Steve Rozenberg on Why Mindset Matters More Than Talent in Sales & Life
Not only does Steve run a growing property management business but he is also a full-time airline pilot, regularly flying international routes. While many property managers with full-time jobs treat their PM business as a side-gig, that’s not the case with Steve as his business is rapidly growing.
In our chat, we’re going to talk about Steve’s journey from 0 to 500 properties in under 4 years and dig into the specifics of how he has used BDMs to help him do that, all while holding down a job that sends him all over the world.
If you’re looking for systems to help you grow a thriving property management business without taking up all your time, then this is the episode for you.
- (00:00) – Background Leading up to Today
- (00:22) – Steve discusses his lifestyle and other job as an airline pilot.
- (01:53) – How Steve manages to juggle his many responsibilities.
- (02:29) – What led Steve to pursue property management.
- (05:17) – What Empire Industries looks like today.
- (05:49) – Steve articulates the long term vision that he has for Empire.
- (06:15) – To franchise and license out the rest of the United States and possibly some other countries.
- (00:22) – Steve discusses his lifestyle and other job as an airline pilot.
- (06:37) – 0 to 500 Doors Properties in 3.5 Years
- (06:55) – Steve explains the shift in mindset that led him to his current ambitions.
- (06:55) – The role of mentors and coaches.
- (07:43) – Identifying self-limiting beliefs.
- (09:06) – Steve provides some examples of self-limiting beliefs.
- (11:28) – Discussing the paradox of self-development.
- (12:22) – The importance of using coaches and mentors and building a mindset of abundance rather than scarcity.
- (13:19) – Emulating the actions of those who are already successful.
- (15:58) – Steve answers whether or not he attributes his success to his mindset.
- (17:23) – How Steve distills his passion and belief regarding mindset and develops leaders within his organization.
- (17:52) – The importance of ‘walking the talk’.
- (18:27) – Leadership meetings to introduce repetition.
- (18:48) – Using audio books to create a shared vision.
- (19:11) – Providing coaching for employees.
- (19:36) – Digging into Steve’s use of BDMs.
- (21:35) – Discussing necessary pre-requisites to hiring a BDM.
- (22:14) – Understanding that money spent on marketing and sales is an investment.
- (23:06) – The importance of properly defining the role.
- (24:07) – Following up with a detailed explanation of what exactly the role does, expectations and how they are accountable.
- (25:16) – Steve discusses the practical aspects of using BDMs.
- (25:49) – Using a manual with scripts and templates.
- (26:28) – Daily KPI meetings.
- (26:28) – Determining budgetary spending and the metrics and details of lead generation systems.
- (28:20) – Discussing satellite offices.
- (28:40) – To maintain person to person contact and cut down on windshield time.
- (30:04) – Why windshield time matters from Steve’s perspective.
- (21:35) – Discussing necessary pre-requisites to hiring a BDM.
- (32:10) – Steve’s perspective on the lifetime value of a customer.
- (33:20) – The importance of knowing your numbers.
- (34:25) – The importance of putting eyes on the property.
- (35:43) – Average lifetime of a customer for Empire Industries.
- (35:53) – Average properties per client.
- (36:03) – How Steve plans to encourage clients to buy more doors.
- (36:41) – Hiring a specialist to work with their owners.
- (37:59) – Empire’s relationship with realtors.
- (38:08) – Referral program.
- (06:55) – Steve explains the shift in mindset that led him to his current ambitions.
- (40:04) – Follow Up Questions
- (40:47) – How Steve tackles the branding side of his business.
- (43:04) – Steve details the comp model he uses with his BDMs.
- (45:06) – Using metrics to effect.
- (48:23) – Discussing who is responsible within Empire for generating leads.
- (49:19) – The success of Empire’s drip campaigns.
- (50:40) – Constraints to growth.
- (51:41) – Lead cultivation strategies.
- (53:18) – The yin yang relationship between sales and operations.
- (51:41) – Lead cultivation strategies.
- (55:33) – How do you respond to people who say, “I don’t have time.”?
- (57:08) – How much is too much to pay for a new property management contract?
- (58:46) – Who do you learn from?
- (1:02:48) – Are entrepreneurs born or bred?
- DiSC Profiles (23:20) – Resource that Steve uses to make hiring decisions.
- Fourandhalf (41:38) – Source of industry knowledge and expertise that Steve has made use of.
- Extreme Ownership, Jocko Willink (57:05) – Reading resource recommended by Jordan.
- Brad Sugars (59:05) – Coaching resource used by Steve.
- Marshall Silver (58:57) – Coaching resource used by Steve.
- Grant Cordone (59:14) – Coaching resource used by Steve.
- Doug Winnie (1:01:10) – Coaching resource used by Steve.
Where to learn more:
Jordan: 0:00:00.1 Welcome closers, today we are talking to Steve Rozenberg. My man out of Houston, Texas, that has taken time out of his busy schedule to talk with me.
Steve, let’s just start here, where have you been in the last 30 days man? I know you get around the block. Last 30 days, last 60 days, where you been lately?
Steve: 0:00:22.1 Well, I just actually got back from Australia. I was in Brisbane doing a convention with our friend Dennis Heussaff and Derek Hunter 0:00:32.6 [Confirm].
And I was a keynote speaker for several days regarding property management and my expertise, if you will, on my subject of growing doors and how we do it through marketing and growth and mindset and you know, I’m just such a firm believer in that.
0:00:50.2 So I’ve been to Australia, let’s see – my other job of being an airline pilot, I was in Rio De Janeiro, for a day or two and I was in Tokyo. So you can kind of pick your continent and I’ve probably been there. 0:01:01.9
Jordan: 0:01:02.6 So this is some great context right out of the gate, because you’re clearly in a situation where you’re having to juggle a lot. 0:01:08.2 They say that – Ok, so we can edit the podcast here and in this case I completely forgot something… 0:01:29.7
So they say necessity is the mother of all invention, you have some clear constraints that are forced upon you as a result of the work that you do as an airline pilot. That’s really interesting to me because everything we’re going to talk about in the course of this interview is going to be in the context of you having some significant other obligations. I just want our listeners to keep that in mind.
0:01:53.5 Do you feel like that having – I guess here’s the real nut of the question, why are you still flying Steve? How do you manage to juggle that along with being maniacally focused on growing your property management business?
Steve: 0:02:05.7 You know, that’s a good question. And the easy answer is the flying is something to be quite honest is something I love doing. It’s something that as a little kid you look up in the sky and you see these things and I thought, “Man I’d love to do that one day.”
So to me, doing what I do as an airline pilot, I don’t think I would ever give that up. Only because it’s a true love of mine.
0:02:29.7 It also was a very big lesson for me because I never really wanted to be an entrepreneur. I never wanted to be in real estate, I just wanted to be an airline pilot.
But you know, as the saying goes, bad things happen to good people and when 9/11 happened, I was forced to make some serious decisions, because I realized that the safe, secure job, the career that I’d studied my whole life doing and studying for was really not as secure as I thought.
And because of that, it really just ingrained in me how unmarketable and basically how specific I was that I couldn’t do anything else. 0:03:08.7 I wasn’t qualified except flying an airplane, and after 9/11 I was about to be basically out of a job and on the street with 200,000 very qualified, just as good airline pilots.
And it really made me realize that by me not controlling my destiny, meaning having my own career or owning investment properties, I was really at the mercy or the whim of whoever wanted to make a decision that one day I would be – you know, with the swipe of a pen be bankrupt.
And they would say, “Sorry, thanks for your service but you’re gone.” 0:03:39.4 So, I think to answer your question, I think that’s what drives me, is the fact that I don’t want to be put in that position.
So yes, I love building businesses, I love what I’m doing. And I love being a student of that, but I also love flying. I love travelling the world. I’ve got the best job in the world – the best part-time job in the world, I would say. And that’s the answer. It’s something – it’s a love that I love doing.
Jordan: 0:04:04.2 You know, I’m thinking about a quote from Cheryl Sandburg, talking about burnout, which is common in Silicon Valley. And her advice is that the answer is not working less, but making sure that you don’t give up the things that are important to you and that give you life and energy.
And that, regardless of how much you’re working, can also be a true source of burnout. So for you, you have identified that flying is a real long-term passion and calling, and you don’t want to jeopardize that.
Steve: 0:04:32.1 Yeah, yeah. Again, it’s something I love doing and I kind of fell into the real estate business because I realize it’s something that I liked for the fact of leverage.
I started buying investment properties and people that have followed me online and know my story, know that I made a lot of mistakes. I made a lot of tactical errors buying wrong properties, which led to me creating a management company, because nobody would manage my properties.
0:04:56.2 Because frankly, they were such horrible properties, I didn’t realize the mistakes I was making at the time until I was knee-deep into them.
And then I had to figure a way out of all these problems. And the only way I could do it was, again, just trying to figure this out and creating a management company and over time, that’s been a huge, huge driver to my success. 0:05:16.7
Jordan: 0:05:17.8 So Steve, let’s start here. Talk to me about head count, talk to me about number of doors under management right now for Empire today.
Steve: 0:05:24.9 Sure. So today, we’re just shy of crossing the 700 door mark. As of December 1, 2017, we’ll be in business five years. So, we grow – we are growing exponentially fast and it’s – you know, the sound principles that I’ve learned that I continue to learn are really what’s driving this whole thing.
Jordan: 0:05:49.8 What’s the long-term vision? Where do you see yourself wanting to take this company and how do you articulate that message throughout your organization?
Steve: 0:06:00.1 That’s a good question. So the long-term goal of Empire Industries is we plan to open up 100 locations across Texas, with satellite offices. We have seven locations in Houston, and we just opened five locations in Dallas.
0:06:15.1 So the idea, the concept right now in Dallas is basically we’re proving out our business model and then the plan is once we have proof of concept to implement ourselves in a city with no marketshare, is to basically franchise and license out the rest of the United States and possibly some other countries from some talks I’ve been having with people.
Jordan: 0:06:37.1 So you’ve got a big vision. And it’s interesting you say you’re five years in and you’re proving out the model. What was the shift in mindset that caused you to go from accidentally backing in to the industry as opposed to now talking about a much, much larger vision? What was the inflection point for you in terms of the vision?
Steve: 0:06:55.6 I would say the fact that we have mentors and business coaches. Pete my business partner and myself, we are very, very adamant about self-development and trying to align ourselves with people that are along the same lines. People like yourself and Alex and other people that are visionaries.
0:07:14.6 And our goal is to be around those people and emulate that and try to keep ourselves accountable. So since day one, we’ve had a business coach. And that business coach has been the driver of our growth and our success, because it’s always being held accountable and we know that we are going to hit a glass ceiling which we hit all the time of our own knowledge and expertise and we’re smart enough to know that we’re not that smart.
0:07:43.6 And we always are looking to align ourselves. And by doing that, you know, we sit there and we think of well, maybe we will do X numbers, let’s just throw out a number and say we’re going to do three million dollars in revenue this year and you know, our mentor may say, “Well why not fifteen?”
And that’s something that really pushes your boundaries. They’re not saying four, they’re saying, “Why are you limiting yourself to four? You could do fifteen if you really wanted to, because Google does it, Amazon’s done it. Why are you limiting yourself?”
0:08:11.2 And what we have found is the limiting belief is really something in your mind. We are our own worst enemies for all of us, because whenever we think of doing this daring thing, it’s a self-limiting defeat that we try to tell ourselves why it won’t work.
And we’re really learning that it’s just action. By doing action, is what’s making this work. 0:08:32.7 We don’t – you know, we back it up with testing and measuring and KPIs and our marketing, and we can talk about that in a minute, but really, it lives or dies on what we think about and how quickly we take action on it.
Jordan: 0:08:44.0 So Steve, let’s camp out on this, because this is definitely distinctive of our relationship and the experiences I’ve had with you, that you are really enthusiastic and committed to personal development. Specifically when you talk about limiting beliefs.
0:09:00.7 Give me some examples of limiting beliefs. Maybe some limiting beliefs that you feel like you’ve experienced coming through the business.
Steve: 0:09:06.2 Sure, sure. Yeah. Well, I can tell you one. My partner Pete and I, we were mentored by a gentleman named Marshal Silver, who is a world – he’s a hypnotist. And he also teaches people how to train in business and how to unlock your mind, because basically, things you tell yourself are self-limiting.
0:09:23.1 So for example, he says one of the things when we were being trained by him, he said, “Tell me you can open an office in 90 days in Dallas.” And it’s different when you think about it, and it’s a lot different when you say it.
0:09:37.8 And even though we said it, we didn’t do it in 90 days. It still took us about a year to get up the courage to do it, but the reality is, is we just opened five locations at once and nothing has changed in our business. As a matter of fact, we’re gaining momentum.
So we realized, you know what, all these successful people, I’ve never had one person that is successful tell me, “You guys need to slow down.” Every single person I know in business that is successful always says, “You guys are doing good, you need to pick up the pace and you need to increase velocity, you need to increase momentum.”
Which, for people like myself that came from a modest background with parents that worked 9-5 that were always telling what I shouldn’t do, to go to, “Hey you can do whatever you want, just stop telling yourself you can’t.”
That is a big paradigm shift and it’s a very hard thing. And by us doing that and hiring employees – because now we’re hiring employees in other cities and we’re not even meeting them except one time and now we’re training them remotely.
0:10:43.3 So there’s a lot of things that all of a sudden, you’re saying, “Ok, I hope this works.” But regardless, the ship has left the port and it’s happening.
Jordan: 0:10:50.8 Help me unpack this paradox. What I observe is that the most successful people are the most motivated to spend time on and to invest in personal development. It’s somewhat perverse and backwards right? The folks that are the most in need of help are the least interested in actually receiving it. 0:11:13.3 And when you start talking about hiring a hypnotist and spending money, tens of thousands of dollars 0:11:26.8
0:11:28.2 Alright Steve help me explain and unpack this paradox. The phenomenon that I’ve observed is that the folks that are the most in need of help from a personal development perspective, are the least interested and the folks that seemingly are the least in need are the most motivated to spend time and money on that.
0:11:44.0 So when you start talking about things like hiring a hypnotist and investing tens of thousands of dollars in coaching, unlocking your mind, I know a lot of people really get uncomfortable with that.
Can you try and just explain this paradox of saying, “You need to got faster” and that by focusing on going faster, creating more pressure, when you’re already struggling to meet your current day-to-day objectives. How that actually makes things easier and allows you to be more effective as opposed to just basically creating a scenario where the wheels are effectively going to fall off.
Steve: 0:12:22.8 Yeah, well that’s going to be a lot of unpacking. I’ll do my best though Jordan. So, the one thing I think about is the greatest people on Earth. I went and I’ve done a lot of studying on I think the best athlete on Earth ever, is Michael Jordan. And not just because he played basketball, but the guy’s drive.
0:12:42.0 And they said he would practice over 8 hours a day, every single day, for what, a couple hour game. And they said that guy’s the best in the world. But if he’s the best in the world, then why is he practicing? And why does he have a coach? Because clearly he’s better than his coach. But he has a couch for accountability, he has his coach to take him to the next level.
0:13:03.4 You know, Tiger Woods, they have coaches. All the most successful people, as you stated, all have coaches and mentors and there’s a reason behind it. And I think it’s the reason of abundance, not the mentality of scarcity.
0:13:19.1 And everybody I know that’s successful, you know, they all do the same types of things, where you know, you read books Jordan, I read books, we listen to podcasts, we go to conventions.
You know, people that talk and do these IM statements, where they envision their lives of how they want it to be, they all do these things, and I’ve just noticed that trend where I’m thinking, “Ok, I don’t need to reinvent this wheel.”
There are very successful people that are doing these things and it’s a very common thread with almost everybody, and it’s that compound effect of just doing a little bit where all of a sudden you’re increasing that tension on the spring.
0:13:57.2 I’m not going from zero to 700 doors in a week, we’re adding things on, but we’re adding them through learning. And I feel a lot more comfortable, and as an example in my business, you know, we used to be very happy if we were getting 20 leads a month.
Well now, we’re trying to pump it to 150 property management leads a month and I want a 50-75% conversion rate.
0:14:18.8 I wouldn’t feel comfortable with that back on year one, but as we increase the tension on the spring and we start going more and more by adding teammates and adding people like BDMs and marketing directors and other people to do these things, we’ve learned that the way that we can grow and the way that we can do this is by, very simply by dividing to multiply.
0:14:41.4 And we divide ourselves up into – I now have a team of sales people, BDMs – I have a team of marketing people and the only way that I – they’re going to grow to my level of incompetence. So at some point we’re going to get to a level that I say, “You know what guys, I don’t know how to answer this.”
But, if I have a coach or if I have a mentor, or if I’m going and getting that knowledge on a further basis, I can come back to them and say, “Ok, I’ve got the answer now.”
And just like Michael Jordan, he was the best basketball player, Tiger Woods is the best golfer, but they still have people that they’re accountable to, and they still practice every single day. Which I think, that’s the difference.
A lot of people that I’ve met, and like you as well – in the property management business is they let that identify them as property managers when the reality is they’re business owners but they’re not looking at it like a business. 0:15:30.1 They’re looking at it as their identity of being a property manager, and I’m not so sure that’s the best way to run the business.
Jordan: 0:15:39.8 Steve, we’re going to dive in and talk about some tactics, strategies, practical things that you’re doing in pursuit of growth.
But if we were going to just stop right now in the first part of this interview and sum it up, would you say that your success could be distilled down to mindset?
Steve: 0:15:58.7 Without a doubt it’s mindset. It’s what I tell myself on a daily basis, because the fish stinks from the head down. It’s what I tell myself, it’s what I tell my team, it’s what I tell my family, and it’s more than what I tell them, it’s how I act in my actions.
0:16:17.7 And that I think is the key. When it hits the fan and you have a bad day and things are hitting the fan, everyone’s looking for a leader. They’re looking for that one person to say, “Hey, I need you to tell me it’s going to be ok. I need you to have a vision to get out of this.”
And you know, Jordan you know as well as I do, when you start a business, there’s a lot of unknowns that you’re going to cross that you don’t have the answers to because you don’t even know that you’re going to cross them yet.
And as we’ve grown our company, the problems we had at 200 doors was a lot different than five and it’s different at seven and it will probably be different when we get to 2000 doors. 0:16:51.7 And we don’t know what those problems are.
You know, I had one of my mentors – told me – he said, “You know, when you go from a five million to a ten million dollar company, you’re going to have to totally revamp your company. All of your systems are going to break. Nothing is going to work and you need to be prepared for that and you need to be ready for it.”
0:17:09.4 So that’s kind of a weird thing when you think, “Oh, well I’m going to be making more money, things should be easier.”
And he says, “Look, you’re going to hit a point where everything is going to collapse on you and you need to be prepared.” 0:17:17.7 So that’s something that I don’t know what that’s going to look like yet.
Jordan: 0:17:23.2 So Steve, if the investment in mindset, if the investment in thinking is priority number one, tell me this: How do you push that into the organization?
You said you and Pete are really into this, it’s your thing. Clearly. You’re passionate about it, you like talking about it, how do you infuse this into your organization in a way that is not Steve beating his hobby horse and making it feel coercive?
How does – how do you develop leaders internally with this same type of thinking?
Steve: 0:17:52.1 Well, that’s a great question Jordan, and getting the buy-in is always tough. You know, the number is 68.5% of employees are not engaged in their business. So employee engagement is very tough. And number one, I think employees act upon what they see.
0:18:09.5 So if you walk the walk, number one, at least you’re going to get the buy-in. Once you get the buy-in, now you have to get repetition. And the way you get repetition is by including them in the leadership stuff.
0:18:21.1 So for example, you know, we’re not a big company, but we’re getting bigger, and so we have department heads.
0:18:27.0 So for example, I have a marketing director, I have a sales director, we have accounting, we have operations. So from that right there, we have leadership meetings.
And in those leadership meetings, we talk about higher level things. Either any challenges going on, or we talk about anything that we want to grow with.
0:18:48.3 But part of that leadership team – you know, I’m a big believer in audio books. Because like you, we’re always on the go, we’re always moving. I don’t have the time to sit down and read, so I have the team do audio books as well.
0:18:58.3 And some things are just non-negotiable. Some things are just part of the culture that if you’re not willing to do that, then at some point, you will become the choke point. You will become the problem because you’re not being – you’re not seeing the vision I’m seeing.
0:19:11.1 The other thing we do, is because we get coaching, we let the employees get coaching as well. So we let them go to the coach and they get some type of coaching every month or whatever it is, because we want them to buy into the same vision, because again, our model is that we will be able to remove ourselves from the business and they will be running the vision that we want as we’re going out and growing this nationally.
Jordan: 0:19:36.0 Steve, that’s a perfect segue to dive in and talk about sales. And I want to tell you a story that I’m sure you’ve seen before, and that’s the story of the property manager that is a “successful” local operator, and what I mean by that is that they have achieved a great lifestyle.
They’re managing 100, 150 doors and they’ve gotten to the point where they truly have a recurring revenue business that affords them some – a nice income and some opportunities for freedom. A little bit of travel here and there.
Not totally hands off by any stretch of the imagination, but for whatever reason, they decide that’s not enough, and they want to push on, they want to keep growing.
And in order to do that they think about hiring a BDM. Three letters: B-D-M. I’m hearing it a lot right now. I know you’ve gone down that path, but the story that I’m talking about is where the broker is doing the majority of the sales up to this point, wants to hire somebody to manage that function of the business – in part because they don’t like it. It’s uncomfortable.
They’re disinterested and they really just want to make it go away. So they put somebody else in that seat, but they don’t train them, they don’t onboard them, they don’t hold them accountable, and so what that person represents, is a cost-centre, and an unknown, potential opportunity.
With those two things combined it’s a recipe for disaster. I can think of one situation in particular where I am on the phone with a guy that I walk through the process of hiring a BDM – three months later, he fires this gal, we log into his LeadSimple account, we’re going through his stats to try – in his mind, to try and understand how much money he wasted – and I’m going through the stats and she was actually killing it.
She was doing a great job of followup, she was aggressively working the leads, but because he had no framework for knowing what was going, he just related to it as a cost-centre.
0:21:35.9 Can you tell me what does it look like to achieve sales mastery and that function of the business that would be a necessary pre-requisite prior to going and hiring a bunch of BDMs?
Steve: 0:21:42.9 Man I tell you, you just hit on a very big subject for me. I actually sat up in my seat, I couldn’t wait to chime in on this one, because this is what I live and breathe.
And as you know, you guys were in Australia recently and I just got back. I go a couple times a year speaking and the BDM is much more prevalent in Australia than it is here.
0:22:02.5 And that was a bit of a surprise to me, I don’t know about you, but to me it was very interesting that it’s been around so long. But the biggest challenge – I’m going to go back to the mindset.
0:22:14.6 The biggest mistake that I think people make is first of all, they feel that marketing and sales is money being spent. And the reality is it’s money that you’re investing. Because you’re investing it into your business.
0:22:28.1 So I think the definitions – people have the definitions wrong. So when they have the definitions wrong, they look at things wrong. So the first thing I would say, is people need to look at marketing and sales as an investment in their company and it’s an investment in their future.
0:22:41.3 Because if they’re not growing, they’re dying. And if they don’t have leads coming in and they’re not closing new doors, they are dying, they just don’t realize it. And they don’t realize it until it’s too late.
And a key – if this gentleman, if he had known the true definition, first of all of what marketing and sales and how vital that is, that may have just changed his mindset of how he would look at this employee, first of all.
0:23:06.2 Second thing is, is you have to, without a doubt, you have to define that role. And that is one of the biggest challenges people do not do. When they have a sales and marketing person, first of all, sales and marketing are two different roles.
0:23:20.9 They are two different – we hire on DiSC profiling. We’re very big on DiSC, and the profile of a marketing person is much different than the profile of a sales person.
So when some people say I hired a sales and marketing person, that’s telling me they’re probably good at one thing and they’re crappy at something else. Or just mediocre at both. Because you just don’t – it’s just two different personalities.
Like, I could never be an accountant because that’s just not my personality. I could do the job but I’d probably be a crappy accountant.
So you know, when it comes to that, they don’t have the roles defined and I bet you if you took a step further and really dove into this guy’s business model, he probably never had an organization chart that showed where in the old chart this person sat and who they reported to and what it was they had to report.
0:24:07.2 So, the first thing they have to do is they have to define the role. And then once you define that role, you have to explain in detail what exactly does this role do and then, what is required of that role and how are they accountable.
0:24:21.1 Meaning through KPIs or test and measuring, or metrics. And we test and measure every single thing we do, just like you do. When we have leads coming in through our system and all of our inbound funnels, we want to know which one is working, which one is not.
You know, I bet you if you polled probably half of your clients, they would not know the acquisition cost of their client, the acquisition cost of a lead and more importantly, the acquisition cost of a specific marketing campaign.
0:24:51.4 So if they can’t answer those things, how do you, like you said, how do you know that this is working when you don’t even have a yardstick to measure it by. And if you don’t know what is this person’s job, what is required of them, and how I measure the role, you’re just throwing – you’re throwing money against the wall and that, to me, rolls back to a bad leader. That’s not a bad employee, that’s a bad leader without a leadership vision.
Jordan: 0:25:16.2 So Steve, you’ve done it. You have multiple BDMs working for you now, talk to me a little bit about – let’s start at a high level, let’s talk about the structure, because you’re doing something that is unconventional.
I do these interviews and I’ve spoken with a lot of folks that are really trying to achieve significant scale, but the flavour of what you’re doing is a little different.
0:25:38.2 Let’s start there and then we can dive into the nuts and bolts, but talk to me about the expansion structure, the BDM structure, the satellite structure, how does all that work on a practical level.
Steve: 0:25:49.1 Sure, sure. Yeah, and I mean, I’m in the heat of battle. We just hired a BDM in Dallas, so we’re right in the heat of it. But, essentially what we’ve done is we’ve created a business model where we have a BDM – let’s just say a manual, and that manual is very specific of what this person does.
0:26:09.1 And it’s specific in the fact that this person has scripts, they have email templates, they have everything that they need to succeed as a BDM. It also – are required to utilize the scripts and everything that they have, but it’s also a matter of daily meetings.
0:26:28.0 We have daily KPI meetings, our – everything we do is tracked, so you know, for example, when it comes to the marketing guy, the marketing guy is spending the money. You know, he has a budget. And he’s spending the budget. And then we want to know, what are we getting for what that budget – where’s that money coming?
Is it – where are the leads coming from? All Property Management? Online? AdWords? Click? Where are they coming from?
And then once we get them, how are we converting them? Are these good leads or are they bad leads? Because, just cause you’re throwing money at something and people are calling, doesn’t necessarily mean it’s a good thing. And more importantly, are they good owners or bad owners?
So, the BDMs have a very vital role of tracking this information, because that is giving us feedback to tell us, not only what is working, but more importantly, what is not working. 0:27:15.3 And that is the key.
So when we hire these BDMs, we have to hold them very accountable to what they’re doing with very specific guidelines, roles and KPIs.
0:27:27.3 So I have a sales director. I believe you met her when we were speaking at your PM Growth. Kelly. And Kelly is basically in charge of the sales team.
So I have three – I’m sorry, I have four BDMs here in the Houston area and right now we have one in Dallas. 0:27:43.7 And this guy is just basically dovetailing in with the rest of the team. We do daily training with the team every morning for 20 minutes – sales meeting.
And all the successful companies that I have researched and talked to and found, they all do these type of repetition meetings to keep everyone on track. 0:28:03.9 It’s like swinging the golf club right? Everyone’s got to go up and swing the club a couple times before you hit it. Same thing. I want these guys swinging the club and then we do script training once a week.
0:28:13.0 And discuss any challenges. So, on a mindset level, on an education level, that’s how we are doing that.
0:28:20.5 Now, what we’re doing with our business model is, all of these offices are satellite offices through the Houston area, and the way we did that is we wanted to test the system by seeing – could we go from one location, which October of last year we had one location, and we decided by the end of the year we were going to create seven satellite offices.
0:28:40.9 Now the reason we created the seven satellite offices, is because the BDMs were losing a lot of conversion due to a lot of windshield time. Because Houston is a rather large city with traffic and because of that, you’re going to lose conversions by not getting – being able to make it to appointments.
0:28:58.1 So what we did is we sectored off the city to basically a pie shape if you will, of Houston, and that is a sector of town, and so when leads come in they go to that sector, and when they utilize that sector, that BDM gets the leads, and there’s a property manager in that sector as well. So it’s almost like a mini-team that handles that.
0:29:18.3 And so that was the first test to basically – if you will – let’s just say, stretch the balloon. For just Houston, to see, ok can we stretch the system. And we did that and successfully. That worked well.
So then we said, ok now what we’re going to do is we’re going into, let’s say, Dallas and we’re going to put five satellite locations throughout Dallas where we wanted, but all the main marketing, branding, SEO, accounting, is all going to be done in the HQ, which is in Houston.
0:29:51.1 But these little satellite nimble offices of teams, we’re going to have a BDM, and a property manager, and assistant property manager in each sector, if you will, and that will be the makeup of our model.
Jordan: 0:30:04.5 Talk to me about why windshield time matters. Why does a BDM, in your model, need to actually be meeting in person? Why not have all the BDMs work out of the central office and just cut out doing in-person meetings altogether?
Steve: 0:30:17.9 Well, the challenge we had, and again, it’s just the way that we close and sell, is – we have learned that you’re going to have a much better chance of closing a client when you’re standing in front of them.
And by getting in front of them, it – you know, people want you to see their house, you want to create that rapport, and – not to make this a whole closing session, but you know, people buy on emotion and they back it up with logic. 0:30:45.4
0:30:45.4 So they’re going to buy on emotion. You know, when you go to a car dealership, you’re buying a car – the reality is you’re buying that car because you like that salesperson. I don’t care what anybody says, you may like a Toyota, a Ford, a Honda, you’re going to close on the deal because you like the salesperson at the end of the day.
The same is true with anything. 0:31:02.9 You can be convinced to buy anything. You know, a property management company, let’s face it, we collect rent, we do our job, the guy down the street, he collects rent, he does his job.
What’s the differentiator? The differentiator is the person standing in front of him at the time that knows how to create rapport, get some global values with them, create some common ground and by doing that, they’re going to get some commonality and they’re going to see value in our company because we’re standing in front of them.
0:31:27.3 So, we’ve tried the various ways, and I mean, last year Kelly, the girl you met, she closed 289 doors. And that guy was running ragged, but the sad thing is, we left a lot of conversions on the table because she couldn’t get to them all.
Jordan: 0:31:46.2 So let’s go back to cost and value. Windshield time represents a labour dollar. You’re choosing to deploy that labour dollar by having those folks continue to do in-person meetings, focusing on high-touch service, the presence, etc.
But I think, and I have to assume that that decision is at least in part influenced by the value that you place on each one of these owner relationships. 0:32:10.6 Walk me through how you think about the lifetime value of a customer in your business.
Steve: 0:32:14.4 Sure. And just to kind of touch on this as well, about 50% of our clients do not live in the state of Texas or in the country.
0:32:22.4 So, because I do a lot of speaking out of state and out of country at a lot of conventions, we actually do drive a lot of traffic from Asia and Australia and Israel to our site and stuff.
0:32:33.6 So we do get a lot – we do close a lot of doors, don’t get me wrong, from that, but when you’re closing 289 doors, if you’re doing 50% of that, 140 doors are being closed by driving around. So just kind of – well we can circle back to that, but 0:32:48.4 – I’m sorry, what was your original question?
Jordan: My question was regardless, you’re still willing to make the commitment in person to show up at people’s doors where somebody else says no. Hire a call-centre, do it all centralized, refused to do in-person, use Join.Me sessions exclusively. What I’m asking is, 0:33:05.7
0:33:06.3 How do you value your average lifetime value of a given customer? Because regardless of whether or not it’s marketing or how you’re running your sales labour costs, that’s going to impact that, so how do you evaluate what a customer’s worth?
Steve: 0:33:20.7 That’s a great question and it goes back to knowing your numbers. And so just to give you an example, the average property management company, they value their client – the revenue per door is roughly about $2200 per door.
We’re running $3500 – 3700 per door, per year in revenue. So we are essentially getting more dollars out of that property. 0:33:44.3 We do a lot of upper end properties, so we are getting a lot more value on the revenue side from that.
Again, going back to knowing your numbers, if you didn’t know your numbers and you didn’t track this, you wouldn’t know the difference between one property management agreement and another. We’re very precise on the type of clients we want, we’re very selective.
0:34:03.9 More importantly, one of the reasons – going to that is, as they are interviewing us, we are also interviewing them. Because it is a bi-lateral agreement that we want to make sure that I am not going to put my property managers in a huge stressful situation because I just brought a guy on that has a bad property or he’s a bad owner.
0:34:25.0 So one of the reasons we want to do that is we want to put eyes on the property to actually see what is this guy handing us. Because his definition of a make-ready could be completely different from what we consider made-ready.
0:34:36.7 And we have learned to be very, very strict on our clients and on our properties to not just – we don’t just take any property. We have limits. We won’t take low-end properties. Probably because I’ve owned them in the past.
0:34:50.4 But we’ve learned what we don’t want. And so a lot of that – we explain to them – we let them know, “Look, just like you’re interviewing us, we’re also interviewing you, because this has to match us as well. You know we’d love your business, but we don’t need your business,” so there’s a difference there. I’m not begging for your business. I think that I can offer value to you and I think that you will get value from us, but it’s got to be mutual.
0:35:13.2 So, I guess to go back to your question, one of the biggest challenges was, you know, we used to close doors, a lot of doors, especially when I was doing it the first time around. I would just – I’ll close anybody and I love the challenge of closing them. And all of a sudden we’d get doors and we’re like, “You’ve got that? Like why in the world would you have brought that property on?” It’s like, “Well it was a challenge and I wanted to see if I could try to close them.”
It’s like, “Yeah, but now we have to deal with this guy, we have to deal with the tenant or the roof is caved in.” 0:35:40.2 So a lot of it is just putting visual eyes on the property I guess as well.
Jordan: 0:35:43.7 What’s the assumption you make about how long a customer will stick with you?
Steve: 0:35:47.3 Right now what – you know, we’re going on five years. Our current is 39 months.
Jordan: 0:35:53.6 And what’s the assumption about the number of properties that your average owner will have?
Steve: 0:35:59.3 Our current owners are 120.
Jordan: 0:36:03.3 How do you think about expanding that? Do you have any kind of investment programs to encourage your owners to buy more doors and have you guys manage them?
Steve: 0:36:11.6 That’s a great question. We’re actually launching a program for our owners because again, going back to numbers – what people don’t realize is the lowest acquisition cost is to get your current owners to buy more.
Now statistically, the average owner in the US owns three to five properties. Our owners own 1.8. So if we could get each of our owners to buy one more property, which would bring them up to the national average, we would double the size of our business with zero acquisition cost.
0:36:41.0 So, absolutely. I mean, that is a huge thing. So what we’re doing, is we’re actually taking a step further where we’re putting in a specialist agent of ours that is only going to work with our owners. They’re going to work with their portfolio, we’re going to assess their portfolio, see how much equity they have in their properties, and have intelligent conversations with them to say, “Look, you know, you have one property.
No one is going to get wealthy off of one property, let’s be realistic. It’s only going to work in multiples. Let us help you get to that vision. When we first talked, you said you wanted to retire on real estate. Well that’s not going to happen with one property.”
0:37:14.1 So a lot of times, they just don’t realize how to do it. Now something that’s very interesting, Jordan, is you know, we’re a full brokerage company and one of the things I’ve noticed is, for example, last year, like I said, Kelly closed 289 doors, but we did not do 289 sales.
0:37:30.7 So that tells me there’s a disconnect, because people knew enough to find us for managing properties, they didn’t know us enough to find us to help them find that property.
0:37:40.8 So there’s a disconnect there that you know, we could have gotten those sales had they thought to use us. And again, when we talked to them they said, “I didn’t know you did that.”
So I said, ok we have a message disconnect that we need to let people know that hey, we can help you purchase properties.
Jordan: 0:37:59.4 Now how do you manage that with your relationship with realtors? Do you get a lot of realtor referrals and how do you balance their concern about you having a brokerage with still soliciting referrals from them?
Steve: 0:38:08.7 We do. Believe it or not, we are the number one referred management company by realtors in Houston. The reason is, we have a great referral program. The referral program is actually so good that we won a national award for best marketing in North America because of our return on our dollars.
We had a 1371% return on our marketing dollars. Specifically because of our referral program. 0:38:35.5 So what we do is – agents, the biggest challenge that owners – I’m sorry that realtors and property management companies have is they’re like oil and vinegar right? They don’t mix because they feel that the property management company is stealing the client.
0:38:53.6 So there’s an easy fix to that. The fix is, well, if you bring us a client, how about if we don’t steal them and we give them back to you for the sale. And it was kind of like, well if you do that I’d give you all the business in the world.
So basically, what we do is we write it in the contract with the agent that, “Hey if you give us somebody, we will not be involved in the sale. It’s your client, you get them back.” 0:39:15.8 And just by doing that, we’re giving something up, yeah we’re giving up the sale, but we have all these agents now that are singing our praise.
0:39:21.2 I even took it a step further and I got MC Certified, so I teach accreditation to agents and we specifically talk about this subject. Because it’s kind of like the 800 pound gorilla that nobody wants to address. And I just thought, “Well this stupid.”
And, of course, me not coming from the industry, I’m looking at this from a business standpoint and we know the average cost dollar of what we can make on a client over a lifetime of 39 months as opposed to just doing a sale.
We come out way further out ahead on the management side and in multiples. You know, we have brought so many agents – online, inbound, our website is our number one referral. Number two is agent referrals. 0:39:57.9 So we know we get a lot of agent referrals because of our program.
Jordan: 0:40:04.2 So Steve, you have ready answers to the majority of my questions and in part that’s because you’re a smart, thoughtful guy. But that’s also because you articulate yourself in a way that is accessible, packaged. Some might use the word personal branding.
When you think about the brand positioning of your organization, how do you think about the value of something like that, that really can be difficult to measure. You get the leads from APM, you’re managing a close rate that’s very straightforward. It’s not the same with you doing a podcast. It’s not the same with you putting your face on the side of a bus necessarily.
0:40:40.7 How do you think about the softer elements of branding and walk me through the progressive investment that you’ve made in that aspect of your business.
Steve: 0:40:47.9 Sure. And you know, people do business with who they trust. And my thing is – really coming from the heart – of when I was first learning this business, there was no one there to teach me the mistakes that I made. And I just had, from pure determination of not wanting to quit and not accepting the fact that I was going to get beat by having 35 rental properties that were the wrong ones, or a 50-unit apartment or whatever. I realized that I needed help.
So now that I’m in a position that I can help people, I like the fact that I can give advice and Pete and myself, we do it all the time where we help people. We tell them, “Look, we’re just like you. We’re investors. If I can learn something by helping you, I’ve got no problem doing that.”
And I think what I’ve been able to do over time, not really on purpose, is be able to build that trust. 0:41:38.4 Well, I’ve taken that further and I do a lot of video blogs and Alex was instrumental at Fourandhalf to show me that building the trust of – and I think it’s just because I really want to do it. I really enjoy helping people and not just try to sell them on my service.
0:41:55.3 Because the reality is, if you’re trusted and people like you, they’re going to do business with you. If I can help somebody do a conversation and they feel a little bit better about how to sell themselves or how to do something, they are going to come back and do business with us.
And you know, we have a radio show that we’re on every week, and I do the podcast and speaking events. 0:42:13.3 I just enjoy trying to help people and I think that just kind of, as you said, I think it shines through.
And I’m glad it does, because I don’t have an ulterior motive that – yeah, I’m in business and I want to make money, and just like everybody I want to – I’ve got 26 employees that I want to make sure that we feed and house and all that, but at the end of the day I want someone to leave with a little bit more knowledge than when they started when they talked to me. And if I can do that, then I’m happy.
Jordan: 0:42:40.4 So it’s about service, it’s about focusing on the client, but it’s also about filling the leadership vacuum and providing people a source of where they can get information that is really going to make a difference in their lives. 0:42:53.7 I totally see the value of that.
0:42:55.9 Going back to the focus on the BDM structure. Can you walk me through comp model and reporting for how you manage this BDM labour force?
Steve: 0:43:04.2 Absolutely. So the comp model, we give them a small base per month and then they get a percentage of the deal that they close. So we value the percentage on the agreement of a 12 month agreement with the client. So they’re getting a percentage based on that.
And then we make it an escalating where when they get up into the higher numbers, you know, my business model is that each BDM is closing 20 doors per sector. 0:43:33.9 That’s how the business model is forecasted to be built out.
So my job is, if I want them to have a 50-75% conversion rate, where the industry average I think is maybe 12%, I’m not sure. That’s because they don’t train, and they don’t do that. I think 50% to 75% is a realistic conversion rate if they’re equipped with the right tools of training and education.
You know, just like having a LeadSimple and having the drip campaign. I mean those are – that’s a whole other conversation, but I’m a huge believer in drip campaigns and emails and CRM systems.
0:44:09.1 But in any event, the – so they’re paid on that. They get a percentage and we also allow them to do leases if they want. So they can offset their income by getting leases.
You know, when you have 700 properties, the average property management company has a 10% vacancy. We run about 5.6% vacancy factor right now. But still, it’s just a number but you know, that’s 35-40 doors a month that are vacant in your portfolio.
0:44:36.9 So, obviously these things need to be leased out and it’s nice that when they get a client that they’re the ones that’s actually leasing the property for that client.
0:44:45.3 Now we have agents that can do it, but if the BDM wants to do it, I feel it’s fair because I want them to offset their income as long as it doesn’t affect their KPIs. If they’re going and going and they’re doing what they’re supposed to do and they’re meeting their criteria, than they’re fine. If they’re not, then that’s something that’s going to go, because their real position is to close doors.
0:45:06.4 So one of the things we do is a very simple way is by – people can do it with spreadsheets, we were using a Google spreadsheet. We have a more complicated system now, but we were using a Google spreadsheet of – first of all, I want to know how many people called you today? How many people raised their hand and said, “I want to know about Empire Industries.” Ok? That’s a number.
Then I want to know how many people did you get back to. Because that’s going to be a ratio. And if you said, “Hey I had ten people call me today and I only got back to two of them,” well that’s going to affect your door closing rate.
Then I said, “Ok, if you got to that – of the people that you talked to, how many appointments did you set?” Ok? That’s going to be another ratio. Then I want to know, “Ok, of those appointments that you set, how many people did you make an appointment in person and how many were on the phone?”
0:45:54.3 And again, it’s not good or bad, it just is. It’s information, data, that we can look at. Because we may say, “This person’s only setting phone appointments.” Well they may only be getting international clients. That’s ok, but I just want to know that.
0:46:08.0 Then I want to know, “Ok, how many contracts have you signed and how many contracts are out waiting for signature?”
So if you look at this in a larger picture, that’s a breakdown right? And these are daily. I want these done daily. And these are reviewed in the morning meetings. But if you think about it Jordan, what I want to know, is where – let’s say, for example, let’s say that this person is not closing any doors. Ok?
I can look at this and go, I can either say this person sucks because they’re not closing doors, or I can look and go, “You know what? They’re not getting back to anybody? What are they doing during the day that they’re not getting back to anybody? That’s where the problem is. That’s where the kink in the system is.”
0:46:45.2 And they may say, “Well I’m leasing a lot of properties.” It’s like, “Ok well that’s where the problem is. It’s not that you suck at closing doors, you’re just not doing good with your time management and we need to take that away.”
Or, the other thing I can say, “Ok, you’re calling people back, you’re setting appointments, you’re going to the appointment, but you’re not closing the door there.” That tells me that’s the scripts that we need to work on because all of my BDMs are very strict in their scripts. I want them to say it, I want them to swing that golf club the same way every single time like they own it.
0:47:14.4 And, you know, when you’re selling, either you’re being sold or you’re selling. And if you’re not controlling the conversation, you’re being controlled. So I’m very strict on that.
But more importantly, if I’m listening to what they’re doing and all of a sudden I look and go, “Well this is where the problem is, this is just – we can work on this and we can fix this.”
Instead of throwing them and just bundling it up and saying, “You’re horrible, you need to go,” I can actually break it down and see where the challenge is and fix that challenge. Does that make sense?
Jordan: 0:47:41.3 That makes a ton of sense. I love the specificity. But what you’re really talking about is ownership. You can blame the lead source, you can blame the BDM, or you can blame yourself.
And you’re choosing to take comprehensive ownership over the situation and building out the instrumentation that allows you to actually execute against that game plan.
0:47:58.1 One of the follow up questions that I have was, you talked earlier about the mindset difference between marketing and sales. Well, there’s also a mindset difference between inbound and outbound within the context of sales.
If you want a BDM to be closing 20 deals a month at a 50% close rate, you need 40 leads a month. Are you taking responsibility for feeding them all 40, or are you expecting them to also do some hunting as well?
Steve: 0:48:23.4 We take responsibility for feeding them the 40. We built up this system through stuff, through Alex and through you and things that we’ve learned from your guys’ knowledge and following what you do.
Again, I’m not the smartest guy in the world, I just want to follow successful people. 0:48:39.2 You guys have great systems, I’ve listened to you talk, I’ve listened to things that you do and we take pieces from everybody.
And we have – I mean, I’ve been in business five years, I’ve got over 30,000 something people in my database. I talk to people that have been in business for 20 years and they have 300. I’m like, do you notice a problem here? They don’t look at that database as making them money.
We look at it as we can make money with that database by drip campaign, by AdWords, by having created – you know, I create as many ebooks as Alex will print for me basically. But you know, I’m a firm believer in – we get a lot of repeat business because of our drip campaign.
0:49:19.8 You know, people that – I don’t know if you get a lot of people that see the value in your system, but if they don’t, they’re crazy, because having that drip campaign and having that CRM system – if we didn’t have that, there’s no way we would have the repeat business that we do. Because once we put them on that drip campaign, we’re getting them for like seven years.
0:49:37.5 And it’s funny because when – we do a lot of owner education series and networking events, and people that I don’t even know, they’ll come up to me and they’ll be like, “I get your emails.” And I’m waiting for the other shoe to drop.
And they say, “You know what, those are very informative, thank you.” But I think it’s because I give good valuable content. I don’t just talk about how great I am, we talk about, you know, “Is your house being used as a meth lab and here’s ways that you can figure it out.” “How do you get the best tenant who doesn’t complain all the time.”
0:50:00.6 So I try to give good data but that is because of the drip campaign. And going back to your original question, that is how we are able to feed the leads to the BDM.
0:50:11.1 So we’re averaging anywhere between 120 and 150 leads per month, but as you know, Jordan, that is a pure derivative of our acquisition cost per lead, and if we want more leads, we just increase our marketing budget. So we say, “Hey we want to get 200 leads.” T
hat’s a direct derivative of math and saying, “Well, we just need to invest more money in marketing and we’ll get more leads.” If you don’t put any money into marketing, you’re not going to get any leads. 0:50:39.7 And that’s how I’ve been taught at least.
Jordan: 0:50:40.6 So what is the constraint with growth then? I mean, right out of the gate, you’re talking about some significant lead generation. Well, a lot of people come to me and say, “Hey, I’m thinking about growing,” and they start off wondering where can I get some leads.
Well, we can very quickly go over the list. APM, pay-per-click, management property, Fourandhalf, blah, blah, blah. It’s not a particularly strategic conversation. 0:51:01.2 You can cobble some leads together and as soon as you say, “Well, should I use APM or this, that or the other?” you’re making an assumption about having very limited lead flow. If you’re trying to grow aggressively, you have to cobble together multiple, disparate sources that will add up to a significant lead flow.
But at a 150 leads a month, that’s pushing it. I mean, you’re talking about some pretty, not-out-of-the-box strategies. You can’t just swipe a credit card your way into 150 leads a month. As you’re thinking about growing, do you think that lead flow is going to be a significant constraint? Or do you think that the big constraints will be in other pieces of the business?
Steve: 0:51:41.3 I think it’s not ‘or’ I think it’s ‘and’. To answer all of those questions. I don’t think it’s one or the other. First of all, when it comes to the leads, that – the way we’ve been able to get these leads is we’ve cultivated them.
We’re number one on the front page of Google. Right? So that doesn’t just happen, you’ve got to get there organically. 0:52:01.4 Now that we’re on the front page of Google, we have 330 4.8 star Google reviews. So people look at us and they go, “Huh, this guy’s got 328 Google reviews, the next guy has 50.” What are you going to do? You’re probably going to click on them.
0:52:16.9 Then they click on our website. Then they go, “Oh, let’s see some information. Well they won a national award, they’ve got a lot of education. Let me look at some of these blogs. Oh? This guy’s got five ebooks, let me print an ebook.
Oh now he’s in our CRM system. Now I’m getting emails from this guy. Now he’s tracking me on Facebook. Now I’m seeing ads on Facebook about it.”
0:52:33.7 So, it’s not one thing that creates those leads, it’s a culmination of a bunch – of a lot of work. As you know Jordan, it’s not easy doing all these things. These are things that we have been working on for years to try to get us there.
And it’s not a set it and forget it. We’ve got to constantly be tweaking and changing this business, because you know, algorithms change, things change. You know, we do All Property Management. We do Google Clicks.
We fire on all cylinders. 0:52:59.7 We do the referrals. You know, I’ve got a radio show, I do podcasts, I speak at investor conventions in Seattle and other countries. 0:53:09.0 So it’s not one thing.
0:53:18.8 So you know, the one thing you have to – that we have learned on the management side is, you know, management and sales is almost polar opposites right? When sales is happy and they’re kicking butt, that means operation is slammed because we’re handing them ten, 15 doors a week. Going, “Here you go, here you go.” And operations is going, “Enough! Enough!”
0:53:30.8 But when operations is happy and they’re smooth, that means sales is sucking because they’re not closing doors. So it’s almost like a yin and yang and we’ve learned that’s just part of the business and my job is sales and marketing as I’m sure you can tell. Or listeners can tell. 0:53:45.1
My partner Pete’s job is operations. So my goal is to break him every month and his goal is to keep up. Essentially. And so, you know, what we have learned by having – going back to the original, you know – when we’re talking about the old chart and the roles, it’s just a matter of adding more staff.
And a lot of people are afraid to add staff when they grow because they think, “I can’t afford it.” 0:54:06.5 You know, we had staff all the time because we were getting ready for all the growth that we’re doing, and if we’re having a challenge or a bottleneck, you know, sometimes it’s a matter of saying, “Hey you know what, you’ve got to look at this from a business standpoint.”
And a business standpoint may be, “Yeah, you’re going to take a dip in profit, but you’re going to be able to grow,” and that’s just a strategic view of the company, which I think a lot of people don’t look at it that way.
0:54:29.6 They look at is more of, “I can’t afford to hire someone.” It’s like, “Well you can’t afford not to hire someone.” It’s more of a control, self-sabotage issue, which goes back to the mindset, I guess, that people want to have that control.
And they go, “Oh no one can do it as good as me, I better just step in and do it.” My reality is, is you know what, I don’t have to do it good, I just want someone that can do it and if I train them right, they’re going to get it and they’re probably going to do it better than me. I just don’t want to admit, is what normally happens.
Jordan: 0:54:58.5 Totally makes sense to me, Steve. And I want to move on to some of the rapid-fire questions that we cover at the end of each interview.
0:55:03.7 And the first one is really tailored for what you’ve been talking about, going back to the mindset issue, there’s all kinds of responses that somebody can have that fly in the face of growth, and I want to get your take on one very specific response, which is, “I don’t have time. I want to invest like you do, Steve. I want to work in the business, I want to implement the things that you’re talking about, but I’m managing my current doors, managing my staff, and I just don’t have time.”
0:55:33.5 How do you respond to that objection or excuse?
Steve: 0:55:35.5 You know, it’s funny. People always tell me, “I can’t.” And they tell me all the reasons they can’t do something. And I always tell them it’s funny, I never hear someone tell me why they can. They always tell me why they can’t. And everyone’s always geared to say no.
And my answer to them is, “Look, I’ve got another job. I’m an airline pilot. I’ve grown a company. I have a family. I get up at 4:00am and go to the gym, so don’t tell me you can’t do something. Just say you don’t want to. Because anybody can do it if you put your mind to it.
You have to trade one addiction for another. You have to say, ‘I am willing to not do this so that I can do that’.” 0:56:09.9 And part of that is having the goal. So they can do it, that’s just normally their excuse why they can’t.
And I’m a very passionate person when it comes to this, because it’s like, you know what, anybody can do it. I didn’t come from money. I didn’t come from knowledge. I didn’t go to a business school. I think you grew up in the same area I did of East LA.
I grew up in a very, not so great area. 0:56:30.3 So don’t tell me you can’t do it. Anyone can do it if you try to. So I just – I have a very hard time letting people talk – it’s like the self-sabotage. They want someone to say, “It’s ok, you don’t have to do it.” And I just say, “You know what, I don’t believe that. I don’t accept that as an answer. You can do it, or just say, ‘You know what I can’t do it and I’m going to quit.’ But don’t lie to yourself.”
Jordan: 0:56:51.8 So step one is taking ownership. Just reframing the issue and just saying, “I’m actively choosing not to do this instead of making a circumstantial thing which I love.
I’m reminded of the book, Extreme Ownership, by Jocko Willink 0:57:05.9 a really good book for anyone who hasn’t read it.
0:57:08.6 Second question, Steve, is how much is too much to pay for a new management contract? Where do you tap out in terms of your customer acquisition cost?
Steve: 0:57:15.7 Well, our acquisition costs float anywhere between $300 and $700 dollars per client. So, again, you have to – if you – some people say, “Wow, that’s a lot of money.”
Well, it depends. Depends on how much revenue you’re going to make on that, and it depends on how long you’re going to have that client.
0:57:30.6 We know in Houston, the average is anywhere between $500 and $1000 dollars per acquisition client from some of the larger management companies. So we know we’re in that zone.
0:57:41.1 But I guess the answer for other people is, you have to do what works based on your numbers and based on your plan. And if you don’t have those numbers, it’s irrelevant to even have the conversation if you don’t know your own numbers.
Jordan: 0:57:55.3 So where would you tap out though? If I told you that you could buy new management contracts for healthy, attractive, solid value properties at a thousand bucks a pop, do you do that all day long? Where do you tap out?
Steve: 0:58:09.9 I would say at $1000 we would really have to analyze that because the other question is, is could we get them cheaper. You know, we have the ability to do marketing and we have the ability to get our own clients.
0:58:22.5 If we had zero leads coming in, then I would say, “Ah, maybe we don’t need it.” But if I’m getting leads at $345 dollars, and someone says, “Hey I can get you $1000,” I would say, “Ok, well where is the cost benefit.
What is it I’m getting from this $1000 dollar lead? 0:58:36.1 Is it more revenue? Is it a higher rent role? What is it?” So to me it just comes down to simple math and acquisition cost.
Jordan: 0:58:46.4 Next question: Who do you learn from? You’ve mentioned a lot of different names out there. You mentioned that you have a coach, you mentioned that you’re – the name Marshall Silver 0:58:57.9, give me some of the key people in your life that you’ve learned from in your career.
Steve: 0:59:02.8 Well, I would say the number one – Brad Sugars 0:59:05.6 who is the founder of Action Coach. And I’ve learned a lot on business from him.
I really, really like Grant Cardone 0:59:14.0. I listened to – I’ve probably listened to every single one of his books ten times, I’ve gone to his Growth Con Convention. My sales team is actually on Grant Cardone University.
So every morning, they actually study and do the modules from Grant Cardone. So I’m a huge believer in him, in his sales, and his mindset of sales. It’s a really – kind of like me I guess, it’s kind of a no-nonsense approach.
But I would say the people that I actually know and speak with and get mentored by would be the Brad Sugars, the Marshall Silver, the Grant Cardone.
0:59:47.5 You know it’s interesting, these people that I’ve met that are very, very wealthy people, very successful. You would think that they’re untouchable, but you know, the Marshal Silver and the Brad Sugars, I mean, I know them and I have their numbers and when I have a question I can text them or call them.
As long as I’m not wasting their time, they have no problem sharing information and sharing wealth. So if you get the right people to mentor you and train you, you can go a lot further than you would think. And some people say, “Oh they wouldn’t talk to me.” Well that’s just your own negative self-talk trying to make yourself feel better. The reality is they will talk to you and they will help you if you can give something of value back to them. 1:00:23.9 Meaning – you know, we help them as well. We give them benefit.
Jordan: 1:00:28.8 How much is too little, in your mind, in terms of coaching? On a monthly rate, or maybe a one-time? How much do you think you need to spend to actually get a quality coach? Because at a certain small enough dollar amount, you’re wasting your time and you’re probably wasting their time by dealing with somebody who is incompetent. How do you think about the cost of coaching?
Steve: 1:00:48.5 You know, I have personally probably spent, gosh, I’m going to say well over $300,000 dollars. Pete and myself. A gentleman named John Burley who is an amazing teacher. We spent a lot of money. I would say it depends on what you want to get out of it. I mean, we’re coached every month by Doug Winnie, 1:01:10.8 who is the number one coach in the world actually, for action coach.
And we’ve learned that it’s what you get out of it. 1:01:17.3 So for example, Doug as our coach, if we don’t do our stuff, at some point he’s going to say, “You know what, you guys are wasting your time and you’re wasting my time.”
Don’t come back basically what where it would come down. And we’ve seen him fire people. And we’ve been in with him since the beginning. 1:01:33.1 And what’s interesting with that, is every since we’ve been coached, when he says, “Just go and do it, don’t think about it, just listen to what I’m telling you and go do it,” and even though we may disagree or we get that uncomfortable pit in our stomach feeling, like this is not right, I don’t like this, I don’t agree with this, it turns out that we were like, “You know what, that was probably the smartest thing we could have done.”
1:01:55.4 And Jordan, it’s not even just with growth of the company, it could be how to deal with an employee issue. It could be how to deal with the lease contract on a commercial building we’re getting. There’s a lot of things that we utilize these coaches for and mentors, that they’ve been there, they’ve done that, they’ve seen it, that we don’t know.
1:02:11.8 I don’t know how to quantify the numbers. Whatever you feel comfortable. I can tell you for one coach I’ve spent $40,000 dollars, and for another coach I’ve spent $50,000 dollars to spend the weekend with him. I mean, I know people that will spend $30,000 dollars to go to Richard Branson’s island for the weekend. When you’re ready, when – what is it they say, when the student is ready, the teacher appears. 1:02:32.4 . And that’s one of those things – when you’re ready to receive the message, the person will present themselves in front of you.
Jordan: 1:02:40.3 I love it. The first conclusion for me after hiring a coach was I wish I had done this sooner.
1:02:48.2 Final question of the interview. I ask this of every guest on the show, Steve, are entrepreneurs born or bred?
Steve: 1:02:57.4 I think they’re bred. Because I would’ve never been an entrepreneur or wanted to be in this business if I had not had the 9/11 with the airline industry. So I honestly think that you can train yourself to do anything. Now, the drive that I have, I think that is something that is bred. I’m sorry, I think that’s something that I’m born with.
But what I have become and the type of person and the mindset that I’ve had, is all been something that I’ve learned.
1:03:26.2 So, I don’t people start off saying they’re going to be the richest person in the world when they start off being broke. I think they do that because they’ve learned and as they’ve learned – it’s just like people that start off rich and they end up being broke. You know, I don’t think that’s something that you’re born with. I think you know, you are – everyone is born equal and you acclimate to your surroundings and you rise or fall with your mind.
Jordan: 1:03:53.4 Love it. Everybody has a different perspective. I hear what you’re saying. And really you’re saying it kind of straddles both. You can see both sides of the coin. Steve, I appreciate you coming on the show today. If folks want to learn more about what you’re doing, where can they follow you online?
Steve: 1:04:07.1 They can find us on Facebook. We do a lot of great stuff on Facebook. Empire Industries LLC. They can go to our website: EmpireIndustriesLLC.com and they can look at our blog pages and stuff.
And you know, if anyone wants to give me a call and chat with me, I talk to a lot of people. We actually have a lot of people that come to our office and just want to say, “Hey, I just want to see what you guys do, because you guys are doing some stuff.”
And we’re pretty involved with the NARPM and all the other stuff, and we want to give back. So if I can help someone and they want to give me a call and chat with me, I’m always available to help.
And I just really enjoy and I think what you’re doing Jordan is very admirable, the fact that you’re putting yourself out there, taking your time to do this, and you should be commended for being able to help a lot of people.
1:04:55.2 Because, whether you know it or not and whether you meet all these people, you are helping a lot of people overcome things that they probably either don’t know or don’t want to admit. And I think that there’s a lot to be said for that.
Jordan: 1:05:09.3 We’re all doing our part man. Thanks again for coming on the show. Wish you the best.
Steve: Thanks Jordan!