How to Scale Your Business During a Crisis (1/4)

What's up, business freedom podcast listeners? I want to lay out a framework for dealing with all that's going on right now. What I'm finding with our current members and also with folks that I'm speaking with that are just having challenges right now with operations being limited and just all the fear and uncertainty that is going on out there in the business world, and real estate specifically. It boils down to just a handful of things that I want to kind of unpack with you today, and I may go a little deeper on some of these in future podcast episodes. So I'm calling this how to scale your business in the midst of a crisis. So the framework I'm going to lay out for you, I'll probably take three or four podcasts to do this. It's how to scale your business in the midst of of a crisis. And it really doesn't matter where you are in your business growth journey. You know, the Great Recession of 2008 was my first year in real estate. That year I did 44 sides and I decided that the life of a top producing agent. So my first full year in the business, I was top 1% production in my entire market. And it sucked. It sucked so bad. Seven days a week, evenings, obviously, weekends, sometimes eight days a week, sometimes 25 hours a day. I was doing the job of a real estate agent during sort of daylight hours into the evenings, and then I would put my wife and one child at the time to sleep, and then I would go upstairs and I would work on the business and I would build systems and marketing collateral and just grow the business by working way too many hours in a day and way too many days than anyone should in a week. The good news of all of that is that in 2009, that's the year I hired my first buyer agent. Late in that year, we did 58 sides. I did 54 of them, and then we went on to 118, 178, and 248 sides in 2012. That's probably the last year of the really bad market we had here locally. So that year I did one transaction only, and I built the whole thing on the right model, with the right cadence, with my team, based on a really sound business plan. And I want to unpack all of that with you today. I want to talk about creating your future. I want to talk about knowing your numbers, and I want to talk about growing your team. Those are the three sort of accelerators, as we call them, as it relates to the scale driver and that lingo. May not mean much when I talk about drivers and accelerators. I just want to put it out there in case I reference back to it. So when I look at my business growth journey and I look at where you might be right now, if you want to grow through this crisis, there absolutely is a way to do it, and it's not all that complicated. So a lot of what I'm seeing right now is consumption. And, you know, even folks that I thought were sort of above the noise are getting bogged down with consuming information that is not from the source. So what I mean by that, it's not. They're not consuming data and coming to logical conclusions about what's going to happen in the real estate market in our economy. They're consuming the news and social media and opinions or lawmakers or politicians, what they're saying is going to happen and the effects that are going to happen, you know, as a result of the moves that our politicians are going to make or what, what the news is saying is going on. And that's not the way that I'm operating. I only have a couple bits, a couple sources of data that I track to make sure that I'm making the best decisions I can for my businesses and also my family. And so rather than the fear and just consuming and the irrational behavior that we're seeing in a lot of real estate agents and team leaders, they don't know what to do right now. So rather than doing that, the public service announcement I want to make is that instead of doing that, you should be creating and leading. And what I mean by that is creating content right now for the folks in your world and you being the thought leader in terms of even just the mindset issues that folks are having around you and leading them through how to get. Get on the other side of this thing and be in a better place mentally. It's super critical. And just from a practical standpoint, creating content in your real estate business at a time where folks don't know what is going to happen to the economy or the value of their home. And so you need to step into that void where there's a lot of misinformation that is going on right now and you need to collect data and make logical decisions about where or logical predictions to help support the folks that are looking for expert guidance at a time like this. So I just want to mention that I've done other podcast episodes kind of on fear and how to get through it and routines and all of that, and the value of a morning routine and what mine looks like. And you can look at other podcast episodes for that. I'm going to lay out the framework on this podcast episode and then I'm going to do three deeper dives to go into each of the pillars that I'm going to talk about. So the three pillars I'm going to talk about today in a big picture are to create your future, to know your numbers, and to grow your team. So in order to scale your business and to have true time and money freedom and to be free of stress, the only way to do it is to pay attention to these three aspects in terms of creating your future, knowing your numbers, and growing your team. So I want to break those down for you and what I mean by creating your future. There's three things to consider when it comes to creating your future. The first one is to get clear on the model that you're going to follow. Get clear on the model you're going to follow. There are different models to growing a business. Anything from a brokerage model to a traditional real estate team, which sort of a loose collection of people, not a whole lot of accountability for expenses or the actions and activities of people. And then there's what we call a high performance real estate team or high performance organization. And what that culture look looks like and what that cadence looked like and what the returns on a business like that looks like. So there's implications to choosing the model that you're going to follow to grow your business. Obviously, the farther you get toward a brokerage model, the lower the returns are. Doesn't mean you're not going to have stress and overhead. You may have a little bit more time on your hands, but you don't have a lot of money to show for it. I don't know a lot of super wealthy brokers, the whole joke about brokers are broke is a true statement. And then a lot of the teams that are really just a loose collection of people, I don't really see them having the staying power during the shift, the economic implications of what's going on now with COVID 19. So there's that part to consider. And then we'll talk more about what a high performance culture looks like and what I call an hpret, which is a high performance organization. And so that's number one, is to get clear on the model that you're going to follow. And none is easier than the other. So it's not easy to build a brokerage that makes you really good money. You just need a thousand agents to do it. That's not easy. You can be a world class broker. I think though that's a challenging model. That's not where I'm placing my chips. I'm on the other side of this equation. So the second part of creating your future is putting your life first. So coordinating all of this in a way that at the end of the day, your business supports a lifestyle and your lifestyle isn't your business. So a conventionally successful real estate agent is working seven days a week and more hours than they want to in a day. And that's just the way that it is. And that goes for traditional team leaders as well. Most of them have set the thing up the wrong way and they have to do production in addition to running the team, leading, managing, holding folks accountable and having a lot of overhead. And it's just set up the wrong way. And we'll get more into that and know your numbers and then plan your future plan. That's the actual planning process that you're using to achieve a thing in the future. That's just a vision at this point. And we have a process we call our three year vision one year plan 90 Day World. And then we go into weekly and daily commitments and accountability. So that's create your future in the three aspects there. Second part is to know your numbers. And the first part of this is to determine your economic model. So if you're going to go from, take my example, 58 sides, the first year I hired my first buyer agent late in that year, I already had my economic model chosen. I knew exactly what this thing was going to look like when it was fully built out. So the year we did 2012, we did 248 transactions. 2013 was like 312 and then 2014 was over 400. In the years that we did 248, 312 and 400, I already knew that I was going to be out of production. I had built the economic model for that business back in 2009. Most of the time, almost all of the time, an agent gets busy, hires an administrator, decides they don't want to do buyer sides, makes the wrong splits. The wrong economic model overspends on marketing, overspends on people, overspends on overhead, and they scale. And they don't put themselves in a position where they can actually limit the amount of equity effort they put into the business. They're working more hours, making less money and they're super stressed. So determining your economic model ahead of time is super important. Then the next part are some foundational financial tools. There are some things that you just have to do, like keep your books. You have to track your numbers and the ratios. In your business, we do that monthly and weekly and daily. Right. There are certain things that you just have to do. And then how do you move money around to make sure that your net worth is increasing in all of this? And that's a process we call Profit first. And that's a book by Michael Michalowicz. I did not make up that concept. And it's super powerful to run that way of moving money around. The third part of knowing your numbers is achieving financial freedom. Are you tracking your net worth at least monthly? On the 10th of every month, I calculate my net worth and I see how has it changed in a month, three months and six months. Looking back, it's critically important. The number one score I look at, and it's not the most important score, but the score that I look at is someone's net worth. It's something that we calculate for our new members. Because if I can't help you build a business that grows your net worth, then what are we doing together? There are other critically important areas of life that we focus on as well. In business, net worth is a score that matters and we can't ignore it. So those are the three parts of knowing your numbers. Third part here is growing your team. And there are three elements I want to talk about that I think are critical for you to be able to pull this off. First one is to identify and attract talent. Like, this is the opportunity that we've been waiting for. For years we've been talking about, man, I wish the market would turn so we could pick up some good talent. You know, every agent was able to just sell as many houses that they wanted to, it seemed, in our market, and they didn't need teams, you know, and those days are gone. I was looking forward to an economic shift for that reason so we can get good quality folks that can come into our environment. They would have less stress, work less hours and make more money. That's the opportunity that we built in my real estate team because we've set it up the right way. The second part of growing your team is to hire and onboard new team members. What is your process for hiring, for interviewing, Making sure you're bringing on the right people. And how do you bring those new team members on? Right. We've got a 90 day onboarding process for folks that come onto our real estate team that make sure they're going to get paid as quickly as possible in Real estate. The third part is your, your sort of day to day cadence and culture. How do you make sure the folks on your team are engaged and they're loving the mission that you're on together and the culture. Right. Do you have a culture that's meaningful? Do you guys stand for anything? And how do you help folks on your team achieve? Right. They're choosing to spend, sort of do their business within your team and how are you making sure that you can add so much value to them and their journey that they'll never leave you and never look anywhere else? That's the mindset we need to have as team leaders. So I know that was a lot. I'm going to break that down in the next three podcast episodes. I'm going to go deeper on creating your future. I'm going to go deeper on knowing your numbers and I'm going to go deeper on growing your team. The challenge is, and I'll leave you with this, if you don't create your future, you will have no direction. You will have no direction. I've had a three year plan, a three year vision for six areas of my life every year for the last, since 2009. So the last 11 years, I've always been looking three years out. I've been breaking down three year vision to one year plan in 90 days, weekly and daily. That's the process. That's not rocket science. If you don't have this sort of clear vision, if you don't create your future, you'll have no direction. If you don't know your numbers, there'll be no predictability in your business. You can't just keep putting effort into your business and have nothing to show for it. That is like our entire industry ends up in their 60s and they still have to sell real estate because they have no system for making sure that they would be financially free at the end of all of this, at the end of their career. And then the last part is to grow your team. If you don't grow your team, at least a small set of ninja admin and salespeople around you, you'll have no sustainability. You can't go on seven days a week forever. You just can't do it. So join me in the next few podcast episodes. I'll go deeper into each of those three areas with the whole point of this is to serve you and help you build something meaningful and not only build a business, but actually scale your business while the rest of the industry is just going crazy and out of their minds and anxious and fearful, you can step in and just take over market share and just dominate. And while others just hope to survive, you could absolutely predictably thrive during this time of crisis. If you know you're at the point in your business journey where it's just tough, you've already built something of substance and you're doing good volume, you know, the only thing I can offer you is a conversation about your business. Just go to realestatebschool.com and request a business growth strategy session. Realestatebschool.com and Request a business growth strategy session. It either says apply now on the website, there's orange buttons everywhere. We a few bits of information and me or one of my business coaches will jump on the phone with you for a 45 minute call. It's a valuable time where we'll just dig into where you are today, where you want to be in the future and what's holding you back. And I look forward to that opportunity to serve you on a strategy session. Until then, just be well. Much love and respect, take care of your family and just do the work and we'll talk to you soon.