Business Management

2 Questions to Ask Yourself Before Scaling Your Business (& 3 Easy Steps to Get Started)

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“We delight in the beauty of the butterfly but rarely admit the changes it has gone through to achieve that beauty.” —Maya Angelou

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It seems like yesterday. I was scouring the internet looking for articles on scaling one’s business. While there is a lot of information for both newbie real estate investors and people who are doing hundreds of deals a year, there is not a lot of content available for people transitioning from newbie to veteran.

So for anyone looking to get out of the newbie group, this article is for you!

Scaling your business is a topic that will inevitably arise if your business is doing well. While it may seem like a natural progression, it is not for everyone. Before biting off more than you can chew, ask yourself the following questions to confirm that your business is scalable. 

Related: Scaling From Single Family to Commercial Real Estate

Questions to Ask Yourself Prior to Scaling Your Business

The first question you should be asking is do you want to scale? Bigger is not always better. If you are doing well on a smaller scale, you could just sustain your current business model and still be successful. The other point to consider is if you are prepared for the additional work and stress that comes along with transitioning your business.

The second question is, is it feasible to grow? In other words, do you have the infrastructure to grow (available inventory, access to additional capital, and manpower)? To answer this question, look at all of the components that make your business successful currently, and see if you can double it.

If the answers to these questions confirm your initial thoughts of wanting to scale, then you are ready to take these next steps.

Mans Hand Reaching For Red Ladder Leading To A Blue Sky

How to Begin Scaling Your Business

  1. Check with your current team about whether they are also able to handle the additional workload. If anyone is uncertain and/or cannot, then it is time to look for back-ups/additional resources. This is probably something you do not want to do. It takes a lot of work to identify resources; however, if you do not identify the additional support now, you may regret it in the long term!
  2. Check with your funding sources about whether they are able to lend on more opportunities. Wanting to scale is one thing, but being able to do so is another. Obviously financing is a component that can be rate limiting. If your current resources are not able to provide additional funding, it is time to look for some new contacts.
  3. And once these two steps are resolved, it is time for the fun part: Begin hunting for opportunities! If you are passionate about growing your business, this step is probably second nature for you!  

Related: BiggerPockets Podcast 181: Finding Deals & Scaling in a Competitive Market with Lauren Hardy

As your business continues to expand, it will face new challenges. Don’t get discouraged, as this is actually a sign of growth! It’s only when your challenges stay the same that you should be concerned.

Stay focused, take it one day at a time, and be as proactive as possible when a hurdle arises. Remember, you did not build your business overnight, so you will not be able to grow overnight either! 

As a good friend of mine always says, “Be impatient with action, but patient with results.”

Have you received any other beneficial scaling advice, or do you have any helpful tips to share from your experience? 

Leave a comment below!

Ashley Wilson, co-founder of HouseItLook LLC and Bar Down Investments LLC, started investing in real estate in 2010 with a single rental property. HouseItLook, located in the suburbs of Philadelphi...
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    Wenda Kennedy JD from Nikiski, Alaska
    Replied 3 months ago
    This week, I was talking about this issue with a friend in our investors' group. My friend and I each do our own management. He was asking me what he could expect to lose in his profits (cash flow) from hiring a property manager, on top of the property management fees. He's asked me to speak to this issue in an upcoming meeting. I know that by scaling one's business, you must hire a team of people and give a lot of the hands-on control. It's a trade-off among one's time, personal control and bottom-line profits. Yes, you're probably thinking that my friend and I are control freaks. I'll admit to that on some levels. On the other side of the question, no one is going to take care of my tenants and my properties like I am. And, no one around me comes close to having my years of experience in this business. I don't even have to think about what to do and when to do it. That's why I don't want to scale up my investments. I make a better return on my investments just plugging along. And I don't have to worry about what a property manager is doing on my behalf.
    Andrew Syrios Residential Real Estate Investor from Kansas City, Missouri
    Replied 3 months ago
    It's very true. Not everyone wants to go big nor does everyone need to. "What do I actually want?" is a very simple question many forget to ask when seeking to grow their company.
    Kevin Polite Flipper/Rehabber from Decatur Atlanta, GA
    Replied 3 months ago
    Great topic and one that I've found challenging. The problem is manpower. As I'm not a GC and it is difficult to find a team that you can consistently work with and that does business the same way you do. I find is fairly easy to find a GC, but difficult to find one who is a good Project Manager. Those are mutually exclusive skill sets. I find myself project managing and that can upset a GC and make them feel they are being micromanaged even though they'll call and say I need such and such ordered when they should have told you 2 weeks ago. Some are horrible at business and well some are less than honest. Unless you're a production homebuilder it's difficult to program your construction because each house is different. If you were building 20 homes that are all basically the same except with a few tweaks here and there and a different facade you could easily set up a program for your contractor. However, in the areas I buy most homes are different even if they are in the same area. Also, you never know what you'll find when you open up the walls. Thanks for writing this article. You're right about finding articles where you're no longer a newbie nor are you doing hundreds of deals a year, which is the not the scale I'm looking for.