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The Ground Game Podcast
Welcome to The Ground Game Podcast, where land investing meets real talk! Join your hosts, Justin and Clay, both 7-figure land investors and seasoned entrepreneurs, as they dive deep into the world of land investing, team building, and personal growth.
The Ground Game Podcast
Episode 44: The Death Zone, Scaling from $1M to $3M Without Losing Your Mind
🎙️ Welcome Back to The Ground Game Podcast! 🎙️
In this episode, hosts Clay Hepler and Justin Piché dive into what they jokingly (but seriously) call “The Death Zone”—the chaotic and critical phase of scaling a land business from $1M to $3M in annual revenue. They share hard-earned lessons on hiring, systemization, and why scaling headcount too fast can kill your profit.
Key Highlights
Personal Updates:
Clay and Justin kick off the episode with some light-hearted banter, reflecting on their recent experiences, including Justin's move into his new home and the challenges of unpacking, as well as Clay's excitement over his son taking his first steps during a family reunion.
Scaling Challenges:
The hosts delve into the challenges land investors face during this crucial scaling phase. They discuss the complexities of owner financing in today’s market and how to avoid building your business on shaky foundations by hiring before you're ready.
The Egg Analogy:
Clay introduces an insightful egg analogy that explains the difference between microwave operations and Michelin-level execution, emphasizing the need for quality over speed.
KPIs and Accountability:
Listeners will learn why KPIs, feedback loops, and clear ownership matter more than ever in driving business success. Clay and Justin share the processes they are currently rebuilding and the reasons behind these changes.
Founder Burnout:
The episode also touches on recognizing and overcoming founder burnout. Clay and Justin share their strategies for maintaining balance while driving business growth, emphasizing the importance of prioritization and self-reflection.
Tech and Data Management:
The episode wraps up with a discussion on the significance of tracking key performance indicators (KPIs) and leveraging technology to streamline operations. Clay and Justin encourage listeners to utilize data for informed decision-making, sharing their experiences with various CRM systems and the importance of a cohesive tech stack.
If you're stuck between momentum and mayhem in your land business, this one's for you! 📌
Don’t forget to rate, review, and subscribe if you’re scaling the right way—not just the fast way!
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Clayton Hepler (00:00)
Hello and welcome to another episode of the Ground Game Podcast. This is your co-host, Clay Hepler.
Justin Piche (00:06)
This is your other co-host, Justin Piche, and we're here to show you how to win the ground game.
Hey, Clay.
Clayton Hepler (00:24)
sup dude
Justin Piche (00:25)
life is fun. Life is crazy. I'm in my new office, which I think I was for the last podcast, too, and I'm no closer.
to having all my boxes of stuff which I've conveniently located out of the field of view for the most part of the camera. I've got some guys outside installing my garage door right now because I have like a big tarp like stapled up in the opening of the garage door so people can't see all my stuff as they drive by for the last couple weeks. we're slowly moving in. I'm getting the last load, like carloads of things out of the house we were renting probably tonight, maybe tomorrow.
Clayton Hepler (00:36)
You
Justin Piche (01:01)
morning and then we'll be totally like all of our stuff will be here and then it's the huge process of putting everything away. A lot of boxes have been unpacked but we still just have you know it's like the odds and ends like the things you carry around that you just like don't know where to put and you probably don't need and you want to throw away but you feel guilty about throwing away certain things it's kind of like where we're at right now I'm like trying to be like babe if you don't see us using it chuck it throw it away donate it sell it get rid of it
Clayton Hepler (01:22)
Right. Right.
Yeah, moving is always way harder than you expect. It's just always so much harder, especially when you have three kids, I can imagine. It becomes even more difficult. That's cool, man. I mean, obviously it feels good to be in the new house, but of course it takes a little bit of time to get in there. How do the kids like it?
Justin Piche (01:33)
That's so much harder.
Yeah, mean, my daughter actually like cried one of the first nights, like was really upset because she's like, it's not the same house where I grew up. It's not the same anymore. I'm like, it is. It's actually the same like basic house we just added onto it and made it bigger. like, yeah, but I'm not in my room anymore. I'm like,
because your room is now my office. This is where my kids used to sleep. So we had, you know, it was funny or interesting and cute to see her kind of emotional about the new space that's different than the old space. But in the end, it's so much better. I mean, we went from 1300 to 2900 square feet, which isn't a huge house, but at least by my neighborhood standards, it feels like so much space. And we put so much time and money.
into designing the layout such that it was just very, there's not an inch of space in this house that isn't used. where a lot of large kind of builder grade or like standard floor plan houses may be laid out non-optimally, this is like the optimum layout for our footprint.
Clayton Hepler (02:53)
Yeah, I mean dude, 1300 is a shoe box. It is a shoe box and I'm sure it's like doubling your square footage is like amazing, right? So, and if you plan on having more, woo. Right? So yeah man, I mean for me like we've done a lot of changes here. I think I might have talked about it on the last podcast but we're.
Justin Piche (02:56)
With three kids. Yeah, with three kids.
Yeah, it is. It's great.
Yep.
Clayton Hepler (03:21)
We're doing some reorg here and it feels really good and the right things. Deals are going moving quick. I just got an offer right before this. Buy for 60, sell for 100. Just a solid base hit. And that's our second deal this week. And then we'll buy for 25, sell for 75. So some really good, some good solid deals on our contract this week. Yeah, man, good, good, good solid deals for sure.
Justin Piche (03:42)
That's solid. 25 to 75 is great.
Clayton Hepler (03:47)
And yeah, man, I'm really aware of what's going on in the market. I think that everyone knows it, everyone's feeling it. I spoke with one of my buddies, Drew Haney, last night. I know he's a good friend of yours as well. And we are talking about just the speed of the market and the things a lot of land investors can do is use owner financing provided they're working with the right funder or the right person or they're buying it themselves to really sell these parcels quickly.
And we've been employing that as well. Like basically all of our listings now have owner financing, which really sells. I know you really like owner financing as well.
Justin Piche (04:22)
yeah.
I mean, it's
a double edged sword though, right? Like these last couple months, the vast majority of our listings have sold owner financing. In fact, this week and last week, I think I sold 10 properties, eight of which were owner financing. And the other two that weren't were subdivides where I was paying capital back to investors rather than actually taking profits. So we moved a ton of properties, but we didn't recover initial investment yet. And so now we have all these notes, which are great and they're marketable, but now we got to go through the process of selling those
mortgages to recoup that capital. it's, you know, it is a double-edged sword. It does move things, but you still have to balance cash flow, right, pretty well between selling those notes, selling them, and getting the down payments back and all that kind of stuff. So it's a little bit of a...
A little bit of another aspect of the business to manage, but worthwhile, right? Because it gets something, I've said this many, times, but it gets an asset that is marketable to a select group of people that want to be in that specific place with that specific piece of land and turns it into a piece of paper that pays cash flow that is marketable to a whole lot of other investors. So it's worth doing, but you still got to have a process for selling those notes or collateralizing those notes in some way, whether that's hypothecation from a bank or a fund.
Clayton Hepler (05:34)
Yeah.
Justin Piche (05:37)
you start to buy your notes and make kind of an interest rate arbitrage for yourself or for your investors.
Clayton Hepler (05:43)
Yeah, man. speaking about funds and advanced structures and selling these last week, went selling these notes last week, we went through the zero to a million dollar range for like, what are the things you want to focus on revenue producing activities, things to be aware of core mental models problems. Today, we're going to go in the what I what I kind of jokingly refer to as the death zone. It's not a joke.
a one to $3 million. You think that the death zone is what we were talking about earlier, which is hiring your phantom crew of people, you know, between one or zero to half a million dollars, half a million dollars to a million dollars. But at this point, between one and three, a lot of times you don't have enough capital or margin to hire a true high performer. So you're still all producing. You're producing a lot of
the revenue, you're directly involved in a lot of those revenue producing activities. And you're sort of like not a conductor, you're like a drill sergeant, right? Telling your team members to do what they need to do because you still don't have a lot of the systems, which is what we're gonna talk about today. But I feel like this is like the key death zone, because you could hire, like I did, I hired a global talent operations manager who I thought was very, very good.
Justin Piche (06:41)
Yeah.
Clayton Hepler (07:07)
But I found it found out that he was he was not up to the level that we really needed him to be to run an organization that was at this level. And so lot of lessons learned here, but we can dive into that today. Any initial thoughts about this man? One to one to three. Death zone.
Justin Piche (07:24)
Yeah, is, yeah, I guess my
big kind of perspective here is like, is the, this is a place where it can be really challenging to manage cashflow once you start, because in this range, your OPEX budget is going up substantially. You're obviously increasing your marketing spend, you're hiring higher quality employees that command a higher salary and higher pay. And you're...
doing things like we just talked about is selling notes or selling selling properties on owner financing. So balancing your cash flow across this range as you scale out of here is can be really challenging. And this is the kind of the place where I got last year sometime and you know not necessarily like hit the panic button but got into a couple of kind of tight spots because I was still operating with with kind of like the smaller mindset deploying capital into deals that might take a little longer or that I was going to sell on terms. And you have to have at this
stage
like you said capital is can really be a constraint you have to have funders investors the ability to get bank debt in order to keep scaling through this because at some point you just have too many properties and too many opportunities to use all your own cash on it just it's really hard to do so that's kind of the first thing that that jumps to mind and this is really the place where
you start having department heads for different departments and giving so much more ownership to those people. Because you can't manage all the aspects. mean, it's big enough job just to manage all the aspects of an acquisitions team as the operations manager at this scale.
much less operations, finance, admin, transaction coordination, dispositions, training your whole team, hiring, HR, like all the different functions when you start scaling your team and revenue into this range, it's too much for one person to hold ultimate responsibility in all those things. You cannot do it. I mean, maybe you can. I'm not gonna say you cannot, because I can't speak in absolutes. There are some crazy people out there that managed to figure this out, but I imagine their businesses just look different.
lower volume, higher margin deals, probably, is how you would, if you could be in this range with a lower margin business and still manage everything, I mean, lower, sorry, a lower volume business and still manage everything. But if you're doing kind of the typical flipping and development model where most of your deals are in that 30 to 60, $70,000 gross profit range, it's a lot of transaction volume in this range.
Clayton Hepler (09:48)
That's right. Here's a question I've been thinking about lately. The land business looks very different. Specifically now I feel like in the summers this last three to six months look different for me. We're still doing deals, we're still making money. But now knowing what you know about the market.
And I have a lot of clients coaching students as well that are still scaling, but we're talking about strategic scaling. We're talking about profitable scaling. And I feel like within this range of one to three, you start to get that confidence, the overconfidence, you start to over hire. Maybe for people that are above punching above your weight class, you're not, you're not aware of land days and inventory are going up significantly.
for a lot of investors, are still deals that are selling really quickly. Like I just talked about those two deals. Those are three days, four days on market, cash deals, good rips, you know. But would you think about changing how you're hiring now, given what you know about the market, if you were eclipsing that $1 million a year business?
going into the, you know, maybe you're 800, 900, whatever, and you want to get to the 1.5 range.
Justin Piche (11:03)
Yeah,
we talked about...
We talked about our feedback from the 5280 mastermind in Denver a few weeks ago. We talked about how Sumner said, we're entering the skill era of this business where the industry is maturing, the medium to larger players are capturing more market share and we're seeing newer investors fall. People aren't coming in and lot of folks who maybe started that thought it was going to be easy are dropping out of this business.
And so in order to compete today, I think you just you really need to focus on higher quality hires. And I think like you've done it, right? You're talking about hiring killer acquisitions, associates or acquisition managers that are US based. I think that's probably a big kind of trend that we're seeing in this industry right now is folks going more to that US based commission type structure to not leave as much on the table.
as with kind of an overseas acquisitions team.
Clayton Hepler (12:02)
Yeah, I agree with that completely. And I think that, you know, hiring when it becomes like very painful, I would implore the listeners and this is what I'm doing in my business to do that versus hiring ahead of your skis. Right. We are trying to scale profit here and Justin, I kind of differ a little bit in this, at least maybe I remember.
in the fall, you and I were talking about this a lot and you're like, Hey, like higher ahead of, ahead of where you're at, because it helps you scale quicker, kind of pull yourself up the ladder faster. you know, so we might have different views on this, but at this point, hiring based on looking at your schedule, looking at what the business actually needs, not on aspirational hiring, which I think the difference between aspirational and like reality based hiring is aspirational is, I want to get into this additional,
column of business, I want to try out this new lead marketing channel or subdivides versus flips. I'm going get into different types of subdivides or entitlements. And right now, I don't think it's the right time to do that. Right now, I think it's about learning about your KPIs, learning about what's going right in your business, what's going wrong, fixing what's going in the business. And that will naturally get you to the $1 million, $2 million, $3 million.
Justin Piche (12:57)
you
Clayton Hepler (13:19)
range, right? At this point, you're kind of at the, you know, you're like, Hey, I probably have an acquisition manager, a lead manager. Do I hire another one? Do I hire more people? Do I bring more people on? And I would, I would say you more want to systematize at this level, all your processes systematize your feedback loops from a marketing feedback loop, sales feedback loops, what's working, what's not in the business itself, versus just delegating out responsibilities.
What do think about that, man? mean...
Justin Piche (13:47)
I agree. I think that you can get up into the seven finger revenue range on on kind of volume and a prayer, you know, like as long as you're able to get enough volume out and keep your costs kind of low and you can if you're doing all the work yourself, right? Because you're not you're not having to hire that six several six figure employees if you're just like burning the midnight oil and crushing it yourself to handle all the high dollar employee revenue generating tasks. But once you get into this range, this is
really a quality phase of your business where you've scaled into the seven figure range of revenue. You've done it probably primarily on volume and lower cost talent. And now you want to maximize what your team can do to get through this kind of range before adding significant head count to your business.
Clayton Hepler (14:41)
So yeah, what I think about doing this is like, I was talking to my wife the other day, I was like, hey, what food has the biggest difference between the lowest level and the highest level of quality? We were thinking about like what food, it's not a, it's not a french fry, right? Cause the french fry is an appetizer, right? But you can see like french fries are sold in the
McDonald's of the world and they're also sold in a Michelin star restaurant. And what we came up with was an egg, right? You can have an egg in like an egg McMuffin with like a fake microwave egg, but they say that like an omelet, a really good omelet is like the peak of cooking, right? A really good French omelet, right? So it doesn't really matter what the actual like you might say hamburger or you might say something else, right? But
The difference between a low level egg and a high level egg is like huge, right? It's just massive. And that same exact thing can happen in the way you do transactions, the way you do sales, the way you do marketing. And so you might be at a low level egg, you might be at a microwave egg with your team members if you have a lead manager, team manager, or a lead manager microwave egg, let's say, right? But you say, hey, I don't wanna scale head count, I wanna scale profit.
So how do we get to an omelet? What are the core, what are the core KPIs and core outputs that someone who's making an omelet, the highest quality food in the world need to hit? And so how you can scale profit at this level, the systemization of this level is you take the egg, the microwave egg, and you say you need to omelet level quality, right? And sometimes you'll see this person get to that level, right?
That's why we're talking about, we want to scale profit at this level, not just, not just, you know, gross profit, net profit, right? Actual profitability. And so one of the things we've been doing a lot internally now is because we're kind of in this, in this range floating towards the top and probably this year is how do we, how do we all the ties, all of our processes in our people. So we don't need to necessarily add more VAs.
We just increase through training, increase through better culture, increase through higher expectations. And then if the person can't hit that, it's not like I need to replace one person with two, which I see is what a lot of land investors do. They're like, Hey, what got me to 500 K was replacing one person with two, right? Two more callers, two more lead managers, two more, whatever marketing managers. Now it's like,
If you want to scale profit at this level, it's a different type of thing. Right? So someone who is at $2 million, but they net a million dollars or 1.2 is way better off that someone's at $3 million and they net 600K or 500K. Right? Which is what a lot of times when you scale in this level, this is what happens. So, you know, excuse the kind of really basic level.
Justin Piche (17:45)
Right.
Clayton Hepler (17:51)
analogy, but amortizing, you know, your processes is really how I think someone goes from the low one mil to the two mil and retains profit because that's what we're after. What do think about that?
Justin Piche (18:03)
Right,
yeah, exactly. And that's kind of the challenge with, I think with people scaling through this, is that they are used to this quantity approach to scaling, which increases your costs.
as well as your revenue, but maybe not necessarily your profit. And it's really the quality that's going to increase that profit, getting more out of each employee, getting more out of each marketing dollar spent. And it kind of leads back to what you said earlier, which is focusing on your KPIs, right? Focusing on especially your marketing spend and your return on marketing spend.
That's like the next level hack, is you need to know what you're spending money on and what you're producing from that so that can make decisions on how to spend your marketing budget to increase your profit, not just your revenue. Because yeah, you'll increase revenue. You triple your mail spend, you're gonna increase revenue. Will you increase profit? Maybe, maybe, but how do you know without reviewing those metrics?
Clayton Hepler (18:53)
Dude, I wa- I-
.
That's a great point, with my private coaching students, do a monthly mastermind call. And last week we did a KPI mastermind call. And so we built out this entire KPI system based on all client feedback for the past half year, almost year, and also using our internal KPI. So we built this incredible sheet, very easy to use from everything from marketing to Dispo to TC to sales. It's amazing.
And one of the things that we really, really hammered on, and it's particularly important with one to three is when you're doing KPIs, green, yellow, red, right? So at this level, it starts to get really difficult to prioritize things. Trust me, I know as a guy that's like ADD out the wazoo, right? But the KPIs, they don't like live in a vacuum. And so when we're talking about
going from the base level egg to the high level egg, people are gonna be commenting below being like, dude, stop talking about eggs. But if we wanna talk about the omelets here, right? We have the green, the green, what are our green KPI? So we have, we present this to our new team or say, hey, we wanna scale these KPIs, the green, yellow, red equal us hitting our goals or exceeding our goals for the quarter. Let's say we have, we need to make 600 offers this quarter.
Green is a little bit above 600, yellow is a little bit below and red is like way below. And so as we're thinking about systematizing this process, we want to have those different stops at different parts of the process so that we know every single week when we're looking at our KPIs, and this is what we did, that we know where do we need to focus now. Because it's not just about tracking KPIs, it's about using the insights from the KPIs.
to inform what we're actually doing. Like I always tell my team members like, give me insights, not data. Like I don't need data, I need status updates. you're not a waiter. You don't tell me when my food's coming out. Like you say, know, hey this is the best thing on the menu. That's what I wanna know. And this is the worst thing on the menu.
Justin Piche (21:07)
Yeah, yeah, no, I love that. I love that.
Clayton Hepler (21:10)
So,
I wanna go to kind of the core mental models. You've talked about this pretty at length, Justin, but at this level, the one to three, who were your big hires and why did they impact your business and how did they impact your
Justin Piche (21:27)
Hey guys, this is Justin interrupting your podcast to say thanks for listening. This episode, Clay and I are talking about what it takes to have a business with one million to three million in revenue and what are the mindsets that you need to have as a CEO? What are the hires, et cetera? If you guys are getting value out of this podcast, please rate, review, subscribe, leave us a comment. Let us know what you want to hear about. We'd love getting feedback. It helps us bring you exceptional value each and every week. Now back to your regularly scheduled programming.
I mean, some of these hires took place before the two that took place kind of in this range that really stepped the business up or have helped us continue to scale through this range is project management and operations acquisitions operations management. Cause I already had the sales Dispo manager at the lower scale and he has crushed and helped me move through this. But the kind of the first thing is like, know, who?
who is going to take these responsibilities off of your plate? We've talked so many times about Buy Back Your Time by Dan Martell, great book, another plug for those who haven't read it, to just read it and kind of understand the framework behind how do you think about hiring to get more time back on your plate? This is like a play, you have to do this.
all through scaling your business, but this is a particularly important time to do it because at this stage, you are likely handling too many things that you cannot produce exceptional results on all fronts. And so you really, really, really gotta get A players who can think critically, who can improve processes, who can bring you solutions, not problems, and take ownership over those solutions and implement to help your business scale. So.
For me, when I got into this range, was really project. Project management was one of the biggest ones because we had a bunch of subdivides, we still do, and I could not continue to be the person underwriting every deal, hiring all of our surveyors and contractors and managing communications with the county engineering department and all that kind of stuff. I had to get somebody in who could handle all that. So that was a game-changing hire for me.
and then the other would be the ops management. So who's taking ownership over hiring on your acquisitions team, kind of your marketing strategy, training your whole team? Because I found for me personally, that was the biggest, that was one of the biggest things that was lacking on acquisitions was training. I was not in a position where I had the time to dive in to all of these calls and give pointers and to give feedback and just.
improve and focus and pour into the team so they could get better. I didn't have that time anymore. And so getting somebody in whose core responsibility is that was also essential. Those were my kind of two big highlights in this range.
Clayton Hepler (24:17)
So what were the, I know we've talked about this before, but for the listeners who kind of listen to intermediate, like what were the big things that this, like the acquisition hire, like what were three, you said eliciting the calls, like what are the things that they actually brought into the business that impacted it, right? We know job descriptions are fine, but observationally looking back, this is what happened and this is how it impacted us.
Justin Piche (24:34)
Yeah. Yeah.
Because we were able to scale pretty well through quantity, the quality of our follow-up processes were just lacking. That's probably like the biggest initial impact was evaluating what are our follow-up processes and what is our process flow for when we bring leads into the business. How are we making sure we capitalize on all of those leads as best we possibly can? It's a crutch.
or a kind of cop out to just say, well, we're gonna do it at this level and we're just gonna increase the number and so that we can kind of hit the lower hanging fruit. We just get more lower hanging fruit and so we can scale through hitting more lower hanging fruit. But you're just throwing away a lot of opportunity that way. So that was kind of the first big task was how do we get the higher reaching fruit with the same amount of marketing and turn the same amount of marketing and spend and team into more deals.
Training, training plan, that was another huge kind of whole. We had some training, but it wasn't very structured. There weren't key like metrics and things to work on each week that we kind of didn't, yeah, we just didn't have great handle on what each individual person need to work on. So now we have somebody in place who has those one-on-ones, who can give direct feedback to each employee, has group training, has focus items to focus on for those team members.
And then, yeah, those are probably two of the biggest things. And it's good to just have somebody who has ownership over process improvement as well. Right, because every quarter, we'd go through the EOS framework and we establish what are our quarterly rocks, what do we want to see.
And everything regarding acquisitions and project management was all kind of on me to see the end result, see through to the end result. But now I have kind of executives, if you will, or like high level managers over these departments that they own their own improvements. So we can discuss as a group, what are the things we want to see better in each of these departments? What are the projects that are going to get us to those results? And then you are the owner of these results.
I mean just like little things man, like website, yeah, just like, I mean you just add up all the things that need to be improved, like website updates, alright?
Clayton Hepler (26:40)
adults in the room. Adults in the room. That's what you're saying.
Justin Piche (26:49)
If you don't have somebody who's responsible for your acquisitions team, your brand image on the acquisitions team, that's you. So things as simple as hiring a website developer, getting a cohesive plan for how to improve the conversion on our website so web traffic can convert better, that's all on you to do. And it doesn't sound like a very challenging task. It's not particularly a challenging task to do that. But somebody has to see it through and own it.
you will add that to your plate. Add that to your plate when you're overseeing everything else too. It's just not going to work. You need somebody to get these things across the finish line.
Clayton Hepler (27:30)
Yeah. And also like what we were talking about earlier, the base level to the high level executive hire, right? You were able to negotiate a good structure so that you're still a profitable enterprise at this level, right? Um, but these businesses at one to three, it's the death zone because you don't have the collective genius of a lot of it. You can't afford the collective genius of a lot of executives.
So when you sit down in an L10, you're the person who's the smartest person in the room, usually, right? And that's good in terms of like, you can push your agenda, but a lot of times other people have really good ideas. A lot of times you're not seeing the picture as the full picture and other people can bring themselves to the table and it really helps you.
I say, what are the actual priorities of the quarter? Because me as a CEO might want this, me with all my shiny objects might want this, right? But is this actually the best thing for the business? Is this the best thing for the business? And so that's another real benefit of the executives. you know, if you, one thing I'd like to point out, right, is both of your executives are directly tied to revenue.
would be more difficult to afford someone who was just like an operations person. That's like a standard operations person has that level of OTE high 150, 200, 250. Right? If they're that base with a little bit of juice at the end, that becomes more difficult to afford versus having an executive tied to revenue. I have an executive on my team, director
director of Rev and he's directly tied to revenue. Right? So all he does all day is focus on, how do I bring new, new deals through the door here? By the way, ran a call call center with 25 callers has flipped hundreds of houses. So the guy is like really sharp guy, like teaches me stuff all the time. but he's tied to revenue and he's not, it's not like in, in for our type of businesses, that's way you can get that executive level talent to try to get out of the swamp.
effectively at this level.
Justin Piche (29:41)
Yeah, no, I agree with that. agree with that. The other thing that I think really
helps when you have these hires at this level is because the jobs in each individual department are so involved, there's so much going on in each department, if you're still trying to have your hand in everything, you just can't see all the details and get a cohesive picture of what is going to drive the best improvement in profit or revenue in a specific department. You may have your ideas, but you may focus on the wrong thing as the CEO. You you were talking about
shiny object and my priorities as CEO are different. I want things that are going to make my life easier, my life easier for working with investors and banks and financials and accounting and that doesn't necessarily always drive revenue. It makes my workload lighter but doesn't necessarily drive revenue. So if you have somebody who's in the weeds in the department every single day, they are going to know the things better than you, a lot better than you, that are going to actually make a difference on the ground to generating more volume.
actual deals that get closed and thus revenue.
Clayton Hepler (30:47)
Yep, I love that. So one thing that...
I see a lot of entrepreneurs at this level mess up is the leading and lagging metrics. like, for those of you who practice the L10, which is from EOS, most people probably know about this. They fill up their L10 with lagging metrics. The difference between leading metrics and lagging metrics is leading metrics is an input, lagging metrics is an output, right? Leading metric is four by 10 bench press, lagging metric is
Look how amazing my chest looks, right? And I find that a lot of guys at this level, guys and gals mess this up that their L10s are primarily laggy metrics, not leading metrics. So what are a couple of metrics that you really like to track? That let's say five metrics that you would say, man, if I didn't have these metrics, I wouldn't have any visibility in my business.
But with these five to seven metrics, I could be on a desert island and I can know how my business is doing.
Justin Piche (31:51)
Yeah, mean, leading metrics are your...
kind of inputs, right? That's kind of what you said, your inputs, making sure you hit your inputs. So, I mean, obviously for acquisitions and sales, we're tracking kind of cold outreach numbers, like how many are we actually, how many leads are we reaching out to on a weekly basis? Contracts are offers made, contracts signed. Those are key metrics to understand how our lead flow is going on this Dispo side. It's new buyers, like added to the buyer's list, offers made on properties. Those are all kind of like the leading,
the output obviously is how much gross profit we're getting and how many deals we're closing from those. So those are kind of the key leading metrics that we're looking at, making sure we're achieving our output goals, or our input goals rather, so that we can see the lagging, which is the output. like, because when you look at your, when you do your quarterly planning or your annual planning, you're trying to get a specific output of profit, of number of deals done, of something.
but you don't have control over the output. You have control over what you put in to achieve the output. So level 10 should be focused on making sure you're hitting what you need and the goals that you set to get to that output and then evaluating if that's sufficient or if you're going to get there and making adjustments based on kind of the difference between where you said you wanted to go, the output, and what you're putting in to the business.
Clayton Hepler (33:10)
Yeah, I find that the best CEOs are the ones that can clearly link inputs to outputs and they pull that thread between.
whatever department is responsible for an input up to the OKR. So like allocating your company resources. There's a million things you could do, for example, in your marketing department. You could focus on adding more callers or a few text texters or sending more direct mail or you could focus on doing a new hot topic, only texting and calling people close to water or, you know, survey hacking or...
whatever you want to do, there's so many things, entitlement opportunities, right? The mark of a good CEO is your ability to the inputs and associate the inputs and align the inputs of your team to the outputs that you're looking to do. And you're gonna mess this up. It's not like gonna be perfect every time, but the speed with which you can mess it up and then change it is directly correlated to, I think your ability to succeed in this business.
in creating those quick feedback loops through the weekly cadence. I like to do weekly briefs actually. So I like a lead metric from my, my team. there's the metrics that are within the L 10 company metrics, marketing sales, TC, Dispo, but there's also a weekly brief that I have all my team members do.
their quote unquote executive team, my cold calling manager, director of revenue, certain executive functions that they send me a weekly brief, answer a bunch of high level questions, take some 20 minutes on Friday, 20 to 30 minutes, that's all I ask. And it's more about a commentary. So I can kind of see on Monday morning when I come in, or from doing some stuff on Sunday, that I could say, Hey, what's the actual anecdotal health, right? I can see the numerical
but the anecdotal help of the business too. love those weekly briefs as well.
Justin Piche (35:11)
Yeah.
Clayton Hepler (35:11)
So what process are you currently trying to replace in your business? You're currently struggling with or trying to replace in your business.
Justin Piche (35:20)
process am I currently trying to replace? Do you have an answer or an example and then I can jump in?
Clayton Hepler (35:26)
Yeah, yeah, yeah.
I, yeah, I recently
part of ways with my disposition manager. And so I'm spending a lot of my time, maybe I asked the question incorrectly. Thanks for the rephrasing of it. But I'm currently looking, I'm actually personally in this department day in day out building it out. And I'm building the department on, with concrete foundations, not with sand, which is what I did originally. And so I'm...
getting the Dispo admin, the associate, the people that can help me out in the department. I have some interviews tomorrow, but I'm day to day that that's what I'm doing in my business. And how I thought about prioritizing this is this is the one of the most important functions of the business. And so I could have just brought someone on and hired someone to come in to this part of the business. But we as the CEOs of the employees that we cannot afford.
So we should be focusing on the biggest, hairiest problems and challenges in our business. And so I could have someone else solve the challenge, or I could roll my sleeves up and come in and do it. And so I've rolled my sleeves up, I'm coming in and doing it, and we are already having remarkable successes very quickly. And I think that...
The role of the CEO is to go into these departments, parachute into department, fix the department, whether that's through allocating a team member to do that and holding them incredibly accountable or personally doing that. That's our roles as a CEO. And I think we lose track of that man between one and three mil. We kind of scale out of the day to day and a lot of the stuffs and then we're, it's like,
You haven't run in six months, but you used to run every day, right? You're like, man, I don't want to go back to running or you haven't died it in six months. And you're like, I'm going to go on a diet now that initial inertia to get back in is so difficult. But it, but after you diet for a week or so, you're like, man, I feel so good. look so good, but man, it was hard to start. And I feel like it's the same thing here. But as a CEO, as we have to know, that's kind of our job to go in and fix it apartments where it needs to be fixed. so.
That's what I'm doing currently. That's a lot of my time.
Justin Piche (37:32)
Yeah, I agree it's really important to be able to step into those roles. And yeah, there's some growing pains when you kind of
Where you feel like you've you've scaled out of something and then you realize that You have to step back in and fix the process and build the foundation up right now. My focus is on transaction coordination We I have a great transaction coordinator It's just the business has scaled the transaction volume has scaled to the point where frankly it's hard for one person to handle all of the different dates and milestones etc, and now we have
Transactions touches acquisitions, touches project management, and it touches sales. It touches all those kind of things. It's like the integration of every different department in my business.
We've just kind of neglected the alerts. And so we've had a lot of instances of earnest money going hard before due diligence periods are up and maybe just a lack of clarity on who owns those dates and when we need to make decisions by. So I have my ops manager right now going through and doing like a full audit of end to end TC process, how it integrates with each of the departments. So we're creating a process flow and then we're trying to, we're going to create kind of a map of key decisions
dates and what information needs to be to whom by when to make sure we don't drop the ball and then we're going to basically redesign our TC kind of system of information with automatic alerts to make sure that we're not missing and dropping balls. You know it's like when you have 50 contract active contracts between or more I think we have like 70 or something active contracts between acquisitions and sales all those have due diligence dates earn us money to collect or deposit ⁓ some of them are developments some of them need bank loans
Clayton Hepler (39:07)
Yep.
Justin Piche (39:11)
they all need kind of funding. There's so many different aspects to each transaction that need to be worked out and without clear ownership and clear alerts, balls get dropped. So that's kind of what I'm spending some time focusing on and working with my leadership team on improving right now is TC.
Clayton Hepler (39:27)
Yeah.
I love that man. Well, we're getting to the end of the episode here. So just wanted to remind our listeners that the gentleman's agreement is if you get benefit from this, please rate, review, subscribe, leave a little comment below. Let us know how you think and what you're doing. Again, we have so many people that listen to this podcast and a lot of people do not rate, review and subscribe and it helps us get our name out there as the premier land scaling podcast, the ground game.
someone that's actually from someone that's actually building a business, not exclusively selling a course, right? Someone that's actually full time in the land business. So until next week, Justin, you got anything for us?
Justin Piche (40:06)
I know, can't wait to talk again, Clay.
Clayton Hepler (40:09)
Yeah, buddy. We'll talk to you later.
Justin Piche (40:11)
Bye.