Strength in Numbers with Marcus Crigler

Episode 48: The Feast or Famine Cycle Isn't Bad Luck - Here's Exactly What's Causing It with Gary Harper

• Marcus Crigler • Episode 48

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0:00 | 49:12

The feast-or-famine cycle is one of the most common frustrations for real estate entrepreneurs, but the reality is that these are the opportunities to get better.

In this episode of the Strength in Numbers podcast, Marcus Crigler sits down with business coach Gary Harper from Sharper Business Solutions to talk about the feast-or-famine cycle.

Listen as Gary explains why the cycle isn’t random or caused by bad luck but a result of missing metrics, poor pipeline management, and a lack of operational discipline. He also shares how strong operators track the right numbers to grow during good markets and stay stable when the market shifts.

You’ll Learn How To:

  • Break out of the feast-or-famine cycle
  • Identify where deals are being lost in your sales process
  • Measure the ROI of your team members and marketing channels
  • Adapt your business when the market starts to shift

What You’ll Learn in This Episode:

(01:58) Introducing Gary Harper and Sharper Business Solutions

(03:22) The good days and bad days of entrepreneurs

(05:54) Early mistakes in real estate and the impact of the 2008 crash

(08:44) Returning to real estate through wholesaling and scaling quickly

(11:17) The Rise Business Framework and building companies responsibly

(13:11) The feast-or-famine reality many operators are facing

(14:23) Downturns are the best time to prune a business

(15:40) The lesson behind the book Who Moved My Cheese

(18:24) Why the businesses embracing change are the ones winning

(19:38) The problem with hiring too many executives instead of producers

(22:01) Compensation should be tied to business performance

(23:12) The importance of hiring the right people and placing them in the right seats

(24:21) Most important metrics in a real estate company

(26:39) People problems vs process problems

(27:45) The “heart, head, hands, feet” framework

(30:07) Purpose and profit indicators

(32:21) The conversion benchmarks Gary recommends for healthy businesses

(35:28) Tracking daily process indicators vs performance indicators

(36:43) Understanding the cash conversion cycle

(38:45) The role of the “innovator” inside a business

(41:16) Fixing people and processes first before the marketing channel

(43:11) Getting better, not bigger

(44:30) The “become the box” concept for analyzing how deals move through a system

(45:36) Connect with Gary Harper.

Who This Episode Is For:

  • Real estate investors who deal with inconsistent deal flow
  • Wholesalers who try to stabilize their business
  • Entrepreneurs who want visibility over their numbers
  • Business owners who want to improve systems before scaling

Why You Should Listen:

If you want more predictable growth and fewer surprises in your business, this episode breaks down the operational mindset that makes it possible.

Connect with Gary Harper:

Connect with Marcus Crigler:

SPEAKER_02

These are opportunities to get better. And people are fighting it right now. And I think the ones who are embracing change, embracing adjustments, they're looking at it and going, hey, listen, it's not what it was, but it could be better. And here's the changes I'm making to make those adjustments.

SPEAKER_00

Welcome to Strength in Numbers, the podcast for real estate entrepreneurs who are tired of being broke and not having control of their finances. If you're ready to finally take control of your money, slash your taxes, and start building real wealth, you're in the right place. And now here's your host, Marcus Krigler.

SPEAKER_01

Hey there, welcome to the Strength in Numbers Podcast, the podcast dedicated to helping real estate entrepreneurs just like you finally take control of your numbers so that you can stop living deal by deal, month by month, and finally start living the life of real estate that you truly desire. Today's episode is going to be brought to you by Beck CFO and CPA, the CPA firm dedicated to helping real estate entrepreneurs across the country make money, save money, and build more wealth through their proprietary accounting processes that help real estate entrepreneurs. My name is Marcus Krigler. I am the founder and CEO of Beck CFO and CPA. Today's episode is going to be a good one. You want to talk about numbers. Today is going to be your episode to talk about numbers and not just numbers that are profits of your business. We're talking about the numbers that generate the revenue, that generate the profits of your business, and ultimately allow you to grow your business when times are great and allow you to be safe when times are like this and not so great. So enjoy this episode with my friend Gary Harper of Sharper Business Solutions. What is going on? Another episode of the Strength in Numbers podcast. I've got my friend, mentor, coach, Mr. Gary Harper on the call. Before Gary jumps in here and tells you a little bit about himself, I'm going to give a couple things that I know about Gary and a couple things that I think about Gary. First off, Gary is somebody that has coached thousands and thousands of real estate entrepreneurs. I bet his business is going to be in over a dozen real estate businesses this week alone, probably over 50 this month. It's insane the amount of impact they have had in the real estate industry, especially in REI. He owns the company along with his wife, Sharper Business Solutions. They are probably, I'll go venture to say this, one of the most impactful companies in REI in this decade, I would say. Super excited to have him on the podcast. Super excited to hear what he has to say. And I think we've got some good topics to chat about today. Gary, welcome to the welcome to the podcast.

SPEAKER_02

Wow, what a great introduction. Thank you so much, Marcus. I'm humbled and I appreciate the kind words. You know, I never 10 years ago started off on this journey being a real estate investor myself. I just wanted to get back. I just wanted to help people. I never thought we'd be where we are today. And that's I think it's because we didn't seek after it. We didn't seek after the recognition, notoriety, or even any uh accolades. We were we were just wanting to help people. And there's there's just good people in this world. I always say there's good people, there are bad people, and there are good people having bad days. And the same thing goes true with an entrepreneur. You're having good days, you're having bad days, and then there are some days that you just don't know which side's up. But that's our goal as an entrepreneurial coach is to help business owners come back in control, putting them back in their vision of achieving their purpose. So thank you so much for the introduction. Man, you've been a friend to me so many years now, not just a customer, you get customers, but then you get friends. And I think uh it's cool when you have both and you could do life and business together. And we've seen a lot of ups and a lot of downs in our health and our business. I'm just grateful to be able to join you today and be able to bring some value to your listeners. So thanks for having me on.

SPEAKER_01

Yeah, absolutely. Absolutely. Well, I think it makes sense for those people that have not met you, do not know you, do not know what you do. Take them back a little bit into maybe how you got to where you are today and then ultimately what you're doing day to day in uh real estate businesses across the country.

SPEAKER_02

You know, I get asked this question, and it's funny, year over year, every time I answer it, it seems like the timeline gets so much longer. And uh when I first started answering this question, it was like five years ago. Now it's like 25 years ago. Man, I start to feel older and older the more and more I answer this question.

SPEAKER_01

But you're looking younger and younger though.

SPEAKER_02

So that's I feel good. I feel a lot better than I did 10 years ago when I started this business, that's for sure. Health is definitely better at 48 than it was at 35. And so I praise the Lord for that. And I'm glad we're on the other side of that uh that struggles. But appreciate the kind words. But you know, I started off in 1998. I came into Chicago, I left Northwest and I came into Northwest Indiana. Really, I started off my career in corporate America, worked up my way up pretty quickly to an executive level. You know, a lot of mid-level management reporting to me. My title was National Manager of Business Initiatives and Development. And I worked with sales and operations to help Fortune 500 companies get back control and drive their costs down and profits up and help them scale properly and grow, help develop leaders in the world and helping them. You know, I always say uh everything rises and falls on leadership. So helping them become who they need to be and reach their full potential. Got into real estate because started making money, had to keep the money. And I was like, man, I'm making money now in corporate America. I'd really like to keep it. I, you know, I was hitting higher tax brackets, and I'm like, this is really frustrating. There, I not I'm like getting a refund anymore, I'm giving a lot more money at the end of the year. And so I got into real estate and it kind of off offset a lot of those high end-of-year tax payments, and then it also started teaching me a lot about investing and how to invest. Man, I'll tell you what, I'm I made a lot of wrong decisions in real estate first go around. Bought a lot of houses, bought too deep in the houses, my loan to values were too high, the market started shifting, they crashed, it crashed. I was way upside down, had a bunch of houses that no longer even worth 50% of what I paid for them. Escrows were two years in the rear, my payments ballooned. I found myself in a really ugly place come 2008 to 2010. Had a lot of money in savings. Unlike a lot of investors, I didn't pocket my rents and not pay the banks. A lot of guys were doing that back then. I paid every dime I could back to my bank and to keep them afloat. While it was a small bank, first federal savings loan and right here in northwest Indiana. And I gave every extra dime I had, including that savings, to keep my word. Bible says it's uh it's more important to have a good name than great riches. That thought kept going through my mind. It's like, you know, I made a promise. I'm gonna keep this promise. The president ended up being like, hey man, like you need file bankruptcy. Like, you know, you've you're this is bad. And I did. I ended up having to file bankruptcy in 2011. And I thought to myself, I'm never gonna do real estate ever again. No, I'm just gonna stay 100% focused on my career. I had one executive vow of the year eight out of 10 years, got to 2011 and got a different plan for my life. I got bit by a tick. I came down with Lyme disease, and I found myself as sick as I'd ever been in my life. Um, went back to like a five-year-old mental state, having different types of treatments, trying different types of doctors, all kinds of crazy things just to try to eradicate this parasite in my body called Lyme disease that I had gotten. And I found myself, you know, the lowest part of my life. I call it my year of Job. If you study in the Bible, he lost his wealth, he lost his health, he lost a lot of things. Thank God I didn't lose my kids, but I did lose my wealth, I did lose my health. Found myself on the other side of that year, wondering what's next. You know, corporate America would become elusive to me because I just didn't have the energy to travel like I did. And so I ended up stepping away from corporate America, tapping into my 401k to survive. And I used that money to help build back. And I'll never forget the day that uh I got well enough that I could go back to corporate. And I talked to my brother-in-law, and he's like, Gary, do you think God took you out of that just to put you right back in it? And I was like, Man, don't say that to me. I need the money, man. I got to get back into this. And uh, and he was like, Why don't you come back into real estate and help me with that? And I was like, Man, I'd rather eat my own vomit at this point to get back into real estate. He's like, But listen, we're doing something a little different. I'm wholesaling, you know, we're getting in, we're getting out, we're not, I don't have all this risk like we had before. We're not holding these properties, we don't have to make decisions other if we find it cheap enough, somebody will buy from us and we're out. We make money. I'm like, well, how much are you making? He's like, Man, we're making twelve thousand five hundred dollars, you know, per per assignment or per double close. And that sounded really good at the time, right? Like, so I got back in and used my experience to scale businesses to help my brother-in-law. He did about 48 deals his first year. We got to about 300 deals a year in five states in the next three years. Did that for a couple of years. 2016 rolled around. I'd been in CG a couple of years, met Jason Medley, who we both know and we've mutual friendship with. And uh, and he he was just a he's such a pioneer of where the industry has been the last 15 years. And the man gave me a lot of good advice and good wisdom. I decided to take some time off. You know, my health was not still at 100%. I was uh I was grossly overweight at this point. And uh I turned to my brother-in-law and said, Hey, I'm gonna, you know, a little break from real estate for a while. It took about a year. People started calling me though, Marcus, and they said, Hey, can you come help me with my business like you did your business in real estate? And I kept telling people no, I'm like, I'm good, I don't really want to do this. I was a business coach for years in corporate America and now, you know, building my own real estate, wealth is back. But something kept happening in the back of my brain. And God, when I was really sick in 2011, I remember making a promise to God. I said, God, if you'll give me my health back, I'll give my life back in helping other people. Now, just like many entrepreneurs today, I had to put my mask on first. I had to become healthy, I had to build back my wealth. But that promise kept coming back into my mind and then into my heart. It could be in your mind and not bother you. Once it hits your heart, it's a different feeling. You know, it's like now I got the heart strings being tugged at, and I decided I was like, I'm gonna go help this guy. And I did, and he scaled and then he went to a mastermind, told somebody about us. They called, would you help? Sure, came in. We didn't have a company name, we didn't have anything. We were just going in and doing our best. Uh, we were using EOS at the time just as a baseline. And then I started noticing things that they needed that EOS didn't have, like a business performer and your financial reports and variance reports and PLs, and that's not in there. And then the process documentation was weak at best. And having a background six sigma, I'm like, they really need to do a better job with this and start doing it. And before I knew it, I was like, man, it's missing so many things, and entrepreneurs are getting hurt. They would we would come in and tell them you're in all these seats and you got to get out of these seats, but not have a business performer to tell them when to get out of the seat. When it was financially responsible to lose, leave the seat. And so guys were running on this system, and then they were like hiring all these people and they had no money left for marketing, Marcus. They had no money left to like scale their business and hire, you know, do anything else with. It was all setting in salaries. And that's what they thought. They thought if I hire all these people, I can set on a beach. And that and that was the wrong decision. They found themselves in a bad way. So we were starting to find ways to like bring this value, and that's why I wrote the book, Rise Business Framework. I feel like it's uh it's a complete business model that takes an entrepreneur from startup all the way to succession, all the way to their ultimate purpose, and does it responsibly and make sure it does it by protecting the profits of the organization. And now you fast forward as you started this conversation off with. We've been doing this for 10 years. We've helped over 5,000 businesses in nine countries. We have 14 companies of our own. We've written seven bestsellers, actually, have a brand new book. First people to ever hear about it's your listeners have a brand new book that's coming out this week, and it's called A Mind to Rise. And it talks about having a mindset. So, Marcus, that's it. That's the journey, and that's how we've gotten to where we are. And on that journey, our paths cross. And I've been so blessed to have you as a friend in my life over these last many years.

SPEAKER_01

That was just the journey, you know, corporate America, advising companies across the nation, and then, you know, 5,000 plus real estate businesses. And here's the thing that's crazy. You're like, when I say you're in real estate businesses, you're not just like, oh, we call them up on the phone every once in a while. No, it's I'm in their office, I'm in their city, I'm flying on a plane to I don't know how many miles you probably get on a jet. You probably know on an annual basis, but it's a ton, right? And it's because you want to get in there and get your hands dirty with those clients. And I think that's an amazing, I think it's an amazing feat. So let's talk about that. Because you're in there, because you're in digging your hands in with these clients, what are you seeing right now? So we're in uh you know, February. Again, I'm I'm not supposed to date podcast. This is what I was told. Because then in two years from now, somebody comes back and they listen, they're not supposed to know what date it is, but it's February 23rd, 2026. Okay. What are you seeing right now as you're digging into these businesses?

SPEAKER_02

It's feast, feast and famine. You know, there are teams out there that are just having the biggest feast they've ever had in real estate. I would say the majority of them out there are living in fanning and they're not, they're really struggling. And uh doors are shutting, people are being let go. You know, what we're hearing in the news in the economy doesn't match up to what we're seeing on the bottom of our PLs. And the people are just in a really bad place, and and it's starting to cross over from that financial uh bad place to a mentally bad place. And I think you're starting to see entrepreneurs become depressed, downtrodden, you know, not knowing what to do. You've got a lot of the last 10 years, you've had a lot of younger people coming into real estate, and they found this to be an easy way to make good money and to be in control of their own, you know, their own destiny, where they're going. They haven't had a lot of tough times, you know. And so even when it started to get tough, we printed so much money in 2020 coming out of COVID that it just inflated the market for a little longer, you know, kept everybody living in that again. And one thing we've been taught is there has anything that goes up has to come down, right? Like economies are the same way. You're gonna have bubbles, you're gonna have you know, markets growing and getting stronger, and then you're gonna have downturn. And and this is a thing, we all like get depressed and frustrated about a downturn. We get downtrodd about like it not working as well as it once did. But this is our opportunity to prune. Like, this is the best time in a business for me. I love these times. I like my back against the wall a little bit. I like, you know, I don't want to feel like there's no way out, but I like the moment that I can look at the business and start to adjust it and make it the right changes. You know, when you're living in feast, you don't always like become picky at what you're what you're doing. And I think it's time to get picky. And the guys who aren't getting picky. Now you ask a question, you're like feast and fan, and like who's feasting? Well, the ones who like spent the last three to five years are frivolous with their money, they reinvested their money wisely. They were taking time to build their systems, build their brand, build the people around them, you know, and reinvest back in their businesses. And their businesses are reaping the benefits of that right now. And the ones who were wasteful in their spending, they were frivolous in that area, in that mindset, they weren't willing to make the adjustments. You know, there's a book that came out in 2000, and this is dating myself a little bit like you did this podcast. But uh, this book came out, it's called Who Moved My Cheese. And if you have not read that book and you're going through this right now as an entrepreneur, go pick up that book. It's super short. Read. Phenomenal book right now, right? To be reading. It's a change management book. And everybody is like still setting, as it talks about in that book, in station C, where the Hemon and Hall came in and sniff and scurry. They came into Station C in this maze every day. And they came in and they would see their cheese. And it was cheese that was in there, and they were happy because that they had this wonderful cheese that they could eat from every single day. That's in the last 10 years. We've all come to Station C and it's all there. Well, some part in that book, they come in and the cheese is gone. And Sniff and Scurry are like, we ain't staying here anymore, bro. Like, it's this cheese is gone. Like, it ain't coming back. Him and Hall is like, it's coming back. Just wait it out. You know, him and Hall are a little older and they're like, it trust me, it'll be back. You don't have to run off and go find no cheese. It's stupid to go out there and try to change right now. But sniff and scurry take off. And they they learn as they're going and they write little statements on the wall, they're going through the maze. And would you believe it, Marcus? They get to a station that has more cheese than they ever saw on Station City. And they even go back and they start they start telling him and Hall, like, you gotta come, man. And him and Hall are like, I'm not going. I want them to bring me back my cheese. Like, I built something already here. This was mine. You had nobody had any right to destroy me. Nobody had any right to take this away. And they get frustrated and they wouldn't leave. Him decides to go on his way and he starts trying. He even comes back to try to get all hall's wasting away nothing, dying. And that's how it feels right now, right? It feels like as a business coach, I'm out there going, hey, you need to stay focused. Hey, you need to cut some costs. Hey, you need to make sure you're maximizing the income coming into the business. Hey, you need to make sure that you're treating every league coming to your business with some sense of urgency and purpose and not just letting it fall off. Like every piece could bring value and matter right now. And there's people who are just going, I don't want change. I want to stay right where I am. Like, what do you mean, wholesale becoming illegal in the nine states? What do you mean I can't double close? What do you mean? You know, and they're just they're fighting the evolution and change that's upon us. There's people fighting AI. I'll never use AI. That's of, you know, I've heard guys ask me, that's the devil, man. The AI is the devil. I'm never gonna do it. Start made me think of the movie Waterboy where the mom's like, you know, school's the devil, you know, education's the devil. Like these are opportunities to get better. And people are fighting it right now. And I think the ones who are embracing change, embracing adjustments, they're looking at it and going, hey, listen, it's not what it was, but it could be better. And here's the changes I'm making to make those adjustments. And uh the people that are doing that, and the people have been doing that, are the ones that are starting to reap the benefits of it. And the ones that haven't, they're being left behind.

SPEAKER_01

And you know, it's interesting. I see the exact same thing because here's the thing. I I think it's interesting because the ones that were that invested in their business heavily are also, and I say invested in their business heavily, most of the time, what I see that hurt businesses the most is that they invested in their people faster than they invested in marketing. Okay. And so when you start to invest in staffing cost, which ends up being a fixed cost generally, right? Even when there's commissions involved, you still end up having fixed costs, especially when you start talking about benefits and all these other things as you start to become a much bigger business and you need to have those kind of things in your business. The human capital cost bloated so much. And some of this GNA cost bloated so much, not commiserate with the marketing spin. The marketing spin went up, sure. What I've seen in some of the biggest companies that are struggling is that they really heavily focused on C-suite executives, they heavily focused on management level, right? People that weren't out there generating the day-to-day revenue. But if you go back to when these businesses are the most successful, you have the majority of the people in the business producing revenue. You've got acquisition managers, lead managers, dispo, like you know, when you start getting in all of these other executives in here, all those people have to pay for all of that. And it makes it very, very difficult when times get just a little bit tighter, right? And that's kind of what we're talking about right now. Like those big companies did, and like some of the, and that's why some of the smaller companies are able to kind of win right now, because they don't have that overhead. They don't have that big old uh you know, cost that they're having to maybe shrink down. And and you know, as a business owner, you know, I think this is kind of what you're saying. As a business owner, we're we don't like to move, and sometimes that's because we're just used to going back to that same well, if you will, that same same spot to get the cheese. But it's also like this emotional piece of it, and you hit on this as well, this mindset piece of it, like, I've got to go lay off employees, I've got to let people go. And did I fail? Did what does that mean? Did you know how did I let this happen? And you know, surely we can just get over this, surely it'll end up solving itself. And then, you know, you tell yourself all these stories and you end up broke or millions of dollars behind in decisions, yeah.

SPEAKER_02

You know, we're seeing that right now, and I think I think here's two things here. I think it's definitely people unwisely spending on costs that they're not re measuring an ROI on, you know, in marketing, we do a really good job in the real estate industry of like measuring the ROI on our marketing channels to some degree. I'll I'll I'll put a little asterisk on on that statement. But the other thing is we don't always measure the ROI in our people. Like, what return are they giving us? And when you do a lot of top heavy hiring and you don't tie it back to a return, and that's what you're referring to, is what was the return on those mid level managers, those executives? How are they affecting the day to day? Every one of my executives in my companies or mid level management are tied back to making moves. More money. You know, I don't pay um bloated salaries. I give a small salary with some level of like I make more, you make more, whether that's profit share or commissions or something of that nature. But like I build all our companies based on like when our revenue goes up, so does your pay. And our bar revenue comes down. And everybody, everybody in our company, like our moderators, our salespeople, our business coaches, they get paid when I get paid. So if the business starts to dwindle and the number of clients we're coaching start to dwindle, well, I don't have to go like just cut costs, it cuts itself. Yeah. Right? That's how I've got it structured. It it pays them more when we do better, and it cuts itself when we do worse. And so there is a way for me to tactively see and tangibly see the ROI on their efforts and what they're bringing in. And so here's one of the things I wanted to put that asterisk on it for. You know, go out and hire people, bring them into your business, all those things. But you better make sure you're one, measuring their return on the investment you're putting in them. Number two, you're paying them to where if they don't produce, it doesn't hurt you. Number three, make sure you're hiring the right people and put them in the right seat. And I know that's a cliche statement, but the right people in the right seat should help improve your processes and get you a better return. And I this is something I've been doing a lot of lately when you talk about spinning and being in these guys' offices. And you're right. I was home 91 days last year. I'm on the road a lot. Three to five offices a week where I'm in their office working with them, helping them adjust their business. One of the things I've seen a lot of lately is people looking at their marketing channels and saying, it's not working, I'm not bringing enough money. And where sharper lives is Sharper lives in the equation of lead to closing for real estate guys. We live in the process of that. If we do that right, we'll actually increase their conversion on their marketing channels. And so here's what happens a guy spends$100,000 on marketing. He puts it in six buckets. In those six buckets, he looks at it and goes, How many leads did I get? And this, and if you're not measuring this, by the way, Marcus, you guys aren't measuring this, your listeners, they they need to start right now. Oh, yeah. Most important metrics in a real estate company are the ones I'm about to tell you. Lead to qualified lead. How many leads are you getting on that marketing channel? And how many, what's the percentage of the qualified leads are coming? We our our floor that we start to get concerned about is at 50%. If your lead to qualified lead ratio is below 50%, I look in that process to find out why. Could it be your people? Could it be your process? Are you answering the phone? Like, are you calling them back an hour later, three hours later? Because we know motivation drops, the longer it takes to respond to that lead. But if your process is solid, and that's where we live, Sharper lives in identifying the people in the process for that area. And if your process is solid, and us as a business coach, after seeing 50 businesses this week, we know what ideal processes are working for real estate right now. And if we don't think your process is solid, we're gonna make the right adjustment. If we don't think your people are the right people, we're gonna make that adjustment. But if your people and processes are solid, now I'm willing to go back to your lead channel and go, is this the wrong lead channel? Or should we spend money on a different lead channel? Once we have a 50% to 75% conversion of lead to qualified lead and we're doing well there. Now I'm dialing in your qualified lead to what? Your appointment set. I want to know of your qualified lead, how many appointments did you get set and attended? Even more than set, how many were attended? I want a 50% in that number too. From qualified lead to appointments attended, I want 50%. That's my floor. If it's dropping below that, I'm what am I doing again? I'm going and look at your people. I'm looking at your process. Because we already identified this as a good lead channel. We're getting 50 to 75% of lead to qualified lead. Now I'm looking at it going, of your qualified lead, how many appointments you're attending? So do we need to adjust your people or your process in this area to get that number up? Once Sharper does that job of adjusting the business, gets it above 50 to higher, then we have to look at the next set of numbers. Your appointments attended to your what contract sign. And if we're not setting that 20 to my floor is 20 to 25%, that's my floor is probably 20. I don't, I don't even like saying 20. I like it a little higher. Some of my coaches are like, bro, you're pushing them too hard if you're pushing them past 25. But I want it as high as 30. Like my teams that are like world-class optimal businesses are closing, getting contracts at 30% of appointments attended. Your industry average is going to be around 20% of appointments attended. But if we're dropping below a 20% ratio of appointments attended to contract signed, do we have a process or people problem again? Sharper as a business coach because we're in so many offices, we're making these adjustments right then and there. Soon as I see those numbers, I'm making those adjustments. And it is so hard for customers and companies to do that when they're in it every day. When you're meeting with Joe's your buddy, and you know, you're in the back of your mind, you're like, I just don't know. Is he the right person? And how do we make sure the right people? Do they have the desire to do that process? Do they have the natural behavior based on a predictive index to do that process? Or are we asking them to modify behavior? Do they have the training, the skills? Do they have a knowledge gap in that process? And are they helping, are they identifying problems and helping the company grow that process? And if they're not, we call that the heart, the head, the hands, the feet, tell me you're in the right seat. If they don't have that, then we have to make that adjustment with that person. But if we have the heart desire, we have the head, the natural behavior, we have the training and the skills, and we've identified that. And they're helping or trying to grow the business, identifying problems in the company. They're engaged and they're helping the company to grow, then we go to the process and go, where in the process did it break? We look at the process indicators, which is why the performance indicator is contract, but the process indicator is in the middle of that process, were you hitting certain conversion metrics to get to the contract? Did they cancel the appointment? Was the person at the appointment not the decision maker? Right? Did we not find out that they have, you know, um other uh liens on the property? Or did we not find out in lead management that it needs a bunch more work than it needed? Right? Like, what's causing us not to get the contract? Those are process indicators. And if we see a spike in a certain metric called a process indicator, then we know we have to adjust the process. If all the process indicators are right and the performance indicator is not there, we're not getting a signed contract, then we know I have to adjust the person. Maybe we have to change your training. And maybe we have to offer a different product. Maybe wholesale's not working right now. Maybe seller finance is more of an option, maybe novations are more of an option. Like we have to look at the process if it's not the people or if it's not the process. We have to look at the product at that point. But if we're getting a 20 to 30 percent close rate, now we have to look at another number. A lot of guys don't look at a lot. And it's from contract to closing. Industry average, and my floor is 70%. If you are not closing higher than 70%, you're hurting your brand, you're pissing people off. Here's why I like it. I like it 80 to 85. Yeah, world-class, high-producing businesses are hitting a number of 80 to 85. And the ones that are dropping below a 70 are killing their return on their investment for that marketing channel. That's right. Marcus, I can't tell you, and that's what I call profit indicators. You know, when you're looking at the profit indicators of the business, and you and I live in profit indicators, there's a purpose indicator. Like, why are we doing this? Okay, well, we want to rejuvenate businesses or we want to rejuvenate homes and turn this back this community back into a thriving community. Okay, that's great. That's good purpose. How do you measure that? Well, we measure that by we're gonna we're gonna fix and flip 30% of the houses in this area. Okay, how many is that? Well, it's 500 houses. Uh perfect. 500 houses. That's our purpose indicator. We're gonna measure against that. What is our profit indicator? What do we have to do? How much do we have to spend on marketing? You know, how much we need to make, how much do we need to spend, how much we plan to keep? We have to create a business performer that helps us make sure that the strategy that we're doing is going to be profitable. Because the only reason we got in business in the first place is to make money. I mean, I'm not just talking about making revenue, I'm talking about making profit, cash flow, that's bringing it back into our homes. And that's the thing, we have to protect profits at all costs. If we don't have a good strategy, then we're not going to make profits. And if the strategy needs to change, then we have to, because the profits aren't showing up anymore, then we have to make those adjustments. You know, I just spent some time last week and this week with teams helping them adjust their strategy. Why? Because when I went in, I looked at their profit indicators, or profit indicators told me the strategy wasn't working anymore. Right. You know, in 25 years of coaching, Marcus, I've never had somebody turn to me and go, I've made too much money. I want to change strategy. Never had anybody tell me that. They always say, I need to change my strategy because I'm not making enough money. That's why they call you, that's why they call me. And so when we go out for an eight-hour session in the business with a team, what are we doing? We're determining whether or not we change the strategy based on the profit indicators. And part of strategy is marketing. So connecting the thoughts here, the thoughts are this if you are getting a two-row as on a marketing chain and you're like, I think I need to cut this before you cut it. Go back and look at your lead to qualify. Am I getting more than 50% lead to qualify? Are my qualified? How many am I attending the appointments on? Is it below 50% or is it higher than 50%? And I'd like these numbers to creep up as high as 75. And then of the appointments that I'm getting, I'm going on, and the ones I'm walking away on contracts, what's my ratio there? Am I at 30? Am I at 20? Am I below 20? And if I'm getting contracts at 20 to 30%, how many am I actually closing? And those are where we need to live right now. We need to get super dialed in on those conversion numbers. Because if we get super dialed in on those conversion numbers, we will actually increase our return on our investment for that marketing channel. And what happens when we increase the return on investment for that marketing channel? You start to see a ROAS or return on investment at 3X, 4X, 5X, 6X, 7X, 8. I've had team last week at 12x right now. So what do I want them to do? I want them to spend more money on that marketing channel. I want them to bring that ROAS or that return on investment back down to a 5x. Because then I know I'm maximizing that channel, but then I got to keep both eyes on the other side. I got to keep my eyes on each one of those mark, those conversion numbers again. Did my lead to qualify lead drop below 50% when I spent more money? Did my qualified lead to my appointments attended drop below 50% the more money I spent? Did my appointments attended to my contract sign drop below 30% when I when I you know increased my spend? And then did my closing percentage drop below 80, 85% or 80% or even worse, below 70%. Then we got to go back and make the adjustments to that part of the business again. And that's why I think people are lost right now, Marcus. I think they're absolutely lost in what to do.

SPEAKER_01

I mean, you hit the nail on the head. This business is very, very simple. You know, everybody has a different version of their real estate business, right? But if you're listening to this, you're running a real estate business, and your model is basically the same generate lead, generate appointment, generate contract, generate close. Measuring through those segments is the blocking and tackling, right? That is what you when you first started this business. Every lead that called you, right? You can probably remember you were only getting five or 10 leads a week. And every time that phone rang, you were like, Don't get off the phone. I want to talk to you forever. Because we know the longer we talk to them, the better the lead is, right? You've got to get back to that blocking and tackling of tracking those leads the way you used to do it when it was only you. And I made a post the other day, and it was hey, right now I got more CEOs, business owners, owners box business owners getting back into the business and getting focused on those, just just those things. And here's the secret: the secret is if you never lay your eyes off of them, you don't have to worry about this getting back into them. This is the stuff that's easy. See, we get all into the these other sexy data sets, and you know, we all have these big CRMs and we all have these amazing things that we and reports we can run. But then I go in and I talk to a client, I'm sure you do the same. And it's I'm like, okay, well, what's your lead to appointment ratio? Um, uh, well, let me uh look that. Hold on. Why isn't that posted everywhere? That's a very critical thing. Like, you need to be talking about, like, if you can't pull it up off the top of your head, you're not talking about it enough because it changes, by the way, right? So, what is your lead to appointment ratio last week, the week before, the week before. So, if you're discussing it all the time, you should know our range is between this and this. Okay, perfect.

unknown

Right.

SPEAKER_01

You're 100% right on.

SPEAKER_02

I mean, and that's why I push our teams to not only have those lag indicators, those performance indicators, like the lead to qualify, the qualified to appointment set, the appointment set to contract sign, the contract sign to closing. Those are result parts of the process. They're called performance indicators, but we also need to know how many process indicators, like how many appointments did we set today, how many offers did we make, right? How many closings do we have with issues? These are process indicators that we're tracking on a daily basis. How many leads did I get today? How many of those leads came in through what channels? Through you know, TV. Do they come in? Those are process indicators because here's the thing if we keep our eye on the process indicator, the daily number, and then again on the weekly performance indicators, the conversion numbers, we should never not know when our business is starting to struggle. I tell people if a week goes by and your conversion numbers have changed, that could be an anomaly. Two weeks, it could be an exception. Something could be going on. You could have a storm hitting the northeast right now, like the hurricanes hitting out there. Those are going to affect performance numbers for the next couple weeks. Those are exceptions. But if you hit three weeks of hitting below your target, that's a trend. Yeah. Companies that wait too long to make the adjustment find themselves in an ugly place because of another profit indicator called the cash conversion cycle. Yeah, right. I always tell people three weeks of failed performance can affect up to 13 weeks of profits, right? It's a compound effect, it creates error in your line that you don't fill up your pipeline with stuff and there's an error. And if guys go too long in their cash conversion cycle, because there's when they all want to make changes, Marcus, they want to make changes when money's not coming in. If your cash conversion cycle is four months, it's and the time on market right now is getting longer and longer. So that's elongating our cash conversion cycles. And if it's four months, five months, six months, and you wait till the end of the cash conversion cycle to make a change to your people or your process, that means you have six months of air in your line before you get back to cash. Businesses aren't making it through the six months. They didn't have enough reserves, they aren't able to pivot fast enough. And so what do they do? They start to freak out and they lay everybody off. They stop spending money on marketing, they go through all this fear, panic mode of getting rid of everybody instead of just having a foresight of knowing that the process broke, but it broke five months ago. Your performance wasn't there. The person stopped trying because they made too much money in 2024 and 2025, and you should have adjusted them. And because they wait till the profit indicators tell them to make a change, they should be making the change when the process indicator, the lead metric, is telling them they're not making enough offers, they're not going on enough appointments, or their conversion numbers at the end of the week are not hitting that 50, 50, 30, and 80. When you're not converting at those numbers, then you know you have a performance problem. Don't wait till you get to the end of your cash conversion cycle to say we got a problem here. It's too late. And guys are calling me right now, Marcus going, hey, can you help me? I'm like, no, you're already waiting too long. You know what you got to do now? You gotta lay everybody off. You got to dial back on your spend. You know what you got to do? You got to go back into your business right now and you've got to go work the process. But here's the beauty in that, and this is a beauty that they don't understand. I call the position an innovator for position on purpose. The innovator seat is not a beach seat, guys. It's not a beach seat, it's meant to be in your business. You have a job. Your job is to identify your process and performance indicators and innovate the process or innovate the people or change the people. That is your job. And the teams that are doing that ahead of schedule, they're not waiting to the end of the cash conversion cycle. They're feasting right now. They're feasting off every piece of meat that you didn't identify that you've lost, and you're vacating the industry because you don't have the right system or business to capitalize in it on anymore. Because they've already adjusted their business. They've already taken advantage of the new market, they've already taken advantage of the new process or the people getting the right training. And people are on the outside looking in, going, What did I do? What did I do wrong? Well, you waited. And what did you do wrong? You were on a beat somewhere, you were on a cruise somewhere, you were driving at Lamborghini and you took your eye off the dashboard, you took your eye off the metrics, and you said it perfectly well. If you don't have it in here, then you ain't focused on it. I don't care if you spend$100,000 on a CRM, if you aren't managing the data that CRM is telling you, and everybody doesn't have it rolling off their tongue, then it ain't real and you're not managing your business properly. You know, whether it's core values, whether it's purpose, whether it's the KPIs of your company, if you don't have them memorized, then you're not, you're, you're, you're an absent leader in your business.

unknown

Yeah.

SPEAKER_02

And you're no better off than everybody else in your company that's not performing properly because you have been absent. You have failed to do your job, and your job was to innovate this business to get it stabilized or growing again. And the ones who waited too long, it is on you. Everything rises and falls on leadership. If you want better results, be a better leader.

SPEAKER_01

That's right. Very simple. Very simple. And that's you know what? A really, really good place to pause. And the reason why we are gonna pause is because we're at 40 minutes and we're gonna have to do another podcast at some point in time. Because you and I talked about this to even start with, and we're like, dude, we could do this for four hours. And maybe that's what we need to do. Maybe that we need to just do a seminar and you know, find a nice place sometime, and we'll go uh do a full class. We can get enough people that are interested in it. I'm sure we can make it happen. But here's the reality: here's what I want some, I want to finish at this, and I got one last question for you before we finish off. One of the things that I noticed that you said was don't change the marketing channel, change the person or the process first. Make sure that that's right. And here's this is wise words because, and this is coming from Gary, this is coming from myself, who see the insides of the business, the guts of the business, right? Like we're like the mortician, right? We open up their bodies and we see all the bad things that they're doing to themselves, right? You know, you check that you weren't a smoker, but yeah, we opened up the body, your lungs look pretty black, look pretty black, you know. So we understand that. And so we understand that every marketing channel works. That's how we can be confident in saying, hey, wait a minute, wait a minute, wait a minute. I got clients that are making TV work, I got clients that are making PPC work, I got clients that are making this work, mail work, bat work, that work. Something's not working in your process. Now, if we figure out that people in process are doing everything right and your market specific just doesn't work for that thing, there's a few of those.

unknown

Yep.

SPEAKER_03

That happens.

SPEAKER_01

But eliminate the obvious things because if you don't fix that, the marketing channel doesn't matter. Marketing channel doesn't matter. That's going to be broken. And by the way, if you don't know how to fix that, then you might be right. You don't, you've got to eliminate that marketing channel because you don't have the right process for that type of lead or the right people able to handle that type of lead. So I think that's just something that I hope that people didn't miss out as you were as you were talking about that. Because I think that's a really, really important takeaway. Last question, Gary. My big saying is better decisions, better results, right? If you're gonna make better decisions, you're gonna get better results. It's just a matter of time. If you were to take away one thing from everything that you know working with real estate investors right now, what is that better decision they can make to go get better results?

SPEAKER_02

So I like to add this I think better decisions make bigger results too. Like, I think when you get better, you get bigger. Yeah. And so, like, people need to stop focusing on scaling right now and they need to focus on getting better. Yeah. And so the one takeaway is how can I get one step better in every area of my business right now? How can I get better in my product? How can I get better in my marketing? How can I get better in my operations? How can I get better in hiring? How can I get better in managing my numbers? Like that's what we have to focus on is how do we get better? And the only way you're going to get better is get back in your business. You are never supposed to vacate it anyway. If you want to sit on a beach, be an owner. Don't work at a C the process ownership chart, accountability charts, your organizational charts. There's a reason it's a C in the business. Now, The process of it is working on it more. And what we mean by on it is like, how do we direct it? Which is the RD, which is the innovation, which is those things. But it's still an in the business. The only way to innovate your process is to work the process. Go on the appointment again. You don't have to go on every appointment, but when was the last time? Before you call whining about a process not working, whining about a marketing channel not working, when was the last time you walked it? When was the last time you went on the appointment? When was the last time you got in that process and made the adjustments? And the thing I'm going to tell you right now that you have to go do is go become the box again. FedEx does a phenomenal job of getting your package from point A to point B. And what they do and they do very well is they become the box. It gets picked up here, it gets moved here, it's at this facility, it goes here. And what are they doing? They become the box to see the process of how it moves. And right now we got to get back in our business and we got to become the house. We got to figure out how the house moves through our system. And we need to earmark any processes in our business that either don't bring value or not essential. And if it doesn't bring value and it's not essential, cut it out. If it brings value or it's not and it's not essential, or it's essential but it doesn't bring value, find the cheapest way to do it. But every process in your business today that brings value to your customer and is essential to your business, you better go rework walk that process and make sure that it's solid.

SPEAKER_01

Yeah, I love that. Solid advice. Gary, if somebody wants to get a hold of your business and figure out uh if they would be a good fit for working with you guys, how would they get a hold of you?

SPEAKER_02

Sharperbusiness.com. There's a free business assessment on there. It tells you where you might be struggling in your business. They can schedule a call with Jake. Jake's full-time job is just to do free business audits and assessments with him to look at those things, see what they're lacking and what they're missing, and then decide whether or not we're a fit. We don't, we're not a fit for everybody. We tell people that. And what I say that for because if you don't have a product, you don't have a business. And right now, if you don't have, you know, you're spending less than$10,000 a month in marketing, then you probably don't have enough product to hire us. So I always tell people if you're if you're under five to$10,000, depending on your type of business you have and what your row has is returning your investment, then we got to determine whether or not you should be spending. I literally, Marcus, my sales department led a company in, and it was a husband and wife, and just the two of them. And I was just like, and I know why they did it, bro. They these people are amazing people, and they really thought we could bring value to them. And we did. We brought a ton of value to them. But I met with them just a couple weeks ago and I looked at them. I'm like, hey, how do you think it's been going with us? They're like, Ran, it's this has been great. This has been really good, blah, blah, blah. I said, Well, I hate to put a burst your bubble here, but I'm gonna put you guys on pause right now. And he's like, Why? I said, Because you're not spending enough money in marketing. Yeah, I need you guys to take the money you're paying me and go put more money in marketing right now. Yeah, they'll come back. But they we've we've equipped them enough with what they need right now and made the right adjustments. Like, could I have kept them in? Probably. Were they obligated through an agreement? Yeah. Was it the right thing to do? Nope. What the right thing to do, a good work, which is our purpose, was to give them some money back so they go pop the ROAS and spend a little bit more on marketing and make some more money. They'll come back, their goals for the year, they're ready to roll, they'll come back, they'll do that. People come back all the time. But those are the right decisions. And so somebody comes to us, we're gonna help them whether they do business with us or not. So give us a call. Let us decide.

SPEAKER_01

You guys definitely definitely live out your mission for sure. It's been been a pleasure getting to know you. It's been a pleasure uh becoming friends with you, getting to chat business with you. And certainly it's been a pleasure being on this podcast episode. Uh, look forward to chatting soon. I'm sure we will see each other in the next couple of months because I know we've both got events that we are both a part of. So we'll see you soon, Gary. Everybody else, we'll see you later. Lead to appointment to contract to close, right? It's that simple. We're all in this uh world where we've we're focused on the other things, the things that don't matter to our business. See, if you just listen to that podcast, you realize how important just going back to the blocking and tackling in business is. Gary's doing it in his business. We're having the exact same conversations in our business with our clients about getting their conversion metrics up. Right now, conversions across the industry are down, and it has to do with not being focused, taking your eye off the ball. It used to be easy, now it's tough. So people like us and Sharper are focused on helping you make more money through understanding your conversion metrics. If you want to learn more about how we can help you with that, visit us at BeckCFO.com. Look forward to seeing you there. If not, until next time, keep making better decisions so that you can get better results. See you soon.

SPEAKER_00

Thanks for listening to Strength in Numbers. If you're ready to take control of your finances and start building real wealth in your business, be sure to schedule your free discovery call with markets at BECTFO.com to get started. Thanks for listening, and we'll see you on the next episode.