Yesterday I talked about beginning the process of building a team, and doing so via establishing a solid network of contractors. The reasoning for doing this of course is to get you from working in your business to working on your business – for your business to grow you need to not be held back by fulfillment and instead focus on growth and acquisition (filling properties with tenants and getting more properties to fill with tenants).
Determining when to acquire employees is going to be more of an art than a science. When you start out and have few properties, in order to extract yourself from being mired in the business it makes sense to just contract out as much as possible. Once you do that, get to the point where you are growing the business, and then stabalize your situation (where you are comfortable with how everything is being run), that is the time to start thinking about building an in house team.
The reasons for this are in some ways opposite to our reasons for getting contractors – at the beginning we get contractors because with a small amount of properties, having employees and managing employees is more trouble than it’s worth (the time managing, insurance, taxes, etc). Once you get to a certain size and wish to continue growing, it becomes more affordable (and easier) to move everything in house.
There is a simple transition for making this happen – have your first ‘employee’ be an on site manager. That is, you get to the point where the only tasks you haven’t contracted out are managing your tenants, and developing business. Starting your hire point with an on-site manager means you can step back even further from being ‘in’ the business.
Starting with an in house manager is also a great point for building an in house team because you start with someone who needs little managing. In fact they are taking over much of the management responsibilities for you.
So why is this a great place to start?
When it comes to expanding your employee team, you will have an established manager – so you will have to spend none of your time managing new employees, this job will go to your hired on site manager. You are left with nothing to worry about but building your business. Just like with the change from doing everything for yourself to having contractors, hiring an on-site manager will at first be expensive – but remember your time is worth more than the amount you will spend (and on the future value they will alone provide).
Once you are completely removed from being ‘in’ the business, it is far easier to establish proper employee duties. Segment the necessary jobs into definable positions that you can hire for, and then as you grow begin to fill those positions and replace your outside contractors. Again, this process is pretty organic.
This is the beauty of focusing your time working ‘on’ the business. You get to leverage your time to make your business more streamlined and profitable – which in turn makes you more attractive to work with to property owners. You also have much more time to meet new property owners and expand your business.
So if you find yourself stuck ‘in’ your business – consider taking this path to extract yourself. You will find more success than you can shake a stick at.