“I will tell this story one day”
This past few weeks of running my business has been incredibly stressful. After 4 years in business and 44 deals closed last year, we hit a juncture that felt like a crisis- more expenses coming due than money in the bank, and deals in escrow that had been delayed or canceled. Not enough properties in the pipeline in general. My brother and I have not paid ourselves salary for over a month now in order to leave money in the business to keep it afloat.
It has felt like the business could crash, or that I’d have to put personal money in or use credit cards to float the business.
Not having been paid my monthly salary has caused the financial tension to spill over into my personal finances too- I’ve been scrambling to move money from other accounts for my personal bills, and carried over a balance on a high interest credit card instead of paying it off. I’ve considering taking a personal loan from my life insurance policy cash balance, which I don’t want to do just to pay bills.
It has made me consider closing the doors on the business and just doing a couple of deals per month myself, solo. It almost feels like that would be easier.
Zone of Misery in Wholesaling
There is a purgatory that we have been in as a business for months now, maybe even a year or more if I really look back, where we have not had enough money to really aggressively market for leads, yet we need leads and closed deals to have marketing money.
This is the zone of misery that Jerry Norton and others talk about- the business is big enough to close a lot of deals, but not over the hump to true profitability, just a painful break even to slightly above break even. 90-95% of the time, I’ve been getting paid on the first of the month. Occasionally I’ve left my salary in and gotten paid later to float us until after a deal or two has closed. I want out of this unhealthy and stressful cycle. I did not start a REI business to live paycheck to paycheck.
How Did I Get Here?
Hiring sub par closers and trusting them to get the job done. Trusting them, but also abdicating power and not holding them accountable out of laziness or fatigue- wanting someone else to punch the ball over the goal line.
Letting these B players milk the clock and not bring in deals for a period of months has resulted in us not having enough deals in our system to keep us afloat, so now it feels like a crisis.
Lessons?
Hire good people, screen intensively pre-hire, and hold new hires accountable with rigor, especially in the first few weeks. Know what they are doing and gauge their productivity and culture fit. Do not let people hang on and get paid if they are not working out. Cut your losses early, or end up in a big bind.
I’ve heard the saying “hire slowly, fire quickly”, and that is definitely appropriate to my situation.
Hire only A players and rock stars. We brought on a minor league level closer and let him slack off for 3-4 months. We attempted to have accountability meetings with him and he was a good enough salesman to baffle us with bullsh*t and induce us to give him a bit more time.
Trust your gut. I hired this guy to fill a gap, not because he was a rockstar that I was excited about. I paid the price of not listening to my body telling me this guy is probably not a fit.
This is not a crisis, it’s a turning point
That is the mindset I need to get over the hump and into true profitability, and the wealth creation that I started this business for.
Since I’m the founder and CEO, my business is largely a reflection of my consciousness. My Upper Limit Problem has manifested in the business and it’s my responsibility to fix it.
My feelings; fear, frustration, doubt. Whiny voice: “After all of the work my team and I have put in, we should be farther along. Why do we still have to do more work? It’s so haaaard!” Somebody call a Waaahmbulance.
A hero does what needs to be done
I want to be a hero for my team and myself. No one is going to come and save me, it’s up to me to dig deep and get shit done.
The first thing is for me to suck it up and be the acquisitions closer that our business needs. I thought I was done with that role a long time ago. As an introvert, I hate the role. I’m good at sales, negotiations, and rapport building, but tell me I have to do it for hours every day and I’ll tell you I’d rather shave my head with a cheese grater while chewing on tin foil. Being an aquisitions closer is in my zone of competence, maybe even excellence, but it drains my energy battery and if I’m doing it, I’m not contributing to the business from my zone of genius, which is what the business ultimately needs from me.
Calculated Risks
The next move for me is to take a risk and hire a closer when we are short on funds and hope that that person can pull us out of this rut. I can be the closer for a period, but I’ve tried in spurts, and the anxiety and stress I’ve built up over the past few years of growing the business has made it difficult to do at any good clip without causing panic attacks. (More on my experience with anxiety and panic disorder on my personal blog).
After that, once the efforts from me getting out of my comfort zone, silencing the whiny b#*ch part of me and bringing in some deals like I know I can, then we can have extra money to spend on marketing and grow to the next level. I’m not going to be the general sitting up on the hill in safety, as his troops bleed and die (very dramatic, I know). I need to get in the fray and get dirty. Part of my role is to be an inspirational leader. It’s my time to shine and get us over the hump and to the promised land.
The Next Level, The Promised Land
My goal with this business from the start was for it to be a vehicle for wealth building and retirement. That means making large profits every year, and empowering the team to run the business and take ownership. The promised land for me is that the business pays me well and that I have little to no involvement in the day to day.
The promised land for my team is that as the business grows and prospers, they share in the success financially. I want to install health care. I want to give everyone profit sharing that increases with tenure, and i want to give long tenured team members ownership stake in the company that grows as their tenure does. I want to pay 13th month as Christmas time and close the business for holidays and let people connect with their families. All of these things will be made possible by getting over this hump, out of a cycle we’ve been stuck in for a year or more, and into the next level of success.
It’s not a crisis, it’s a turning point. Time to dig deep and get sh*t done.
Is there a similar dragon that needs to be slain in your business? It’s been said that there’s only one bottleneck in a business that once it’s solved, will allow for a breakthrough. What is your one bottleneck? Leave a comment, let’s chat.