I can’t believe the year is about to come to a close. I like these last two weeks of December: Things kind of slow down, and it gives me more time to reflect and plan than I normally get. I’m not closing the books on 2015 yet, and I still have a few projects I would like to wrap up. If there is enough demand, I could do a sort of 2015 wrap up in the beginning of January. We are hoping to wrap up around 50 projects this year — a little short of our goal, which brings me to the topic of my post.
Download Your FREE guide to evicting a tenant!
We hope you never have to evict a tenant, but know it’s always wise to prepare for the worst. Navigating the legal and financial considerations of an eviction can be tricky, even for the most experienced landlords. Lucky for you, the experts at BiggerPockets have put together a FREE Guide to Evicting Tenants so you can protect your property and investments.
The Decision to Add on Employees
I have been giving a lot of thought over the last couple of years about the growth of our organization. I’m extremely excited about how things have continued to grow. I’ve met and continue to meet a lot of interesting people here on BP. It’s had a substantial impact on my business. There are a few bottlenecks that keep coming up in my business, and I have slowly come to the conclusion that it is due to a shortage of manpower. So, the biggest thing that I plan to do in the coming year is to hire more people.
My partners and I work tons of hours trying to keep up with everything, and we have been slow to bring on workers. I hate adding expenses without adding more revenue, but I realize that there is stuff that falls through the cracks, and it is because there is too much work to go around. I’m at a point in my business where it is more costly to my growth to not hire personnel than the expense of hiring them.
The first person that we are currently interviewing is a project manager. We’ve had too many delays this year, and while it did cost us some additional money in carrying costs, the bigger cost was opportunities. We ended up missing out on good deals because we weren’t in the position to take down another property. Going forward, I would rather be in a position of having excess capacity than always being in overdrive and barely keeping up. This is a big step for our company because we’ve always tried to keep up by working harder or more hours.
No matter the size of your business, there are always things that you could assign to someone else by hiring them. This will give you the time to focus on activities that would help you get closer to your goal. Even now, I find myself doing things that doesn’t really contribute to the bottom line because quite frankly, I’ve always done them and I’ve never gotten around to getting someone else to do it.
Making Money by Spending Money
There are probably low skill tasks that you do, which prevents you from doing things that will help you make you more money. The mental block that I’ve always had is spending my own time versus spending my money. It took me a long time to come to the conclusion that it is better for me to spend the money than do it myself as long as I can reallocate that time to an endeavor that generates greater value.
I encourage you to start examining decisions that you make in regard to your actual time value. Caution: You need to be realistic about what your time is actually worth. There are plenty of books that talk about this concept and assign very high values to some tasks. Don’t assign $500 an hour to a task if you aren’t actually making that type of money. And start small. Maybe you hire a landscaper to mow your lawn. I stopped mowing my lawn a few years back. It would take me two hours to do everything, and I hired a company for $25 a week. I just got back two hours of my time for $12.50 an hour. That is a no brainer to me. But if you have excess time and you are short on capital, that might not be the right decision.
To try to bring it back, this year I am focusing on making sure that there is not a shortage of workers in my business. I want to have excess capacity so that I can continue to grow my business and be able to find more opportunities. I don’t want to continue to reallocate the same resources that I had before to try to cover more and more. It is a losing battle, and my employees are showing signs of fatigue.
Leave me some thoughts. Do you have any big plans for 2016?
Let me know with a comment!