At a glance
- Building a business from scratch isn’t easy – it takes years of hard work and determination
- In a new Q&A series, we will be asking small and medium-sized business owners about the biggest challenges they face
- We begin with a husband-and-wife residential property management team
Every new business faces a unique set of challenges, but launching a property company can be particularly daunting, with property-based businesses one of the most likely to fail after one year of trading.
There can be a number of reasons for this – unexpected shifts in the property market, for example, or difficulties in accessing capital.
Chris and Jean Lamb, from Weymouth, Dorset, know all about those difficult early years establishing a property business. After running a hotel in the seaside town for more than 20 years, the Lambs made the move into residential development in 2003.
They demolished their hotel and built a block of 12 flats in its place. Chris and Jean live in one of the flats and have sold or leased the remaining 11. As well as being a landlord to a number of their neighbours, the Lambs are also responsible for the upkeep of the lifts and other communal facilities.
Here, Chris discusses the risks and rewards of running a small property business.
Q: What was it like setting up your business?
A: It was fairly nerve-racking because we didn’t know what the property market was going to do. We were living in a caravan while the hotel was being demolished and there were times when we wondered if we were going to be left with a big pile of dirt and no building!
Q: How time-consuming was it?
A: Very. At the same time as we were trying to find buyers for the flats we were selling, we were also having to furnish the flats we were trying to let. It was a full-time project and it took a lot out of us.
Q: What were the biggest challenges you faced?
A: There have been a number of financial challenges. Our builder went bankrupt a week after we’d handed over a cheque for £60,000 to complete the final part of the development, and we didn’t get any of that money back. It was also really difficult to get the funding we needed for the flats, even though we had a good track record with our bank as we’d paid off a previous loan for the hotel in full. We had to approach a number of lenders before we secured a loan.
Q: What are your expectations when you buy an insurance policy for your business?
A: First and foremost, it’s that we will get the cover that we need should we have to make a claim. That’s really important because we’re not just insuring our home – we’re insuring the whole block for our tenants. If something serious happened, I would want to be sure that my tenants would have somewhere to live.
Q: If your property was badly damaged, what would you expect your insurer to do for you from the moment you notified them about the incident?
A: Firstly, I’d want the person on the other end of the phone to be able to take control of the situation, so that I could reassure my tenants that everything that needed to be done was being done. Ideally, I’d want a single point of contact and not to be passed around from person to person.
I would want a loss adjuster to visit as soon as possible. A quick response is really important because when something serious happens, your stress levels soar. In terms of actually handling the claim, I would want my insurer to provide practical support and to take control of arranging repairs, because that’s the last thing I would want to be worrying about.
Q: Besides insurance, how else do you manage the business risks you face?
A: We vet prospective tenants very carefully, to ensure we only let to people who will look after the property responsibly and who can demonstrate they can afford the rent. Living in the same apartment block makes it a lot easier to do this.
Q: What do you most enjoy about running your business?
A: I like being able to make my own decisions. I stand or fall on what I do. If something works, then great; if not, at least I know it’s my fault!
We don’t just protect businesses, we protect years of hard work
At Zurich, we know how hard our customers have worked to create their businesses, and that they need an insurer that works just as hard to protect them.
We have tailored our SME proposition to carefully match the needs of our customers, and provide a range of additional services that can give them peace of mind, and allow them to concentrate on growing their businesses, from disaster recovery to legal cover and helplines.