I have learned over the last few years that I can’t do everything myself if I want to reach the level of success I am striving for. I have also learned that no matter how good I think I am at something, there are other people who are better at it than me, especially if they have more time to devote to the task. I have been working on outsourcing many of my day-to-day tasks, but there is still more I can do. So far hiring people has not cost me more money like I thought it might, but actually made me much more money.
As a real estate agent I tried to learn the business myself without learning from others even though my dad had been in the business for over 20 years at the time. I tried to manage my rentals myself thinking I could deal with tenants and it would save money. I tried to manage all my contractors and flips myself thinking I would have time. I did my own accounting for years even though I hated it. I did my own BPO’s for years thinking no one else could do them as well.
When I hired someone to take over each of these tasks for me, it didn’t eat into my profits, but it made me more money. I realized the people I hired (if I hired the right people) were just as good as me or better than I was at the jobs I hired them for. They weren’t always better because they were more talented. But they were better because they had more time, they had more focus and they had a clear idea of what their job is.
Why is hiring people essential to running a business and making more money?
Many people want to start a business and many people do start businesses. Most people who start a business get stuck working in their business and not working on the business. If you work in your business you are the one doing the work. You are handling the busy work, the day-to-day tasks and if you manage to hire help you usually spend all your time managing staff or making sure the staff are doing their jobs right. Your still stuck in the business!
Working on your business is much harder to do, because you must let go of control. You have to separate yourself from the day-to-day operations and concentrate on profit. You must hire the right staff, then hire people to manage the staff. Most business’s succeed when they have an owner who can see the big picture, look in to the future and come up with new ideas. When you are stuck doing all the busy work, you don’t have time to think about the big things than can be game changers.
If you are a rental property owner, a fix and flipper, a real estate agent or a wholesaler you are running a business. You must treat it as a business and create something that does not need you constantly in the picture to work.
Why are people you hire able to do a better job than you?
The biggest issue most business owners have with hiring help is they do not want to give up control. They feel it is their business and they know how to do everything better than anyone else. Why would they hire someone who will do a worse job and cost them more money at the same time? The problem that most business owners don’t see is they may be better at certain tasks than someone they hire. However, are they better at those tasks when they are trying to do everything at once and don’t have the time needed to complete those tasks properly? I ran into this problem myself where I am trying to do ten thousand things at once and maybe I would be better at those tasks than someone I hired if I was only doing that one task and had time to complete it.
When you are short on time and short on focus things do not get done quick enough or well enough. So even if you hire someone who does not do those tasks perfectly, they will most likely get done better than you did them. You can also train your people how to complete the tasks over time so that eventually they are as good or better than you at them. When you step away from those tasks and see other people do them, you also might see things that can be improved. When you stop doing those tasks you see the big picture and can make changes in the business that equal more money.
How has hiring people to help run my business made me more money?
I have hired many people over the last few years and my team is up to 9 people plus a few others who work only a couple of hours a week. Every time we hire someone I get a little nervous about the extra costs, because the overhead on my business is already very high. In the end hiring someone almost always makes me more money, because it frees up my time to pursue other opportunities or focus on higher level activities. In the next sections I will outline exactly what hires I have made and how they have helped me over the years.
How hiring a personal assistant help my real estate business
When I started to sell a lot of houses around 2008 I was swamped with work. I was working 12 hour days and the weekends and barely getting things done. I had hit it big with REO and HUD listings, which was great, but it also was stressful. I was not able to spend any time on the flipping business and I was barely getting BPO’s done. At the time i was doing almost everything myself including driving to all my properties.
I hired my first assistant and it was so nice to have help. I had to teach her how to do many things, but she also figured out how to do many things on her own. She took over the expenses on REO’s, which I hated doing. She took over much of the busy work and paperwork I was doing. I didn’t realize how much time I was spending on the little stuff. She eventually learned to do BPO’s which saved me a ton of time! She started part-time and then came on full-time a few months later and is still on my team. Now she is licensed, still my assistant but sells enough houses every year to more than make up for what I pay her. Her help allowed me to work on the flipping business again and add a huge stream of income.
How hiring someone to do drive by inspections made me more money
After I hired my assistant to help complete BPO’s and paperwork I had a lot more time. However, I when we do BPO’s we have to drive by houses and do exterior or interior inspections. I was doing almost all the driving for those inspections and for my new REO listings. I would put at least 30,000 miles a year on my cars and that took a ton of time. I would tell myself I liked driving and I did, but really it was costing me a lot of money to spend all my time driving around. I ended up hiring my mom to help with inspections, then added my uncle, my cousin and now one member of my team helps as well. Sure I don’t make as much money as I did before on BPOs, but I make more money overall because I spend my time on higher value tasks.
By not driving around all over the place every day, it gave me time to start this blog.
How hiring someone to run my team allowed me to buy out my dad
My dad ran out real estate team from well before I started in 2001 until 2013. During that time I was able to hire my own assistant and use his assistant as well. I also had to give him a huge percentage of the deals I did and he kept the majority of the profit on our flips. I was leaving a lot of money on the table, because I sold most of the houses and I pretty much ran the flipping business. I had though about taking over the team for a while, but I did not want to hassle with the management and keeping track of payroll, expenses etc.
Shortly before offering to buy out my dad my friend expressed interest in changing careers. He was a corporate manager and hated his life. I offered him the opportunity to work with me and he accepted. He worked on getting his license and I now had a person who could manage the team if I took it over. I went to my dad with an offer and he was ecstatic to be able to hand over the business that he was tired of running.
I paid my team manager a base salary, plus he got his real estate license and started selling houses. He was able to set up all the payroll, get the business set up correctly (with the help of lawyers and accountants) and we were up and running. taking over the team was a lot of work, but it meant I got to make all the decisions, I was the sole owner with no partners and I would make more money. There is no way I could have done it without hiring someone new. We have since hired new agents for our team, my cousin to help with accounting and a new person who’s only job is to make phone calls all thanks to my team manager.
If you are interested in starting a real estate team or learning more about how I was able to find success in real estate, check out my Six Figure Real Estate Agent Success System.
How hiring a property manager made me more money with rental properties
I managed my rental properties myself until I had 7. I thought I was doing a good job, but I really was not. I did not have time to properly check out tenants, stay on them for rent and I was too soft. We had some tenants way behind and others who did not take care of the houses well. I ended up telling my team manager I would pay him 8 percent to take over management and make sure everything was done right. Since he took over no one is behind, everyone takes care of the houses and we have much better tenants. Even though I pay him 8 percent I think I make more profit because of the better tenants and systems.
How hiring a contractor to manage all my rehabs has made me more money
My biggest issue with flipping houses and finding contractors has been managing the rehabs. I find good contractors and then they start screwing up or charging more. I hire bad contractors or I just can’t find enough contractors. I was getting really tired of it taking six months to finish a flip because I did not have enough contractors or the wrong contractors. So a couple of months ago I hired one of my contractors to manage all my rehab projects. He is a full-time employee and only works for me now. He has a management background and is very honest. Already we have all my projects with crews working on them and things are moving much faster. Again I did not have the time to properly manage all the jobs and contractors and my business was suffering for it.
In the future if we get our systems set up correctly and enough sub contractors we could even start a contracting business doing work for other people. I know how hard it is to find good contractors!
While it is not easy to hire people, it is vital to anyone’s business. Many business owners do not want to manage people, but you must have help. If you don’t like managing people than hire someone to be your manager so that you can focus on the business. When you get the right people in place in management and staff, you should have a business that will run on its own. You can then take vacations without working, spend more time with your family, focus on building the business bigger or move on to new ventures.