FCB #031: Appraisal Business Owner Challenges

Top Challenges They Face in 2024 and How to Solve Them

Introduction

Last week I introduced you to the 8P Framework for building a smooth-running, successful business that can set you free.

Again, the 8P Framework consists of the following eight components:

1. Planning/Strategy
2. Preparation
3. Promotion
4. Pulses
5. People
6. Processes
7. Performance
8. Problem-Solving

This week I’m going to focus on each component, one at a time, and present:

1. What I believe are the top challenges in each area that appraisal business owners face, and
2. How I would help them solve each if they were a Founder Coaching Program client.

1. Planning/Strategy

• Challenge – Most small business owners, appraisal or otherwise, are too busy working “in” their businesses as technicians and have never learned how to implement a formal and professional strategic planning process into their business. As a result, they end up in a state of perpetual crisis management or chasing too many bright shiny objects at the same time.
• Solution – In our Founder Coaching Program, we teach founders a powerful strategic planning process, which includes a 2-day annual strategic planning retreat, 1-day quarterly reviews, and weekly leadership team meetings.
  • In the 2-day retreat, we teach them how to develop pertinent parts of a simple 2-page strategic plan document: 1) Core Values, 2) Core Focus, 3) 10-Year Target, 4) Marketing Strategy, 5) 3-Year Picture, 6) 1-Year Plan, 7) Next-Quarter Plan, and 8) their Issues List.
  • In the 1-day retreats, we teach them how to review looking back and reforecast looking forward.
  • In the weekly leadership team meetings, we teach them how to review the quarterly goals and weekly scorecard, be accountable for strategic tasks agreed to the week before, and how to solve issues once and for all.

2. Preparation

• Challenge – I’ve yet to work with an appraisal business owner that didn’t have at least one business basic they failed to put into place. The Founder Coaching Program Business Assessment is designed to surface these holes which include the following foundational items, to name just a few:
  • Branding
  • Business Plan
  • Legal Structure
  • Accounting System
  • Marketing/Sales Plan
  • Registration/Licensing
  • Technology Infrastructure
  • QC & Customer Service
  • Project Management
  • Employee Handbook
  • Compensation Plan
  • Online Presence
  • CRM Software
  • Staffing Plan
  • Compliance
• Solution – The first step is to identify which foundational items are missing. Depending on the size of the company, there are usually a few key items which the founder has never put into place. We help prioritize this (usually) short list and them bake into our monthly coaching meetings time devoted to make sure these business basics are nailed down and put into place.

3. Promotion

• Challenge #1 – Many small businesses we work with don’t have one or more of the of the following:
  • Website
  • Social Media Presence
  • CRM Marketing Software
• Solution – We start by making sure they have a website and, if they do, make recommendations on how to optimize it. We then focus on their social media presence – typically LinkedIn, X, Facebook and/or Instagram – and make sure their personal and business branding are strong and their content posting regular. Finally, we help them pick a suitable CRM/email marketing solution, where they can capture leads and manage their entire sales process.
• Challenge #2 – Most appraisal firms are still dependent on banks for their appraisal work. With the Fed's historic rate of raising interest rates in 2023, this work has all but dried up and most smaller appraisal firms I am coaching are reporting that revenues in 2023 dropped 25% to over 40% from 2022. This may be the No. 1 Challenge facing appraisal business owners today!
• Solution – We start by working on an emergency marketing/sales plan to help them diversify quickly into replacement niches for this evaporating bank work. This includes:
  • Professional Networking through groups like ProVisors, Local Estate Planning & Fiduciary Roundtables, and Rotary meetings
  • Lead Development & Outreach involving cities, counties, public agencies, law firm lunch 'n learns, real estate broker referrals, etc. We have a list of 21 possible lead sources in the Founder Coaching Program that appraisal business owners can leverage to turn the RFP tide in their favor.

4. Pulses

• Challenge – Most small appraisal business owners have no regular, recurring meeting rhythm or “pulse” in their businesses.
• Solution – In our Founder Coaching Program, we help them implement – one at a time – regular, efficient, and highly-productive meeting rhythms including:
  • Strategic Planning Meetings
  • Leadership Team Meetings
  • Department Meetings
  • All-Staff Meetings
  • Vendor Meetings
  • 1-on-1 Meetings

5. People

• Challenge – Perhaps the biggest challenge that appraisal business owners face in 2024 is the difficulty finding, hiring, and retaining top appraisal talent.
• Solution – This challenge requires out-of-the-box thinking and includes helping owners think through and implement options such as:
  • Division of labor in the appraisal and quality control review process
  • Utilizing out-of-state and even out-of-country appraisal assistants
  • Developing appraisal teams under a licensed appraiser or MAI
  • Leveraging appraisal technology to maximum extent possible
  • Outsourcing property and comparable inspections

6. Processes

• Challenge – Most small businesses are run on tribal knowledge and training is very inefficient word-of-mouth, oftentimes from owner to new hire. Most of the intellectual capital resides upstairs in the brains of staff and isn’t documented. When they walk out, that IP is lost.
• Solution – We help owners start by documenting as many or their technical tasks as possible so they hire, train, and delegate to their tactical role replacements, freeing them up to focus more on strategic growth initiatives and professional management. This starts off, in order, with the following:
  • Employee Handbook
  • Company Operating Manual
  • Process Documentation
  • Role Documentation

7. Performance

• Challenge – I have yet to work with an appraisal firm that even has a nominal performance management system in place.
• Solution – You can’t manage what isn’t measured, so we start by helping the founder implement basic departmental KPIs that funnel into a company scorecard. This is reviewed weekly by the leadership team. Over time, each employee is given a number to track for their role which ties directly into the profit & loss statement or the balance sheet.  We also help shift the HR focus from Job Descriptions to Accountability Agreements which have performance metrics and expectations built in and agreed to with staff.  Performance-based compensation plans come last, after these basic performance metrics have been weaved into the company culture.

8. Problem-Solving

• Challenge – Most small appraisal businesses are not systemized or run professionally. As a result, the owner is usually weighed down by ongoing problems and issues. Most feel like they are constantly playing the circus midway game known as Whack-A-Mole.
• Solution – Every issue or problem in a business involves an area of the business which has not yet been systemized, or a business system that is broken or needs to be improved. We train business owners and their leadership teams on a process that helps them prioritize issues and then work on the systemization process to make sure these pesky Whack-A-Moles disappear forever!

P.S. If you are an appraisal business owner and like what you read, I can help you with one of two Founder Coaching Programs options:

1. Option 1: 6-Month Program, 10 sessions for $2,500, or $250/session. If your firm is smaller, well under $1MM in annual revenue, and you don’t have a leadership team yet, this is the option for you. Here I collaborate with you using our proprietary Google Sheet Founder Coaching Workbook to help you start to take your business to the next level, systemizing and delegating so you can reclaim 8-10 hours of time per week.
2. Option 2: 12-Month Program, 24 sessions for $4,800, or $200/session. If your firm is larger, with a high 6-figure or even 7-figure revenue, with the beginnings of a leadership/management team, then this is the option for you. Here I work closely with the founder and their leadership team to implement strategic planning and professional management systems leveraging the Ninety.io business operating system (BOS) online platform. The focus of this program is to (1) empower the leadership team to systemize and professionally manage operations, (2) free up the founder from day-to-day operations, and (3) 2X your revenue, profits, and enterprise value.

Go to my website at https://www.calvincummings.com/coaching and book a free consult call to see if our Founder Coaching Program might be a good fit for you.