11 Aug The Trickle Down Effect – the Benefits of the Development Ecosystem
It has often been said, and whinged about, that developers make so much money. This is certainly a superficial view of it and though partly true, there is far more to it than simply building and making money. Certainly the development landscape is littered with far more spectacular failures than it is with resounding successes. But let’s for now concentrate on the successes.
Who benefits? Well certainly the developer for one. But what is the trickledown effect?
A developer may have between 2-50 employees (more for some big players). Each of those staff receive a wage, they go home to their families and with that money earned from the developer they buy food, they send their kids to school, they purchase property, they put petrol in their cars, they drink coffee, they do their part to keep the economy moving.
The builder makes money. They are generally, though not always, separate from the developer. They too have staff and families of their own. However here another trickle starts. They have subbies. Those subbies have to buy specialist gear- work boots etc. They also spend well in the economy. How well does the Ute/SUV trade do out of tradies?
Manufacturers- someone needs to make the nails, timber, tilt slabs etc.
Plumbers, electricians, suppliers….. all make a living.
Then the background that few people see or take notice of. Lawyers- some needs to do conveyancing. Quantity surveyors, valuers, architects, mortgage brokers- they all generally have staff and do their part in keeping the economy moving. Of course there is the banks or private lenders- they have the potential to bloom or bust our economy. Love them or hate them, lenders help keep this country growing.
We have real estate agents- they market and sell the properties.
And finally we come to the end user- if you own, or aspire to own, property, then you are ultimately the beneficiary of the success, or failure, of the developer. The person with the original dream who turned a thought into action. And if you make a profit from your property then you probably have a developer to thank.
Potentially there are hundreds of people affected and in some way, reliant on what the developer does.
The guy I buy my coffee off can, in some small way, thank a development we funded in Footscray for being able to employ his 6 staff. As it is Australian grown organic coffee there is another industry spawning- all part of the development ecosystem.
Whether we realise it or not we are all a part of an ecosystem and an ecosystem works best when it is fed. In business we are all reliant on each other even if we can’t initially see the connection. So when you are buying your coffee, putting petrol in your car or getting your hair done take a moment to reflect on the fact that we are all connected- dozens, hundreds, even thousands are affected by your choices today.
Take care of what you feed your ecosystem and your ecosystem will take care of you.