I know most here are most likely Inc’d or LLC’d, but i also know that most probably work from home, or a small office with family or no employees.
What I want to know, is how many are, or are planning to move into a commercial space, with more employees (most likely not blood or marriage related employees mind you). And if you are, how many employees do you/ will you have, and what are their functions.
I have always done everything myself, and it just feels weird thinking about hiring others ( I am greedy and want all of the CASH. LOL it’s funny but I am serious!).
I am really thinking about buying a house in a residential/ commercial zone, and make it my office. And having people do some of my work for me might be good for a change. I’ll have more time to spend with my son, more time to shop, more time to get my nails and hair done, ect. ect. At the same time, I don’t want to create more furture competition (like I said, I want all of the cash).
By hiring the right people, you will personally make more cash than you could ever come close to making, working by yourself. Although now you can do it while working less. Most employees will remain employees and not try to be entrepreneurs becaue they've been brain washed for their whole life that they must have a job. Which means, don't expect to hire anyone who cares about your business as much as you. When they go home, they forget all about work. Give them a long term vision of the possibilities for them and they will care a little more.
When I started rehabbing, it was always my intention to make it a real business and not just something I ran around all day and did myself. I must say, it was never so I could get my hair and nails done or to go shopping.
If you have some extra cash I would absolutely recommend getting some office space and hiring employees. When starting out, it’s best to hire people from the bottom up. I never understood why people who do the worst jobs, make the least amount of money, but thats the way it is. But that way, your time is spent on the most valuable things, the things you’d have to pay someone a lot of money to do as an employee. Do this all the way until your looking for a President and COO to take care of the day to day operations and then you can go shopping and get your hair and nails done in France if you want.
If you’d like to know more about how much business operates you can PM me. I don’t want to tell everyone all my secrets!
It sounds GREAT! Rent an office and hire some employees to do all the work. You can sit by the pool or take a spin on your yacht! The only problem is that this is fantasyland!
Forgive me if I’m wrong, but IMBeautiful aren’t you a brand new newbie? Weren’t you talking about hard money? Where is all this money going to come from to pay employees? Where is the money coming from for the office? Who’s going to manage the employees?
I have owned many businesses and had many employees. Many years ago, I owned a business with 50 employees. IT WAS A NIGHTMARE! It was at least as bad as having low income tenants. They did every stupid thing you could imagine and some you couldn’t imagine.
Besides the nightmare of dealing with employees, there is that nasty form 941 and those nasty worker’s comp premiums. The government taxes you to death if you have employees.
My advice is to do as much as you can and hire contractors to do the rest. Grow your business until you can’t get along without employees and then hire only as many as you absolutely need.
Thanks Mike. And you are correct I am new to rehabbing, but I am not new to real estate. I do utilize hard money, and investors. Although I can, I am not at the point where I am willing to use my own money to finance deals. I prefer investors because they are the fastet, with the least amount of tape, then the HMLs. I have enough in savings to finance a couple of my deals right now, but I won’t. I won’t for the same reason I refuse to pay cash for my personal residence, even if I can. If something happens insurance will only pay so much, which is why I am only willing to put in the bare minimum of my own cash for any deal, and I would prefer not to put anything in.
As I said I am thinking about going “business business”. I didn’t give myself a timeline for that. But I do plan on doing it, because my family and my personal time is most important to me (and I need more of it), I believe with the right management in place having employees will allow me to make more deals than going it alone. I am a young mother, and I won’t let a career or business stand in the way of me being able to enjoy my life and my family. Although I don’t believe that I can hire everything out and do nothing; I do believe, I can hire others to do some things, while I concentrate on other things all the while being more productive.
I agree with you to an extent. There is nothing easy about owning a business. It’s very stressful at times and very expensive all the time. There is a huge difference between the revenue my company produces and the money I make. However it would be impossible for me to make what I make if I was operating by myself on residential rehabs. It’s not something for everybody. The most important requirement is to be a type AAA personality.
A small office with a handful of employees is a very simple operation. Especially if you still maintain a very active role in the company (everyone works harder when the boss is around). Just have cash reserves to cover a couple months of the office space, employee wages, etc. Hiring the right people can lead to success, hiring the wrong people WILL lead to failure. It’s always a work in progress.
One thing to think about when hiring employees, is that the reason employees need bosses is not to tell them how they can cut corners, they know how to do that in spades. A boss is needed to tell them to do the job right even if it calls for extra steps.
I just had a tile job done last week. Before I left I told the “head employee” to wash out everything in the back yard. The guys washed out their grout in my new stainless steel kitchen sink. From their point of view it was a smart step saver to wash out their things in the house. A boss has to look at the big picture. A few steps saved is not worth having to buy me a new $500 sink. Having employees means that you don’t just think for yourself but you have to think for each and every one of your employees also.
Hiring employees is an art. There is a constant balance between cost and quality. Hiring the right person (and not idiots) is vital. This is why I don’t wait until I absolutely need someones help but rather can take my time finding the right person for the job before it’s crunch time. There are plenty of good quality employees who don’t need their hands held, it’s just a matter of finding them. Every new employee makes mistakes in the beginning but after some time, most conform to how things are supposed to be.
The majority of my employees work out of their home offices or cars and I don’t see them for days or weeks at a time. We stay in close communication via email and phone and so far there hasn’t been any major problems. Over all, I’ve had great success thanks to my employees and I couldn’t be where I’m at today without them.
Kiyosaki used the term 1:1 vs. 1:n to donate the power of many. He coined the use from the founder of (3Com???) who first developed the theory that the economic power of a network is equal to the square of items in the network (I’m sure I butchered the exact theory, but hopefully you get the point). Basically it means if you keep adding things that add to your economic power, the returns are expoenential - not linear. One example Kiyosaki made was with the fax machine. Adding it didn’t make your economic power grow linearly, but squared:
Economic power before = 1:1^2 = 1
Add fac machine
Economic power after = 1:2^2 = 4
He also apoplied this theory to networking and business in general. Hire a good employee, and the returns are exponential. That’s why they say it’s better to hire good people and pay them good rather than to hire okay (or bad) people and pay them less.
One other thing to remember________empowerment___ You guys are probably saying well it doesnt work or ok John you really think that works. Now i do admit i dont have tons of experience with this but enough to know that when given equity in this case we will say they will be your vip for life. You may be able to do this to a couple people giving yourself a team instead a group of employees. Two keys
Give them the open opportunity, not 50% of the company and see how they perform. Example, you may hire one person that you chose very specifically, you give them a task and say if we do this well you will make 10% of the profit. Now they think we have to do well to increase profit, and dont sit on my butt cause i can do another and another and soon i will make x amount of dollars.
Keep the goals realistic and the rewards definate so that you soon will be giving up more and more money but not until someone in a sense has made you double what you would have made alone. Then repeat process.
Some might also think well this person will go off on their own. This is when you think of what your providing them write it down and dont let them forget. Also keep things to yourself, do not let all of the birds out of the hat at once. In essence you have a super employee that is paid on commision, over time you will build relationships and trust and everyone will be wealthy.
One last thing really think about specialization and needs in accordance to your company. Dont waste your time and dont waste their time, make sure the job is clear cut and makes sense (MONEY) and you will be alright in the end.