Following an extensive career in the real estate industry, Lauren Staley realised there was an opportunity to launch a new sort of property service.
In 2008, she launched Infolio, a Melbourne-based buyers advocacy and property management company that also specialises in auction bidding, property negotiation and renovation guidance.
She talks to StartupSmart about how she survived launching just before the GFC.
What gave you the idea for the business?
I’d worked in the real estate industry and saw so many flaws with it. I realised there was a gap in the market for a true end-to-end property service that would help everyone involved in the process.
We had to set strict criteria though – no property more than 15km from the CBD. We cap the development size we work with at 18 plots as it’s not a great yield. I’d seen how it could all be improved, over the years.
There’s a lot of competition in this area, isn’t there?
Yes, but the thing was that I didn’t even think about the competition to start with, which was probably a big mistake.
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We started with a real machine gun approach as to who and what we targeted, which brought us to pretty much a zero bank balance.
We mainly thought the service would be good for single or double income professionals. We tried radio advertising for a whole month and didn’t get a bite from the market. It just wasn’t targeted enough.
So, what was your cash situation?
We were literally out of cash. The business had $150,000 to start-up with and, perhaps because we got a private investor on board, we didn’t quite value it. It wasn’t our money, so we didn’t try to make it count as much.
I think it’s better to start from humble beginnings. It gives you more focus. When the GFC hit, it was a humbling experience. We prospered because we had to be resilient and not spend money that didn’t make us money.
Our investor is no longer a shareholder as the business didn’t provide him a fast enough return. I suppose it seems silly to look a gift horse in the mouth, but I’m not sure if we’d be here now if we hadn’t learned how to do it the hard way.
What did you do to turn things around?
We spent about four weeks talking to real estate agents and realised it would work best if they referred clients to us.
It’s a reciprocal arrangement so that buyers don’t have to fight against estate agents. They work with them.
A lot of people are time poor and realise that we can help out.
What was it like launching just before the GFC?
It was absolutely frightening. Everything was doom and gloom, but we just had to be strong and resilient.
I thought it would be easier, but the stress, the bills, the rent – it’s just 24/7. But we used it in a positive way. When you are fighting to sell your service, you are committed on another level.
When the market is hot, you don’t have to negotiate and it’s almost too easy.
It’s strange, no one really asked how old the business was when we started. We were experienced in real estate, which helped, I think.
We identified the main competition and looked at the main differences we could offer. We decided to charge a flat fee, rather than charge a percentage of the purchase price, like others do.
Now, we get 80 to 90% of our business through referrals.
What is the growth of the business now?
We are growing at a good rate now. We have eight people but the biggest issue is getting staff. It’s hard to get the right people who can do the job you need them to do.
We’re dealing with around 12 to 15 properties a month. We handled 100 properties last year, 90% of which were new clients.
Do you have any particular ambitions for the business?
We want to continue to build a strong portfolio, which we’ll do by targeting online and social media. The dream is to open another office in Sydney, as lots of our clients are there.
Our rent roll is what will provide us with our super. We have 250 at the moment – we want 1,000.