You will also discover how he was able to automate his marketing process, how the business has transformed into one that can run without him, and what he learned from being a part of a mentorship program called FortuneBuilders!
OWEN: My guest today is Sam Craven and he is the co-founder at Senna House Buyers. Sam, welcome to the show.
SAM: Thanks Owen, I really appreciate it. It’s an honor to be here.
OWEN: Awesome. This show is all about going out there and talking to entrepreneurs like you and finding out how exactly you systematize your business so that it can run without you successfully. Before we even talk about what you even did to do that I want to know what are some mind-blowing results that you now experience as a result of going through that process of systematizing and automating your business.
SAM: We started our company about 3 year ago, and our first year in business we only did about a million and a half in sales. And this year, three years later we’re going to do well over $10 million.
OWEN: That is mind blowing. Now I’m going to listen to how you did that. How has your company been transformed as a result of systematizing your business?
SAM: It really allows us the leaders to lead the company and steer the company, and at the same time allows the technicians to excel in their position with clearly defined tasks and direction. I think that’s probably the biggest thing that it’s been able to do for us.
OWEN: And you also mentioned something about going faster, talk about that.
SAM: Okay. Every single time that we reach this choke point in our company, and we write this process, and we’re able to delegate that task with a clearly defined process. It allows us to grow faster and faster because the leaders are able to do things that leaders are supposed to do. We’re not just trying to go hand to mouth and feed ourselves, it’s more about steering the company, looking for directions, and finding opportunity. Not so much in our business where when you’re starting off you’re just like where’s the next deal? That’s kind of how it is when you’re starting off. But once you get those processes and you’re systemizing everything you start thinking a lot more strategically.
OWEN: Awesome. If we’re just going to talk about the business itself we’re not giving a full picture because the business is also benefiting you. How will you say your personal life has been transformed as a result of systematizing your business?
SAM: My personal life has been transformed as well. One of the major drivers for me leaving the corporate world and starting our own company was the two weeks of vacation, right? It was demoralizing. I’m actually going to wind up taking around 8 or 9 weeks of vacation this year. My wife and I every single year we take 20, 25, 30 days off in a row late summer and we literally disappear off into the woods out in the western US.
OWEN: That’s awesome, being able to spend more time with family, I love that.
SAM: Exactly. It’s just me and my wife but the travel and the time together is really important to us. So that’s really what we try to do every single year.
OWEN: I think you already mentioned how long you traveled away from the business, you said 25 days. Talking about your business itself, because we want the listeners to get some context as to what your business is all about. So what exactly does your company do and what big pain or problem do you solve for your customers?
SAM: Excellent question. We are in the easiest terms a house living company. The reality is though is we’re a company that works with individuals who want to invest in real estate but don’t necessarily have the complete market knowledge or understanding of how to manage contractors and things like that but want to invest their money in real estate.
OWEN: The private lenders, right?
SAM: Exactly, private lenders. They lend us money, we go buy the real estate. We renovate it and we sell it. They make a return or we make our profit. This year like I said before we’re going to do about 80 houses total that really allows us to work with a lot of private lenders in that way. And then as far as the big pain or problem that we solve for our customers, we kind of consider ourselves as having two customers [Unintelligible 00:04:01] our lending partners. And number two is the people who are selling their homes. We’re very much a customer service business and that’s kind of a little different. You don’t really hear that a whole lot in our industry,
OWEN: I love that word. That’s the first time I’m hearing that from a real estate professional. Go ahead.
SAM: We’re not real estate agents. Only about 5%-10% of the market in Houston would even need us. A company like us, we can come in and pay cash, close on their timeline and solve their problems. Everyone else, they’re fine going the typical agent method and we’re completely okay with that. We’re going after this niche part of the market in Houston. And so we really have to focus on solving the customer’s problems and really trying to add as much value as we can to their lives to make these home selling process as easy as possible.
OWEN: And just to give the listeners some context as to this type of seller like a classified types of houses, is it like bankruptcy and stuff like that? I’m just wondering.
SAM: That’s a really good question. We actually get that question a lot. Most people ask me if we just buy foreclosures. And the reality is I think we’ve done 140-ish or so houses since we got started and we haven’t bought a single foreclosure. The range of customers go from, these are million dollar homes and they don’t want the hassle of listing on the open market, they don’t want the hassle of making repairs since they’ve had the house for so many… to, “Hey, I need to get my kid in a new school next week. I need this house sold so we can go buy the next one” to, “I inherited this house. I can’t afford the taxes.” It really runs the gamut, but we do market direct to homeowners and it’s kind of unique. We work with so many different people. Every person’s situation, problem, or pain point is completely different. And so it means that we have to be really think on our feet and do everything we can to really solve that customer’s unique issue.
OWEN: Awesome. I’m wondering too, basically you’re creating win-win solutions for both the home sellers as well people investing in you. I like that. How many full-time employees do you have?
SAM: We have 6 full-time, 5 in the office, and one who’s a full-time VA out of India who works about 50 hours a week for us. And then here in the next couple of months we’re going to be hiring 2 more people as well.
OWEN: Is the company profitable? What would you say was last year’s annual revenue and what do you expect to do this year?
SAM: Last year we purchased about $6 million and sold over $5 million of the property. This year we’re going to do about $10 or $11 million in sales, and $12 to $13 million in purchases.
OWEN: Awesome. Now that you’ve shared with us some of the highlights let’s take it back to when the business was not where it is right now. Take us back to when the business was not systematized and even automated like it is right now. What will you say was wrong with it at that time?
SAM: When you’re just starting off in the business like I kind of alluded to earlier you’re really just going hand to mouth. You’re like, “Man, when’s that next deal coming? We got to do everything to get that next deal.” We’ve always been system focused but also at the same time we’ve been a little reactive to our systems when we should’ve been proactive. Maybe that only comes with the hindsight of a lot of [Crosstalk 00:07:19]. That’s right. It seems like as we’ve been growing our business and we reached that point where we’ve encountered this issue twice. We’ve written a process for it. Before then it was really just me. My dad’s my business partner. It was just me and him in the business and we were just taking things as they were coming. There was no thought of direction. It was really just when’s the next deal, how do we make money, when’s the next deal, how do we make money?
OWEN: So like feast to famine kind of thing.
SAM: Yeah, exactly, especially in this business, the very cash intensive business.
OWEN: Yeah, you also mentioned that at that point communication was an issue. Talk about that.
SAM: We didn’t have an office. And actually the truth is we only just got an office in January of this year, and I was working full-time. I only quit my full-time job in February of last year. So it was really difficult. I was running a 5-state sales territory for a company. I’m flying all across the south. And at the same time trying to support my dad as he’s out trying to support my dad as he’s out kind of jump start the business. Communication was difficult because we’re rarely in the same room together.
OWEN: Things were getting lost.
SAM: Oh yeah, things got lost in translation and lost in the ether, and I thought you said you were going to do that, and I thought… He said, she said stuff. And a lot of that stuff is what a lot of our original processes were born out of that original frustration.
OWEN: Back then when the business was not systematized what will you say was the lowest point? Can you describe a specific instance where you just feel like, “No, this has to change. I can’t take it anymore.” Can you remember something specific that happened?”
SAM: The biggest things I kind of alluded to earlier was that this is such a cash intensive business. And so it was about 18 months in and we’re very profitable. We’re making really good money and we’re growing really fast. And we looked up and realized that we didn’t have any cash. That’s a horrible thing to realize. You’re super profitable, everything is going real well, you’re continuing to grow, but your coffers aren’t filled, right? So that was like wait a minute, this is not good. We need to figure out how manage our cash flow better and how to put processes in place to ensure this doesn’t happen again.
OWEN: Yeah. And so basically you say you didn’t have systems in place, so that cash flow situation you didn’t even have an eye on it so it just kind of fell off the bottom.
SAM: Right, we were still focused going hand to mouth and just getting the next deal that we weren’t watching our cash flow. It never got to the point where we were in danger or weren’t paying our bills, but it was to the point where if things that we had in place weren’t going to plan then we could have been in trouble. But since then that’s not an issue anymore because we put the processes in place that we have.
OWEN: So you kind of reached the breaking point experiencing that situation you just described and I’m wondering what was the very first step you took then to now systematize the business?
SAM: It probably came about…
OWEN: I think during the pre-interview you mentioned something about how when you go out to properties that you have to access the repairs and stuff like that, and eventually you had to even train people on how to do this stuff.
SAM: Right. What was the very first step we took systemize the business? That was probably the first system was walking properties and estimating repairs. There’s a lot of variables that come in when we’re walking a rental property, it needs $10,000 worth of work versus walking a million dollar property that needs $200,000 worth of work. So what my business partner did, Robert…
OWEN: That’s your dad, right?
SAM: Yeah, that’s my dad. He wrote a sheet out that allows us to say “Does it need windows, yes? How many? It’s this cost. The roof? Yes. How many or how large this cost?” You understand. It turns into a checklist at that point. And then what’s been great is that we’ve hired people and we’ve taught people this process. Literally, we walked 2 or 3 houses and they know how to estimate repairs from 5,000 to 200,000 within about 5% using this process.
OWEN: So you kind of codified the system for basically getting an estimate of what the repairs would actually cost.
SAM: Right. We’ve created the system and stuck to it, and don’t deviate from it. So we get the same results every single time. So that when I have a salesman come in and say, “Hey, I just bought this house. I think the repairs are going to be 20 grand” I don’t have to wonder if they’re real. We know.
OWEN: And why is that important? What does that factor into?
SAM: That means that everyone can do their job effectively. My job isn’t to double check numbers on someone’s rehab sheet. We have a process for that. If I have to go back and do that it takes time away from steering the company. It takes time away from all the high level things you should be doing and I shouldn’t have my hand in those little technical aspects like that.
OWEN: Because I was wondering maybe knowing the repairs, does that play a factor into what you’re going to offer and maybe the…
OWEN: Okay. I was wondering too, what was the second step you now took to systematize the business? And I think during the pre-interview you mentioned something about marketing was another issue you had to fix.
SAM: Right. In the very beginning we really didn’t know what the heck we were doing on marketing, and we were spending a lot of time with it. Once we hit our stride with it, once we kind of figured out the finer points of our marketing we were able to write a process for it and put it on autopilot. I went from spending a couple of weeks a month on marketing to now it’s all done by the second day of the month.
OWEN: We want to give the listeners kind of like a before and after. Before you guys figured out the marketing process just give us a blow of what you guys were doing then and then when you now created a system, what it was like.
SAM: I’m sorry, I didn’t hear your question, how much what we were doing?
OWEN: I was trying to figure out before you guys figured out and created that marketing system, because you mentioned that one of the second thing you did was created a system for the marketing. I was trying to give the listener kind of an idea of how it was marketing itself specifically before you even figured out a system for it.
SAM: So physically what we were doing to market?
SAM: It was like our business operates on a few different marketing channels and that’s one thing that’s… We’re very marketing heavy business because nothing happens without it. So we were doing some direct mail stuff and we’re doing some online stuff, and we’re doing some… I’m trying to buy a house on the MLS. Once we figure out our criteria for that and once we figure out the general direction then we just write a process for it. So instead of us having to spend 10 hours a day scouring the MLS now we get our leads delivered to us in the morning and then we make offers on just the good ones. Same with our direct mail and things like that. I’m not having to mess with our lists, I’m not having to mess with our message. It’s all laid out in the process what list is going to be sent that week. So it’s literally turnkey now. The only time I spent time on marketing is when we need to change up our marketing message or we’re going after a different kind of marketing. That’s the expansion, that’s the growth. Actually you get to see that growth as when instead of just thinking how do I get my marketing out today it’s how do I improve my marketing?
OWEN: What I get from that so I can summarize this for the listener is that you have different channels in which you were marketing out to us. So one of the channels specifically was MLS. And then you figured out what was working and how to identify the best properties on the MLS to get. And now you mentioned during the pre-interview that you even had your office manager handling that part, and now you spend one day a month just looking at that specifically for the MLS channel.
SAM: Exactly. It all gets done and I just get to see the results.
OWEN: I love that. What are the steps did you take back then to kind of systematize the business? I think you mentioned something about encountering issues in handling contracts, selling houses, accounting… Talk about those different issues.
SAM: Okay. We’ve tried to systemize just dang near everything in our business. We have handling contracts, multiple processes for that, multiple processes that when a house becomes available to sell that our sales team follows. Same with our accounting, same with managing our contractors, every little part of our business has that system now. And that will continue to evolve and continue to change. We’re to the point now where we’re hiring people and we’re having these processes that they need to follow. It freezes up to work on even more systems in our business to get everything even tighter.
OWEN: Also back then how did you even prioritize, because you mentioned all these different aspects of your business that you were creating systems for, how did you even prioritize what order of steps to take? How did you decide which systems to create processes for and which ones to create next? What decision factor went into that?
SAM: Starting off our decision factor was what hurts the most.
OWEN: I love that.
SAM: Where are we screwing up the most? Okay, that deserves a process. And the beauty of it is for your listeners if you’re just starting off, it’s really key that you try to think ahead as much as possible so that you can do some of that stuff ahead of time. So you have to learn the hard way.
OWEN: How so? Can you give us an example?
SAM: If you’re ready to hire someone, don’t just go off and hire someone, or just put an ad on the paper and wait for the right person who comes along. Put together an avatar that says this is the type of candidate we’re looking for. Put together a job description that says, “These are the jobs that this person needs to create. And then put together a true process that says, “This is how we’re going to vet this people and these are the things that we’re looking for as we’re going to this process of adding them.”
OWEN: What I get from that is not only focusing on what’s hurting the most so that you know where to… That becomes a navigator to know where you should create systems for. But before you even create a system really think through it and understand what the goal you’re trying to achieve and even how to achieve that and kind of lay it out your initial version 1.0 of the process kind.
SAM: Yup. And the beauty of that is that the more you think ahead with that stuff it says… As long as you’re saying, “Hey, I need a process for this” you’re ahead of the game. As long as it’s not something that’s like, “I lost my leg. I need to figure out how to put my leg back on.” And it’s like, “How do I not lose my leg” is the best way to put it.
OWEN: Awesome. Back then how exactly did you even document procedures and even processes for your business? What tools did you even use back then?
SAM: Back then and even now currently we have an operations manual and we have spread sheets that we use. We have videos, processes, we’ve recorded calls to make that part of our processes, but right now everything’s just done through documents and spreadsheets.
OWEN: And you save them in Dropbox and recording of the video, training, and all that stuff.
SAM: All that stuff’s easily accessible through the company Dropbox account so anyone can access it from their computer.
OWEN: And at the time when you were working on systematizing and even automating the business what books or mentors had the most influence on you why?
SAM: I’m involved in a real estate education company called Fortune Builders. We joined them very early on.
OWEN: Why is that?
SAM: To be honest with you I wanted nothing to do with them. My dad dragged me to one of their events kicking and screaming. I’m like, “These guys are just trying to take our money. We can learn this stuff on our own.” We knew wanted to be in real estate beforehand so I was being bullheaded. That’s how we got into it. They changed my mind, and now I’m a coach for Fortune Builders. I just got back from an event in Las Vegas where I was speaking at an event with them. I’m a huge fan of what they provide, the mentorship they provide, and I’ve been really impressed at how well they’ve grown with our business. As we’ve gone from doing three deals in our first 6 months to what we’re doing now, the people that are within Fortune Builders and the way that they are able to attract those people, they continue to push our business to the next level.
OWEN: That’s awesome. You mentioned during the pre-interview that they played a major role in helping you guys identify things in your business that needed process.
SAM: Yeah. One of the things actually that sold us in the beginning is how process focused Fortune Builders was from the get-go. Thy already had some pre-written out processes and things like that for various aspects of the business, and that was a big selling point for me and my dad, absolutely.
OWEN: We’ve talked about all the successes you experienced now, and if we just keep it like that and talk about what you did to even fix some of the problem but don’t talk about the challenges that you actually experience when you’re trying to systematize it we don’t give a full picture of what really was happening. What will you say was the biggest problem you actually experienced when you initially try to systematize the business and how did you solve it?
SAM: I think the original problem that we had was just identifying the systems that were necessary. We’re kind of out there and we’re just feeling around on the dark. We weren’t really sure in the beginning which ones we needed, and lots of times they only became clear right when they were hurting.
OWEN: So meaning that some of them might have to be eliminated because you didn’t have to do them, and so…
SAM: I don’t think we’ve eliminated the process yet. I think it was more about identifying the ones that were necessary and kind of what that looked like. So I’d never written the process before. I graduated from college in 2010. I worked in sales for a few years and then I’m off trying to act like I can now run a company. I didn’t really understand…
OWEN: I guess I understand what you’re saying. First of all was I didn’t find where you should focus and create the first process for, and then the next thing was what should process just identify, what should they look like just to give the listeners some kind of insight into what you did then. Choose any process you created and just give a quick summary of how it looked like so that we can think…
SAM: So you want to hear about one that we have recently?
SAM: Okay. We use a VA to make offers on the MLS. And we have 400 or so properties that are listed every single month. He scrubs the list and delivers us the good ones. And he also estimates the repairs just based on pictures. Just pictures and he’s already estimating his repairs on. And the first house he bought 2 weeks in to following our new process on this thing. I think the house we purchased, the $60,000 it needed $200,000 repairs and we’re going to sell the house for 1.3 or 1.4 million. And what was crazy about it is we had this house under contract and we had yet to see the thing. It’s just based off the pictures they had posted.
OWEN: The pictures they’ve posted, okay good.
SAM: Right, on the MLS. So we just estimated repairs based on pictures. Through the process that we had he nailed the repair estimate, and he nailed the after repair value. So we had a house under contract and we went out there and looked at the house and we were like, “Holy cow, this is exactly right.” Just based on pictures, and the house was built in the 50’s. I would say that was a pretty big win, and a pretty big eye opener for just how powerful the process can be.
OWEN: That is good. I’m impressed just from pictures. What was the second biggest challenge that you guys experienced back then when you initially tried to create systems for your business and how did you solve it? I think you mentioned something about the challenge was making sure that the team were actually doing things properly.
SAM: Yeah. I think the other thing that what is a big challenge is making sure that everyone’s holding each other accountable is held accountable against the process. Especially when it’s a new process that comes in, everyone’s kind of set in their ways. You as a leader need to be the one who’s going to step and say, “This is how we need to follow this process. This wasn’t done correctly, let’s make this right.” I think creating the process is only step 1. Making sure that the whole team has buy in and follows the processes appropriately is a very important step 2.
OWEN: Back, how did you get them to get buying into it?
SAM: That is kind of a million dollar question. We really do it through company culture. The foundation of our company culture is what we call our code of honor. It’s very quick, 8 or 10 set of rules that everyone in the business abides to. There’s a lot of things in there, and it’s not stuff like make sure your portrait turned in on time. Everyone is allowed to hold everyone else accountable. Things like always create win-win situation from the customers. Always focus on self-improvement on yourself and process improvement for the company. It’s things like that. So if it’s in our code of honor that you’re going to follow the process and work hard to improve the process and you’re not doing it then anyone in the company can call you out on not following our code of honor.
OWEN: What I get from that is you identify the core characteristics for somebody who will be the right fit based on the culture sense to join the company and be able to follow the company that is build based on you guys having processes. Just by the mere fact they come in and they know all the values and all that. If the right people you’re putting on the boss and they also know going in that this is how the company operates, right?
SAM: Exactly. That really comes down to picking the right people.
OWEN: Yeah. And you also mentioned another challenge you had was after creating the process, figuring out which areas you needed to tweak and stuff like that. Did I get that right?
SAM: Yes, that’s exactly right. One of the things that once you get the process in place and you have the person in place, you’ve hired the right person that person should help you tweak that process because they’re going to be working day in and day out. No one’s going to be more familiar…
OWEN: More hands on with it.
SAM: Right. It’s strengths and weaknesses in the person who’s in that position. And that person needs to be strong enough to stand up and say, “This can be done better this way.” So tweaking that process and getting the most from it I would say is the next challenge.
OWEN: Once they’ve taken over the task they’re now responsible for actually updating the procedure or process for the role they are doing or was that someone else that takes feedback from them and then go ahead and change them? I’m just wondering how you guys…
SAM: It’s going to be up to them to update it, but no updates are going to be made without our prior approval. They can’t just go through and make it whatever the heck they want. It needs to be something that we can…
OWEN: So there’s still oversight?
SAM: Absolutely. The leaders can decide.
OWEN: Okay, good. Given all these challenges that you mentioned I’m wondering why did you even stay committed to this goal of systematizing and automating your business?
SAM: It allows us to focus on our business. We’re able to work on our business instead of in our business. We’re no longer focused about where is the next deal coming. Now we’re focused on what’s the market doing and how can we bring in more deals? How can we make or sales people better sales people, things like that. So we’re able to look at things kind of top down instead of just right smack in the middle of it.
OWEN: Now, let’s start coming back to the more present day now. At what point in time do you feel like the business was systematized and the entire business could actually run with you?
SAM: This is a tough question because I don’t even think we’re there now honestly. And I don’t even know if… We don’t have goals to stay in one place. I’m not happy being in one city. So to say run without me successfully, it’s kind of difficult.
OWEN: I love the answer.
SAM: This is a pretty good story. I told you we take at least 3 weeks off every single year, my wife and I, and we leave the company. The first year we had the business I took 3 weeks off and I pretty much have to work every single time we had internet. It was 3 weeks of vacation and I get to go off into the hills in the woods and be with my wife. But every time we come back to civilization I’m on my computer and I’m having to work a little bit. The second time it was a little bit less. I only had to do it every now and then, and this last time I’m gone for the longest amount of time, 25 days. We have a team of people here now, and now I’m not hearing from people, I don’t hear from the team members, and so I’ll call in. I called in about once a week. I was pretty much annoying my team. They’re like, “Sam, we get it. Just go and have fun, go do your thing. We got this handled.”
OWEN: And that’s a good indicator of it runs without you literally. They don’t want you to call them because they go it. Do you have another point to get across?
SAM: I’m trying to remove myself from this company. I don’t like operating my business from a beach somewhere. I like to be in it every single day, drive the business, grow it, and I was going to see where we’re headed, and take us to the new directions that we’re headed. But I think the story there, our 3-week trip every year pretty well illustrates as we have found more processes in our business, how it’s transformed our business in the way that it can run without me.
OWEN: I love that. Just to give the listener insight as to the different parts of your business and the specific systems that you have in each place I’m going to ask you to kind of picture a business like a conveyor belt, just like an analogy. On one end is because we have two different types of customers. It might be a little bit… You take it the way you want, so you can choose either the one customer who the people who are trying to sell you the home, or you can take the customer who are lending money to buy these homes and do the rehab. The different parts of your business on one end is either of those people, and all the way through this conveyor belt. And on the other end they become a raving seller of a home to you who’s telling other people, “Check them out because, Sam, they can actually buy your own [Unintelligible 00:31:06] with all cash” or maybe be a private lender and say, “Hey, these guys, they’ll double your money.”
OWEN: Tell me the systems you have behind working the different systems in the business.
SAM: The different segments we have, we have kind of the marketing side of our business. We have the buying side of our business. And then once it’s purchase goes through contract handling in the back office processes then once it’s under contract we have our sales process team. You know if it’s a wholesale. And then we have our project management team, or kind of like segment if we’re going to renovate it. And then we also have our accounting processes. And then we kind of have some overall team processes which is kind of like the hiring side, and the team building side, and the code of honor and things like that. Each one of those segments exhaustive processes. And I give you an overview, when we’re meeting with our private lenders. We have a package that we deliver to that private lender that shows them how we operate, how we use their money, what kind of returns they can expect, things like that, all the way down to our contract handling back office stuff that says when a contract comes in it basically turns into an if then statement. “If it’s this kind of contract that follow through in this way, if it’s this kind of contract follow through in this way” reporting and things like that.
OWEN: I like that. We basically give the listener kind of an insight and behind the scenes of what’s happening. What systems do you currently have in place that instead of so that your employees, it enables your employees to know exactly what they need to do. I think during the pre-interview you mentioned something about written and defined roles for all team members.
SAM: Yup. Every person on our team has defined roles. So it’s things that they need to cover, the people that they report to, the things they’re expected to do, the ways they’re expected to kind of prospect and present themselves. As well as we have an outline for each person in our company, we call it an avatar for an ideal candidate. So with the two people that we’re going to be hiring shortly, we’ve gone through the process of not just writing out what that person’s going to be expected to do, but the type of person we hope to find for that role, or the type of person that we will find for that role, that kind of stuff.
OWEN: I think you used an example also about the business manager.
SAM: Right. Our business manager are kind of office mangers. It’s the one that handles all the contracts and does all the back office stuff. So she has processes that she handles for everything. Everything from the contract side to the reporting side, “How is the project on Nottingham going? How’s the project on Smith St. going?” We have spreadsheets where she is required to fill in the spreadsheets with the pertinent information and get that information from the different people because our project manager’s going to know some of the information, our sales team is going to know some of that information, some of the buy teams…
OWEN: Speaking of spreadsheets my next question is basically how do you track and verify the results delivered by the employees. I think you also mentioned how does the spreadsheet play a role in that tracking.
SAM: The spreadsheet is almost everything minus our books. We have a giant spreadsheet we call our key performance indicator tracker. It tracks everything from how many days a job has been idle to how far under or over budget we are currently, to how many days the house went before it was sold, or before we got our first offer, what the offers were, how far apart the negotiations were. We’re trying to track everything. I want that insight. I’m an engineer training so I love spreadsheets and insight.
OWEN: And you also have meetings where you go over metrics and then there’s another individual members handle different spreadsheets. I guess that each team member has a specific kind of spreadsheet that is…
SAM: Each team member has things that they have to report on. Everything gets put in the same sheet so all the information is the same place. Office manager manages that sheet. We only have one meeting a week, the normal meeting. It’s every Monday. Everyone comes in with the things they’re supposed to report on. We talk about things that happen the week before, we talk about things that are happening this week. We do training if we need to do training, things like that. I try not to weigh it down too much with meetings. But then each team member also has a CRM that they’re responsible for that’s operated not with spreadsheets. We have a proper CRM program that we use to manage sellers, and buyers, and things like that.
OWEN: I like that. And so since now you have more free time, which areas in your business do you focus on now and why?
SAM: We’re highly focused on growth. I know I’ve said that a lot. Just kind of a for instance, my dad, my business partner has been kind of our project manager for a while. We’re really to the point now where we need to expand that role and we have the processes in place, and it’s time for him to fire himself and move on to another part of our business. Another part that we’re going to be growing in very soon is on the commercial side. So we want to be able to take all the processes that we’ve learned and put in place in the residential side, apply that same exact mentality on raising capital, raising equity on the commercial side as well.
OWEN: Awesome. And so would that be him moving from, might doing the management on the residential but then taking that and moving to do the management on the commercial while you guys [Unintelligible 00:37:03] create process for that as well.
OWEN: And that brings me to asking you, what is the next stage of growth for the business? What are you planning to achieve next and why? I know you’d mentioned commercial but what else did you mention during the pre-interview?
SAM: Yeah. Commercial is very early. We’re very early on in the stage there. When it comes to our residential business, Senna House Buyers is going to continue to grow. We’re going to continue to dominate the Houston market, be a key player here. But everything that we’re doing and all the processes that we’re building here, the beautiful part of it is once we have everything ironed out and all the processes done we have a turnkey business that we can go take to any other city in the country. And that’s the beautiful part of it. We internally refer to it as a…
OWEN: Franchisable model?
SAM: Exactly, yeah, a franchise type model. Not necessarily that we’re going to franchise our business but that we have a franchisable model where you can literally walk in, flip the lights on, and you’ve got a business that’s operating well. That’s really kind of the next stage of our business is going to get all these stuff ironed out and expand to another market.
OWEN: That’s awesome. As we’re rounding out the interview just two more questions. If you were trying to summarize the entire process, what you talked about step by step, so that that listener can actually take what they’ve learned and just take the summary and get their business to run without them successfully… Go ahead.
SAM: I think you should look at your business as different departments. In our business we have a sales department. In your business you may have a manufacturing department, a liquidations department, front office department, things like that. Think of your business as far as different departments, and what does each department need to run successfully without you. And this might be really hard to think about because you might be a one person company and you’re going to be it. You’re everything from the CEO to the janitor, right? So how do you create the processes necessary to fire yourself from the one department. And that kind of helps you kind of compartmentalize it a little bit. The other thing is don’t be reactive, be proactive with everything. Start with the big goal. I’m a big proponent of starting with the 5-year personal goal, 5-year company goal, and back that to 3 years, then back that to 1 year, then back that to 6 months, and then next week. But start with that big goal in mind. And if you think big, processes are going to come to you, and they’re going to come to you a lot easier.
OWEN: And as we end the interview what would you say is the very, very next single step that that person who’s listening right now should take in order to start that journey towards transforming that business so that it runs successfully without their constant involvement?
SAM: I think the very next step is the goal. For me it’s sit down and write out your goals because you have to dream big. You have to dream big to start thinking of your business as needing these processes. If you’re perfectly fine making $100,000 a year, going soup to nuts as the guy’s who’s building it, and the guy who’s shipping it, and the guy who’s cleaning up the parts by cleaning after yourself, you’re perfectly fine, and you may not need a system in your business. But if you want to grow something, something that’s going to be greater than yourself, and then something that’s going to give you the lifestyle that you want, think big. Be proactive with your processes and everything like that. I heard it recently told the media at a sales turning event I went to, if you want to make big money, solve big problems.
OWEN: I love that. As we come to the very end of the interview we try to ask as many questions as possible. But is there a question that you’re wishing I would’ve asked you during this interview, and if so please pose the question and the answer. Anything that comes to mind.
SAM: You know Owen, I think you did a really good job. I think all the questions were excellent. Let me turn it on you. Is there anything that you wish you would ask me or maybe something I need to give a little bit more insight on?
OWEN: To be honest, I love the fact that you turned it on me. I don’t even know. I’m always wishing that every time I ask this question that you guys tell me something I didn’t think of. Honestly, I don’t know. But let’s talk about it from more of a personal standpoint of you’re talking about the big picture goal of the company. But what is the big picture goal from you on a personal standpoint?
SAM: The big goal for me is independence. I have a lot of that now through the hard work that we’ve done. I want to give… Actually, I’m going to get kind of personal with this one.
1; Go ahead.
SAM: When I was working through college it took me 6 years to get my undergrad in school. With A&M we got an engineering degree. The reason it took me that long is because I was working full-time and I was working as a race car mechanic. I was working 9 months in a year. Every single race I had to go to, it means I was away from school for a week. What I slowly realized is that I didn’t want to be a race car mechanic, I wanted to be a race car driver. But that’s an industry that requires a lot of money to be able to chase your dream in that way. And so when I finally realized that and then realized that I was gone all the time, and I was away from my wife. It wasn’t the lifestyle that I wanted and I had to change it. We worked really hard and when we started the company I sold my race car, I mortgaged my car, and my dad and I put a lot of our own money into this thing, pretty much everything. I put everything I had into this business to create what it is now. And so personally what we’re trying to achieve is I never want my kids to not know what it’s like to be able to chase their dreams because they can’t afford it. I’m going to fix that. That stops at my generation. We’re going to do everything we can. My wife’s a psychologist. She just quit her job and started her private practice, so she’s an entrepreneur now as well. And so we’re in the process of just busting our butt and just changing things.
OWEN: That is awesome. I’m glad I asked that question, we got you to go personal too. What is the best way for the listener to connect with you and thank you for doing the interview?
SAM: The best way to contact me is just email me direct. My email is email@example.com. You can check out our website, sennahousebuyers.com, you can find me on LinkedIn, or Facebook, anything. We’re very easy to get a hold of.
OWEN: That’s awesome. I’m speaking to you the listener who’s listening all the way to this point. If you’ve enjoyed this interview then I want you to do us a favor, and go ahead and give us your honest review of the episode right there on iTunes. And to do that I have a quick link that redirects you to iTunes, it’s sweetprocess.com/iTunes, and go ahead, leave us your honest feedback of this podcast. One more thing, if you know another entrepreneur who will benefit from this interview regardless of whether they’re in real estate or not, if you feel they will benefit from this interview, feel free to share this interview with them so they can get the same value that you’ve gotten from it. The last thing is if you’re at that stage in your business where you’re tired of being the bottleneck and you want to get everything out of your head so your employees know what you know, consider signing up for a free 14-day trial of SweetProcess. Thanks Sam for doing the interview.
SAM: Owen, I appreciate it. This has been awesome.
OWEN: And we’re done.