Before joining MSP Capital in 2016, I worked at NatWest bank, looking after property development companies across the South of England. From that experience, I know first-hand the challenges and triumphs we face when building and selling properties.
In the complex world of property development, one thing remains certain: the landscape is always evolving.
Property developers are feeling the pressure of high building material costs, high interest rates, a dip in house prices, and an increase in living costs. I’m noticing that outsourcing is being used more and more to help maintain efficiency and safeguard margins for developers across the UK.
Why would Developers use outsourcing in today’s climate?
Cost Efficiency
With building costs rising, it’s not always viable to employ a permanent full-time team. Outsourcing offers a pay-as-you-go model, often leading to considerable savings and faster project completion.
Expertise on Demand
Outsourcing gives you access to niche expertise, ensuring that each aspect of your project is managed by someone who knows it inside out.
Flexibility
The market’s unpredictability necessitates an agile approach. Outsourcing lets developers scale operations in response to market demands, safeguarding against overcommitment.
Focus on Core Competencies
Now, more than ever, developers must zero in on their primary strengths. By delegating secondary tasks, you’re free to channel your energy where it’s most needed.
What kind of work could be outsourced for a property development?
Outsourcing isn’t limited to just one facet of property development. In fact, the possibilities are broad and varied. From Architects to bookkeepers, from lawyers to marketing specialists. There is a plethora of options for savvy developers who want to free up headspace. Below is a short list of the key things that can successfully be outsourced, if done well.
- Design & Architecture
- Construction & Labour
- Project Management
- Legal & Compliance
- Digital & Marketing
- Administrative Tasks
Considerations When Outsourcing:
Below are some of the key factors to consider when looking at outsourcing parts of your project. Click on each one to read more.
Quality Control
When you hand over a part of your project to an outsider, there’s inherent risk. Monitor the quality of work closely. Remember, the end product will carry your name, not theirs.
Confidentiality
Protecting your business’s sensitive information is crucial. Ensure non-disclosure agreements are in place, especially when outsourcing digital or administrative tasks.
Cultural and Time Differences
If you’re outsourcing beyond UK borders – say, hiring a virtual assistant from another country – be aware of time zone differences and potential cultural communication barriers.
Over-reliance
While outsourcing is beneficial, it’s essential not to become too dependent on it. Maintain a balance that ensures your core team still steers the ship.
Cost-benefit Analysis
Outsourcing, though often cost-effective, is not always the cheaper option. It’s essential to weigh the costs against the benefits for each project.
Practical tips on outsourcing
-
Step 1
Identify what to outsource
This is paramount. While it’s tempting to offload as many tasks as possible, it’s vital to analyse which operations will benefit most from outsourcing.
-
Step 2
Vet and choose carefully
Do your due diligence. Ensure that anyone you hire – be it a site manager or a virtual assistant – comes highly recommended.
-
Step 3
Communication is always key
One of the main pitfalls of outsourcing is a potential communication breakdown. Schedule regular check-ins, use digital tools, and set clear expectations from the onset.
In conclusion
The landscape of property development is ever-changing. Outsourcing, when done thoughtfully, can be a powerful tool in a developer’s arsenal, offering flexibility, efficiency, and access to a world of expertise.
Here’s to building smarter, not harder.
Chris Sheppard has nearly 30 years of finance experience
To speak with Chris or another expert about a bridging or development loan, simply fill in the form.
