Most successful business enterprises were conceived after creation of an initial business plan which is continuously modified over time as the company grows and the needs of the business change. The comparisons between a business and mandatory-membership community associations are similar in that both have income, both have expenses, both are managed by a group of people and both must continue to satisfy the needs of their customers. But the similarities end there.
While community associations do have guaranteed income and operate on a not-for-profit basis, it is the ever-changing makeup of the board of directors, and in some cases even the property manager, that makes the need for a “business plan” more compelling for these mandatory-membership associations.
Successful community associations, as governed by their board of directors, must always work to meet the needs of the entire community. The ultimate goal should be the preservation of the community’s physical amenities, the safety of the residents and the financial health of the association. However, the needs of the residents usually change over time, while statutory changes and economic circumstances often create operating and/or financial challenges…. Most of which cannot be fixed or successfully addressed in a one-year cycle of a board of directors.
The Association Management Plan is a “Blueprint for the Success of the Community”. The Association Management Plan is a 3-5 year forecast which outlines all the foreseeable problems and other opportunities for improvement, creates realistic and achievable objectives, and establishes a financial and operational plan for accomplishing these objectives. This plan should be created in conjunction with input from board members and certain key residents (as identified by the board).
A Management Plan for an association should include sections such as:
- List of all recognized “Issues” facing the community now and foreseeable within the next 5 years
- Discussed, agreed and “board resolutions” addressing solutions to these concerns.
- Financing plan created and agreed to by the board and/or residents of the community as necessary.
- Implementation plan – A plan identifying responsibilities for the board members and for the property manager.
- Calendar of Events including all board meetings, annual meetings with elections, tax returns, annual reports, end-of-year tax and audit requirements, inspection, maintenance and repair schedules and much more.
The management plan helps define roles and responsibilities for board members and the property manager, and serves as an on-going document that keeps everyone on the same page. The major benefit however, of having a Management Plan in place, is that the plan remains even when board members and/or property managers change – Thus fostering continuity in the way in which the association operates and successfully serves its resident members for many years to come.
About the author: Perry C. Rohan, MBA, is the Director of Business Development and Client Services in the central Florida region for FirstService Residential (www.fsresidential.com), North America’s leading community association management company. He has a background of more than 15 years of sales, property and asset management experience with single and multifamily residential investment properties, and condominium and homeowner associations. Perry is a licensed real estate broker in Florida and New York, a licensed community association manager in Florida, and is currently a CPM® Candidate with the Institute of Real Estate Management. Contact information: email@example.com