For so long I thought I had a business. Money coming in, some months more than others, but pretty consistent. Month after month this continued, until one month, it came to a screeching halt. Our one marketing channel we were using for our deals dried up. There was a 3 month lull from February- April of this year, 2024, where we only did a handful of transactions. Things got scary for a time. We quickly came to realize that we never had a business at all and that one little shift in the market could derail us and did so completely for a period of time. We would not be able to survive another cataclysmic event like this again. We knew we needed a change. As we dissected what we had scraped together as our business, it became very clear to us that something was missing, predictability. We had no idea when our next deal was coming or what outputs we needed to put in place to receive a deal. This was a huge glaring problem. How could we have missed this for so long. It was time for a big change!
How A Business Becomes A Business
Businesses last and sustain themselves by executing on two key things. These are changing and adapting to the marketplace and running the business in a way where results become predictable. How on earth could this be possible for us? Well, all of our business was really coming from one marketing channel. This was outbound cold call to agents for on market real estate deals. When this strategy dried up for a time, there was nothing for us to fall back on and our business crumbled. We realized the first thing we needed to do was to open up other marketing channels so that we couldn’t suffer in the same way we had just endured going forward. If one marketing channel dried up, we would have several others picking up the slack!
With that solved, we had a piece of the puzzle but not the whole picture. We were missing something crucial, something drastic. It’s not enough to have multiple streams of marketing, it’s about honing in on the most predictable ones and making them the bread and butter of our business. For us, this breaks down into two categories:
-Paid Leads
-Free Leads
The paid leads are something we would be able to predict. For us now, this includes direct mail, pay per lead, and pay per click. These marketing channels could become predictable with the right systems and processes. We would know exactly how much money it would cost us to get a deal, how many leads we needed to talk to in order to get a deal, and how much on average we could expect to profit per deal. These paid leads would go on to form the backbone of our business. Their nature allows us to reverse engineer our goals and grow and scale to where we want the company to go. With paid leads, there is trajectory, stability, and most of all predictability.
The free leads are a tool we use to supplement the business. They are a great source of additional income and when they click on all cylinders business gets really fun. But, we cannot rely on them to be the core makeup of our business. For us, this includes all outbound such as direct calls to agents, and JV (joint venture with other people and their deals). We work on these diligently and free leads have become a thriving part of our business. We have a rolodex of people who bring us their deals for help and guidance that we are able to partner on and profit off of. Our outbound business is bringing in consistent deal flow, although unpredictable in nature on the amount of deals it produces. These two pillars form the cornerstones of our business and make it actually function as such.
The Priority
Our priority, and the priority of any business that wishes to stay in business is to form the core pillar of your business around the things you can predict and control. Build systems and processes around these things so that you have standard operating procedures you can use to navigate your day to day. It should get so predictable it almost becomes boring (of course there will always be nuance, you get the point). For us, the answer was twofold. It was adding more marketing channels into our business so that if one of them dries up temporarily, there are several others to pick up the slack. The other key for us was to know and understand what it takes to get a deal. With crystal clear numbers on our inbound marketing, we know exactly what we have to do and what we need to spend in order to operate our business efficiently and effectively. This concept transcends industries and applies to every business. The key is to add predictability at all costs. If you don’t understand where your next meal is going to come from, eventually, you are going to get hungry and either get desperate or starve. Predictability is the priority. Without it, your business could become a lost cause, fast!