Here’s how to set yourself up for success in even the most challenging market environments.

Where do you want your business to be in one year, three years, five years?

Answering this question in a COVID-19 economy may seem tricky. After all, since the pandemic hit, we’ve seen far too many real estate entrepreneurs and businesses stagnate. Their growth plans have failed or been scrapped.

Only the most prepared players have emerged stronger. For real estate firms that have moved forward during the pandemic, it hasn’t all been about cash flow and strong portfolio assets. It’s also been about having a strong blueprint for scaling growth through all cycles. With the right culture and method of executing, you can set yourself up for success in any environment—even a pandemic or market crash.

Let’s take a look at the elements of blueprint for scaling growth in real estate.

 Be Mission-Driven

Purpose-driven companies achieve 30% higher levels of innovation and grow three times faster than competitors, according to Deloitte research. Clearly, culture paves the way for success.

During your high-growth phase in real estate, you may have achieved fast growth by testing innovative ideas, breaking the rules, and/or moving quickly. However, exponential growth can’t be achieved on that strategy alone. You could stagnate or fail after that first growth spurt, especially if you encounter external scenarios like a pandemic.

Verne Harnish, the founder of the Entrepreneurs Organization (EO), has studied why startups struggle after their initial high-growth phase. He cites a lack of focus and alignment on vision—not setting long-term goals, scaling too quickly, or not having a scalable infrastructure. All those issues stem from not having a good culture and clear mission.

Your mission and cultural values should be more than just words. They should be practical. Your team members should understand how to apply those values to their daily work.

You can even create a playbook that is a tool laying out the vision, strategy, and direction of your organization.

In short, in the world of real estate, you and your team need something greater to bind you together.
To scale successfully, you need:

  • A clear mission statement.
  • A definition of your company’s purpose.
  • Core values that your team can live out each day.
  • A vision for where you’ll be in one, three, five, and 10 years.
  • A strategy and practical tools for realizing your mission and vision.

With a great mission, culture, and strategy in place, you’ll have more clarity and focus. And you’ll be able to work with greater purpose.

Embrace a Strong Structure and Discipline

You’ve probably heard that 90% of startups fail. This is true, but it’s not as if they all fall flat on their face. As data from the SBA shows, only 21.5% fail in their first year. Fifty percent of startups fail by their fifth year and 70% by their 10th year.

So, many companies plug along but then fade away over time. They fail to scale successfully, and they eventually die due to cash flow issues, inefficient processes, and other problems. In private lending, home flipping, multifamily investing, and other real estate businesses, we see these issues time and time again.

The problem is, startups experience initial success by being bold and breaking traditions. If that approach helped you get where you are, you may think that’s the right path forward and may not develop a strong organizational structure. This can cause discipline problems and lead to pitfalls such as not having sufficient capital or not doing proper due diligence for a deal.

Real estate startups must focus on structure and discipline as soon as possible. When you’re growing at breakneck speed, you don’t need theories. You need a blueprint for profitable scalability and direction on how to maximize execution.  The success of this blueprint centers on discipline:

  • Disciplined people
  • Disciplined operations
  • Disciplined strategy
  • Disciplined acceleration

 As you get bigger, more is at stake. You simply can’t risk having inefficiencies and poor decision-making. With structure and discipline, you mitigate risks, avoid bottlenecks, and increase your odds of scaling successfully.

Create and Execute a Growth Playbook

Once you’ve instilled a purpose-driven culture and operate with incredible focus and discipline, develop a playbook. This playbook should be able to adapt to the ebbs and flows of the real estate industry, with plug-and-play tools for any scenario.

To design a strategy to grow your business, you must:

  • Determine where you want to go.
  • Understand what drives your mission.
  • Execute on the great ideas that align with your mission, purpose, and value.

This strategy must be clear and actionable, with SMART goals: Specific, Measurable, Achievable, Realistic, and Timely. Keep these goals top of mind. Research shows you’re 42% more likely to achieve your goals if you write them down.

To analyze your successes and failures, you must know your key metrics. For instance, maybe you’d like to do 20% more real estate lending deals in the coming year. Ask yourself questions like:

  • How many more leads do I need to generate to get there?
  • How much more capital do I need from investors?
  • Do I need to hire more team members to achieve this goal?

After answering these questions, you can track those metrics and take steps to close any gaps.

 Rock Star Teams Push You Ahead

Of course, the best plan won’t work without execution. That requires the right people and the right operations.

In real estate, founders wear many hats in the early years. But if you want to scale and make a name for yourself in real estate, you can’t do it all alone. You need A-level talent.

Your team members must not only possess excellent skills but also fit your organizational culture. Companies with high employee engagement are 21% more profitable, according to a Gallup survey. If you have talented individuals who share your values and are engaged, scaling successfully becomes almost natural.

To get and keep rock star talents, you should:

  • Define the right person. For example, if your company is full of entrepreneurs, you should say you want a self-starter who thrives when given autonomy.
  • Be picky. The cost of a bad hire easily exceeds $40,000 for managerial level positions, according to studies. In real estate, the number may actually be between $50,000 and $100,000.    
    Put people in the right role. Put employees in positions where they can best leverage their skills and add value.
  • Set responsibilities and expectations. Team members must know what they need to accomplish. Make their role and their goals clear and achievable.
  • Reward good work. As Gallup research states, recognizing employees is low cost, high impact. It boosts morale and productivity.

With a great team and management system, you can build a company in which people take ownership of their work. That should give you most of what you need to withstand market cycles, economic challenges, and anything the competition throws your way.

Consistent Execution Enables Acceleration

You’ve certainly heard WeWork’s story. Their growth-at-all-costs model made them a venture capital darling—until they weren’t. The rapid growth was expensive and inefficient, and the company has had to retreat.

Scaling like WeWork can be attractive, but you should manage your growth more wisely. Rome wasn’t built in a day.

In Jim Collins’ book Great by Choice he emphasizes the value of consistency through the idea of the 20-mile march. The idea is simple: If you have to walk 3,000 miles, you’re more likely to succeed if you keep a 20-mile pace each day. That way, you can handle any bad weather and tough terrain without overextending yourself.

The same idea applies to real estate business. You don’t achieve greatness in one fell swoop. Greatness comes from consistent work over time.

If you want to scale successfully, focus on consistency. With the right mission, discipline, strategy, and team, consistency becomes much easier to achieve.

You also need specific processes for all that you do, from hiring to how you find and analyze deals. This keeps you working efficiently, ensures you capture new opportunities, and prevents you from entering bad deals (which can significantly hurt growth).

The Secret Weapon to Scale Your Business

If you dream of building a $1-billion-dollar real estate business, first build an elite organization and a blueprint for scaling growth. This should be a practical system that leverages your organization’s mission, purpose, values, and talents.

Along the way, consistently improve organizational culture, structure, and discipline. Develop a sound strategy and execution playbook. And focus on bringing in the talents that can take you to the next level. With clear goals and responsibilities and great leadership, your team will stay disciplined and perform.

Although there’s no one-size-fits-all approach, this blueprint gives you a framework for building an elite real estate organization and scaling your business. Use it in the way that fits your company best. You’ll reap the rewards as your business achieves sustainable success and growth.