Rule No 1: Do not lose what money you already have
Rule No 2: Make Money
Rule No 3: Make More Money
The above rules for a developer are all you need to know and remember to live by.
At face value they may seem crude and simplistic; however think harder!
Rule No 1 is all about risk.
Risk is a beast that can destroy you. Before you take on the beast look carefully, very carefully before taking on any risk.
When taking on a development or property project there is always an element of risk and it is worth looking at and remembering what is at stake and possibly being placed in harm's way: Financial security for you and your family.
The loss of financial security could mean the loss of your independence, your home, your business and your family.
This is why developers who have survived for any length of time are inherently conservative and will react at the first hint of any negative issue affecting their financial position.
Rule No 2 is all about financial viability.
The development business has to generate a return, i.e "profit" or it does not exist. A developer should only invest when convinced beyond doubt there is money to be made.
We all like to be charitable but remember charity is not an overhead, it's paid from the profit.
Rule No 3 is a reminder.
A reminder that while there is a lot of investigation and key decision making before any investment is made, not all the work is up front.
The money is not made until the development or project is complete and converted back into cash.
The reminder is to emphasise that management of the development process to to protect time, protect the existing money invested and enhance the money invested. Always be examining the development to see if it can be done better.
The winning formula has always been the development that offers the most for the least amount of money. This applies to all business not just property and development.
Quality always sells, often first and faster which in itself is a financial reward. More importantly the buyer's property purchase holds its value which is the best endorsement any developer could receive.
In closing, luck has nothing to do with it; obey the rules and stay in business.