Why Implementing Systems Will Improve Your Business | Propertylogy

Why Implementing Systems Will Improve Your Business

By on August 3, 2016

The difference between maintaining a small business operation and building an empire is systems. Particularly how systems are created and enforce so that scaling activities can be implemented.

Most real estate investors do not see themselves as running a business. This approach to their rental properties is often what is holding them back from quickly expanding their portfolio and profits.

It’s not that there is a lack of funding. It usually, and oddly, a self-acceptance of being unable to handle too many properties simultaneously.

Well if you start off your real estate investing activities with the objective of building systems to manage them, you might find that scaling your business is not as difficult as you think.
The good news is that it is never too late to make systematizing your operations with well laid out processes and protocols.

The sooner you start, the sooner you gain more confidence in taking on properties.

If you need more convincing, here are 3 big benefits that should persude you to start right away.

1) It makes decision making a piece of cake

If you need to balance out the pros and cons before making a decision each time a tenant calls you late in the night, you are already doing too much work.

For example, if a tenant makes a request for a lower rent, you should list down a few criteria to meet before approving that request. Then each time you receive that dreaded call again, you can respond quickly and with certainty whether to grant or decline that request.

This help you avoid making emotional decisions. It also helps you maintain a standard of consistency so that clever tenants don’t use your inconsistency against you in future.

Systems have been the hallmark of great franchises. Although you are not running a franchise, you can still borrow some of the great management methods that made proven companies great.

Going back to the example of lower rental request, if you allow your tenant to think for a moment that he/she could actually sway your decision because you are displaying indecisiveness, the odds are that he/she would double down.

You are not an immovable object. And they will try everything in their black book to influence a compromise from you.

2) You will have more time to grow your business

One of the undisputed advantages of creating operating systems is that it frees up your valuable time so that you can spend it on exploring ways to grow your business and revenue.

You won’t be able to do it when you have to scamper around to solve issues all the time.

Systems will solve your issues for you.

For example if a tenant calls you about a plumbing problem, if you are new to real estating, you might start calling up the plumbers you see in the Yellow Pages and asking for quotes for a list of services.

However, if you had already anticipated these problems, you might have already listed down 3 contractors that have agreed to partner with you with a list of prices they charge for each type of service.

Even then, you can still “niche” down the handling of such issues by deciding if the problem is severe enough to require your attention… by meeting certain criteria.

If for example, a tenant is complaining about the noises coming out of the air-conditioner unit, you might decide that it is not a problem you are obligated to solve as long as the air-conditioner is blowing cold air. You are not a contractor after all.

This not only makes you life less difficult, but it also “trains” tenants to realize that you are not their mother.

If you are to attend to every little issue yourself, you wouldn’t even have time to use the washroom.

Systems will make your schedule that much easier to manage.

And if you have hired property management companies to do the hustle for you, you can still instruct them to adhere to the systems that you have set up religiously. This can be invaluable should you need to change managements one day, or even take on the job yourself.

3) It gives customers more confidence

Nobody likes to get into arguments where there can never be a winner.

Without a set of standards and rules, your tenants might not have a lot of confidence renting from you as they will never have a chance to win an argument against you.

For example, if the air-conditioner is not cold anymore, and it’s stated in your terms that in this event, you will either replace or repair it, your tenants will be comfortable enough to rent from you knowing that they can get you to act should certain criteria is met.

Without systems and rules, people might stay away from doing business with you because there too much risks with too many unknowns.

Credible businesses always have systems in place.

4) It makes financial and budget forecasting more predictable

Without a dependable financial forecast, a business man could be too petrified to expand the business.

When you can predict revenue with a certain degree of certainty, you can work out how much you can budget for acquisition and marketing activities.

And your operating revenue will be most predictable when it is supported by systems in place.

For example, if you have somehow determined that you should not spend more that 10% of revenue on advertising, your system should alert you when you are getting close to your budget.

This helps you avoid overspending and also motivates you to generate more revenue should you want to increase the budget.

If your revenue is not predictable, how are you even going to calculate what comes up to 10% of revenue?


Remember that the systems are created by you.

Even though you should be rigid in following the processes you’ve set up, you have to learn to identify and recognize when things are not practically working. This means that you have to be flexible enough to change and tweak your systems… should it meet certain criteria.

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