The Good, Bad, & Ugly: The Critical Mindset Shifts to Building a Business Worth Owning

Hey, welcome back to the Business Freedom Podcast. Lars Hedinborg here, founder of Real Estate B School. And this is the good, Bad, ugly of building a real estate edition of the podcast. And this is where I get to rant a little bit about, you know, what I think is broken in the industry, how I think the industry is changing, what I've done well, what I've failed miserably at. And so all that being said, I appreciate you joining me for another edition of the podcast today. I want to talk about when I look back on my business journey, really in order to build a fully leveraged real estate business, I had to break through a lot of limiting beliefs and have a lot of major mindset shifts and just a different way to look at the world. And I think there's some value for me to go through what that looked like. So I call this one, you know, the Critical mindset shifts to build a business worth owning. That's the title of today's podcast. Just came up with that on the fly and, you know, really influential early on in my journey in business building. And so I'm on the second business now, multimillion dollar business this year. The combined revenue of the two businesses, probably about 6 million or so and fully leveraged still at this point, you know, I work four, five days a week, so I'm still involved in both businesses, but they are fully leveraged. It's one to many for me in both these business and the influential, really probably one of the most influential works in my journey was E Myth, Michael Gerber. And I love this quote from the book where he says most entrepreneurs are merely technicians with an entrepreneurial seizure. Most entrepreneurs fail because you are working in your business rather than on your business. And so I really took that to heart. And the E Myth question, you know, if you had to replicate your business 10,000 times, how would you have to think about it differently? That is a rider downer. If you had to replicate your business 10,000 times, how would you think about it differently? So even if you're a real estate agent and you're know, early stages of growing your business, think about it that way, you know, so when I stepped out of buyers, I only worked with buyers so I could build a system to not have to work with buyers and backfill with talent that was more appropriately suited for that position. Same thing with listings. I mastered the listing side of the business so I could build a system to have someone come in and do that work. So let's go through these 10 critical mindset shifts. Number one is the fact that you are absolutely a business owner. And I think traditional methods and just our industry in general, they're not training us to build real real estate business. So it's this shift around, you know, just doing the thing, you know, as Michael Gerber says, doing it, doing it, doing it, you know, painting the house or doing the tax returns or, you know, throwing pizza pies up in the air. You know, that's not a business owner. So you've got to make that shift from doing the thing to building the systems that you can hire people to do the thing at way lower price or dollar per hour than you want to get paid. So that's, number one, is that you are a business owner. It's, you know, a lot comes with that, right? You've got to track in your business, you have to use sound business principles and you've got to build it in a way where it could be replicated even if you plan on not replicating it. Number two is that you are a marketer. You need to embrace the role as marketer in your business. I still do. Basically. I'm the chief marketing officer of both of my businesses. It's something I learned early on and I fell in love with and I trained heavily on in real estate B school and the ability to generate inquiries, right, buyers and sellers that raise their hand that you know, are at least asking about something, that you offer some kind of giveaway, some direct response, offering some call to action of some sort. So, you know, we've got probably eight marketing pillars in our business this year. You know, I don't go down the path of building or even entertaining the thought of adding a lead source unless it could lead to at least an additional 50 transactions within the first 12 to 18 months of that lead source. And that that's allowed us to go super deep on lead sources and not really wide. Number three is the fact that every day you must be creating new business. And so you're a new business developer. You can call it prospecting, you call it lead generation, we call it new business development. But it's the fact that even if it's just you, you need to have this culture of productivity where the first part of your day, the best part of your day is for new business development. We have what we call protected time, and that's 8 to 11 every morning, 50 minutes on, 10 minutes off. We do 50, 10 time blocks where in a three hour time period there's two and a half hours that we focus on developing new business. Everyone on our team, inside sales and outside sales. So you've got to generate business every day and track your results, track your activities as well. Number four is that you need to know that we're trading time for money. And there's a simple equation I did when I was early in the business. So number four is turn your time into serious money. You need to make the decision at some point. If you're not making the amount of money that you want, you need to make the decision at some point that your time is worth x dollars. And for me, right out of the gate, I decided that I was worth $250 an hour. For me, I wanted to work 2,000 hours. I was willing to put in. Well, I wanted to work 2000 hours, which is roughly a 40 hour workweek, times 50 weeks is 2000 hours. I wanted to make half a million dollars pre tax. So pre tax I needed to. Well, not needed to. I wanted to make $250 an hour and it's gone to $500 an hour and it's $1,000 an hour every hour I put in. Now I want to see a path to make $1,000 an hour for the time I put in. So now everything I do is one to many. This podcast, I'm sharing the good, the bad and the ugly about my real estate business growth journey and just business in general. And I attract people to what I'm teaching and that's a highly leveraged, highly dollar productive activity. So what's your number? Once you commit to that number, it makes it really easy to get things off of your plate. So really, really, really encourage you to pick a number, write it on five index cards and put it everywhere. Number five is to know your numbers. Making the shift from production mindset, working in the business to working on the business means that you have to know your numbers, you've got to run monthly financials, you have to track your leading indicators, you have to know how many meaningful conversations lead to an appointment set. You have to need to know how many appointments set lead to an appointment met, how many mets lead to signs, how many signs lead to contracts, how many contracts lead to closings, and how many of those closings are really clients for life that are referring business back to you. You gotta know your numbers, you gotta know your cost per lead, your cost per set net sign. All of that. That's part of your responsibility as a business owner because we've now shifted your mind to think as a business owner. Number six is the fact that systems are the solution. You Cannot scale a business without building systems. Right. I mentioned earlier, made the shift from the shift from, you know, doing everything to doing very little in my business over basically a three year period. You know, my journey was about 58 transactions. My first, well, my. The first year I added somebody to my team, it was 58 transactions. That was 2009. That went to 118, 11778 as the market was declining. Those three years, 9, 10, 11 to 248, 191112 to 312 to 4 53. Something around this about a five, six year journey. And the year I went did four hundred and fifty three sides is the year I only worked Tuesdays and I was only in town, I think 42 Tuesdays. So the reason I could do that wasn't because I'm like this genius or I had ever done it before because I hadn't and had no sales skills, Never built a business, never managed anybody. It was because I had a systems approach to my business. I work with buyers only so I can build a system to train someone else to do it. I work with sellers only so I can build a system to train somebody to do it. All the files, we touch them the same way. Our client servicing for buyers, for sellers, it's documented. And there are systems that we now train on that our members can implement so they can scale their businesses in the same fashion. Number seven is the fact that you must stop chasing squirrels. Your failure to scale is based on the fact that you think there's this magic pill and you're chasing. I say you're. I just say the generic you are chasing. The majority of our industry is chasing some easy button and they think it's the next CRM or the next lead source or. And it's just not. It's not. It's two paid lead sources, yard signs and a database. One of our members who is actually on my real estate team, Dan Jones in greater Charlotte. He'll do almost 300 sides this year on two paid lead sources. And he's about a 35% profit margin on over a $2 million GCI business. And he's totally out of production. Just took eight weeks off to have their first child and he took like paternity leave or whatever. It's because he doesn't chase squirrels. He kept to a path. He goes super deep on every lead source before he adds another lead source. Very related to number seven, which was don't chase squirrels is number eight. Go deep and not wide. Go deep in everything you do, right. If you don't have a lead management policy. If you don't have a way that the best practice to handle every lead source, it's a foundational system or tool or process that you have to have documented. If you don't have that, you don't have the right to add a second lead source. You need to monetize. You know, we can go three, four times lead conversion increase just by adding some best sort of practices around lead conversion and more importantly, lead management. So you've got to go deep and not wide. You've got to go deep on your people. The reason why brokerages are broken broken is because they go wide. I'm in the number one KW office in the world and our average agent sold 3.5 homes the first half of this year. So they're on track for seven closings. Brokers go wide, we go deep. Our average agent will do over a million GCI this year and they get paid accordingly. They get paid really well. They get paid about $250,000 to do a million GCI. Different model, right? Your model doesn't have to be my model. I feel more secure in my ability to make a lot of money in any market than the average broker. So go deep, not wide. Number nine, this one is important, is to guard your mind. I only use social media in a business setting. I do not watch any news. I watch very little tv. I don't read newspapers. I do the things I need to do to get to where I want to go. And, and whether that's as a father, as a husband, as a man of faith, as a brother to my men's group, or my physical health or my spiritual journey. I decide what gets into my brain. I don't waste any time on conversations that aren't moving me forward in some way. Not in a. Like, I'm better than you. I'm not going to engage those conversations. I just, I want to be around people that are moving their businesses forward or moving their lives forward. They want to be better fathers, better husbands. They want to be better business owners. They want to increase their physical vibrancy and energy and their faith. And I want to have real authentic conversations and I don't want to be around. I just, I don't watch football, I don't watch any sports. You know, I don't golf. I don't do the things that I think are escapes from. I create the world I want to create. So gotta guard your mind, make a decision. If you want to achieve at a high, high level. You can't watch Two to three hours of TV a day. You can't binge watch anything on Netflix. It feels good, right? I totally get it. It's just not gonna help you get closer to your goals. And number 10 is that you must do the work. You've gotta do the work. This one is the most obvious. There's not a shortcut per se. The only shortcut I know of, and this is not a plug for real estate. B school, although I guess it is, is getting aligned with somebody that's done it ahead of you and that's built out the systems that you can use, the tools that you can use, the strategies to straight line this process for you. It doesn't matter where you are in the journey now. You've got to do the work to get to where you want to go to. And the industry's changed dramatically and it will continue to shift in major ways via technology and just business model disruption and then just the cyclical nature of the real estate market. We've got a lot of stuff coming our way. And so if you don't make this decision to build a high performance real estate team and do the work to do it, I fear that you'll be out of the business or you'll be working for a team leader. And that's not what I want for you. And so you've got to do the work, you've got to put in the miles, you've got to execute, you know, one step after the other to build this thing. So I have got a challenge for you. 66 day challenge. And I want you to pick what it is. You know, right now I'm in the midst of a physical challenge. I'm also in the midst of reading my Bible every day for an entire year. So I'm reading the whole Bible in one year. That's an annual challenge I took on. What are some of the other challenges? I did a wake up early challenge with. I didn't like it should be a go to bed early challenge because waking up at 5am Wasn't sustainable. I did it though. I'm constantly doing these 66 day challenges. So what's going to be your challenge? Is it to, you know, stop watching tv, you know, Sunday night through Thursday night, maybe just Friday and Saturday night and put that time back into your family or spouse? Is it to hire, you know, make the commitment to, you know, not to lead, generate to do new business development from eight to 11, five days a week for 66 days in a row that'll change your life? What's the thing you're going to commit to for the next 66 days. It's my challenge for you. So hopefully you'll take me up on the challenge. As I always say, I only have love and respect for anyone that's in this business. Nothing but love and respect. Because this is not the easy path. Building a business is hard, but there is, there's a path. If you have any interest in, you know, having a deeper level conversation with me or one of my business partners, our business coaches, just reach out to us. You know, it's not hard to find us. We're Real Estatebschool.com if you know, you just want to get access to some of the tools that we use that I've used in my journey that I use now. Our clients are scaling their business with. You can go to getbschool.com it's getbschool.com if I'm not mistaken. Yep. Getbschool.com and I'm here for you whenever the time is right. And if we never do business formally together, that's totally cool. My goal at this point is to add value to the industry and to teach a different way of going about doing this business. So much love, much respect, and we'll talk to you on the next episode of the Good, Bad, Ugly edition of the Business Freedom Podcast. See you then.