Budget Season Etiquette
For both supplier partners and property management professionals alike, budget season can be an incredibly hectic and exciting time of the year. On-site teams spend time scrutinizing their current budgets, and making wish lists for their properties and finances. Suppliers and management companies work tirelessly to produce and acquire quotes for future budgets. It is important to strengthen your professional relationships by following these important rules of budget season etiquette.
Discuss Project Goals with Stakeholders
Are you a property manager that knows your retention will skyrocket if you add a brand-new amenity? It’s fantastic to have forward-thinking people on your team, but for the sake of your supplier partners (and budget approvers), make sure those conversations are held far in advance. After discussing your ideas with owners, they’ll often encourage you to pursue pricing. Getting their buy-in on pursuing the idea will assist in cutting down the quantity of “wish list” bids your supplier partners are asked to spend time preparing by eliminating those that have little chance of being approved. In doing so, your budget process will also be streamlined. You are likely only going to get a portion of your wish list approved, and therefore should focus your efforts on the projects most likely to gain approval.
Establish a Timeline
Communicate with your owners and management company, on when you would like these projects budgeted. Are these projects you plan to pursue for your capital expenditure budget three years from now? That’s great, but be honest with your supplier partners about expected completion dates. If you know when bids will be approved, communicate that with your supplier partner so they can properly time their follow up. This way they will not waste their time following up too many times before budget approval, and you will not need to continue to field their calls and emails. If you are a supplier, and you know you have been overwhelmed by the volume of quotes being asked of you, make sure that you prioritize your bids based on when your clients need them. You should also set clear expectations with the property manager as to when they can expect to receive your bid.
You might have seen an earlier blog article regarding comparing bids. It is especially important during budget season that you compare equal bids. This gives each supplier a fair opportunity to bid equal work to their competition and avoids the sticker shock when your VP reviews your budget on the management side. If you do not effectively articulate the project scope, you might not budget correctly for your project and stand to lose future approval. Not to mention, you might entice your owners with a property upgrade, and find out down the road you cannot afford the entire scope. Be open and honest when discussing project goals and make sure to ask any clarification questions to avoid misunderstandings.
This is the most crucial piece of bid season, and often how you can set yourself apart from your peers professionally. It is important to maintain positive relationships with both vendors and management partners, and the key is to offer objective feedback. In certain scenarios, you know a project is approved, and that your owners selected a preferred vendor of theirs. Do the right thing, and do not dodge your supplier partners follow up emails. Let them know if their pricing was in line, but also that the project was awarded to another supplier. No one wants to be told a project was cut from the budget, only to hear from a friendly competitor that the work was awarded elsewhere. While sometimes it is easier to avoid telling a supplier they lost the job, they will respect your honesty and integrity for years to come. The same goes for suppliers who are not awarded jobs. Maintain a friendly and professional relationship, the industry is always growing and your response, and then the continued relationship will pay off in the long run.
Successful management and supplier relationships will help you create an efficient budget for your company and your residents. Suppliers who are treated with respect during the bid process will thank you and are more likely to offer you increased customer satisfaction in future projects. Our industry is very close-knit, and you never know who you might work with in the future. Maintain a stellar reputation on both sides, and you might even meet your new best friends along the way!
This article was written by Heather Arndt with Bell Partners Inc., as a part of the XCEL Committee's goal to provide regular, educational, posts for TAA's blog.