By the Seat of our Pants

As business owners, we ought to be constantly asking questions. What is working what is not? Where should my focus be? However, if the answer to any of the following questions is, “by the seat of my pants,” it might be time to reevaluate the way you run your appraisal business:

• How do you determine fee quotes?
• How do you determine acceptable work scope?
• How do you handle angry clients/homeowners?
• How do you answer typical questions from curious borrowers?
• How do you take care of your main computer or the internet going down?
• How do you answer your business phones?
• How do you prioritize incoming email?
• How do you handle unpaid invoices?

The list could go on, but I think you get the point.  There are things that we do on a regular basis in our business that we often handle the same way every time… by the seat of our pants.  Perhaps this works for you.  On the other hand, perhaps you only think it is working for you.

Do you think Walmart has a policy in place for how to handle angry customers?  Would you guess that Lowes has a model for properly pricing its merchandise?  Do you think Comcast has a certain script they follow when answering incoming phone calls?  Of course they do.  But, you are not Walmart, Lowes, or Comcast right?  Maybe,  but there is a reason these companies are so successful at what they do.  In your own realm, is there more you could be doing to also increase your level of success?

Like hard and soft costs in business, there are also what I refer to as hard and soft policies and procedures.  Business soft costs are unpredictable.  They rise and fall with volume.  Similarly, soft policies are decisions that have to be made which are a bit unpredictable.  For example, what is the policy in your office for finding a snake under your desk?  What?  You don’t have one?  Of course you don’t.  Why?  Because it is something that will likely not ever happen, your reaction to it would be spontaneous (and comical), and it would for sure never happen more than once.  In this case, there is no need to write a policy for such an event.  An even more reasonable example of a soft policy is how to take care of an angry borrower who shows up at your workplace demanding a copy of an appraisal.  Though you should have general guidelines in place for how to handle angry homeowners, you would not likely have an exact script to follow for this type of event because the likelihood of it happening more than once would be remote.

What about things that happen with more frequency?  Do you or your employees answer the phone the same way every time?  If not, can you see some benefit in establishing such a thing?  What do you do when a borrower (not a client) calls your office and wants to discuss the value on “their” appraisal?  If you show up on a Monday morning and the internet does not work, do you have a troubleshooting procedure to follow?  I would recommend considering it.

Furthermore, just as a goal unwritten is only a wish, a procedure unwritten is only a nice idea.  It will not be followed and will be of no help to anyone.  Write your procedures down and make sure everyone in your organization has unfettered access.  I use Google Drive for all of our policies.  It is accessible to everyone, easily searchable, and keeps a record of who made what changes.  There are other options available, but choose one and get started.

How do you determine when a policy is needed and when you should just use common sense?  The test we use at our office is to simply ask ourselves what are the chances that this thing will happen again?  If the answer is high, write a procedure.

Sounds like a lot of work, Dustin.  Running an appraisal business is already hard enough.  Why would a business owner want to take time from running a successful business to write procedures?  Perhaps the answer to that is simply; to remain a successful business.  Furthermore, it does not have to be you that does the typing.  If you are an office with employees, consider having them write the policies.  Doing so will accomplish two things.  First, you will get the policies written, but second, your employees will learn the policies better if they are the ones to put their fingers to the keyboard. Finally, written procedures do not need to be (nor should they be) lengthy.  The shorter the better.  Use bullet points even.  If they are short, employees will be more inclined to write them and more inclined to read them when they need a refresher.

Making and keeping to policies may seem like one step backward in the beginning.  Indeed, it may be, but the two or three steps forward it will propel you will be well worth your efforts.