Management company as a business

Business ideas by directions

The reform of housing and communal services led to the emergence of numerous management companies that were created by completely different people, but with a common goal — to generate income in this area of ​​activity.
The struggle for the right to become a management company is the best evidence that this type of business is profitable and desirable for many entrepreneurs.
Indeed, a management company as a business, in the presence of skillful management, most often brings good income to its owners. The essence of the work of the management company is well known: the management company specializes in servicing residential buildings and other real estate, taking on all issues of technical support, providing utilities, and interacting with other service companies.

Ideally, the management company is the representative of the tenants in relations with supplying organizations.

But, in the conditions of the housing and communal services reform that has not been fully carried out, management companies often become like old housing maintenance offices, with all their inherent shortcomings. Meanwhile, the possibilities and responsibilities of the management company are much wider, and the experience of such companies in the West shows that the level of services can really be raised quite high.

The management company is designed to become a model for small businesses, showing flexibility, efficiency, high quality services, and active work with residents of apartment buildings.

To create a management company, it is necessary, first of all, to register a legal entity in the charter, which provides for the management of residential buildings. It should be noted that the direction of activity of management companies is different.

The form of management of residential buildings can be different. A residential building can be managed by the management company itself, which takes care of all the problems of maintaining the house, or it can be managed by a Homeowners Association (HOA).

In the latter option, the management company is only a contractor for work ordered by homeowners. The list of services provided by the management company depends on the form of house management chosen by the tenants.

There are management companies that take care of operational maintenance, that is, the solution of all problems of water supply, sewerage, electricity supply, and so on. Some management companies are engaged exclusively in cleaning services, putting in order the entrances of residential buildings and the surrounding area.

Specialized management companies have certain advantages, although there are enough disadvantages. On the one hand, such a company can save on staff and technical equipment. On the other hand, in this case, the company acts only as a contractor and receives only a part of the money allocated for the maintenance of residential buildings.

The largest part of the financial flows is received by the management company, which takes on the complex maintenance of residential buildings, attracting other companies to perform work on the basis of outsourcing. However, the costs of creating such a company are very significant, and the costs of maintaining it are also high. After all, it is necessary to maintain a large staff of highly qualified specialists who are able to perform independently, or to hire contractors for technical work.

The profitability of the management company is highly dependent on the amount of work and the number of houses taken for maintenance.

Experience shows that in order to make a profit, a management company needs to take on the service of at least 30-40 residential apartment buildings. It is natural to get such volumes, in conditions of intense competition, for a novice entrepreneur, without support from the city administration, it is almost impossible.

The initial funds that need to be invested in such a company can be estimated at amounts from 200 to 400 thousand dollars. So for start-up entrepreneurs, it seems more realistic to create a small specialized management company that performs a certain list of work on orders from the main company or homeowners. In this case, the initial investment can be only a few tens of thousands of dollars, and the current costs will allow you to maintain profitability even when servicing several apartment buildings.
The business of managing multi-apartment housing is quite complex, dependent on resource-supplying organizations, city administrations and other participants in the housing maintenance market.

The creation and development of a management company is impossible if you act on enthusiasm alone, without accurate calculations and a clear action plan. To create a successful management company as a business, you can order a detailed business plan on our website with all the necessary recommendations and calculations.