Many real estate investors start with the dream of building a successful business that frees up their time so that they can spend more time with family and follow their passions. As Michael E. Gerber remarked in his seminal book The E-Myth, your goal as an entrepreneur is not to “run” a business, but in fact, to “own” a business. However, when you’re in the trenches of building a business, it’s easy to not know where to begin and find yourself overwhelmed and exhausted in the process – and with less free time than when you first started. That’s why learning how to systemize your business is the key to separating yourself from your venture.
Whether you’re looking to improve the efficiency and success of your business, or you’re simply attempting to carve out more time away from the desk (or both!) here’s a simple, three-step process to systematize your business so that you can give your venture the oxygen it needs to breathe.
Benefits of Systemizing Your Business
Before we jump into the nuts and bolts of adding proven business systems to your operation, it’s important to clearly establish the “why” of business systematization.
Adding systems to your business has the following advantages:
Depersonalize your business: It can be an emotional rollercoaster to ride the ups and downs of a real estate investing business. By instituting systems in your business that you can trust, you’ll be able to rationally, and with a dispassionate eye, look at the performance of each system, then make adjustments accordingly, without getting emotionally involved in the day-to-day.
Consistency: There’s nothing worse than having one end of your business look (and act) incongruous from the other. Yet we all know Fortune 500 companies who make this mistake all the time. By integrating business systems, you’ll enjoy consistency and integration across all areas of your venture, which can help you avoid confusion and decision-fatigue about what to do next.
Leverage: There’s no quicker way to gain leverage in your business, than to systemize your business and then hand over those systems to members of your team. (You’ll get more done, and accumulate less gray hairs, in the process.)
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Steps to Systemize Your Business
Now that we’ve discussed the advantages of putting systems into place to help you run your business operations more efficiently, we can get into the nuts and bolts of exactly how to do so.
The first step is to analyze your current business practices and take stock of what systems you might already have in place.
1. Take Inventory
The goal is not to bulldoze your way through your entire real estate business and reinvent the wheel. Instead, the goal is to get a clear sense of the existing systems you already have in place. Once you’ve done that, you can then figure out how to improve them, as well as come up with new systems that can both complement and augment your existing operations.
Here are a few different questions you can ask yourself to help you identify what’s currently working, and what areas could use improvement:
Current systems: What systems do you currently have in place? How would a stranger organize your business?
Rock stars: Which current systems are successful? Why are they working? What’s their secret sauce?
Underachievers: Which systems need to be tweaked? What obstacles are standing in the way of your business being awesome?
Wish list: Which systems would you like to create to help improve your business? Don’t just focus on performance, also focus on leverage, namely giving you more bang for your “time” buck.
2. Create a System Path
Running a business can often feel like you’re making your way through a labyrinth, in which you’re surrounded by hedges and unable to see the way out. But by breaking down every business system, according to its step-by-step path, you’ll not only see places where you can fix inefficiencies, but lay the groundwork to handing off those systems to somebody else.
Here’s how to create system paths:
Pick a medium: Whether you use mind-mapping software, or hand-drawn visualizations made with crayons, pick whatever medium you prefer to map out the flow of all your systems.
Every action: Take each system, and write down every action that happens within that system from beginning to end. Don’t fib; be honest, and be sure to make a note on the amount of time spent on each action.
Inefficiencies: If you’re brutally honest when mapping out your current system flow, you’ll be better able to identify inefficiencies. Take a look at current systems that seem to have repeated steps, any unnecessary steps, or steps that are currently taking too much time. Now, you’ll need to spend some time figuring out how exactly to improve inefficiencies. Once you’re done with that, you’re ready for the next step.
Documentation: This is, by far, the most important part of systemizing your business. The goal here is to document what “should” happen, ideally, for each system. How tasks should be accomplished, in what order, what materials are needed, what best practices should be followed, how long each task should take, etc. Documentation is the key to successful business systematization because that means that you’ll now be able to hand off the systems to your employees.
3. Hand Off the System
You’ve already done the hard part! Now, it’s time to take all of your systematization efforts — both the visualization and the documentation — and (finally) hand it over to a system owner.
This doesn’t have to be done all at once; no need to hire 12 full-time employees right out the gate. However, do your best to hand over at least one key action a week, or one entire system a month, to somebody else. (You might even create a system to handle this “handing over” of systems!)
The overarching goal of analyzing just how to best systemize your business is to eventually be able to scale and replicate your operations in such a way that you can hand them off to others. Even when you’re just getting started on your real estate business, it’s never too early to set systems in place with the expectation that you’ll be able to hand over the reigns to employees one day. After all, what’s the purpose of starting a successful venture if your goal is not to achieve freedom?
Do you have any other pro tips for someone attempting to systemize their business for the first time? Feel free to share in the section below.
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