Learning how to manage a business is something that will take time to master. While you may have experience leading a team, managing a business will require new knowledge, skills, and strategies. Here are the 5 keys to managing a business:
- Back to Basics
- Build Your Infrastructure
- Set Yourself Up For Success
- Tweak And Improve
- Manage, Don’t Micromanage
- Effective Communication
- Opportune Brainstorming
- Creating A Dynamic Environment
1. Back to Basics
Long before you turn the lights on in your new business, it’s important to know exactly what this business will look like and how it will make money. As a real estate entrepreneur, this means doing the following:
Developing a thorough business plan: What need in a particular market are you filling? How do you plan to fill it? How will you acquire customers/leads? What’s your compelling reason for having the business? Include as many details as you can.
Identifying your customers: Be as specific as you can. Not just “homebuyers,” but “first-time homebuyers looking for starter homes in Imperial County, California.” Create an avatar of your ideal customer containing both demographic and psychographic information.
Planning your finances: It’s key you understand the numbers of your new ventures so you can confidently answer an essential question: What can I do to learn how to manage my own business? How will you generate income in your business? By when? How will you finance your start-up business costs? How do you intend to grow the business from a fiscal standpoint?
2. Build Your Infrastructure
Luckily, as a real estate entrepreneur, there aren’t the huge start-up costs associated with many other types of businesses. However, there are certain business expenses that we should be aware of before plunging head-first. And they include:
Business entity set-up: As a real estate investor, this will likely be in the form of a Limited Liability Corporation (LLC), which helps protect you and your estate from potential issues down the road (it also helps tremendously come tax time).
Marketing materials: This includes things like your website, a credibility packet, direct mail postcards, and even the email database tool you use to communicate with potential leads. Though you may not need every item of your marketing funnel completed before you get started, you must get as much set up as possible before you hit the ground running.
Team members: You may be just a one-person show at first, which is okay, but whether it’s hiring a part-time graphic designer or outsourcing your social media to a starving college student, it’s important to budget for additional members on your team.
3. Set Yourself Up For Success
Plunging into the deep end of the real estate business management pool can be daunting, especially at first. It can feel like you’ve got thousands of items on your to-do list, with just a few hours each week to accomplish them. Here are some keys to help you stay on track both personally and professionally:
Document as you go: No matter how small or large the business task, document the steps taken to execute it. This will make it easier to delegate the task later if desired and help you become more efficient.
Keep your marketing focused and targeted: One of the biggest mistakes that new businesses make is to try to market to everybody under the sun. This can make your marketing costs prohibitively expensive and quite ineffective. Make your marketing as targeted and segmented as possible and expand as required.
Set specific, realistic goals: The biggest reason entrepreneurs don’t reach their objectives is that their goals are too vague and unrealistic. Set actionable goals with a defined time period to help motivate you every day.
Go left, when everybody goes right: If the competition in your local market is communicating to clients and leads in a specific way, do your best to try something different. Take risks. Stand out. Don’t be afraid to be unconventional, yet still professional in attracting would-be customers and clients.
4. Tweak And Improve
It may take a little while, but once you’ve got your business up and running, it’s time to look for areas where you can improve and optimize the business. Learning how to manage a business means learning how to improve constantly.
Budget weekly time for education: It’s important to keep tabs on your industry. Whether it’s gathering more data about market trends, or mastering the latest social media marketing strategy, always be open to learning new things that can help your business. According to Nathan Kelsey, Managing Director at Make Me Local, aspiring entrepreneurs need to have a belief in their plan. Still, they also need to be smart enough to know that the learning never stops. “Take time out for self-development on topics that might not be what you are used to – e.g., managing cash flow. Invest in systems early; it’s easier to build these from the start rather than unravel them later,” says Kelsey.
Look for minor improvements: It can be tempting to look for huge, earth-shaking improvements that will radically boost your business. But the key to long-term success, whether improving your website conversion rate or simply shopping around for a cheaper graphic designer, is to look for opportunities for small tweaks, which can lead to consistent efficiency and improvement when put together.
Make time for life: Working non-stop on your business without a break is not only a recipe for burnout but deprives you of the chance to realize huge business gains found outside your industry. Make time for recreational activities and charitable functions (anything that helps you re-charge your battery). You might find it’s a new pipeline to a whole new side of your business.
5. Manage, Don’t Micromanage
When managing a business, your job should be to listen, delegate, and assess progress. Never be a micromanager. Delegating effectively will always provide better results than trying to control every aspect of your team. Provide a hard copy of any training required and an involved orientation so employees know what to expect right from day one. Incentive-based systems are also useful motivators you can implement. If ever a problem arises, communicate solutions calmly with your team as maintaining a “no-problem” attitude will reduce the stress on your team and yourself.
Your team will be essential when collaborating on ideas. When managing a business, think of your team as advisors who can help you achieve greater accomplishments. Do your best to also be good on your word no matter what the task at hand is.
6. Effective Communication
Effective communication is the key to successful relationships. When you’re building your own business, your success is contingent upon building good relationships with partners, clients, and contractors. Strong communication will help you convey your message clearly so that the person you’re working with understands exactly is needed without any confusion. This helps create trust and minimize errors and misunderstandings. Don’t forget that good communication is a two-way street. A secret to success is always summarizing key points and ensuring that everyone is on the same page.
7. Opportune Brainstorming
Brainstorming is a creative process that could result in your brightest of ideas. Be sure to schedule intentional brainstorming sessions, where you freely think about ideas and flesh them out. Try to do so without judgment and without limitation, as some of your best ideas might seem far-fetched at first. When you’re running a company, engaging your employees in the brainstorming storming process is valuable as well. Not only will employees feel engaged and valued, you might actually glean some amazing ideas from them. They key is to facilitate a brainstorming space in which your team feels safe expressing their ideas without feeling ridiculed or shot down.
8. Creating A Dynamic Environment
As a leader, it’s critical to remain flexible. Change is constant, especially in business. Model the way for your employees and contractor by reflecting a flexible, dynamic approach to business. That way, when change occurs or unexpected events happen, your employees will look to a leader who is cool, calm, and collected.