Management companies come in a variety of forms. The first step in starting a management company is to define the industry or type of services on which the company will focus. The real estate industry utilizes residential and commercial property management companies and appraisal managers. The entertainment industry is rife with outside management firms that deal with every aspect of the field, from event management to artist management. Financial management firms offer debt management, investment management and account management. Business employs strategic management companies and outside project managers on a regular basis. All management companies share the goal of relieving the client of certain aspects of their business so they can concentrate on their core competencies.
Once the focus of the management company is found, the next step is to write a business plan. The narrower the focus of the company, the easier it will be to write a business plan because much of the direction is self-evident. Start with a goal, whether it's to sign three bands to the company or land one large IT client in the first 3 months. Be specific. Include short- and long-term goals. Consider the resources required to achieve those goals. Staff, office equipment, travel, association fees and entertainment expenses should be included in the initial needs assessment. Include timelines and expected revenues. Finally, write down specific activities and measures to be taken that will bring in the business to make the company successful.
Because management companies rely primarily on talent and time, there is very little start-up funding required to start a business. Office space is not required until the company is large enough to hire full-time administrative staff and bring on additional consultants and salespeople. Many management consultants work successfully from home offices. Ideally, a new management firm is started in response to a particular need that already has been identified. Starting a management company with a couple of solid clients can bring in the income needed to keep the business going while ongoing marketing efforts work to bring in more business.
Many management companies develop long-term relationships with clients who can bring in referrals for more business. When clients hire the firm for specific projects, follow up on a regular basis to keep the company name in front of the client for future needs and to request referrals. Hire staff as needed to maintain accounts. Network in the industry that the company serves. Join trade groups and attend trade shows to support existing clients and to build a broader base of contacts. Beware of relying too heavily on one large account. Network among other management firms through organizations, such as the American Management Companies Institute, to share ideas and to take advantage of educational opportunities to improve the business.
Linda Ray is an award-winning journalist with more than 20 years reporting experience. She's covered business for newspapers and magazines, including the "Greenville News," "Success Magazine" and "American City Business Journals." Ray holds a journalism degree and teaches writing, career development and an FDIC course called "Money Smart."