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The Importance of Real Estate Business Systems

Published on Friday - November 12, 2010

If you intend to make a career out of real estate investing — or use flipping homes to create a way of building real, lasting wealth and freedom — you must have real estate business systems set in place. In fact, if there’s one distinguishing factor from businesses that succeed — and those that don’t — it’s the presence of proven business systems that serve the venture, not simply provide busywork for its inhabitants.

The trouble that most newbie real estate investors is knowing how to cultivate the art of building business systems. Which online business systems should they spend time? And which should they avoid? And what exactly are the primary benefits of building a real estate business, from the system level? (All that work needs to pay off, at some point.)

Here’s a quick guide to learning how to implement real estate business systems into your career, and maximize your ability to succeed on a grand scale.

The Art of Implementing Real Estate Business Systems

Building a real estate business

Step #1: Understand What Defines a System

A system is simply a set of principles or procedures according to which something is done. From a business perspective, this means organizing the many different steps and activities taken in a business, and coalescing them into an organized framework for how the actions should be taken, and what constitutes a good result or a bad result.

This definition of “system” can extended quite broadly throughout your real estate business. Certainly it takes no large intuitive leap to understand that an area of your business, such as direct mail marketing, can and should be systemized. But areas not quite so obvious, such as logo design or what to do at a networking event, can all be broken down into a blueprint of correct procedures.

Step #2: Focus on the Benefits of a System

Okay, so what does building a successful business with systems actually do you for you? Besides filling up your computer with charts and graphs.

There are two key advantages to organizing your real estate business around systems. For one, a system can be replicated…by someone other than you. This helps you delegate tasks to members of your team, which frees you up for more high-level tasks required in your business.

Secondly, systems are scalable. This means, after you’ve been at your business for a while, you could take on partners — or spin your business off into other segments or franchises — and leverage the power of other entities to grow your business exponentially.

And perhaps most importantly of all, organizing your business around real estate business systems forces you to pull apart every aspect of your business. Like a mechanic rebuilding an engine – and taking each part out to examine what’s working and what’s not – you’ll be forced to stress-test every area of your business. This can bring some much-needed clarity and focus to your business operation, not to mention sharpen your business owner mindset.

Step #3: How to Systemize Your Business

Start by brainstorming all the different, possible systems that make up your business. Put down every single thing you can. This could include things like: marketing, publicity, networking, working with contractors, etc.

Then break down each of these into smaller subsets; for marketing this might include things like: bandit signs, Craigslist, Facebook groups, etc. Keep going until you’ve put down every single aspect of that larger category as you can.

This is where most people stop. Now it’s time to take each section of your real estate investing operation and develop a system for it that can easily be given to someone else. This may take some time to determine. Often business owners will find, with the act of writing out the steps to accomplish a task, that they find needless steps – or areas that could be improved – and by tweaking here and there they can maximize efficiency and performance, without compromising results.

And when developing the steps needed for each system, write them as if somebody you had just hired – but was not intimately familiar with your business – was looking at them. Don’t use short-hand language or jargon. Talk plainly and clearly, step by step, to lay out exactly how a stranger would perform those functions and replicate the same exact results.

Scientists do this when they conduct studies. By clearly articulating the steps they used to get a result, they make it possible for other scientists to try to replicate those same results. That’s how progress works, both in science and your business.

“To Infinity and Beyond…”

Believe it or not, every step of the process of your real estate business can be systematized and outsourced in order to create a business model that eventually does not even require your daily monitoring or constant involvement so that you can actually live the life you have always dreamed about.

Though of course for some the mayhem of doing many deals on a daily basis is what you love most. That is fine, but it is better when you do it because you love it and not because you have to. And real estate business systems can certainly help you get there.

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