Stop Selling and Start Building a Business - Part 3

Welcome back to the Business Freedom Podcast. This is part three of Stop Selling and Start Building a Business. And if you missed parts one and part two, you definitely want to go back and spend time going through those sessions. I think it's about an hour of content altogether. Parts one, two and three. These are definitely. Grab a journal, grab a pen and slow down and take notes. He lays out his journey from agent to owner. The only thing I ask because this is member only content, is that you share it on social media. If you're enjoying the podcast, share this episode, share the podcast and leave us a five star review. So stay tuned for part three of Stop Selling and Start Building a Business. Much love and respect.

And the final part is really those systems. And I think the key things here, again from eos, are documented. It's gotta be on paper. It can't be in our heads. We will never have a business if it isn't clearly documented. Right. There has to be training. One of the best methods I've learned for training is let them watch you. You watch them, then they can go do it on their own. Right? The mistake I made in the beginning was there's a video over here, I don't know, I went to a seminar. The guy did it. Just watch that and then just make that happen. Just do that. And then it's never what I want, right? So have them watch you. You watch them. Then they can do it on their own. The franchise model around your systems, you have to have systems that you've created that can be duplicated to have the same result 10,000 times over and over. That's really the approach here that you want to take with your systems. Don't build a system for a temporary solution. Build it for the long term growth of the company. And then the final part around systems is it has to be leveraged, right? So it can't be on you. You can't build a system that pulls you back in. Or you know what, I'll just do that part. Avoid that temptation, right? That's, that's you getting back involved and forgetting why you're building this business. It has to be leveraged through people. Try to leverage technology that tends to be less expensive than people in some cases. Right? If you can find an effective piece of technology, then that can be more effective than people. And then it has to be efficient. You're only worth what you can pay someone else to do the same job. That's one of the key things I tried to keep in mind, you know, when I was getting sucked Back into pieces of the business is I'm only worth at that moment what I could pay somebody else to do the same job. Plus I'm robbing them from the opportunity to be able to make that money as well. So again, asking that question of yourself, I'm going to keep moving quickly here. All right, tactics. Okay, so this goes back to the VTO and that plan, right? So we talked about the why, the vision and now the plan. What does this mean? Well, begin with the end in mind. We've all heard that term before. The VTO. We again go back to 10 years, three years, one year, four quarters and then breaking it down by weekly measures. Right. So the 13 weeks is where the rubber really meets the road. We're just reverse engineering our plan. So notice the one year plan based on the three year plan, down to the quarterly plan. This is the 90 day world that you have to live in. Number one, it makes it more manageable to deal with. Number two, you have a clear understanding of what needs to be done in just those 90 days. Focusing on lead measures. Understand and focus on your lead measures. So I'm going to show you here and I don't want this to be overwhelming or I can talk to you separately about this, but basically, as you can see here, so this is from a piece of our VTO and really trying to break down to lead measures. So here's what we did is we said, basically I said, how much money do I want to make this year and not be in production, not be in the business, be working one day a week. I want to make 400 grand, okay? Without working, making 400 grand, that's a lifestyle that I would be okay with. And so we built this plan, right? So you can see in the bold, the profit before tax and owner comp is 405,000. So what do I have to do? I have to add my expenses on top of that. That means I need to make it 720,000. My gross margin's at 62.5%. So I need to generate $1.8 million in GCI this year in order to do that. Okay, that's a little bit easier to digest. Now I know what I got to do. So what does that mean? We need to tell 260 homes. Because if my average sales price is 200 grand and my average commission is 3.5%, then now I know how many I need to sell and I need to do 45 of those in Q1 because based on the seasonality of my market, that's the percentage that sells in Q1. All right, sweet. 45 in Q1. I don't care about the rest of the year. Right now, I'm focused on Q1. Keep in mind, this planning happens the quarter prior to Q1 starting. But 45 transactions. All right, so here's the path to 260. If I have a 50, 50 split, business 130 buyers, 130 sellers, you can break it right down to. And really what I want you to focus on is at the bottom, the 539 dials per workday that we have to make. And we have to set eight buyer appointments per week on our team to do 1.8 in GCI. Now, guess what? All I have to do is in our team meeting, say, did we hit our eight appointments or didn't we? And if not, what's going on? Let's fix it. Do we need more people? Are we not generating enough leads? Is our conversion need to get better? Where's the missing piece? All of a sudden, your role shifts from selling houses into owning a business. Identifying problems in your business based on these lead measures, it becomes a lot easier to digest. Now you have a plan in place. You can breathe easy. We do the same thing on the listing side. If I sell, I need to sell 130 listings in order to hit my goal. Okay, well, 99% of our listings sell. Therefore, I need to take 131. If I sign up 65% of the sellers I meet with, I need to go on 202 listing presentations. It means I need to go on 17 per month and four per week. If I have two agents, listing agents, they can each go on two per week and generate two opportunities per week. We've got our plan. It's done. If I only have one agent, and four is a stretch, guess what? I gotta hire and train another and make sure that they have the opportunities and the accountability in place to make sure that they hit those numbers. But break these things down into the lead measure. Who cares at that point what your end of your GCI goal is? All that matters is, did I meet with eight buyers this week and did I meet with four listing appointments this week? And then you can start to figure out where the holes are in the business. So you gotta work it backwards. That's really probably the best advice I can give you around this plan is work it backwards to those leading indicators and then track it weekly. Every week in our team meetings, we'd look at these numbers. Are we hitting them or are we not? And if not, what do we gotta do to figure it out? And then eventually let your team figure it out for you? And then you really have a business, right? Here's what's really cool, too, is you can do the same thing for your team members. This is where you add value. I've had a lot of coaching clients say, well, I don't know how they'd want to join my team. And I don't know if I could do that split because I don't know if I have enough leads. It's all about the leads. It's all about the leads. It's not about the leads. Your team members are not on your team for your leads. Your team members are on your team for your leadership and showing them the plan to success. You think there's anybody ever in the world that has sat down with them and said, here's how you make 100 grand? Guess what? I've done it and I've got the plan, I've got the tools, I got the systems. They're not going to ask about the split. They're going to say, how do I make 100 grand? Well, here's how you do it. You set 2.1 appointments per week on my team. We'll take care of the rest. Think you can do that? Great. You'll make 100 grand, right? Because you just break the numbers backwards. So you can do the same thing you do for your business. You can do those for your team members and add huge value to their lives. So. And now you just repeat that everywhere. Where in your admin, your admin world do you need to track leading indicators to determine if they're providing the results that they need for your business? So, for example, what's the key kind of indicators to whether your admin team is doing a good job or not? What is that number? And then track it backwards. For us, we track the NPS score or the net promoter score, the survey score, and we had to maintain a certain level and we just tracked it weekly. All right, what did we maintain last week, what did we maintain the next week, and so on. If there's an issue there, we got a problem with our admin team. The other thing we tracked is the time that we took a listing to the time it hit the market, because we identified that that was a super important piece to selling more homes and selling them quickly. We need to get the admin team to get people to get their homes on the market. So we tracked that number, right? And then our admin team would have a score. So repeat this over and over. Pretty soon, when you teach other people to lead your team around these key numbers, you can walk away to a certain degree. Now you can just lead your leaders. So those are the tactics. To go from job, in my opinion, to business is to do those things. So again, just that question. Do you truly own a business or is it just simply do you own the place that you go to work right now? Here's the action steps. Okay. What stage is your business at and how are you showing up? Right. What's in your calendar? Are you the entrepreneur, the manager or the technician? Adjust as necessary. You really gotta show up as your business grows more and more as that entrepreneur to the point where that's the only role that you're in. What is one system I could build now to open up time in my calendar to move in the direction of business building versus job ownership. Do this forever. Here's the thing, even if it means you lose listings, if you lose a listing because you took an hour out of your week to build a system that would take you to the next level, forget about that listing. That's not the goal. The goal is not to sell more houses. So don't be afraid of the ability to learn business. I did that for so long, and I wish that I wouldn't have is I would forego my time set to really build my business because, oh, somebody needs to meet with me, right? So I got to the point where we only did in office listing appointments, so sellers would have to come to us. And I know that doesn't work in every market, but ours was small enough that it did. And I'd only have certain hours of the day that I had open for listing appointments, typically in the. In the afternoons. Mornings was my business building time. And if I. If people didn't want to do that, okay, that's all right. It's fine. Now, like I said, that's not something that everybody can do in every market because of, you know, how big some markets are. But the point is that you've got to be diligent, disciplined to say no when it eats into your time to build your business. And then number three, assess your why. Get clear on your vision. And then create a plan based on those lead measures. And don't forget to track it. Right. This isn't just a once a quarter. And at the end of the quarter, you see how you're doing. This is a weekly rhythm. Your business is a week at a time. A week at a time, right? But it's built on all starts with that. Why? Why are you doing it? You doing it to be number one on the list at your brokerage, or are you doing it to have ultimate time and money, freedom to live the life, however your life, however you want to live it. If that's the case, get clear then on what you got to do. What is your vision to make that happen? What are the lead measures to fulfill that vision? And make sure you're tracking it weekly? I really think it's that simple. Questions? We got about seven minutes or so.

I wanted to throw these things around. So who's got the next question?

Andy, the question I have is you made a statement, you can't buy leadership. And you made a statement earlier on in your talk when you were talking about your story, how you felt like you let your team down at a certain point and, you know, you went home and you were upset that you may have failed in leading them and a number of people left your team and then you made that other statement. I can't buy leadership. You can't buy leadership. If you had to go back and do that period again, you obviously wanted to exit certain aspects of leadership. You can't buy it. You realize that. How would you do it differently to make a more healthy and graceful exit of, of certain aspects of leadership?

Probably two things I would remember. Number one, that leadership is slow, management is fast. I just wanted to hire somebody to manage a team. Leadership is slow. It takes time. It doesn't happen overnight, you know, so that's number one. And again, I just wouldn't try to buy my way out of. Out of leadership. I actually hired a guy from IBM. There's a plant there. He was a global automations integrator for IBM. And I saw the word in his title, integrate. I said, you're hired. You're gonna just do all the integrations. Whatever that means, just do it. And it didn't work at all. And I paid him a ton of money and got nowhere because I thought I could just hire someone to do that. So I would definitely just take my time. It just takes time. And then. So leadership is slow, management's fast. Take your time. Develop those people over time. Let them make those mistakes. That's number one. And number two is, you know, I would, I would. Gosh, I had a thought there on that and I can't remember, but I guess it'll come to me. Just give me a second. I'll think of it. I'll think of it.

Oh, neat. Hey, Andy. My name is Dana. Ben. I'm in North Carolina. Raleigh, North Carolina. It's nice to meet you. Thank you so much for your honesty. This has been a big thing that you said. The last thing that really hit home is stop and work on building your business. And that's been a huge fear that I've had. I really need a little bit more elaboration on this, on how much time did it take you? How did you get over that fear of losing business so you could work? I know you were really, really centered on, I want to build a business, I want to get out. But this is huge because you're getting business, people want you, you're excited about it, and you're saying I can't. Did you give it away as a referral?

No. And the truth is I probably didn't lose that much business. But it was the mindset that I was okay with it if I did. Right? So I think that's what it is. I'm sure I lost a few listings because I didn't bend and go to their home when they wanted me to come to their home. But this is just the way we ran the business. You came to the office, right. And you did it during these hours. And if you couldn't take an hour off of lunch, like how serious were you about selling your home? And that's just where one. Where we went with it. And I kept the long term vision in mind. I think also that I set myself up financially and my lifestyle where, you know, I don't know, I just didn't. I guess I didn't care. Maybe it's just a personality trait too, where when I make up my mind and I'm pretty stubborn about it, like I just wasn't going to do it any other way.

And how much time did it take you. You approximately where you were in that mode of I'm gonna stop.

Yeah, I mean, probably a good year. A good year of, okay, this is what I'm doing. I'm getting out of production one way or another. I just, here's the thing. I knew in the back of my mind that if I didn't say no and say, this is how I'm gonna do it and you need to fit my model as a client or not. I knew that if I didn't do that, I would never get out. I would not get out because I would constantly be, okay, fine, you can, you can get in the way of this thing. Okay, fine, yeah, you can get. And then you'd never work on your business. So it's just keeping that long term. Why Are you doing this? How do you set yourself up financially to where you aren't desperate for that next listing? Being really smart, leading with revenue. Right. Don't just go buy that next lead source because somebody on the phone told you it's gonna make you 100 grand this year. Right. If you have 200 grand to blow and you can afford to below 100 grand, okay, maybe that's an option. Otherwise, being disciplined with your finances, I mean, we have to personally do that as well as in our business. And I think because I did that, I had maybe those options to do that. So throw it.

Hey, Andy.

Hey.

First off, these are really cool. Lars threw me this, and I had no idea it was a mic. I was like, this is awesome. Dave Kaziana from Newport News, Virginia.

See you again, Dave.

Yeah, good to see you. I feel like I might be going through a therapy session here in a sec, so bear with me. But I've been doing this 17 years, and I've got four kids at home, 13, 10, 7, and 5. And I've got a team that's growing. I've been with the B school for a few years, but I'm in that struggle right now. I'm in production as a listing agent. Got a couple guys handling all the buyers. I stepped out of buyers about a year ago, but I wish my kids were younger.

And sorry.

I want to step out of business, but I want to enjoy time with my kids, and I see how quickly that you did that, and I want that. So I just don't want to try to balance that time where I'm getting time with my kids, but I feel like I'm going slowly, you know, you did it in a year. I've been with B school for a few years now, and a lot of that's my lack of structure and kind of personality, but I just want to experience that. I want my kids. I don't want to miss the time that I have with my kids. Left years were younger, and, you know, My oldest is 13, my daughter one of three, and I just want to be there, but I also want to grow. And so I'm trying to figure out, you know, what were the things. My question is, what were the things you did during that year that you felt like were most beneficial to ramp so quickly so it doesn't take me another five, and I miss out on time with my kids that I want while they're at my home.

Thanks. Yeah, that's a tough question to answer. I would say it's a great question. And I think that is the question to ask is what is it that you have to do? I mean, I think, you know, I've heard it said that you're one hire away from kind of going to the next level in your business, and maybe the next level for you is the next level of freedom from your business. I think of some of the key hires that I made and just the change in my life when I brought them on board. And those people are out there and they want to work for you. And so I think as we grow our businesses, our shift has to go from how do I become better? To how do I find people, you know, that are better and then just support them? I mean, I don't think everybody should just go out and hire people and just hire and hire and hire. But at the same time, there are some key pieces in your business. I think of every successful real estate agent I can think of has, like, that person, right? Like the person. And if you don't have that person, I think you need to find that person, right? They just. They just pick up where you left off without even asking. They just. You look at them and they just get you. They know what it is you're talking about. You don't have to over explain yourself. If you have that key person and you don't feel that way, that might be part of the problem, right? I just feel like, for me, it was my operations director. I don't think it always has to be the operations person, but I just feel like that is probably, you know, a key function of the business that needs to be filled by somebody who just gets it. You know, you be the entrepreneur, you find a manager, right? And then you find your technicians. But somebody in there has to be like that key person. So I think that brings you the relief and stress or relieves the stress a little bit. When you have that person, if you don't, it can really be tough.

So I'll just add one thing real quick, and I'll probably get emotional saying this. It's a mindset shift, for sure. And like you just said. And Cherie, I don't think real estate B school would exist if it wasn't Cherie stepping up in my business and just allowing me to go do something bigger and be there for all the messiness of the business. And there is someone in your world that would just love the opportunity, because corporate life doesn't allow these opportunities. Like any agent on your team, you attract talent, and someone's gonna step up and say, what are you still doing Listings for, you know, or an admin that, you know, Cherie wasn't hired on to run the whole company. And within like 18 months of hiring her, she was running the whole company. And I was down to one day a week. And so just look for the opportunities, like Andy said.

Dave Hook. I remembered the second part. To me, it was just understanding the power that we have as leaders. Like I said, just saying, how are you doing? I never thought that that would be such a big deal, but it was. And then, yeah. So, I mean, and then I think thirdly, just offering some more grace, at least for me. I think you're just naturally grace gracious person and forget. But, like, you know, for me, like the grace that God gives me every single day, if I just gave a fraction of that away to some of my team members, and I really didn't, I tend to be too much of a hard charger and was pretty clear about what we needed done and not done because I believed in them. But I realized that that approach just wasn't leadership. Right. That was management. Right. And so giving. Just kind of pushing into that a little bit more.

So we'll do our last question over here.

Oh, can you hear me?

There you are.

Yes, Minnesota. So my question for you is based on the leadership and how your team breaks down, where the are, and then also within that, do you have like a perspective of smaller team versus a larger team on being able to exit 3 to 5 agents versus 5 to 8 or 10 or whatever?

Yeah. So, I mean, I think what's cool is that every. A lot of different models seem to work. But I think, you know, some of those. Those key roles are there's front stage and there's backstage. Right. So front stage is all the sales and the marketing and all those things. There has to be some key leadership on the sales side. You got to generate opportunity and you got to convert it, and somebody has to be leading people to do that. Right. And then the second half of the business is that backstage and those operations and finance and somebody has to. And those are two very different people. I think of Lars team with Thomas and Mimi. Like, you know, I don't know Mimi real well, and I don't even know Thomas all that well, but I can really clearly understand that they're different and they're very key functions in the business. To me, those are the two key, key, like, pieces of leadership that need to be in place as you grow. There may be maybe you have somebody who, you know, as a leader of an ISA team, if you build out. We didn't have isa, so we didn't do that. But if that's your model, having a leader of that conversion side and really setting up your agents for success. But I think just think of your business in two ways, front stage and backstage. And then build out key pieces of leadership. And then to your second point of your question, with the size of your team, again, I think it can be done in a lot of different ways. Big is not better. In fact, I think bigger is more difficult, right? Not that growth is bad and growing your team is bad, but you know, growth for growth's sake, as far as your team goes, doesn't isn't always better. So I think the smaller you can keep it. If you can, if you can avoid bringing on more people and still hitting your goals, I would do that. Don't just bring them on to be like, well, now we're a team of 15. Well, now we're a team of 20. Keep in mind though that it's natural. There's a natural cycle with real estate that you always have to have that bench built out and there always has to be. You're gonna lose people like it's gonna happen and you need to bring more people on and so don't forget about that side of your business. But I wouldn't bring on people just to bring them on. So.

All right, let's give Andy a huge round of applause.

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