Monday 12 June 2017, by David Córdoba, MiquelGomis, Sergi

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A. The main facts about the activities of the company.

FemEscala is a small business from Barcelona, created about a year ago in cooperation with Celobert and Arç (two cooperatives that work in architecture and insurances respectively), which is specialized in management of neighboring communities. They manage the accounting, contracts with suppliers of services or materials, budgets, rents and they give legal advice and in choice making. But their main features are their transparency, they promote cohesion within the neighborhood and energetic saving, and their suppliers are social businesses.

Despite the price for their services is a bit more expensive than the average one, they have managed to grow quite a lot in just a year, and although they are still small, their future prospects look promising, as all of their clients report to be very satisfied and having a slightly higher price doesn’t seem to be a problem once the clients know where exactly their money goes. From this, we reinforce the idea of transparency and confidence with the managers of the community.

The public can get to know them through several online platforms that support ethical businesses, such as “PamAPam”, “mesOpcions”… Also, they participate in fairs and conventions like “Biocultura” or “Fira de l’economia social i solidaria”, where all kinds of businesses with ethical values in their cores get together to expose their products or services.

B. The Ethical challenges this company is addressing.

FemEscala differs from the other companies in the sector of real estate administration in several aspects, and all of them related with ethics. Real estate administration is not a business where ethics are very present, and they have actually been the first ones to think that another business model was possible in the sector.

Transparency. Real estate administrators tend to have one single bank account for all their clients, which makes it very easy for them not to be totally transparent. FemEscala, decided to try a much more transparent method, having a different account for every single customer. This way, they manage to create a much closer and honest relationship with their clients, who know exactly what they are paying and what for, and give them a more personalized treatment.

Trying to work on a model of social economy and cooperation with other ethical businesses. Since they are in charge of the cleaning, reparations, insurances… they have other companies provide these services. The difference is that they choose these companies according to an ethical criteria. They always contract with companies that share similar values to them, and that have some sort of solidarity project. Just to provide some examples, they try to contract their insurances with Arç, an ethical Catalan insurance company that provides transparent and ethical insurances. Also, they tend to contract their cleaning services with Trèvol another cooperative that only uses ecological cleaning products and foments recycling. Moreover, they cooperate with many other providers, for example with Som Energia, a cooperative that foments renewable energies, in case they need to contract a company for the electric power of the building, or with Celobert or trinijove, other cooperatives with social projects when needing a reform, or with Triodos Bank, which promotes a model of ethical banking.
Contrary to what many people believe, their providers are not necessarily more expensive. In fact, they acknowledge that the consumer is very price sensitive in these sectors, so all the companies mentioned before have similar prices to the ones of the market, but adding the ethical component that other companies can’t provide.

Ethical flat renting. They also intervene in housing renting, and they do it in a very particular way. So far, the payment to the administrator had to be done entirely by the tenant, but they propose to do it differently, and make the landlord pay a part as well (although they would like that Spain applied the same law as Germany and make the landlord pay, since it is indeed the landlord who hires them). Making both pay, they manage to create a confidence relationship. Moreover, they try to avoid terms in the contracts as for example the obligation to contract a certain insurance or a certain gas company just because the landlord works there, which also helps build trust.
This confidence is, under their opinion, the key to a sustainable business model, minimizing costs, problems and leaving both parts satisfied, knowing also that the management of the property will be done in a very transparent way. More people everyday value transparency when it comes to their money and especially taking into account how the business has worked so far.

C. What makes you believe this company is really ethical and why you trust it?

Management of neighbor communities is not a glamourous business at all, and managing many communities can be very complex, and usually opaque. In this environment, making an ethical company based on transparency succeed can be quite a challenge. They are working to make the whole business more transparent, and thanks to their work, they are setting an example on how to be profitable while being transparent in such a business.
In addition to the previously mentioned, what makes them ethical for us is precisely their willingness to be different and to apply moral principles in a business where the easy path is being like the rest and focusing on cost saving and price reduction. It was a surprise for us to find that in an environment where all the companies are pretty much the same, such a different one would emerge.
There is definitely a niche in the market, and being ethical can be a source of profits, but it must be taken into account that profits have never been what primarily drives them, at least not further than for making a financially sustainable company, but their main motivation is to improve neighbor relations, and cooperate with a model of social economy. Also, basing their model on transparency, makes their clients trust them, and be willing to pay a bit more, for having proof of where their money goes (having different accounts) and what is it used for. Being able to trace the money very easily and knowing who they work with, is definitely a signal of ethical principles. Therefore, it is not so much about believing in their ethics but about being able to proof them.

D.The possible challenges facing the company in the future and how you think this company may improve.

FemEscala is a recently created company, and as such the main challenge/objective that they are dealing with is the expansion and growth of their business, to ensure economic viability in the long run. However, the sector or approach that they are using, being ethical and promoting other ethical business and actions, it is still nowadays a new concept for the majority of our society. Despite that, they have managed to sustain their activity in their first year and even have some progression and establishment on the market. This must certainly be because they are delivering a good service, where not only a better understanding between the two parties is being hold but also ethical and ecological actions are being taken and supported by it.
So, we believe that having the eagerness to deliver the best possible service to as much people as possible is the motor that will sustain and nourish the firm’s growth and success.
As for now, what can FemEscala do?
We would suggest on a traditional basis that the firm invest a lot of capital in advertising if it is true that they have something good to offer, and if not they should spend even more trying to cover it.
But in this case, given that the profitability of the company is not very high, and that they can not risk to focus that much on growth since their actual revenues are not so stable, we believe that the best strategy is centered on efforting to deliver the best service that they can, building connections with people, and ensuring they are learning from first hand reports how to improve. What that will do is create a momentum effect where the better your service gets, the more satisfied will be the client. And we all know that a satisfied client can be the best advertising. Through word to mouth our public presence can grow without subtracting or redirecting our efforts from what really matters which is the quality of our service (as opposed to using capital and purpose to hide or persuade people into believing that your product or service is of any good).
From this we get a radically different approach to business, that allows us to improve and at the same time grow as a byproduct. We see then that these momentum that the firm is carrying, does not only benefit the firm but because of its ethical values and ethical stakeholders it also benefits the world, and needless to say as in other classical businesses, the clients also.
Moreover, another objective in the short term would be focusing a bit more on the flat renting business rather than on the administration one, since the profitability is different, and they should try to develop flat renting, which is more profitable and they are starting to do it.



Location: Barcelona (Spain)

Sector: Real estate activities

Official website: http://www.femescala.coop/

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