“Organize around business functions, not people. Build systems within each business function. Let systems run the business and people run the systems. People come and go but the systems remain constant”
Michael Gerber, E-Myth Revisited
On this post, you’ll learn the fastest, easiest way to understand, design, and execute systems in your real estate business in order to grow something bigger than just yourself.
The term “system” gets thrown around like it’s some sort of complex beast only reserved for Harvard MBA’s and quantum computing doctoral candidates.
I’m here to tell you that you’re already a systems engineer and you don’t even know it (or you do because you’re a business nerd like myself).
First, I’d like to quickly eliminate the blockage most investors have about systems.
You Don’t Need Perfect Systems
While you may not have perfectly architected and mapped out processes for your business, chances are you have a certain “way” that you do your day-to-day business. You just haven’t come to perceive that “way” as any sort of system, per se. That’s about to change.
Don’t worry, having fancy workflow diagrams and intensely detailed “Standard Operating Procedures” is NOT ESSENTIAL for those of you who are just starting out or have small operations.
If you’ve read Work The System, you’ll know what I’m talking about, but there’s a time and a place for that level of documentation. When you have a bigger business, others can help you build a lot of those fancy procedures later. Don’t let that hold you back from creating and executing the vital few systems you need to take you to where you want to go.
For now, let’s focus on the essentials.
Systems are tiny facets of everyday life. You’ll find them anywhere from when you’re brushing your teeth, to starting your car, to processing your incoming seller leads, to measuring China’s gross domestic product. Systems run the world. Without them, we would have pure chaos. Sounds fun right?
We’ll start by defining what exactly is a system in general terms, and why you should care. Then, we’ll start to dive deeper into individual systems as it relates to real estate investing.
You’ve probably seen the meme for “System” as “Save YourSelf Time, Energy, and Money.” I love that.
Here’s a less cute definition:
A system is a set of interconnected processes designed to produce a consistent outcome.
Your company produces revenue by doing the same thing, over and over. The general rule of thumb is whenever you have a repeatable outcome, there needs to be a repeatable system, or set of processes, in place for that outcome to show up every time.
In order for your business to serve you and others in the fullest possible way, your business needs a skeletal structure keeping your company standing upright. Let’s talk about how to give you a basic system skeleton.
No matter how complex a company is, that repeatable outcome can be broken down into its smallest parts and expanded outward until you’ve hit the task level or the individual steps that need to be executed in order for the end result to occur as planned.
For a higher-level understanding, you need to learn to see your business as ONE system, broken down into smaller sub-systems. Here’s how to do it.
A great way to break down your real estate business is by creating a visual representation of your business. One way to do this is through mindmaps, which you can think of like branches of a tree. You can use the tool Xmind to create a quick and dirty mindmap breaking down the departments of your business, such as Marketing, Acquisitions, Sales, and Administrative.
Use the following mindmap as a guide for your own company (click the “+” to expand out each branch):
Download links: Mindmeister file, Xmind file
Don’t let that intimidate you. It’s just to show you that your business is not as complicated as you think. Sure, there’s a lot of moving parts, but it’s not an infinite amount if you can show your whole business fitting snugly on your computer screen.
Notice how each branch of the mind map can expand outwards until it hits the individual tasks associated with each element, i.e. “Send property email to buyers list.”
These individual tasks require the “process” that makes up the “interconnected set of processes” we mentioned in our definition of a system. So now let’s zoom in and look at what a process is, and how you can easily make them in your business.
Here’s the process for making a process 🙂
1. Define: What is the repetitious end result you’re trying to accomplish? Can it happen without your involvement?
2. Eliminate: Do the process yourself, and streamline the steps involved in order to save time for whoever is executing it. Don’t hand off something and waste others’ time!
3. Document: Create a simple video, checklist, or step-by-step outline for someone else to execute what you’ve streamlined. It DOES NOT need to be fancy. I use Snagit to create short videos to send out quickly.
It just needs to be a simple resource for your team that exists in the cloud whenever they need it. You can use Evernote and store links to all of your process videos and checklists in a shared Evernote notebook. Or just email it to them. Keep it simple.
4. Automate/Delegate: Hand off your documentation to a qualified team member OR use CRM technology like InvestorFuse to automate the process. More on technology later…
Another way to break down processes is in the form of a decision tree, or a workflow diagram. This is basically just bubbles of text with arrows pointing to what happens next in a process. It’s a great way to create a graphical representation of a longer step-by-step process with a lot of decision points, like processing seller leads for instance.
We use LucidCharts to create workflow diagrams for InvestorFuse. Here’s one we created for InvestorFuse users to show the process for how all seller leads are automatically funneled through the system all the way to getting a deal under contract. Note the various decision points and actions they will encounter along the way:
What To Systemize?
Breaking your business down into basic visual representations will not ultimately make you money, but it will allow you to mentally simplify each department of your business and internalize that it’s possible to work without your direct involvement.
Now, it’s time to execute.
As an entrepreneur, the first thing you’ll want to systemize is the elements of your business that don’t inherently make you money. You understand with the 80/20 Principle that 20% of your actions lead to 80% of your business results, so you need to systemize/automate/or delegate the 80% that produces only 20% of your results.
Make sense? This means you can focus fully on your 20% day-to-day and NOT feel bogged down with having to do it all.
You will use technology, your team, and 3rd party vendors to execute your systems’ processes. We’ll talk about each of those, but first, here’s a breakdown of tasks by their estimated dollar/hour value, so you know where YOU should be focusing (towards the right side) and what you should be systemizing (everything else).
Real Estate System Technology
“The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency.”
Bill Gates, filthy rich guy that understands systems
What ol’ Bill means is you shouldn’t systemize/automate the WRONG thing. The above chart above will give you a good idea of some of the important, but not high-value things you can automate.
As a modern day real estate entrepreneur, the foundation of your business is your CRM (customer relationship management) platform. InvestorFuse runs on the Podio.com CRM.
Your CRM serves as a framework for your team to execute their specific roles. By framework, I mean structures where you can record data about your leads, contacts, deals, and sales pipeline. Look at the top to see a few of the structures, or “apps” that encompass the InvestorFuse system.
These apps house the data for each element of your company’s operations that you mapped out earlier with the mindmap and workflow diagrams. Podio has been a favorite for real estate investors because it allows you to design and even automate the execution of your real estate systems. Here’s the basic gist of how we use this CRM structure to work through the process diagram you saw earlier.
When set up properly, your CRM can automate a lot of the left side of the above chart:
- Follow-up communication
- Generating and sending offers
- Direct mail
- Database management (moving leads through the pipeline automatically)
- Deal analysis
Real Estate Systems Team
If you haven’t yet, read The Essential 4 Person Wholesaling Team.
You can also use your CRM technology to set up manual processes in a way that makes it easy for your team to execute specific functions of your system, so you don’t have to. However, you need to give structure for how your team executes.
For example, let’s say you’d like to have your office manager send out offers on your behalf. Setup an “app” in Podio that looks like this: https://youtu.be/0Ks5Pgc3U_I
You can also use your CRM to streamline communication between your team.
We use separate tools behind the scenes at InvestorFuse to make our internal communication more standardized. We use Basecamp and Front, which is a separate email inbox for company-specific emails so it stays OUT of our personal inboxes.
We also built-in texting and emailing into InvestorFuse so you can communicate directly with your leads all under one roof.
3rd Party Vendors
You can also simply hire 3rd party vendors to execute more of those $5-10/hour tasks, $100/hour tasks, even entire branches of your business mindmap. A few vendors I recommend to execute your business processes on your behalf:
Real Estate Investor Websites: Investor Carrot
Bulk Mail Fulfillment (for yellow letters, postcards, you name it):
Answering all your seller leads: Patlive.com,
Data research for your mailing lists:
Google Adwords Management: Submit your info to the Adwords Nerds team. They’ll do everything for you.
Automation Technology: InvestorFuse! Duh 🙂
Finding Virtual Assistants: https://discovery.rocketstation.com
Real Estate Systems De-Brief
By now, you can see how technology, your team, and 3rd party vendors can work together to execute a lot of the 80% of your business that is producing 20% of your results so you can focus on the 20% that produces the 80% of your results.
Your job as an entrepreneur is to put the people, technology, and resources together to create a system that serves you for life. Your job is the manage the system and processes, not the people running the real estate systems.
I’d love to hear how you’ve used real estate systems in your business to create amazing results without your direct involvement, or if you have any other great vendor recommendations, feel free to leave a comment below.
Cheers to your systematic, INTENTIONAL success!