5 easy to implement business practices that will greatly improve the way your board operates.
Successful and efficient community associations have one thing in common: they view themselves and conduct their boards as a business. The reality is HOAs are not-for-profit businesses that are subject to the same requirements as any other business.
The real issue for many associations is figuring out how to run their boards the same way they would a business, determining the steps to take, and the other facets that will enable them to become most effective and even enjoy their responsibilities. This outline serves as a guide to putting all the pieces together, laying out exactly what needs to be done for you to run your association as a business.
Develop and define mission and vision
The first step to running your association as a business is to have the board sit down and draft a mission and vision. In the same way that you would define your corporate vision, doing this for your association will allow everyone involved, from the board members and residents to your board's trusted advisors, to know and understand what the association is trying to accomplish.
Enlisting the services of trusted advisors
In much the same way that a business has a group or panel of trusted advisors, your board should enlist the services of several professionals who can be of assistance and offer their expertise in matters that need it. The key advisors your association should have include:
- Community Association Manager (CAM): can be responsible for a myriad of tasks including acting as the point of contact for residents and handling administrative tasks
- CPA: Handles corporate and tax filings and any other issues related to finances
- Community Association Attorney: Responsible for reviewing contracts before board signs, handling any legal disputes and other matters relating to legalities
Identifying and planning out Association Business Cycle
Associations must plan their annual business cycle. By doing this, they are able to see exactly what tasks need to be completed to accomplish yearly goals. The key elements for the annual business cycle include:
- Financial Reporting
- Special Projects
Using KPIs to measure effectiveness
In business, Key Performance Indicators are used to measure how well a company is achieving their objectives. For associations, using KPIs accomplish the same goal and allow boards to evaluate how effectively they are functioning and what tasks need to take priority over others. Some KPIs that associations can measure include:
- Meetings: How many board members are attending, are agendas properly distributed on a timely basis, are meetings beginning and ending on time
- Community: Are people volunteering for board positons, are surveys being conducted and are residents participating, do owners provide feedback
- Financial: Are reports being filed properly, accurately and on time, what is the association's net income, are owners paying dues on a timely basis, % of delinquent payments
Community Association Boards have much to gain when they view themselves as a business and conduct their actions in this manner. If you're currently on a board and are looking for ways to make it run smoothly and effectively, consider putting these aspects into practice. A good way to start is to sit down with your fellow board members and discuss how each piece of this puzzle can positively impact the way the board is run.
For more ways to improve your association board or if you are a community association attorney, get in touch with us today.