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Own the Outcome with Tyler Deveraux
Own the Outcome dives deep into the real stories of resilience and triumph that arise from the depths of failure. Join Tyler Deveraux on a journey of inspiration, growth, and authentic conversation. Within every stumble lies a valuable lesson, a chance for transformation, and a path towards success. Each episode features compelling stories from a diverse range of guests, from entrepreneurs and artists to everyday heroes—all sharing one thing in common: their ability to turn adversity into an opportunity for growth. Because in the end, it's not about avoiding failure; it's about owning the outcome.
Own the Outcome with Tyler Deveraux
Building Business Success in Real Estate with Tyler
Today we have a solo episode with Tyler Deveraux! Discover how to unlock lucrative business opportunities and transform your entrepreneurial journey with insights on today's episode. As we explore the largest wealth transfer in history, learn how understanding market demand can position you to seize attractive opportunities in buying, owning, or reselling businesses and properties.
Through a journey into the essentials of business acquisition, financing, and management, Tyler offers a framework to ensure informed decision-making and sustainable growth. Don't miss this special episode, designed to help your business GROW!
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All right, aloha and welcome to the Own the Outcome podcast. My name is Tyler Devereaux and today, today, I'm going to do a solo episode, meaning a lot of the times I'll interview different business and thought leaders in the space, but today I'm going to talk about business as a thought leader in the space. I'm the founder and CEO of two eight-figure businesses. For context with that, less than 1% of things like 0.07% of businesses ever produced more than 10 million in revenue. I have two businesses that do that and the best year that we had was more than four times that number. I say that because the things that I'm, the best year that we had was more than four times that number. I say that because the things that I'm about to walk you through are going to help you simplify business in your mind. Business can be and I even had it. Buy a business or get into a business can be daunting, but it's not man. It is daunting if you don't understand the foundational principles of it and how to make it happen, and that's what I'm going to do today. The business that I'm primarily in is the buying and owning and then eventually reselling of apartment buildings. So I bought and sold 17 different businesses. Apartments, see, every apartment is ran, valued, operated like a true business. That's where I've learned business is running, owning, operating these apartment buildings. So I bought and sold 17 of those, meaning I bought, carried out the business plan and exited those, and all but two of those have been profitable. Now, those two that were not were some of my biggest learning lessons and, I believe, what make me even more qualified to teach and train and help with your business than the other 15 that were massively successful, because you learn a lot from those. But today, today is gonna open your mind on possibility of business and then to simplify that process, now I'm gonna relate it to the multifamily space, but it applies to any and every business, like the fundamentals of business all apply here. So whether you're looking at buying apartments or buying other businesses, and operating other businesses today will certainly help you.
Speaker 1:Now there are five moving parts of any business. That's what I'm going to walk you through. So, step one you need to find the business or the property. Okay, there are 33 million businesses in the US, by the way, and 99% of them are small businesses. Over 40% of those are owned by baby boomers. In other words, these are individuals, keith Cunningham.
Speaker 1:If you don't know who Keith Cunningham is, I love this dude. He has a great book. It's called the Road Less Stupid, and he says you know, 40% of these businesses are owned by baby boomers. And he says, in other words, they're old, sick and dying, and keith cunningham, uh, fits that mix, which is what makes it so funny when he says it, but it's the reality.
Speaker 1:These baby boomers who own these businesses a massive amount of them, you know. The stat that I read is 60 of them. I don't know how they know that, though, but 60 of them have no succession plan, progression or succession plan, which means they'll either you're either going to buy that business from them or property, they'll lose that business or property, or they'll die running that business or property, which will then go to their kids, and their kids don't want to take it over. So you'll see, throughout this man, you can be the kid that they wish that they had the one to buy that business, the one who's going to take that property and run it and thrive, and that is how you get what you're looking for. So listen, there is we are in the middle right now the biggest wealth transfer in history, not just in our lifetimes, in history, and it's because of the massive amount of wealth that is owned by the baby boomers, in other words, these individuals who own these businesses, properties, who are now looking to get rid of or out of them. And even if those are not for sale, they're for sale. Anything and everything is for sale. You just need to know what their pain point is and how you solve it. So what you really need to know is what business do you wanna buy? So step one is find the business, but you need to know what is an attractive business versus what is not attractive. So I'm gonna give you five keys of an attractive business. Okay, and remember, when your target is clear, success is near. So you need to know what you're looking for.
Speaker 1:So, once again, when I say business, I'm talking about properties and businesses. It's the same thing. Those go back and forth. It's the same exact, uh, exact, uh, same things that we're looking for. So number one key is is there demand Meaning? Do people want to actually live there? Right An example I bought a smaller property in Mooresville, north Carolina and I, and it was a unique unit mix where all of them were one bedroom, one bath, and so the business, apartment business okay, I get it, but is there a demand for that asset in that market?
Speaker 1:So what did I need to do for that unit mix? So I needed to look at historicals bigger than a year to see is there a demand for unimix in that market? So, essentially, do people want to live there? Is there demand and do the trends show that? Number two is the market growing? Okay, so, is the market a growing market or a dying market? So an example of this okay, in the business world, um, think dvds versus streaming. You. Streaming that business is booming and growing. Dvds not so much. Okay.
Speaker 1:What about your property, though? Are people not poople? Okay, are people moving in that area or out of that area? Are businesses coming in to that area or are they moving out of that area? What's happening within your market? Number three is is there a separator? That property that you're buying doesn't have a separator. See, I do not want to buy a property or a business that doesn't have a separator. Every business that you start, buy, operate, should have a separator, or else man, anybody and everybody can do what you do Like, for example, in the property space, in the apartment space.
Speaker 1:I want to know the location. I can change a lawn about an apartment, but I can't change the location. So do they have a specific location that's attractive? Is there amenities that the other owners don't have? For example, I bought a 138-un unit deal in Columbia, south Carolina, where every single unit had a stackable washer or dryer that they were not charging for by the way that will come into step four here in a minute but they weren't charging for it. That was an amenity, a separator, that none of the other, none of our other competition had. Maybe access to the freeway? Right, it's easy access to the freeway. What is the separator of the business or the property?
Speaker 1:And then, number four, are there value-add opportunities? And when I say value-add opportunities, it is literally how it sounds. It's ways to add value to the business, grow revenue what can you do to grow revenue? Like our bread and butter when we're buying an apartment building is yes, I'm looking at where the income of the revenue is today. I need to know that. But I also need to know where are these gaps that they haven't filled that we can fill, where are they leaking money that we can then plug those gaps to make that money? So, for an example, with the stackable washer or dryer Stackable washer or dryer an amenity that my other competitors didn't have. But that owner wasn't charging for the stackable washer or dryer. Okay, so what do we do? We take that down. Hey, that is a value-add opportunity. We can immediately start charging for those washers and dryers. That will increase revenue, and any business is valued by the revenue.
Speaker 1:The more the revenue, the bigger the revenue, the bigger the demand and the bigger your margins will be, which come into number five. Are there healthy margins? Does enough of the income flow to the bottom line? And if it doesn't, it's too risky. And and if it's risky, it's an unattractive deal. See, the riskiest type of multifamily deal is what's considered a reposition, and a reposition deal is a deal that is not cash flow positive day one.
Speaker 1:It's not cash flow positive, meaning you have to calculate your break-even point. At what point, when you put in the work and you do the things, will you become profitable? At what point, when you put in the work and you do the things, will you become profitable? And if you miscalculate that break-even point, well, there's a great chance you lose that business, that property, which would make it very unattractive. You need to identify those things up front. What does healthy margins mean to you? You know we teach return metrics and things within our program, but for you, what does healthy margins mean for you? How much of the income needs to flow to the bottom line for it to be attractive? Now, some rules with this. Okay, you need to date before you buy. Date before you buy, and what I mean by that is look at a lot of deals.
Speaker 1:I believe one of the biggest mistakes people within our mentorship program make is they don't look at enough deals. They don't look at enough deals. They don't know what is a good or attractive versus unattractive. You know, related to this, if you were on an island let's say you grew up on an island you would you're by yourself. You had literally never seen anybody else before. You had never seen any other human being before and all of a sudden, it's your birthday and a young lady. If you're a man or if you're a girl or whatever, your sexual preference is beyond the point. A person that is of your sexual preference, desire you get, it comes up in a boat. Okay, well, is that person attractive or are they unattractive? You have no idea, because you've never seen another person before. All you know is that it's your birthday and God just sent you a gift, okay, but all of a sudden you look at a whole bunch of people. You're in Manhattan. You see people every single day, everywhere you look. You're going to know who is and who isn't attractive to you, once again based on your rules and what your margins look like. So look at more deals. However many deals you've looked at, you need to look at more to determine what is good, what is bad, which ones are attractive and which ones you need to leave on the damn boat. Now, how you find them. Let people know that you're looking, ma'am. Let people know that you're looking.
Speaker 1:How often are you talking to brokers? How often are you talking to attorneys? How often are you talking to divorce attorneys? As an example, like a lot of these baby boomers that own these or owners period, maybe they own it with their spouse. Maybe they're getting divorced. Maybe now they have to offload the business. Maybe they have a business divorce. Maybe they have a partner that they're divorcing and now they need to split assets and get rid of assets because they want to get rid of the partner that they own that asset with. Attorneys will know those kinds of things. But with anything, nobody knows what you're looking to do unless you tell them what you're looking to do. Tell them what you're looking to do. Unless you tell them what you're looking to do, tell them what you're doing.
Speaker 1:It is crazy to me how many people are out there trying to find something by themselves, without saying or talking about what they're looking to buy or do. And let me give you some context with this. Okay, a good friend of ours I'm going to obviously not talk about names or situations but a good friend of ours their daughter went missing. Scary situation, super scary situation. Their urgency to find her, absolutely through the roof. Their urgency to find her absolutely through the roof. So what do you think they did? Do you think that they just kept it to themselves and, between the two of them went out looking? Or do you think that they just kept it to themselves and, between the two of them, went out looking? Or do you think that they let anybody and everyone that they know know? Well, if you're urgent, if you're really decided that you're going to do this business or, in this scenario, find your daughter, you're going to let everyone and anyone know, because the word will spread. Let me tell you, eventually, what happened. My wife had a conversation with a friend randomly, who then told her husband, who was in the police force, who then happened to me if it be in a meeting, who then happened to mention it in that meeting, and then that right after the meeting, the individual went to a store and, lo and behold, there is the daughter that they're looking for.
Speaker 1:You never know where the gaps are going to be filled or who's going to bring you the opportunity or the connection or what it is you're looking for. You just need to know that you're looking for it, needed to let everyone know that you're looking for it, because what you focus on, you find, or what you focus on, you find, or what you focus on and let other people know about, they will find and bring to you. Now, number one lets you know what business you're buying. Number two is you need to know how to determine the value. Now, in the apartment space, you determine the value by the income. In the business space, you also determine the value by a multiple of the income Same thing, okay. So your net operating income, that is, income subtract your expenses, gives you your net operating income. That's going to help you determine the value.
Speaker 1:You take that net operating income number and once again, this is the same for whether you're buying an apartment building or whether you're buying a business. You take the NOI and it's going to be by a multiple of the business and I'll give you an example of that that will help you understand the value. And the multiple is adjusted for growth and risk, like, if there is a business that is growing at a massively rapid pace, you may pay excuse me, you may pay a higher multiple for that business because you see the growth rate of the business is having Now same with an apartment building. Okay, if you see that the growth is happening exponentially, maybe the cap rate, which is a return metric that we use, that you would be willing to pay is lower than if you're in a stagnant market. But also you already know that if the market is stagnant, not growing, like we said above, you're not going to buy that anyway.
Speaker 1:But let's be on the point. You need to know what you are willing to pay for that. So it's your NOI divided by your cap rate will give you the value that you're willing to pay. You need to set that up front. Then you need to do due diligence on that. You need to know is the income. You need to verify.
Speaker 1:Is the income predictable and sustainable? Is it predictable and sustainable or is the income coming in from your apartment building, as an example? Is it? Do you have tenants that pay every month on time, or do you have a huge chunk of them who pay late and some don't pay at all? Hey you, beautiful being you, it's Tyler Devereaux and I am here to make your decision easy. If you've been thinking about joining us at Peak Partnership, this is your sign. Right now, podcast listeners can use promo code PODCAST300.
Speaker 1:Once again, that's PODCAST300. To get $300 off your ticket. That's $300 to invest in yourself, your business, your future. Do not wait. Grab your ticket, secure the deal, and I cannot wait to see you at peak. Let's make it happen.
Speaker 1:Look at the income how predictable and sustainable is it? Also, what is the growth rate? The trend on the property Is the income. Has the income been trending up? Has it been stagnant or has it been trending down? What is the growth rate Now?
Speaker 1:If the income has been trending down, that may not mean that it is a bad business. That may mean it's a bad operator. But you need to determine is that the case? Why has it been trending down? Maybe those are some ways that you can come in and improve to once again make it trend up, but you have to be very careful.
Speaker 1:Which comes to the next one, which is what are the risks, what are the biggest risks on the property? And then, more importantly, how will you mitigate those risks? If you're not asking that question with any business you're buying, you're not taking the business serious enough. What are the biggest risks on this? How will you mitigate those? Is there a way to mitigate those? Or are you just inheriting those and hoping that you're okay? What are they and how do you mitigate those? Ask those questions, list those out, talk about those things, get guidance on how you would mitigate those.
Speaker 1:And then, once again, the due diligence on the margins. Is there enough that flows to the bottom line for you to determine, yes, this is the property that I want to buy or no? It's baffling to me how many people buy businesses, aka and or apartment buildings with there's no margins, which means you're gonna be working for free and nobody wants to work for free. You do not wanna be in business where you work for free, so are the margins there? Once again, determine your value. Now, once you know what you're buying, you know how to value it. Then you need to actually buy it. So there's some things that you. So number three is buy the deal. So, number one find it. Number two value it. Number three buy it. So things that you need to know what price are you willing to pay? Like I mentioned above, what price? What will also be the terms? Like, what will the terms be? Will it be a cash deal? You're paying cash. Are you going to use seller financing? Are you going to use bank financing? Is it going to be a combination of those? Like, what will it be? Now there's some rules that I want to give you as well with your offer, and then I'll get more into what the terms will be and how you actually find the cash, the seller finance, what those things look like Okay will be, and how you actually find the cash, the seller finance, what those things look like. Okay. Let's some rules with your offer Two dates and then a proposal.
Speaker 1:Two dates and then a proposal, meaning A lot of these deals, these apartment deals that you're going to be buying. You're going to be meeting with brokers and the last thing you want to do is submit an offer to a broker. The first conversation that you have with that broker? You want to date the broker and or date the buyer or the seller if you're going to get directly from the seller. So have a couple of meetings with them.
Speaker 1:Ask questions about why they're looking to sell. Ask questions about the property we have a whole list about why they're looking to sell. Ask questions about the property. We have a whole list. In fact, listen, we have an entire list of questions that you can ask the broker or the seller, depending on who you're meeting with, to help you determine is this something that you would like to buy? So if you would like to know those questions, we put together for you in a PDF down below you can click the link. You can get a whole list of the questions that we ask. You're welcome, but make sure that during those meetings, during those dates, you ask those questions and then you either make an offer or you don't Proposal.
Speaker 1:You either make the offer, the proposal or you don't proposal. You either make the offer, the proposal or you don't. But when you make the proposal, the offer, there's going to be even more due diligence before the wedding, before you actually buy it. Once again, before the wedding, there's going to be more due diligence. So, for example, when we buy an apartment building, okay, I know what I want, I find it, I know how to value it. Now I've went in to buy it, I've submitted an offer to buy it. They've agreed to that offer. Now what's going to happen is I'm going to start my due diligence period and I'm going to check and see can I verify everything? Is this something for sure that I want to buy, aka marry? Now another rule okay. So rule number one two dates and a proposal.
Speaker 1:Rule number two is you use attorneys. Use lawyers to draft your documents when you're buying any business or any apartment building. Use attorneys. When you structure your business, use attorneys. Man, this is absolutely a mistake that I made within my businesses. Is that, listen, we structured the operating agreement. In the beginning, everything was great, so we structured the operating agreement as if everything would continue to be great, and then, guess what happened? It didn't continue to be great and then I was left having to pay and buy out a partner who's just walking away from the work. That hurts the business, that impacts the business. Make sure that your, once again, your operating agreements are solid and planning for the worst, hoping for the best, but planning for the worst, and attorneys will help you draft those. Do not try to do that on your own.
Speaker 1:And then rule number three it has to work for the seller too. Listen, if you're truly going to build a business, buy a business and scale that business, it has to work on both sides. Like it's not this business where you're going to come in. You know, an apartment building is an example. It doesn't. You don't have to go in and it's not win-lose, it can be win-win. You can structure an offer that is a win-win, which is why rule number one is to have two dates and then a proposal, that proposal, that offer, on those two dates you're trying to figure out. What does that offer, that proposal, need to look like in order for it to be a win-win?
Speaker 1:Listen, become how you separate yourself from other people who may be trying to buy that apartment building. Become the son or the daughter that that person never had. Become the son or the daughter that that person never had. Maybe their son or daughter doesn't want to take over the business. You do become that. Help that person continue their legacy with you, become the son or daughter that they never had. They'll just rules with your offer when you buy it.
Speaker 1:Now. Number four finance it. So once you find the deal, you value the deal. Number three, you know how to buy the deal. Number four is to finance that deal.
Speaker 1:Now this is where people get stuck. They get stuck here because they're like I have no idea how I would buy a business. I don't have all this millions and millions of dollars to buy this business. Let me give you a little secret that I learned about a decade ago. That is, those who are buying these businesses very rarely, if ever just are funding it with their own money. It's very rare Not that it's ever, but it's very rare if ever, that they're just bringing all their own money in and they're funding it 110% on their own. Very rare. There's partners, there's different key components that bring the funds together. So I'm going to give you the three most common, or four.
Speaker 1:Give the four most common. Number one is seller finance. A whole bunch of these mom and pop owners, these baby boomers who own these apartments, these people who, once again, are old, sick, dying, et cetera, they would love to seller finance. They still want a string of income coming in. They just don't want to do the operations of the business. Now, they're usually not going to do a seller finance for the full amount Not that that's impossible, but it's very rare. Typically it's anywhere from 30 to 50% of the purchase price over the span of about three to five years.
Speaker 1:So here's what I want you to think of. Okay, I want you to think of how are you going to piece these four things that I'm talking about? How are you going to piece them together? How much do you need to negotiate for seller finance? Well, how do you know that? You need to know these other three that I have before you go to the seller finance route. How much of these other three that we can tap into can you really tap into? And how much seller financing do you need to actually bridge the gap, if any? Now, solar financing is very attractive. It could be a great fit on both sides.
Speaker 1:Now number two is bank financing. These loans that we get, these deals that we do. They're called non-recourse loans, the 1% of the 1%. They are not signing their own personal liability for the loan. It's a non-recourse loan, which means it's backed by the cash producing asset, the property. Now that non-recourse loan is typically going to be around if the funds need it, anywhere from, say, 60 to 80% of the funds. 60 to 80% of the funds come from a non-recourse bank financing route.
Speaker 1:Now to qualify for that, once again, you need to buy a cash producing asset that the bank says, yes, this is something that we. Once again, you need to buy a cash producing asset that the bank says, yes, this is something that we'd like to buy and is in line with their criteria, and they'll give you that criteria. But also you need to have experience owning, operating, controlling something like that. Now that's in the apartment space, in the business space. If you're buying it, they're probably going to want some experience under to you as well if they're going to lend to you. So what you can do is you can bring on a partner, or what we call it a sponsor, or what we call a guarantor, and that sponsor has the net worth, has the liquidity, has the experience to sign on the loan and now you've become partners on this deal together. I am a sponsor on multifamily deals, but how did I get into the multifamily space to build the portfolio that I had? I brought other sponsors in, partnered with them until I had the experience owning, operating, controlling enough of these apartment deals that I could become my own guarantor and signer on these loans.
Speaker 1:So, number one, seller financing 30 to 50%. Bank financing. They usually come in once again, non non-recourse loans 60 to 80. That's the bulk of the funds you need. Number three is friends and family. Friends and family most of these businesses and or these apartment buildings, the equity that's needed to come in to bridge the gap, comes from friends and family. Now, your friends and family. Once again, let them know what you're doing. Let them know what you're doing. Let them know what you're buying. Talk about what you're doing.
Speaker 1:Now, how you structure that. You're typically going to offer what's called a preferred return. A preferred return just means that they get paid first. They get a chunk of the profits before you get your chunk of the profits, which is very, very fair because you're running and operating the business and as long as you run an operator properly and you get them their first chunk first, their preferred return enough will flow down to you as well, which once again comes back in to what I said earlier. You need to know is there enough margins for it to funnel down the bottom line to you. So preferred return of typically 6% to 8%, plus upside on the back end when you exit.
Speaker 1:Now another way to structure is that you can structure with no upside on the back end. You just pay them a flat preferred return with no equity upside. Now, if you did that, your preferred return would typically be in the 10% range 10% range but no upside in the back end. So if you're super confident in the deal and you know that there's going to be big upside on the back end, maybe it makes sense for you to do that. Maybe what they're looking for is they just want stabilized return. They want more cash flow than they're not really interested in the upside, or the cash flow was more attracted to them then the potential of an equity upside that could be a great structure as well.
Speaker 1:Now a reminder for you is that the best time to raise capital is when you don't need it. In other words, you just start having those conversations right now. Right now, people can smell desperation If you all of a sudden have an opportunity brought in front of you, an apartment building, a business brought in front of you, and you've never had any conversations with anybody, letting them know what you're looking for and how you're doing it. You're going to have a very, very, very hard time raising capital because nobody knows what you're doing and the only time that they do know is when you come to them desperate about what you're doing. So start having those conversations Now.
Speaker 1:Listen, a great question, a leading question you can ask, okay, is if I found an opportunity and you spell out what that opportunity means, that gets you X percent. This is what I'm buying, this is what the returns are looking for. If I found that opportunity, would you be interested in me bringing it to you to invest in? That is the easiest way for them to say yes, and you want an affirmative yes in the beginning. And the more yeses that you can stack before you bring them the opportunity. See, alex Ramosi says, the longer you delay the ask, the bigger the ask can be. So if you're having more and more and more conversations with these individuals before actually bringing them the opportunity, the more they are willing to invest in the opportunity. So start having those conversations right now. Let them know what you're buying. Let them know what the returns you're targeting. Let them know once again how you find it, how you value it, how you buy it, and then where they come in and are able to partner on that. And then when you bring it to them, well, they already expect you to bring it to them. You're not shocking them. They've already said, yes, please bring me this. And when you bring them something that is getting them the returns that they desire, well then you'll get what you need. Remember, we get what we want by helping others get what they need. What do they need? How do you get it to them? That's the key for both sourcing the deal and sourcing the capital to buy that deal.
Speaker 1:Now number four is you. You can bring in funds. Number four is you Say that you do have some capital that you can bring into the deals. You should absolutely bring that into the deal. It's gonna be easier for you to raise it from friends and family, to bring it in from the banks, and easier for the owner to give you seller financing. Think about those real quick. If you know how much money you can bring in you've had that conversation with yourself, you've had conversations with others friends and family and you know how much you can raise you have an understanding of how much the bank will lend, based on the type of asset that you buy. Well, now you understand. Do you need seller financing to bridge the gap or not? See the more options the better.
Speaker 1:But you need to be clear on not only what you buy but how you're going to bring the capital in. The key that you need to understand is it doesn't always need to be your very own capital all of it. It's very rare that that's the case. Very own capital all of it it's very rare that that's the case. Now, number five is once you find the deal, you value the deal, you buy the deal, you finance the deal. Number five is you own the deal. So number five is to operate that business. So I'm going to give you the five necessities for you to run the business, five necessities If you are a business owner of any kind. These are five things that you need to have in place for you to make sure that you run that business efficiently and effectively.
Speaker 1:Number one is outcomes, outcomes and priorities. Okay, when you understand your outcomes and your priorities, you're going to understand where you can resource or you can allocate your resources. So, your outcomes, your priorities well, your priorities need to be aligned with your outcomes, which means, then, you know how to allocate your resources. So, what are the priorities to allocate time and money to? Is essentially the question what are the priorities to allocate time and money to? And the only way you know that is what outcome you're pursuing. What is the outcome, what is the number one outcome that you're pursuing, and then you need to make sure that you're putting your priorities in line with that.
Speaker 1:Now, the reality is this If you're starting a business right out the gates, your number one priority is going to be to bring in buyers, bring in customers. There's really three stages of business. You can write this down, too. Three stages of business. Stage one is to promote, to get feedback, meaning you're getting buyers, you're promoting, you're bringing buyers in and you're gaining feedback from them. You built your product, you have your product great, but they're going to give you feedback on that product to let you know what changes need to be made. I promise you your changes. There's going to be changes that need to be made.
Speaker 1:Step two is then to improve the product. So improve the value that you provide. So solve problems until there's no more problems to solve, make it so the value that they get is man, it's off the charts, no-transcript. Then number three is to scale. See, if you try to scale before truly having something that people are going to want to continue to buy from you, you'll have problems with your business. You'll have to continue to create new revenue streams. How does that come into your apartment buildings or your business is very rarely to raise the prices, to raise the prices of the product, to raise the rents on the product it's very rare. You're gonna go in and you're gonna figure out what problems do you need to solve for those tenants, for those buyers, for your clients, and you're gonna allocate time and money to that, which will then help you understand or then put you in a position to raise prices, raise rents, raise occupancy on your apartment building, all those kind of things. So what are the biggest outcomes and then how do you prioritize those outcomes?
Speaker 1:Number two is execution, follow through, listen. You need results and identify what those results are, and then you need to measure those things. So you need execution, follow through and results. And then you need to measure those things. So you need execution, follow through and results, and that all comes from measuring. You need to measure. You can't manage what you don't measure. So what is it? What are you doing and what is working? So who is doing what and is it working? So what are you doing? Is it working, who is doing what and is it working?
Speaker 1:And then, remembering that it's not about just hard work, it's about the results. See, I will list out what is the outcome that we're looking for, the measurement that we're looking for, why is that measurement the most important? How do we get there? Let's say, I list out 10 things that we can do. I can do, the person can do, to execute and get the result. But the reality is, if I only need to do three of those things to get the result, I'm going to do those three things to get the result. It's not about working hard, it's about getting the result. But the key is you need to understand once again number one, what is the outcome that you're looking for? And then, number two, this really comes around execution, execution. How do you actually execute to get the outcome?
Speaker 1:Number three thing that you need on your apartments, in your business, within anything you do, is you need to have improvement and growth standards, meaning, where are you looking to improve, what are those most important measurables, those kpis, and where are the trends that you're looking to take those? What are the most important measurables and where are the trends that you're looking to take those? What are the most important measurables and where are you looking to take those? In other words, what's the level of performance you expect? The base level is your KPI. And now where are we growing those things to?
Speaker 1:For example, in my seminar business, my event business, one of the most important metrics is a show-up rate. It's the show-up rate to the event. If we can have the best marketing to get people registered for the event, but if nobody shows up to the event, well, my goodness, the event's a flop. We need people there. Now. The other one is so that show-up rate, once again, typically ranges right around 15 to 20%. Where do I want to take that 25, 30%? So what do I do? We put things in place to incentivize the team to be hyper-focused on getting those things up, those show rates up, which will take our cost of acquisition down right, which takes our profitability up. The other side of that is lifetime value. Lifetime value comes from the value of the product that you have and the more people continue to re-engage with the product.
Speaker 1:There's ultimately, three ways to grow your business. You can write these things down as well. More clients is number one. Obviously you need more clients. Number two is you need more revenue from those clients, meaning that they pay you more for it. So meaning raising prices, something like that. Think of it this way you go to Starbucks and you have a grande I think it's like a tall a grande, a vente, and now there's a super vente. Okay, so how can you give them more value with very little input on what you need from you? The input you need to put is very little, but the output that they're willing to spend for the value is more. That's what we're looking at. So what are those things? Where are you looking to grow your business?
Speaker 1:And then number three is repeat buyers. So whether they're either referring you a buyer or they're buying more things from you. So number one more clients. Number two the value goes up on what you charge for those clients. And then number three is how often they buy from you or refer somebody to you. That's how you pro, but what are your standards? What are you looking to get to Now?
Speaker 1:Number four, so remember, number one is outcomes, so you know where to allocate your resources. Number two is execution. You need to measure. You cannot manage what you don't measure, so you need to measure so that your team knows how to execute. Number three is improvement for all standards. What do you measure and how are you? You know what's essentially, what's the level of performance you expect and where do you want them to take it.
Speaker 1:Number four is culture. Culture will trump strategy all day. What is the culture within your business? What is the culture within the property that you have? What is it? How do you treat each other? How do you? How accountable are you Like if somebody doesn't hit that performance metric that you set, can you keep them accountable? Are they going to be angry if you keep them accountable, or are they grateful that you kept them accountable Because they have a personal standard of growth and results and all those kind of things? What's your culture? Do you plan together? Are you grateful? Are you nice? Are you fair? What is it? What is your culture? You need to have that in any business. It's a massive part of anything that you do on a property level, at your business level, whatever it is.
Speaker 1:And then number five is you need to pursue reality. You need to pursue reality. You need to have realistic goals. My tagline is think bigger. I love thinking bigger. I love taking to the whole to a whole, nother level. I love that kind of stuff. But you also need realistic goals, realistic measurements. Okay, you also need to say what needs to be said. Say what needs to be said. Don't try to sugar coat things, don't try to kid glove it. Say what needs to be said. Once again, how do you keep a good, strong culture? You set realistic goals. You say what needs to be said. You create. Number three you create accountability. Accountability is powerful man. Are they accountable to the once again metric that you've set?
Speaker 1:Number four you need to be able to make tough and unpopular decisions. You cannot tolerate mediocrity. You cannot tolerate it. Your business is not a family, it's a business. It's a team. You're on the team if you produce results. If you don't produce results, you're not on your team. It's not because you're a bad person, you're just bad for business. See, if we're truly going to provide a valuable product to our client, we need to produce results for the client. So you need to be able to make tough and unpopular decisions, because I'll tell you right now that if you are trying to get everyone to like you. You are not a leader. A leader, by default, isn't going to have everyone like them. They're not going to make all the popular decisions. They're making the tough decisions that other people don't want to make. That is leadership. By the way, what I just mentioned is leadership. Make tough, unpopular decisions. Create accountability measurements so that people know what you expect and how to hit it. Tell them what needs to be said, give them feedback and give them realistic goals to hit. That's leadership.
Speaker 1:Now, those are the five moving parts of any business. That's the five things you need to understand if you're going to buy a business, buy an apartment. You need to answer those questions and figure those things out for you to truly be able to buy well, find value, buy, finance and operate that business. So hopefully, you found some value from this and I know you did so. First, before I give you your end next steps, go share this episode with somebody else. If you found value from this, go share this episode with somebody else. Leave us a comment and let me know what was the biggest takeaway that you had. Leave a comment on telling me what you're going to go focus on on your business.
Speaker 1:Maybe it's not all five of the things you needed to know. Maybe it's a little piece within one of the steps that you needed to know and then go master and improve. What is it? Go share it. Now. Your next steps. Your axiom is here. Okay, develop your rules, man.
Speaker 1:Number one develop your rules. Like rules, keep you safe, but it also makes you way more confident to know what you're going to be pulling the trigger on. When the target is clear, success is near. What do you buy? Why do you buy it? Develop your rules.
Speaker 1:Number two is to start researching. Start researching, start looking at deals. Start looking at lots of deals. Start figuring out and researching what do you want to buy and why do you want to buy it? Number three is spread the word Once again. Quit keeping this stuff to yourself. People will give me a business card and tell me that this is the business that they run. I look them up on social media. There's nothing that they've ever even posted on social media about the business that they run. Your business card, I throw away in one second, but your social media we connect on social media. Well, I'm going to continue to engage with you for a long time.
Speaker 1:So if you are not putting an effort on social media to let people know what you do, listen, you're not going to find your daughter, right? Remember that example. If you want to find your daughter, if you want to find your business, if you want to actually do what it is you say you want to do, tell people what you're doing Now. Number four is to start dating. Start dating. Look at tons of deals. Once again, you don't know if the deal is attractive or unattractive, if the girl or person is attractive or unattractive, if you've only seen one deal, one person. Look at a lot of people. Look at a lot of deals. Figure out what is attractive and unattractive to you. And then number five is start your financing, meaning start figuring out where you're going to bring in the financing. How much money do you have to put into your business? How much money can you raise from friends and family? How much money will the bank's lenders bring in? And then, once again, can you bridge the gap with some seller financing?
Speaker 1:My friends, the epitome of owning the outcome is this kind of stuff. If you want to run a business, you need to know what it takes to run a business, and those are the five moving parts of any business. Now you need to own the outcome of your business and your future by determining which of those. Which of those, do you need to focus on to grow and scale your business? Cannot wait to hear about it, cannot wait to hear what you've implemented and the success that you've seen and continue to see. You just know that we're cheering for you over here. So, as always, go share, go leave a comment and live always with aloha peace.