The past year has forced many entrepreneurs and business owners to review their offerings in the light of constant change and economic uncertainty. Few industries have felt the impact of COVID-19 more than construction and development.
Although the government allowed construction sites to remain open even during the strictest lockdown in March 2020, the major housebuilders chose to shut down operations to keep workers safe. Supply chain problems have exacerbated the delay in starting new projects and completing existing ones.
So, what does 2021 hold in store for property developers? The rollout of vaccines offers hope for a gradual easing of restrictions over the coming months but it will be some time before life and business return to “normal” if this ever happens. If you need a little inspiration on surviving the recession, check out our seven property development steps to success in 2021.
1. Establish A Plan B
If 2020 taught business owners anything, it was to expect and plan for the unexpected. In a world of continuous change, developers must step up their budget monitoring processes and establish an emergency management strategy.
If red flags are raised as soon as a potential issue or crisis arises, you’ll stand a better chance of finding a satisfactory solution and keeping development plans on track. Cut unnecessary costs and renegotiate with suppliers to keep overheads low. Isolate risks and, if necessary, cash-out projects that the budget won’t stretch to or are no longer financially viable.
2. Make It Easy For People To Buy From You
First-time buyers (FTBs) previously dominated the housing market but low-deposit mortgage deals have almost disappeared since the start of the pandemic, forcing FTBs to postpone or abandon their house-buying plans.
In contrast, repeated lockdowns, the government edict to “stay at home” where possible, and a rise in remote-working have encouraged homeowners to reconsider their lifestyles and seek out properties with more space. Movers are now more likely to buy than first-time buyers.
However, the property market is predicted to slow down, making it difficult for homeowners to sell their existing property and buy a new-build from your development. Offering a house part-exchange scheme can remove this barrier to a sale and speed up the process allowing you to hit project milestones and your customer to avoid the stress of an on-market sale.
3. Get Networking
Developers who have established constructive relationships with suppliers, local land agents, estate agents and home stagers will be well-positioned to seize a healthy share of the diminished pool of house buyers if demand drops as predicted this year.
Use the time while projects are on hold or stalled to reach out to relevant contacts — new and existing — to solidify these relationships. Your return on investment (ROI) will be significantly better if you have a reliable network to call upon when things pick up or new challenges arise.
4. Don’t Neglect Your Team
When profits are falling and the budget is stretched, it can be easy to overlook employee wellbeing and development. However, a business’s people are its most valuable asset. Investing in your team now will save you time and money in the long-run.
A healthy, motivated, and engaged employee is more likely to deliver exceptional performance and less likely to take sick leave resulting in a healthier bottom line for your business. Maintain open lines of communication and be honest about future business plans — many people will be concerned about the security of their jobs and keeping them in the dark won’t help.
5. Keep Up-To-Date With Changes In The Market
This may sound like a no-brainer but keeping up to date with changes in the market and monitoring the evolving economic situation will help you plan and adapt development projects to maintain a healthy profit margin.
Keep an eye on changes that could affect your supply chain indirectly as well as those which will have an immediate impact on your business. Developers who keep their fingers on the pulse, adopt agile ways of working, and monitor changes in buyer trends will stand the best chance of succeeding in 2021.
The year ahead looks set to be another challenging one for property developers, but with the right planning and an agile mindset, 2021 could be a successful and profitable year. Monitor budgets carefully, create a back-up plan, invest in the people around you, and offer customers added value to stay ahead of the competition.
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