At the recent Best Practices for Real Estate 2015 Seminar, Mr. Mark Edghill delivered a presentation on Real Estate Protocol and Business Practices in which he outlined a number of Best Practices in running your Real Estate Business. The overarching theme was ‘Your Real Estate Practice must be run as a Business with all proper Business Protocols’.
In this article we will highlight the first two sub-topics he dealt with:
- Managing your Records
- Proper Financial Management
Manage your Records
Modern day Social Science sometimes suggest that one views a business organization as a living organism. This is a very apt description because like an organism, it is living. A business organization is living in the sense that it is made up of people, who hopefully are alive, and who carry out various tasks, interact with each other and adapt to the external environment.
And like every living organization, it therefore needs to have a proper internal information system. The human body communicates with its various parts through the nervous and circulatory system, ensuring proper health and growth, and similarly a business remains healthy and grows by communicating with its various parts through its management information system.
Integral to every management information system is ‘Records of all Transactions’. These records referred to by Mr. Edghill as ‘Manage your Records’ are the capture of each business transaction, between which parties, which date and of what value. Typical transactions are purchases, sales, receipts of cash or cheques, banking and human resource actions such as payroll.
The more timely, accurate and easily accessed are these records, the better they can be analyzed and acted upon. To continue with our analogy, these records are like the information the brain receives from the five senses of sight, hearing, touch, taste and smell. When these senses and their information are properly gathered and analyzed, the brain makes good decisions for health and growth.
Similarly, accurate business records and their proper analysis enables the management of a business to make decisions that would keep the business healthy and growing. So let us follow Mr. Edghill’s advice and capture, record and manage all business transactions.
Proper Financial Management
Closely associated with Managing Records is Mr. Edghill’s second piece of advice, ‘Proper Financial Management’. This deals with i) Planning the proper use of financial resources through the use of Budgets, ii) Obtaining, Organizing and Allocating financial resources to implement budgets, iii) Directing the timeliness and accuracy of carrying out financial transactions, iv) Measuring the results of these financial transactions and v) Taking decisions to control variations, where they occur.
Like ‘Managing your Records’, ‘Proper Financial Management’ is the lifeblood of a successful Real Estate Business Practice. It ensures that scarce ‘Financial Assets’ are utilized in the best possible manner to realize the health and growth of your Real Estate Practice.
Without Proper Financial Management, a business is at risk of running out of ‘Financial Resources’ when needed of using them for actions that do not promote the healthy growth of the organization.
In the next article, we will deal with another two of Mr. Edghill’s Best Business Practices.