of our revenue streams, which led to a full commission and offer restructure, which is more competitive in our market. 

This has resulted in an even better offer than the one we had before, for both our agents and customers.

A few key questions to ask yourself are:

• Where is my business sitting in the market?
• What is our offer? 
• What do our competitors offer?
• Are we correctly positioned?

For us, the answer to the last question was no. Our model was surprisingly too cheap for an offer that is by far one of the best in the market, people weren’t taking us seriously because of this. As a result, we improved our offer and reviewed the fee structure to still be more affordable, but competitive against other agencies.

2. A full review of major costs, including large tech investments and staffing. 

Major tech investments have been delayed for now, which I believe gives us time to look at how future investments align with Tall Poppy’s strategic ambitions. The full restructuring process of staff resulted in 15 roles being altered and 11 redundancies being made. Aligning key roles with the future requirements of Tall Poppy. 

Key things to consider:

• Look at how you can manage the costs. Look towards the future.
• What are your major investments - can these be delayed or reviewed?
• What does your revenue model look like in the future for where the market’s sitting?
• How do you manage the overall costs, & major costs such as staffing, travel and resourcing for the business. 

Sometimes you have to look your business in the eye and make the hard decisions to ensure longevity. Upon reflection, these changes were all required in the first place, but it’s taken a long few torturous and difficult months for me to see this.

Make sure that you have a clear strategy before you make any cuts. Be clear about where you’re going to end up and how you’re going to get there.