Here's the simple answer.
Because you are one. In essence, your community association is a not-for-profit business and although your board members are volunteers that were elected by popular vote, you are still required to follow certain requirements like other businesses. That being said, there are some real advantages to viewing your association as a business that you should be aware of. Let's take a look:
1. To protect against liability
While your association may have a small budget, you do have insurance to protect against third party lawsuits in the event of an injury or a theft and for this reason, the association is viewed as having “deep pockets”. Viewing your association as a business means your board members will take the matter of choosing the right amount and appropriate liability insurance coverage very seriously They will make decisions based on sound business rationale and not on emotions.
2. Eliminating emotions
Business board members know that emotional reactions and decisions based on personal feelings is just not tolerated. The same should go for your association. All too often, association board members allow their emotions to take over and take issues personally. When you consider that your association is a business, you can remove the emotional element which means you'll have a group of people working together with common goals on an intelligent, rational level, without the threat of any emotional breakdowns.
3. Investing in the future of your community
Successful business people know that you have to spend money to make money, right? The same concept holds true for your association. Those that view themselves as a business understand that their goal is not just to protect and preserve the common elements of the community but also to invest in upgrades and improvements that will ultimately raise property values and encourage more people to want to buy in their community. Community associations who are afraid to make changes are usually looking to keep things the same so they won't have to raise HOA fees but in the end, they miss out on the opportunity to reap the benefits of investing in the future. The reality is those board members who understand that they need to think strategically like they would when making business decisions will be much more successful in achieving association goals.
Removing the personal aspect of the decision making process and viewing your association as a viable business will help you create a more productive and effective board. Associations that make this change see a remarkable transformation take place: one that includes a more engaged and forward-thinking board and an increased level of satisfaction for all involved.
When it comes to all matters related to your association and to learn more about running yours like a business, PeytonBolin is well equipped to assist you. We offer a variety of training and certification programs as well as an array of specialized legal services.