Small is beautiful. Well, at least that is the mantra I use as the founder of a small business located in the cut and thrust of the central London block management market.

The world of the managing agent has changed enormously during the past five years, due to both legislative changes and market forces. The house-building boom has been a major factor in the growth of the super agent (the word super referring to size and not necessarily ability). As managing agents grew on the back of this boom so the potential for expansion and growth by merger and acquisition became the goal to achieve and a race began to purchase and acquire smaller agents. It appears that there is no end in sight for these predatory agents as the next small business is eyed for takeover, thus gaining growth in size often at the expense of controlled system and procedure integration, and quality of service delivery.

This may then suggest that those super agents are perhaps motivated by hard cash and the perceived glory of being the biggest agent in the business. This surely cannot be good news for leaseholders, clients and freeholders and those of us in this profession that share the view that service and accountability counts.

Buying Power

It is often argued by bigger agents that they can create economies of scale and pass on savings but our experience suggests this is not always the case. We are a small agent and can obtain good deals on buildings’ insurance, the rates are normally the same as those obtained by larger agents. This suggests that where one might expect commission levels to be much less due to the volume of business, evidence suggests bulk business does not encourage the larger agents to pass on their buying power, it merely encourages them to keep more. Where agents could use their buying power is in the review and implementation of service contracts, fire systems, lift service, boiler plant and air conditioning, for example – pooling together schemes to their customers’ advantage. Again our experience to date is that few agents attempt such an exercise. This suggests economies of scale are not being operated properly, breaking a myth that a larger agent is financially beneficial to the end customer.

Importantly, as a small agent, and possibly other small agents throughout the country will agree, what is important is not just the customer but the building also. A genuine interest in the structure of the blocks this company manages is of paramount importance. This then leads to a genuine interest in the work being undertaken, and an appreciation of the dynamics of property management.

The close personal relationship that can be built between a small agent and their client board and site staff is very advantageous. There is often more time to get to know your client and the building, more time to think ahead and be effective and be pro-active, not reactive. The typical problems that beset the larger agent of petty inter-department squabbling, the ‘it’s not my job mentality’ and lack of accountability should not be an issue in a small reactive organisation where all members know they have to contribute to the service delivery and success of the company.