Chapter 1 - Cornerstones of the Business
The whole is more than the sum of its parts.
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Adam Eyre, Top 100 Lender at PrimeLending and previously Top 100 at Wells Fargo Bank
In real estate, we need to find deals, do deals, manage money, and keep our head straight; marketing, operations, finance, and attitude. These are the four foundational cornerstones of the real estate business. Four—but one plus one plus one plus one equals a number bigger than four. The whole is more than the sum of its parts. We need to be strong in all four areas to be strong in this business.
“Jim, what about branding, cold calling, contracts, legal, inspections, accounting, lead follow-up, the secondary market, technology, staff, payroll, education, and on and on?” If we are talking about a large multinational manufacturing firm, we may need to break it down. When I worked for that type of firm out of college, the organizational chart looked like a road map from Mars. Supply chain management, manufacturing, customer service, internal accounting, research, active product development, real estate, external marketing, and about a dozen more categories. We are providing a service in real estate, keep it simple. We find deals, we do deals, we manage some money, and we work at keeping our head straight. Marketing, operations, finance, and attitude.
When you are a producer in this business, you are responsible for everything. The vast majority of the industry is paid as an independent contractor. If you happen to be paid as a W-2 employee, however, don’t fool yourself into thinking that you don’t need to worry about marketing, operations, finance, and attitude. Don’t make the mistake of thinking that your company will take care of pieces of that for you. As lenders and real estate agents, we are 100 percent responsible for our revenue line and therefore our own success. We need to be the owner of marketing, operations, finance, and attitude. Yes, we may ask (hire) our company to take care of this piece or that piece, but we are still the CEO of own our small business and therefore must be responsible for all four categories. Lots of people will be around to help, but we are the responsible party at the end of the day.
Keep it simple. Why is it important to keep it simple when you are a lender or real estate agent or commercial professional? We are called “real estate agent” or “lender” or “commercial professional”; but who do you think is the CEO of your small business? Who do you think is vice president of marketing or vice president of operations or vice president of finance; and who do you think is the director of attitude? We wear a lot of hats in this business. The majority of the industry does not have a full-time assistant. Therefore, at minimum, we wear six hats: CEO, VP of marketing, VP of operations, VP of finance, director of attitude, and lead sales representative. Six! Do all six have to work for the business to work? You bet. Can we neglect any of these six? No way. So don’t overcomplicate it. Six is enough. Keep it simple.
Marketing. Marketing includes all those areas that are associated with finding new business. We have specific strategies that correlate to specific target markets. For instance, we may be targeting past customers, friends that we have never done business with, people that we don’t know in a geographical area, or attorneys that we work with. The list is nearly endless for possible target markets and strategies thereof. Ultimately, our goal is to generate leads and produce new customers. All those activities fall within marketing. Don’t confuse marketing with sales; sales is simply a piece of marketing.
Operations. The customer hired us to do a job; we will deliver through our operations efforts. These are active transactions that you are currently working to complete. Your marketing efforts are responsible for generating new business, and your operations efforts will be responsible for getting the job completed.
Finance. There are four areas of finance: 1) the financial skills necessary to provide a good service for our customers; 2) the financial skills to manage a small business; 3) the financial skills to run our personal life; and 4) the financial skills to save and invest. Number one and number two are the primary focus of my efforts in this book.
Attitude. This may be the hardest area of all; we need to keep our head straight. Attitude has an overlapping impact on the other three categories of marketing, operations, and finance. What is my attitude about marketing, what is my attitude about operations, and what is my attitude about finance? Attitude is the one that is often neglected; this is also the one that will send your business to the moon many times over.
Everything we do in this business of real estate can be (if you allow it to be) placed in one of those buckets. What about legal? Put it in operations. What about bookkeeping? Put it in finance. What about lead follow-up? Put it in marketing. What about business coaching? Put it in attitude. What about the appraisal? Put it in operations. What about budgeting? Put it in finance. What about contracts? Put it in operations. What about staying fired up and motivated? Put it in attitude. Keep it simple. We find new deals, we manage current deals, we manage money, and we work to keep our head straight.
Marketing, operations, finance, and attitude. All these areas will need to work in harmony for your business to thrive. You can make $1 million per year for ten years straight, and if you have the wrong attitude and can’t manage money, you’ll be broke by year number eleven. You can provide the world’s best service, but if you can’t find new deals (marketing), forget it. You can be the world’s best money manager, but if you can’t find deals or do deals, you’ll have no money to manage. You can find deals, do deals, and manage money well, but if you don’t have the right attitude, you’ll be inconsistent and never reach your full potential.
Don’t be intimated by this. You can be successful in this industry by simply recognizing that the industry is more than just doing deals, doing deals, doing deals. It doesn’t take a lot to be strong in all four categories. As a starting point, simply recognize the four categories exist, and then focus some time on each weekly; you’ll grow strong over time. It’s no different than an athlete focusing on 1) nutrition, 2) fitness, 3) skill development, and 4) attitude. Except for us in real estate, it’s marketing, operations, finance, and attitude.
The real estate business can be incredibility profitable and at the same time incredibly confusing (because of the many hats that we wear). Keep it simple: we find deals, we do deals, we manage some money, and we work to keep our head straight: marketing, operations, finance, and attitude.
Go get ‘em!
A SUCCESS GUIDE
for real estate lenders, real estate agents and those who would like to learn about the professions.
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