Good business people show up for work. Great business people . . .
Over the past five years, I've had a recurring experience that has not only entertained me, but it has been a great case study for how business people respond to information. Five different business owners have come to my office to seek guidance and insight into how to run a successful business. Two were real estate brokers, two were contractors and one was an investor. The paths they took afterward are telling.
The first broker called one day and asked if I could meet with her about starting a brokerage. I was happy to do so. She ended up starting a brokerage somewhat like mine in that it is an independent brokerage with a limited number of agents. My goal, which also became her goal, was to be nimble. I wanted a company that wasn't bogged down with too much hierarchy or too many agents that could potentially distract me from what I was doing. Cornerstone is a lean and mean operation. We get a lot done with a small staff and a small group of committed agents. She did the same, and it's working for her.
The second broker, came in with the idea of building a larger independent company with a larger number of hopefully high performing agents. Once he had his state and local paperwork completed, he started looking for agents. He only hired those with a proven track record, high sales history and a name that was known in the community. He wanted people who needed less training so that they could concentrate on the bottom line and instant income to support his prominent location with high visibility and a hefty rent bill each month.
Of course, this is different from my model, so we looked at it from a completely different angle. Both brokers listened, took advice, called back and clarified things and launched out into the unknown with a lot of hope, a little trepidation but a well thought-out plan. Both are very successful today, and both continue to execute the models we discussed and it's working for them.
The contractors were a bit more like the first broker in that they did not want to build a mega-business. They both wanted to create a business that would provide for their families, wouldn't consume all of their time and would be within their skill set. One of the problems I see with tradesmen is they can be at the top of their profession in the trade, but they are poor business professionals.
These two guys both fit into that scenario. They both wanted to know about the business side. They already had the trade side down. Actually, they have both done work for me at my home, business and with my clients. They're equally good with each one having something they are better at, but overall, they are both top quality tradesmen.
We focused our time discussing the financial side of business. That is where most contractors fail. One of the best electricians who ever worked for me went into business for herself. She was a great technician, but she was not savvy with the business side and failed within the year. Sadly, I couldn't get her back with me because she left the area soon after.
We also talked about getting and retaining clients. I spent a lot time explaining the importance of building a reserve fund for slow periods and the dangers of using credit and the mistake of working without contracts. I also explained the incredible value of under-promising and over-delivering. Meeting clients expectations is key to referrals in most any business, but in the contracting business it is critical. Failure to do so will tank a business overnight. I watched 10 out of 12 contractors we worked with fail as the recession began in our area in 2008. They didn't have the financial side figured out and it destroyed them.
Of the two contractors, one took the advice to heart and has gone on to become incredibly successful. Sadly, I have a hard time getting on his schedule. The other one ignored the advice completely and continues to struggle. His clients have called me to complain and I just encourage them to talk to him. It doesn't always work out and his workload diminishes with each failure.
This one was fun. I met this family nearly two decades ago. They watched me buying rentals and asked me to help them do the same. They have been incredibly successful. They've decided to take their business to the next level and that promoted a new call. The husband and I spent about 1.5 hours on the phone recently as we laid out their plan. I know they will succeed, barring a national economic crisis. They listen. They do smart logical things and they always ask questions and look for better ways to do business. I have no concern about their future.
The three groups all had one thing in common. They all wanted to know how to make the business they envisioned successful. I offered very little advice about their tools and techniques. They're all good at what they do. Of the five individuals, four are a few years into their plans and three out of four are overwhelmingly successful. The fifth one is just getting started, but there is one that is all over the map and still struggling. What made the difference?
A potentially great business person does a few things that mediocre business people don't, such as:
1. They listen and learn. They are never too successful to learn, and learning can come from any source. I learned one of the best business practices from my father-in-law who was explaining how to trim an apple tree. It had nothing to do with my business, and yet, it had everything to do with my business.
2. They ask questions and seek clarity before taking action. They don't make changes or initiate things with a vague understanding.
3. They seek out people who have done what they want to do and glean from their success.They are never too proud to ask for advice and guidance. Humility is their friend. It is not a weakness.
4. They are quick to make course corrections when things are going awry. If something isn't working, hoping it will change gets expensive quickly.
5. They are never so convinced that their way is the best way unless it proves it with results consistently. They are always on the lookout for better ways to do many things.
6. They realize that times change and businesses may need to change to stay in the flow of the changes. Have you seen a Howard Johnson's Restaurant lately? How about a Borders Books?
A good business person will show up for work and hopefully take a check home on payday. A great business person lives off the fruits of the day while planting seeds for the future.