Diving into a new business is hard because most people dive with zero experience and they spend most of their time learning in the beginning. Once one gets to know the market and learn the art and science of that particular business, his/her journey starts to become more steady. But the reason people prefer business over a job is that it provides limitless opportunities to grow and scale your business.
Since we are more interested in commercial real estate here, we will prefer talking about how we scale that after we make successful deals and get comfortable in the commercial real estate investing business. Most people think growing business is exactly the same thing as scaling and that is why we will start with busting the myth of these two being the same to avoid confusion down the road.
So, growth is defined as buying more properties. Even with buying a single property, your business grows. Scaling however is different. Scaling is having the skills and infrastructure or resources to manage the business when it eventually keeps on growing. It is often referred to as the foundation of your business as it grows and hence it should be able to handle and manage the growth with time. No matter if you are looking to scale within your state, country, or even to international markets you need to have the necessary skills to support the growth. Fundamentally there are three steps you must stick to if you want to successfully scale your business.
1. Clarity of Vision
If you don’t have a clear vision of where you are going, how do you expect to reach there? Therefore clarity of vision is one of the most critical and fundamental steps to a successful business. If you pay close attention, this can really help you grow and scale.
When you are clear about how big you wanna grow, you can easily do the math and find out what skills, systems, and infrastructure would you need and how many people would you need to hire to run/manage your business successfully.
Remember, it is advised to be specific in terms of your goals. This will help you get your numbers right. And when you get your numbers right, you will be able to calculate the required equipment to scale. Otherwise, this will slow you down and that means it will cost you time. And time is priceless.
Furthermore, scaling investing businesses comes with a risk. If you hire fewer people than required to manage your properties and save money, this can cost you more. By hiring lesser employees you will not be able to effectively manage the investment and hence your investment will fail. Studies have shown that startups that scaled quickly had a 75 percent failure rate. The reason for failure is premature scaling. To avoid premature scaling, one needs to focus on the way you run your business and improve it.
A clear vision is important to attract highly skilled professionals. You need to give them a reason to work with your company. The professionals must know that you are going to scale your business.
2. Know Your Strengths
Knowing your strength is perhaps one of the most important things you will do when you are scaling your business. When you do figure out your strengths, you can outsource the rest of your tasks. No matter how efficient you are, you have only a limited number of hours each day. That is why you will outsource the task of finding, evaluating, and managing the properties you want to invest in.
It's highly likely that you are good at finding the best properties to invest in. In that case, you can assign the rest of the jobs to the professionals you have hired. If you are good at managing the properties
It is advised to outsource the less important tasks as well. Tasks that others can do for you and save you time. You can spend that time on a more important task.
3. Build a Capable Team:
Each employee of your team is a building block of your business. Each task your employee carries out adds to the growth of your investing business.
Commercial Real Estate Investing is hard regardless of how experienced you are in real estate investing. You need a strong team to help you manage the properties you invest in.
Here are professionals you need to hire when you are looking to scale your business.
Lawyers
Accountants
Maintenance technicians
Rehab team
A leasing agent
Property manager.
Now that you have hired these great professionals, you need to provide them with the guidelines and standards that you maintain in your properties. Because these standards are applicable to the existing properties as well as to the properties you are going to invest in in the future. With having this team on board the process of growth and management will become a streamlined process.
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