Adaero Property

In the previous post I shared my excitement about discovering the Big Five personality traits, and subsequently highlighted why conscientiousness is the single personality trait most consistently associated with life success. [In case you missed it I’ll put a link to the part 1 of this post below]

We left off with the question – are we born with a set level of conscientiousness or can we improve it? On further reading I was relieved to discover that this success trait is definitely something that can be trained and improved upon.

Lifting the lid on conscientiousness and willpower

So, lets dive a little deeper into the make-up of conscientiousness. Some neuroscience studies look at conscientiousness as a set of behaviours not simply a trait that people have or don’t have. Neuroscientists and psychologists have shown that these conscientious behaviours stem from one’s self-control and willpower.

What we are really saying is that if we can improve our self-control and willpower we can benefit from more of the good stuff that conscientiousness brings.

Unlike IQ (which we are born with), willpower, and therefore conscientiousness, can be can increased. Like a muscle, exerting willpower makes your self-control ability stronger over time.

However, willpower is like a finite energy source— using it burns it up, and you have to replenish it. Anything that involves self-control draws on that one willpower fuel source.  For example, dieting all day long takes energy away from your ability to hold back your temper at the end of long, hungry day.

Many researchers who study self-control have proven that, just like our physical muscles, we are able to strengthen our willpower by training it.

How to strengthen your willpower

Like a muscle, willpower can be strengthened. With practice and resistance training, our ability to control our impulses in pursuit of delayed, greater goals can grow (i.e. conscientiousness can improve), giving us the energy to easily resist short term temptations in favour of the important task at hand. Here’s several ways that neuroscientists and psychologists have suggested we can strengthen the willpower muscle.

To help jump-start your willpower training I’ve put together a willpower workout for recruiters following the key points below.

1. Monitor your behaviour

We’ve all heard business greats preach that you can’t improve what you don’t measure. Well the same is true here; it’s hard to practice self-control if you aren’t aware of your current behaviour and routines. It’s the power of tracking- anyone who’s studied personal finance will know that if you want to take control of your personal finances, one of the first things you need to do is understand your outgoings and incomings by tracking them daily.

2. Make habits and automate positive behaviour

Using the analogy of going to the gym, in the beginning it requires a lot of self-control to resist the urge not to go. But over time, as going to the gym becomes a habit, it’s going to require much less willpower. It will start to feel automatic.

Nathan DeWall, a psychology professor at the University of Kentucky, explains that once hard activities begin to feel routine, they require less willpower; you have to fight yourself less and that frees up valuable energy that can be spent elsewhere.

3. Pre-commit and hold yourself accountable

How can you use pre-commitment to keep yourself from giving in to unwanted desires? I have heard it said that, ‘100% commitment is easy, and 95% commitment is a b*tch!’ Once you have committed to something you can avoid the indecision and debate process which saps energy and willpower resources. When you’ve already committed it’s easy, just do it.

To layer in accountability use pre-commitment measures like making your goal public and then have a friend or colleague to make sure you do what you say.

4. Control your environment

Supermarket stores are designed to play off our depleted willpower. “They don’t put fresh produce by the checkout for a reason,” DeWall says. “They know you’ve just made a bunch of decisions; they know you’re exhausted, so that’s where they put the junk food.”

Whilst you can’t change your supermarket’s layout, you can control the environment at your home and at your workplace. Don’t put yourself in temptation’s way, or if you do then have a plan to avoid it. It requires far less energy to resist responding to a facebook message if it is turned off when you want to focus.

5. Prioritise by energy exertion

Because on any given day we have a finite amount of willpower, it’s important that we don’t deplete the well too soon. If you’ve read Brian Tracy’s book “Eat That Frog” you will be familiar with the concept of chewing through the toughest task at the beginning of the day.

Instead of writing out a standard to-do list of tasks, try ranking them in terms of energy or the amount of self-control required. For example, a task requiring a lot of strategic thought is better done when your willpower levels are high.

I personally structure my days to have a 60-90 min focused session first thing on the most important task. So that might be deal analysis or business development calls for our SA business for example.

6. Eat the elephant one step at a time

People often give up not because they lack willpower, but because they feel overwhelmed by the enormity of the goal they must accomplish. A good way to deal with this feeling of overwhelm is to break the goal down into manageable chunks (sub-goals), and then put them back together in a way that guarantees success.

By setting sub-goals you avoid willpower depletion. As an added upside, when you reach each sub-goal, you will derive an enormous sense of satisfaction and pride in yourself, making it that much easier to tackle the next one.

7. Guard against stress

Kelly McGonigal, PhD and author of ‘The Willpower Instinct’ explains that willpower is a response that comes from both the brain and the body. It’s important that we learn to manage our stress levels because being under high levels of stress means that our body’s energy is used up in acting instinctively and making decisions based on short-term outcomes. The part of the brain responsible for willpower loses out in the battle for our energy when high-stress is involved.

Inadequate sleep, poor nutrition and emotional distress are common causes of stress and the result is that the victim suffers from poor attention and lower mental performance. Increasing your capacity for pressure and more importantly listening to your body when you feel stressed is crucial.

Summary

So in responding to the original question of can individuals improve their level of conscientiousness (and experience greater success)? Yes.  But there is no quick fix. Referencing one of my favourite Jim Rohn quotes,

“What is easy to do is easy not to do”.

It requires an understanding of the connection that conscientiousness has to self-control and willpower. It’s then about creating a reinforcing cycle of using willpower to build willpower.

In conclusion, conscientiousness is the character trait of saying “no” to our short term, impulsive desires and “yes” to the real goals we set and the meaningful desires of others. Once we’ve decided this is the right thing to do, we then engage our self-control to actually make it happen. By intentionally practicing this, our self-control becomes stronger and we become successful at managing our wills.

What tactics do you engage when it comes to willpower in your work?

CLICK HERE for Part 1 of this post

I had one of those “Ah-Ha” moments when I first learned about the personality model known as the Big Five (or OCEAN) and the #1 personality trait that inevitably guarantees success above all else. I’ll elaborate shortly.

 

Most property investors realise at some point that being in property is really a people business, especially when it comes to networking, deal making and finding JV partners. As such we can come to have a strong awareness and appreciation for personality traits. It is a complex and varied subject area and I am by no means an expert. However, I am genuinely intrigued by the subject matter and wanted to share some of my learnings from exploring the topic.

Rather than go into too much detail I’m challenging myself to keep this as a brief introduction and look at how understanding this stuff translates to your property journey.

What Is The Big Five Personality Model?

In Psychology, there are five broad dimensions of personality traits, commonly referred to as the “Big Five” personality traits. These can be easily remembered with the acronym OCEAN, as follows:

O – Openness: Curious, open to new ideas, creative, original, intellectual

C – Conscientiousness: Organised, systematic, punctual, achievement oriented, dependable

E – Extraversion: Outgoing, talkative, enjoys social situations

A – Agreeableness: Tolerant, sensitive, trusting, kind, warm

N – Neuroticism: Anxious, irritable, temperamental, moody

 

The Big Five model is able to account for different traits in personality without overlapping. In other words, while identity (our beliefs, values and individual psychological “make up”) might be infinitely varied, there are just five key dimensions of personality that can be tested and measured without overlap.

What I find fascinating is that research has shown the Big Five personality model to show consistency across a wide range of ages and cultures.

The #1 success trait

Research also indicates that one well documented personality type consistently produces more and better success than all the others – Conscientiousness. (Did you guess it was that one?)

Eric Barker (a writer for Wired magazine) uses the latest findings in the science of human behaviour to write about ideas that improve our performance at work and at home. I’ll paraphrase one such article here:

“Dozens of studies show that willpower is the single most important keystone habit for individual success…..

Conscientiousness is the fundamental personality trait most closely tied to self control (willpower) and it tracks with nearly every type of success across your lifespan.”

Whilst conscientiousness was the trait that best predicted workplace success, University of Illinois psychologist Brent Roberts points out this trait predicts so many outcomes that go far beyond the workplace. For example people high in conscientiousness get better grades in school and university; they commit fewer crimes; and they stay married longer and live longer.

Why is this important for property investors to understand?

“Highly conscientious people do a series of things better than the rest of us,” says Brent Roberts.

“To start with, they’re better at goals: setting them, working toward them, and persisting amid setbacks. If a super ambitious goal can’t be realized, they’ll switch to a more attainable one rather than getting discouraged and giving up. As a result, they tend to achieve goals that are consistent with what employers want.”

Hopefully you can see now how a greater appreciation for this trait, and an ability to identify it, plays into the business of being a property investor. Some obvious examples are:

• Assessing and selecting people to employ in your own property business
• Identifying suitable partners for your power team and as JV partners
• Training and coaching your team
• Your own self-development

 

Chris and I have had the pleasure of working with multiple mentees over the last year and we can see that for mentees achieving great things, a lot of their success can linked to this conscientious trait.  For example the ability to prioritise effectively and optimise their return on time invested.

Conscientious people have a tendency to organise their work and their lives well, which may appear superhuman to some observers. On the other hand a less conscientious person might lose 1-2 hours a day transitioning poorly between tasks or not choosing the right tasks that will move their project or business forwards the most. By being conscientious, people sidestep stress they’d otherwise create for themselves.

Being conscientious “is like brushing your teeth,” Roberts says. “It prevents problems from arising.”

So is your Conscientiousness score set in stone for life?

My first reaction to all these learnings was what is my conscientiousness score and how can I improve it? Can I help others improve it?

In short, it is true that some individuals naturally have higher conscientiousness scores however it is something that can be nurtured from childhood and it is certainly something that adults can work on to improve.

Look out for Part 2 of this post where we will look at specific tactics and strategies to improve conscientiousness.

If you are interested in taking an online test to find out your own scores here are a couple of links:

http://personality-testing.info/tests/BIG5.php

http://www.truity.com/test/big-five-personality-test

 

References:

Professor Brent Roberts

Doctor Rajesh Kamath

Eric Barker

Goldberg, McRae and Costa

A recent post I shared on igniting the compound Effect in your life was pretty well received so I thought this post would be a fitting follow up. (I’ll add a link to that post at the bottom in case you missed it and want to read it).

 

Once again it was inspired by the person who wrote The Compound Effect – Darren Hardy, because one of his recent video messages I watched really struck a chord with me. Can you tell I like the content he creates? 🙂

 

In the short video clip Darren recounted the story of his grandmother helping him to set up his very first bank account- he emptied his pockets and handed all the cash he had over the bank counter (thinking the bank cashier was going to take it away from him). In return he was given a passbook with the entry of that first deposit written in at the top of the page. Seeing that figure of $23.12 the young Darren thought to himself, “I’m sure I can get that number higher”. And so began his life long obsession for making entries into his ‘passbook’ as evidence of growth. What started with a simple mechanism for tracking his banking deposits spread over into all areas of life – the continuous desire to take action towards something then measure and track the progress. So simple yet so powerful.  

 

The story resonated with me so much because I can still remember my version of this – it must have been from about aged 8 or so when I had my first account with Clydesdale Bank. I can vividly remember the feeling of visiting the rural Aberdeenshire branch to deposit my hard earned money and savings. You would typically have to queue behind various chatter boxes, it was a high ceiling building that had a musty smell and when the cashier stamped the cheques and payslips the sound echoed heavily around the room. And just like Darren, the young me got immense satisfaction from depositing money and seeing the number get higher. I’m sure you it’s the same for many of you.

 

Whilst passbooks seem very much a thing of the past, funnily enough I managed to find one my own original passbooks from a Kent Reliance Building Society account that I had. This is where I saved up earnings from summer work that ultimately went towards buying my very first Buy-To-Let in 2007. You see, these passbook thingys do work 🙂

As with Darren, my own desire for tracking and measuring progress has spread over into many other important areas of life from business activity to health and family. And whilst the bank balance hasn’t grown to anywhere near that of Darren Hardy’s, the habits I’ve created of tracking and measuring have been instrumental in helping me achieve some satisfying milestones within my property businesses so far. These days the progress is mostly tracked and measured inside a small A5 journal called the Self Journal (you’ll see two of my journals in the cover image). What’s even more meaningful about these little blue journals is that they are designed and created by two amazing people I met when they were at the beginning of their journeys – Kathryn Lavery and Allen Brouwer. You guys are awesome and I’ll take this opportunity to let you know how much I and others appreciate your work.

 

If you’ve heard the Young Entrepreneur Peter Voogd speak, he regularly says, ‘The best way to predict someone’s next 6 months is to look at their last 6 months…because HABITS trump inspiration, talent and ambition.”  This is exactly what we’re talking about with Darren’s banking passbook – that passbook is a metaphor for tracking the important the important habits in our lives that make big things happen. I know many of you reading this will have heard a similar kind of message before, but are you actioning it?

 

I hope that sharing this story and the passbook metaphor will kick start the beginning of a renewed obsession for you. Even if for just one person. You see, it’s not so much about growing money (that will come as a bi-product), rather it’s about growing progress in any area of life that you want to improve in. How about you challenge yourself to also become obsessed with growth, and get yourself a ‘passbook’ of sorts to track your progress. If you’re up for it, share here what is the first thing you’re going to track, monitor or measure in your passbook.

CLICK HERE to read the post on Igniting the Compound Effect

Running a property business can often feel overwhelming, trying to juggle all the variables of different deals, the associated admin, inbound and outbound calls, business development…and don’t even mention the accounting and tax stuff.

It has been said that 80% of business people run their work day in a reactive fashion. 

In other words reacting to all of the day’s demands as they arise, such as incoming email, incoming calls from SA guests, interruptions, operational demands like cleaning and maintenance etc.

This modus operandi of little planning, stop/start execution and lots of reaction typically leads to that common feeling of stress and overwhelm. We can all relate to finishing a day’s work with a long list of outstanding to-do’s and a feeling of anxiety- “I’ve got too much to do!”

Everyone has 176 hours in their week, the major difference is how we choose to spend them. Choose being the operative word. Yes, you have a choice to re-frame your day and the way you operate.

So what are the other 20% of business people doing? 

This 20% choose to work their day in a proactive fashion. What this really boils down to is a subtle but powerful difference in focus, and it takes a concerted effort to plan and then remain mindful of your plan as you execute.

The Eisenhower Box

I’ll use the Eisenhower Box to demonstrate this subtle difference and how it applies to the reactive vs proactive person.

As the name implies, this concept was originally credited to US President Dwight D. Eisenhower. In deciding how to prioritise his time across tasks, it is said he would ask himself two questions. First, is the task important? Second, is it urgent? Of course you will have to define your own meaning of important.

Using this framework we can categorise each of our tasks and projects into one of these four quadrants within a few minutes. Taking a proactive approach means we focus on the tasks that sit in the Important but Not Urgent quadrant.

Every time I find myself slipping into reactive modus operandi the feelings of stress and overwhelm start to creep in and it feels horrible. That’s when I have found this matrix to be so powerful in re-framing the day or week with priority and focus.

There will always be those fires to put out and certain time sensitive tasks but you’ll be surprised at how these reduce when you work in a proactive manner.

Here’s a simplified explanation of the four quadrants:

1. Important and Urgent – for example a last minute booking request  from a direct contractor guest, a request for information from your accountant to get accounts/VAT filed in time, submitting an offer for a property before the closing date

2. Important but Not Urgent  – doing exercise, business development, long term planning, working on a project that will make your business scalable

3. Not Important but Urgent – various interruptions that break concentration, breaking your focus to check every email and text the second you hear a “ping”, dealing with the person shouting the loudest

4. Not Important and Not Urgent – activities that just waste time, procrastination, going off on a web surfing tangent when researching property deals, excess time checking the latest news, facebook updates

 

Needless to say, the first priority goes to the tasks that are both Important and Urgent. However as much as possible, the proactive person aims to spend most of their time in the Important but Not Urgent quadrant. These are the activities that generate production and lead to results.

As the famous Eisenhower quote goes:

“What is important is seldom urgent and what is urgent is seldom important.”

Without being mindful to prioritise effectively, a property investor can very quickly fall into the trap of rushing to deal with all the Urgent tasks (including the Urgent and Not Important) while the Important but Not Urgent tasks get pushed down the queue.

After dealing with your Urgent and Important tasks, your second priority should always be to invest time on the Important tasks that are Not Urgent. Only after some time in quadrant 2 should you move onto the urgent but not important tasks.

As for things in the 4th quadrant, well you really want to start dropping these. This is an opportunity to create more time for the important things in your day

Building this into your life

Like all good habits, this takes a period of intentionally phasing it in. However with a little effort, the practice of consciously filtering your tasks and incoming distractions based on their importance, will result in you becoming more productive as you do less of the ‘Not Important’ things.

Once again, the proactive property professional wants to spend most of their time in the Important and Not Urgent quadrant. Plan ahead and start with the tasks that are important. Mastering this practice will give you a powerful advantage and a feeling of control in all areas you choose to apply it.

Now, because I know that life and business can throw all sorts at us, here’s an extra little hint that I learned a few months ago – schedule in a daily “chaos hour”. Use this time to finish off loose ends that originated from the Urgent and Important things cropping up earlier in the day. If you’ve had a good day with no major interruptions then use this time for more Important but not Urgent activities.  

What tools or techniques do you use to manage your priorities? Share them in the comments below.

The 8^th wonder of the world

These past couple of weeks I’ve been allocating time to read through the latest Local Development Plan for the area I live and invest in. It’s not for the faint hearted, we’re talking 200 plus pages! In whatever part of the UK you invest, the local authority will have prepared and published a vast amount of research that will significantly help inform your property investment decisions. Reading through your Local Development Plan (LDP) and speaking to the Housing Department of the Local Authority is a great place to start.

This little post will help explain what the LDP is, what you can expect to learn from it and importantly, where you can get your hands on it.

WHAT IS IT?

Planning authorities are required to prepare a Development Plan to set out a planning strategy and policies to guide the future development of their area. The Development Plan explains where new developments such as housing, business and retail are likely to be supported and where certain types of development should not occur. It provides a framework against which development proposals can be prepared and assessed.

WHAT YOU CAN EXPECT TO LEARN

Here are some key areas of insight you can expect:

*The spatial strategy element of the LDP sets out key locations for growth – this will highlight where the majority of new development will be in the county and reflect the geography of opportunities for the location of new housing.

*These plans will point out the areas of housing construction, and with that comes potentially new schools, employment opportunities, community centres and renewable energy projects, as well as infrastructure and associated works.

*The Local Housing Strategy will highlight housing unit requirements per annum and the reasons why.

Population / Household Change – Referring to National Records of Scotland or The Office for National Statistics will provide population projections in your area along with household growth, which will either provide comfort or otherwise in regards investing in that area.

*Economic Development / Tourism – A member of the Economic development team will hold a calendar of all your regions events and key contacts, which should enable you to effectively target potential guests in respect of the tourist market.

*Health and Social Care – this part of the plan brings some understanding of the projected demands for healthcare with existing services will highlight projects like community hospitals and possible care villages.

WHY IT’S ALL RELEVANT TO YOU

*If you are choosing the strategy of single let or HMO’s you will want to better understand the population growth patterns, potential reasons for demand and the most suitable areas based on this.

*If you are developing apartments or houses to sell, you will want to understand the areas where such developments are required and where planning policy will encourage it rather than hinder it.

*If you are operating Serviced Accommodation, you will want to understand the Tourism trends in the region and other potential reasons for a sustainable demand in short stay accommodation (ie what development is bringing contractors to the area?)

*If you are planning to invest in commercial or mixed use property, you will want to understand the plans for each respective High St or industrial area in your region. You will want to understand what mix of commercial use class the Councils want to encourage or minimise and how they want to make their town centres viable.

A bit of upfront reading and understanding of your local area could have massive benefits to your investing.

WHERE TO FIND THE LDP?

If you simply google ‘Local Development Plan’ along with the name of your local Authority area, you’ll be able to find the page of your Council’s website where these documents are published.

As a final note, I’m sure being in touch with all the above is similarly of interest to you as a resident in your local area.

With Easter weekend comes a time to be with family, friends and usually a lot of chocolate. Whether or not you’ve been schooled with the Christian story that Easter carries, its a great message for all of us and Darren Hardy reminded me of this with his Good Friday video. He reminded us that as terrible as “Good Friday” was (the day Jesus was crucified), it had to happen for us to get the joy of Easter. In other words, the ultimate sacrifice was made in order to deliver salvation.

Whilst this post is not here to preach, I did want to share the analogy that Darren Hardy was making because it’s a powerful one – and that’s the analogy of the Easter story with the journey of success, and the shared parallel of sacrifice. As he put it, ‘sacrifice is good, because as painful and terrible as it is, it has to happen for you to get the joy of success’.

Life experience has shown us that there is no silver bullet. You cannot achieve success without sacrifice. To get the muscles of an athlete it requires massive amounts of discipline, careful diet and consistent training. To build up a property business that pays you handsomely it takes working on your mindset, educating yourself and taking massive and consistent action. It takes sacrificing other things in life, saying no to other choices.

This brilliant quote from James Allen (author of ‘As a Man Thinketh’) sums it up-

“There can be no progress, no achievement without sacrifice. Success will be in the measure that one sacrifices.”

There are two other strong reminders we can draw out of this Easter weekend:

#1 take the time to acknowledge, celebrate and appreciate the people in your life who have made sacrifices for you. All those who have nurtured and supported you to be who you are today have no doubt sacrificed something to contribute to what you are now, it might be family, teachers, coaches, mentors…you fill in the blanks.

#2 Think about your own resurrection this Sunday. What’s your version, your new lease of life to move forward with? The changing of the seasons is a great queue and a metaphor to jumpstart certain things for yourself. Brighter, earlier mornings are great for some early exercise and longer daylight hours are great for productivity. Think about your habits, your schedule and how you can re-energise your actions towards your 2019 goals.

I listened to a Peter Voogd podcast this week where he shared 3 things that all elite performers do. Here’s a quick summary that might inspire your ‘resurrection’:

#1 They protect their mind

– this relates to what they put in their mind and who they let in around them

-a big part of protecting their mind is by having a powerful morning routine, because a morning routine either sets you up for an amazing and productive day, or just another day. If you ‘guard the door of your mind’ and do the toughest things first, the rest of the day is easier. If you don’t you will just be reacting and won’t be in control. [HINT – think about when you switch your phone on and let your mind get bombarded with messages and notifications. The minute that happens, whose agenda are you really on?]

#2 They get active and increase the strength of their body

-’when you’re stronger physically, you are stronger mentally’

-being active can be anything from walking through to high intensity workouts, do something that works for you to be active in the morning at least 5 days a week. It will help you be more focused and resourceful in your work day.

#3 They reach out to people, or have a circle of influence/advisory board that help them level up and play the game at a higher level

-this links right back in with point one about protecting your mind by having the right kind of people around you

-surround yourself with people that help you think bigger and give you the belief that will help to keep taking big action and making those necessary sacrifices along the never journey towards success.

 

Where do you need to pay the price of sacrifice more in order to obtain the promise you seek?

This week I was lucky enough to hear Dan Pattrick speak again to an audience of property investors. Dan is an incredibly successful and values led property developer and his firm Dapatchi currently has tens of millions of pounds worth of development under construction.  [I’ll put a link to the summary of that last talk that I captured at the bottom of this post, if you’re interested- It’s called 8 Success Principles From An Inspiring Property Entrepreneur].

There were 20 points in total that Dan shared in this recent presentation and I’ve summarised 6 of my favourite here.

#1 DON’T BE AN INTERIOR DESIGNER

Whilst you might have aspirations of being the next Kelly Hoppen or Ashley Hicks (Interior Designers), when it comes to creating a home for others it’s what the end market needs and wants that’s important, not what you like. So to this end, speak to a range of selling/letting agents in the relevant area to understand your end user first.

#2 PAINT EVERYTHING WHITE

Following on from point #1 there’s no point painting everything in expensive F&B Elephant’s Breath when there’s every chance it won’t be to the taste of your end user. From a cost saving point of view, painting walls, ceilings, skirtings etc all white not only saves money on the cost of the paint (fancy colours do cost more), it saves a massive amount of time. Because decorators don’t have to do endless amounts of ‘cutting in’ to border contrasting colours, it saves a vast amount of time and therefore labour cost. In addition, having a blank canvas (ie all white) provides the opportunity for the new owner to put their own stamp on the property.

#3 USE EXPENSIVE UNDERLAY, NOT EXPENSIVE CARPET

I love this point, and it’s a learning I’ll incorporate going forwards. A quality underlay will make a less expensive carpet feel more premium. If you’re letting the property, especially if you’re using it for serviced accommodation like we do, then you’ll know that carpet damage is highly likely. If it’s an inexpensive carpet it’s going to be less painful to replace it when required.

#4 AGREE A FULL SPEC WITH YOUR CONTRACTOR BEFORE WORK STARTS

In other words, define as much as you can in advance and agree a very detailed schedule of works. This upfront investment in attention to detail will remove ambiguity and help keep the project on budget. For larger projects (ie over £100K) you will likely require a JCT contract with insurance.

#5 MISTAKES WILL BE YOUR BIGGEST COST

In other words, having to double back and retrospectively correct something will have a big impact on both your timeline and your project cost. The key things to get really clear on are:

-Building regs

-Fire strategy

-Sound requirements

To avoid the painful retrospective work, consult with the relevant experts and members of your Council before work starts so you can work to the appropriate requirements from the outset.

#6 DESIGN CAN MAKE HUGE SAVINGS

Dan emphasised that this is the one thing that outweighs all other points on a large project. The design of the project must be commercially led from the perspective of analysing the cost to benefit of different layouts. The example that Dan shared was in relation to converting an existing building into multiple flats – by finding a way to add a second entrance/exit to the building it negated the requirement to install an expensive sprinkler system, thereby saving what would have been an additional £30-50K sprinkler system.

 

There you have it, those 6 tips I’ve picked out have the potential to save you £tens of thousands in future projects. A massive thank you to Paul and Dan for the presentation.

On a smaller scale to this but still very relevant, Chris and I were out viewing property for single lets this week and we captured a brief video from one of our viewings. We take a look at a repossession property that to many would look cheap from the outside, but a walk round with an expert builder (our Chris) quickly highlights why many projects like this would require a refurb budget that unfortunately kills the deal.

 

P.S. The link to that first post summary of Dan’s last presentation is http://adaeroproperty.com/8-success-principles-from-an-inspiring-property-entrepreneur/

 

What was the most impactful thing to the bottom line of your business that you spent time on this week?

I clocked up over 4 hours reviewing monthly costs in our businesses and whilst it wasn’t fun, it was very satisfying.

In the last few months I’ve heard several wealthy and successful business people make reference to the equal importance of cost management alongside revenue growth. Revenue growth can often be where the sole focus goes however, particularly in an exciting and fairly high growth space.

I’ve also referenced the book Profit First, by Mike Michalowicz, in several previous posts but I think it will only serve as a great reminder to mention it again. It really is fantastic and a must read, but not just a read, rather a read and MUST implement. The key message in the book is about allocating revenue across 5 buckets (or bank accounts) at the end of the month in order to create profit first and pay yourself first.

One of the analogies that Mike uses in the book is about how we can all be very good at making the last bit of toothpaste in the tube last a surprising number of additional days – ie by not splurging overzealous amounts onto our toothbrush each time and by being diligent to squeeze out every last drop from each corner and crease of the tube. The lesson to carry over here is for us to treat our business operating account in the same fashion. In other words, allocate an amount we need to operate the business with each month and then be extremely resourceful about how we allocate and use that money.

To that end, Mike recommends doing a ruthless review of monthly outgoings a few times a year ie this could be half yearly or even quarterly.

Back to property. We run a portfolio of serviced accommodation properties (both our own and managing for other investors). Because every property will have 4 -5 typical monthly outgoings aside from rent/mortgage (ie gas, electric, wifi, TV license, council tax/business rates) it doesn’t take too many properties to suddenly have tens upon tens of monthly outgoings.

Those 4 hours I referred to above have led, and are leading to, healthy cost savings each month that will compound across the year.

Here’s the exercise, if you’re interested:

-Pull up a list of all the direct debits and standing orders from your business bank accounts

-Copy and paste them into an excel spreadsheet and allocate them to the relevant property

-Go through line by line and challenge yourself on whether the item you’re paying for is still required in the business (ie loads of people have subscriptions they are no longer using)

-For items that you do need like the utilities for a property, check if the amounts are still at a suitable level

-Call utility companies to move onto their best deals

-You will also make savings by moving some bills onto direct debit that currently aren’t on DD

-Use your spreadsheet to track all the utilities and direct debits for each property so you can review again in another 3-6 months

The areas we’ve been able to cut monthly bills have been:

*Broadband accounts – we often set and forget with these but after the initial promotional period broadband providers typically roll you onto an expensive deal so you have to monitor that and move to their current best deal when the time comes (amount saved c.£15 per wifi account)

*Opting out of paper billing with a wifi provider has saved us a few £’s each month too

*Utilities – with up to date readings and a year of usage history you can discuss with your provider the likely projected usage and re-set your monthly payments (amount saved on one of our bigger properties was £235 per month)

*Make sure you have online accounts for your utilities and you are on direct debit, this can save approx £40/year and give you access to the most competitive unit rates

 

So here we are at the beginning of a new quarter and a new tax year – a great punctuation in the year to pause and do this exercise yourself. And of course this doesn’t apply to business only, why not do the same for your personal outgoings?

End of the quarter already! What! Wow that was fast. Do you remember the well known saying from Ferris Bueller –

“Life moves pretty fast. If you don’t stop and look around once in a while,  you could miss it…”

Ok, so that was coming from a High Schooler eager to seize the day, but the words carry wisdom for everyone and applies across the board. Especially into your business world. Why not take this punctuation of quarter end to ‘look around’ and look back on the last 90 days of business. How are you tracking towards your big 2019 property and business goals?

Last year I discovered a great monthly review process, courtesy of Peter Voogd from the YEL 2.0 podcast, that I like to use for a quarterly review instead. It’s called the 7-figure review’ and it provides a great framework.

Firstly, the rationale behind this- Peter Voogd says that, “the best way to predict someone’s next 6 months is to look at their previous 6 months. So, putting that into a quarterly context, we can say the best way to predict our next 90 days is to look at our previous 90 days. Habits trump everything, mindset, decision, network and so on. So if you had a mediocre last 3 months, the takeaway here is that the next 3 are likely to be the same unless you really get conscious about what you’re doing, what info you put in your head, and every single day you do things to get you closer to your goals.“ Is that hard to hear?

This post borrows from Voogd’s teachings and is all about how to purposefully review the previous 90 days so you can set yourself up for a rock solid next 90, and so on.

Most people want to have a great year, they think they will but they don’t take the necessary daily steps to ensure that they will. It’s easy to plan, but executing when you really don’t feel like it is what separates the champions from the mediocre.

This process is about using your reflection as an awareness tool, on what’s worked for you in the past and what you can do differently/reinforce going forwards.

Reviewing each month and quarter is about investing past experience into future preparation and focus – ie your past decisions, successes, failures, lessons. That’s where the good stuff comes from.

Here are a selection of questions to help you reflect on the previous quarter so you can carry on with momentum. Use these prompt questions to help you reflect and free flow write for 30 mins or so each quarter about the previous 90 days. [By the way, I used the accountability of writing this post to get my own review done before hitting publish and it does only take about 30 mins].

Section #1 – OVERVIEW

• What went well, what didn’t?
• When was I in my zone, when wasn’t I?
• When was I at my emotional energy peak?
• What caused me peace of mind?
• What frustrated me?
• Did I do what I said I was going to do?
• What systems have I put in place?

Section #2 – PSYCHOLOGICAL

• What have been my biggest breakthroughs?
• What have been my biggest frustrations?
• What have been my mind-shifts?
• What have been my biggest disappointments?

Section #3 – TACTICS

This section looks at what were my top 5 wins from last quarter: financial, family, adventure…?

Getting down to business metrics ask yourself:

• Did I hit my business income goal last quarter?
• What were the top three marketing campaigns or sources of income last month?
• What were my top income producing activities?
• What are the biggest ways I’ll be producing income this next month?
• How did I add value to the marketplace, could I have added more? (In these property communities and we talk a lot about fair exchange of value, because that’s ultimately how we get paid.)

These will likely be related to your highest values but only you will know.

• Did I leverage technology?
• Did I maximise my reach?
• What will exponentially grow my reach this next quarter?
• What did I do to stay adventurous and feel fully alive?

To help keep you from the nitty gritty march of each day it’s important to mix it with the things that energise you. It might be something small ie for me it’s getting in a game of tennis once a week, or maybe you had planned a mini break with your loved one.  For those with freedom in their highest values this will be particularly important. Can you mix your passion and profession and link up travel to fun destinations with your work?

If you aren’t consciously making a decision to put things in your diary that will keep you alive and vibrant, you will become complacent.

Section #4 – RELATIONSHIPS

I love this one:

• Who did I you connect with and reach out to last quarter?
• Did I take care of my current relationships and did I reach out to people who can cut my learning curve in half- i.e. people who I can partner with in some way that’s relevant to your business?
• Did I leverage partnerships?

Section #5 – TEAM

Think about questions that will help with your team review:

• How was my team engagement?
• How was my speed of communication?
• What feedback can I give them?
• What do they need in terms of skill development?

Section #6 – LEGACY

• What did I work on that was legacy focused? In other words something that you work on now but won’t get paid until long into the future, or something that you don’t reap the benefits for until way later, ie it creating things that you value but that you get paid 6 months or more down the road. Note that if you just do this kind of work for the rewards/benefits you will lose steam, it’s important to engage in legacy work for other reasons, for something bigger than you. As a side example, part of my family legacy work last year and ongoing now is taking conscious time with my boys to teach them one key life value each month.

Voogd recommends spending 80% of your time on profit making activity, creating systems etc that makes sure you have the money coming in for you and your family now. Then 20% of your time on legacy focused things. Eventually when you have built the business you want you can switch focus to investing 80% of your time on the legacy side of things. Isn’t that an exciting prospect? To spend 80% of your time on something that helps a cause you believe in or adds value to the world in some way, and not worry whether it pays you or not.

Conclusion

I challenge you to invest 30 mins each month or quarter to do this. WHY? Because high achievers always ask better questions, and they are always investing their past mistakes/lessons into their future preparation.

Ask yourself the tough questions because the better the questions you ask, the better the answers, and the more clarity you will gain.

With this exercise completed, your task is now to look at how you can use your insights to course correct for the next quarter.

If you have any practices you’d like to share of how you review your months and quarters then please share it.

Here’s to a great Q2