If you are like most people, you probably have a list of New Year’s resolutions that are taking up a lot of your time. Investors, in particular, are most likely setting goals for the new year and trying to find ways to accomplish them. However, in addition to setting goals, you should also take the time to evaluate your business and see what you can improve on. Not enough investors treat their business like a business. While they are closing deals, they aren’t seeing profits where they would like them to be. If you focus on moving your business forward throughout the year, you won’t have to worry about making sweeping changes when the calendar turns next year. Improving every aspect of your business starts now.
A lot of investors run into trouble when they begin managing their own finances. The most important number in any business is the bottom line. Just as you would in your household, you need to be on top of all of your business expenses. If you do not know where your money is going on every deal, you are probably throwing money away without even realizing it. If you aren’t comfortable with budgeting and working with numbers, you should seek the council of an accountant. What you spend for their services will be well worth it. Closing deals and collecting checks is great, but not nearly as important as keeping an eye on your bottom line. Start by looking at all of your expenses and see what can be changed. If you are not on top of your financials, your business will slowly start to suffer.
In addition to your financials, you should take a look at where you are getting deals from. It is easy to take a strong lead source for granted, but it may be the backbone of your business. Whether or not you get your deals from direct marketing, strong networking ties or a realtor relationship, you need to make sure the source continues to provide deals. A certain percentage of your deals will be gained from being in the right place at the right time, but a majority will come from existing sources. This is where you should spend your time, money and focus. Instead of looking at new ways to get deals, see if you can improve on an existing source that has worked for you. Reach out to your realtors, attorneys and fellow investors that have provided you with leads and see if they want to do lunch or grab a cup of coffee. There is plenty of competition in every market. Unless you show your appreciation and gratitude, they may start to look elsewhere. It is always easier and less expensive to try to retain a referral source than to obtain a new one.
The people you surround yourself with and work with every day will largely define your business. Your team of realtors, contractors, mortgage brokers, attorneys and accountants has a direct impact on your business – today and moving forward. It is up to you to continue to work with everyone on your team and to see what areas need to be improved. Your realtor should know what types of properties you are interested in. Your contractor should know what work is expected and what your goals are for every property. Your mortgage broker should call you with every new program change or every time rates take a dramatic turn. This means taking the time out of your busy day to meet or call everyone on your team from time to time. The more efficient your team is, the better your business will be. If your team is strong it will free you up to work on other areas of your business. Ultimately, with more free time, your business will become more profitable.
The investing business rarely stays the same for very long. One minute foreclosures are the latest rave and the next, commercial properties may be in vogue. One of the keys to being a successful investor is to have a diverse business that is immune to any changes in the market. Accordingly, you need to constantly educate yourself and learn more about the business. This could mean doing something as easy as spending 20 minutes a day reading and researching a new niche. It could mean joining local investing groups or networking clubs. If you are passionate about the business and have a hunger to succeed, you will want to stay active and know what is going on. Additionally, you should try to learn a new skill every month. There are plenty of free workshops or seminars at Home Depot or Lowes that can help you pick up one handyman trait for just a few hours on a Saturday morning. Finding one good application or even a website can greatly improve your business. If you are not constantly improving your education or skills, you will quickly fall behind other investors in your area.
Running a successful investing business should be treated in much the same way that you would any new business. By staying on top of expenses and knowing where you generate business, you can focus on what works and what doesn’t. There is always something you can learn or improve on with any business. If you want to get the most out of being an investor, you should learn to treat it like a business.