Not all growth is good as you will hear today. How and when to grow – that is the trick!
Topic – Why successful ideas fail in business
Mentor – Jacob Aldridge – Co-Founder of Real REACH
- One of the most dangerous things in business
- Size or the speed of growth
- Build your business like an engine
Kevin: Good morning and welcome to the show, nice to have your company. I’m Kevin Turner, and today’s show produced in association with PropertyTree from Rockend, Printforce, LockedOn, and View. If you’ve got a question or a comment about the industry fire it into us, we’ll get it answered for you either way in the show, or we’ll do it directly, just email me at email@example.com, or leave a message on today’s show.
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Announcer: More thoughts now from this week’s mentor.
Kevin: As we look this week at the successful ideas that fail in business, now this one today is probably really going to surprise you, but before we talk about that let me introduce our guest for this week, businessDEPOT and co founder of [RealRidge 00:00:54], Jacob Aldridge, as I said from businessDEPOT.
RealRidge, of course, the programme that you can be alerted to when it launches, and it’ll be launching very soon, simply by subscribing to that series. If I had my time again, all the buttons on uncut that will allow you to get access to that series, but also will alert you when RealRidge launches. RealRidge, Jacob, is all about anyone who wants to have their own business or develop their business even further, no matter what stage they’re on that lifecycle, there’ll be a tool and some guidance inside RealRidge?
Jacob: Absolutely Kevin, that was the idea. A lot of experience from me, and we’ve got over a dozen industry experts involved in sharing their expertise because we know that principles at start-up, or in any stage of their business, they need some support when they need it, but trying to go and find exactly the right person and spend that kind of money just isn’t realistic for most real estate businesses. So how do we get all of that expertise online, and in a format that they can digest and get a good return on investment from?
Kevin: Okay, down to the subject for today, another one of the successful ideas, and one of the reasons why they fail in business, is growth. That’s a most unusual one, tell me what you mean by that, Jacob?
Jacob: Well, growth I say is one of the most dangerous words in business, and it’s because it can mean so many different things. Does it mean growing revenue? Does it mean growing profit? Does it mean growing headcount? And the reality is when most people in a real estate business think of growth, they generally think about more bums on seats, and if they’ve got more sales agents, if they’ve got more property managers than that will lead to more revenue down the track, and that can set them up to grow a business that’s far too big for the actual tools and efficiencies they’ve got.
I remember one of the first business coaching clients that I ever worked with way back in 2006. It was a real estate office, he had five or six agents, so a good size office, but he was losing money every month, he just wasn’t getting the actual volume of sales.
He’d gone to his franchise group and he’d said, “Help, what do I need to do?” And they said, “You need to grow. The reason you’re losing money is because you’re not big enough, so what you need to do is take a franchise in the next suburb over and double the size of your business.” Of course all that meant was he now had twice as many problems. So he grew, and it very nearly sent him broke.
Kevin: So is it size, or is it the speed of the growth?
Jacob: It’s a little bit of both. I breakdown a business, and I like to think of a business like an engine. You get all the moving parts fitting together and instead of power coming out you get dollars, dollars and cents coming out of the engine.
Now, you want to make sure that your engine is the right size so that you can actually get that dollars and cents and make sure that that’s profitable. There’s a lot of businesses, like that example I just shared, where the engine really wasn’t powering up, it wasn’t at capacity, and so what he needs to do was get in, look at those moving parts, get some WD40 in there, actually improve the efficiencies of that business, instead of going and growing into a bigger engine.
So, things like improving your listing processes, your sales skills, maybe even the culture, or the brand of marketing that you’ve got in the business, these are things you do to improve the efficiencies before you grow, so that when you do grow the revenue keeps coming in, and you can actually invest from cash that you’ve got, instead of putting it all on your credit card.
Kevin: In a way, growing should be something that comes naturally. As you improve those systems and develop them as you go along, growth will be the end result. Rather than focusing on the growth, focus on improving the systems to give you the growth.
Jacob: I think it was a conversation you and I had a little while ago Kevin, about when to recruit in a real estate business. The reality is that the best principle is know that they’re always recruiting, because if the right person shows up, if a great agent in your area comes to you and says, “I love what you’re doing with your website, or your brand, or the market share that you’re achieving,” then you’re going to grab them and you’re going to make the most of it.
[inaudible 00:05:06] grow, because the opportunity’s there, but ask yourself sometimes if you’re pushing the growth. Is it the right strategy for you, or do you need to look at just making sure that you’ve fine-tuned what’s actually going on in the current business, so that you don’t grow too big too fast?
Kevin: Well said. Jacob Aldridge, my guest. Back again tomorrow with another one of the reasons why successful ideas fail in business. We’ll talk to you tomorrow morning. Thanks, Jacob.
Jacob: Brilliant. Thanks, Kevin.
Jed: Opera Winfrey said, “If you look at what you have in life you’ll always have more. If you look at what you don’t have in life, you’ll never have enough.” Give thanks for what you have today. I’m Jed [Xavier 00:05:46], have a great day.
Kevin: Thanks, Jed. That’s it for today. Thanks for your company. Look forward to catching up again tomorrow morning.