Agribusiness update December 2013
    Seven deadly sins of rural property management

    Benchmarking costs

    "Construction projects have a deserved reputation for getting out of hand, not only are they expensive, they can be difficult to control and budgets and build programmes can soon overrun."

     

    Dull but essential?

    Whilst benchmarking might sound a dull subject, it is just about the most important exercise a country house or estate owner can undertake. It will identify areas of waste, just as importantly areas of under spend and help identify areas of weakness or poor performance, and it will enable informed decision making towards securing better value for money.

    Construction projects

    Construction projects have a deserved reputation for getting out of hand, not only are they expensive, they can be difficult to control and budgets and build programmes can build soon overrun. Getting the structure right at the very beginning will help prevent this, similarly, consultants' fees can often add 25%-30% to the overall cost of the project, therefore if the basis of remuneration is a percentage, the probability is that budgets will continue to rise. It is possible to structure projects that avoid the most obvious of these pitfalls.

    Utility costs

    During the past year we have obtained refunds for three clients that amount to a total of £90,000, an average of £30,000 each. This is separate to the renegotiation of the ongoing tariffs and future savings that will mean savings of £10,000 a year or more annually. Whilst oil and gas prices have reduced considerably, there is still scope to make future savings and reclaim overpayments. 

    Staffing

    Recruiting and retaining the best people will mean that the terms of employment need to be competitive and representative against those that other employers would offer. Whilst salary is the most obvious cost benchmark, accommodation, working conditions and support and training in the role will be much more relevant than simply paying the highest salary, when it comes to providing job satisfaction and staff retention.

    Mansion House costs

    The Savills Benchmarking Survey is a well known tool for estate management, but similarly benchmarking the operating costs of a country house is possible and just as important. We advise many different owners of different size houses on their overall operating costs. Whilst staff levels, the size of gardens and location will vary, the principles remain much the same from one house to another. We see some properties where operating costs exceeds £1m a year, and in those circumstances a benchmarking exercise will almost certainly pay for itself within the first year.

     
     

    Key contacts

    Philip Eddell

    Philip Eddell

    Director
    Country House Consultancy

    Savills Newbury

    +44 (0) 1635 277 709

    +44 (0) 1635 277 709