How can you save and even scale your real estate or finance business right now?
Stress appears to be increasing among some investors and business owners. Particularly those that have only been in the game post-2008. At the slightest sign of potentially slower growth many are getting scared.
Others of course have been well prepared, and even looking forward to this moment for a long time.
A couple of wrong moves right now can seal your company’s fate for the worse. Just a couple of wise tweaks though, could put you on a path to even greater success than you’ve experienced so far.
So, whether you are just concerned about the direction of the market, have already begun suffering the effects of a recession in your business in terms of income, deal flow, defaults, or a credit crunch, or you just want to take advantage of the opportunities arising now, here’s what to consider…
Where To Cut Business Costs
If you are still trying to maintain a physical office, that may just be a pair of size 16 concrete boots that is dragging you down. It is unnecessary.
You may be able to trim labor costs in an intelligent way. Review the lowest yielding activities you are paying for. If you still have meetings, axe them. If your team is spending 90% of their time on unproductive tasks, eliminate those. Instead they can put that time into higher returning tasks that produce real dollars.
Software and subscriptions can be another killer. You probably have far more than you need that are eating away at your cash and profit margins.
Where NOT to Cut Business Costs
Do NOT stop marketing.
If you stop marketing, you stop bringing in deals, customers, and dollars. It is just going to be a slower death.
Don’t reduce value or customer service. That will similarly just bleed you dry slowly. Most brands can’t recover from it.
Don’t cut back on quality. Instead, if you have to do less, make it even better quality. For example; if you can’t afford to publish content every day, don’t find someone cheaper to do low quality work. Instead, find higher quality team members to publish one awesome piece every week or biweekly.
Sell Your Business
If you are already deep in the hole, and don’t see a way out, then there are other options besides just folding and closing the doors.
It may be wise to be decisive and shut down than to struggle for the next couple years and close anyway.
You could have a lot more value in your business than you realize though. You could merge with another company, sell your entire business, or sell assets including your data and contracts.
Sell Your Inventory
You may profitably liquidate your business or recapitalize it by selling off your inventory in bulk. This can be portfolios of homes or commercial properties, or mortgage notes.
Refine & Focus Your Business
Most businesses and owners have something they do very well. Yet, much of their time is spent doing things they don’t enjoy or don’t excel at.
Find what you are best at, and restructure your business in favor of that. Hand off the rest.
For example, you can benefit from arbitrage by raising funds from investors, and investing that in another fund which does all the sourcing of deals and management.
Or you can hand off the acquisition or disposition end of the business to a partner. If you are great at finding and locking down deals, just hand them off to a partner who can close them and turn them into cash and cash flow for you.
If you are bogged down in servicing loans or property management, then you can streamline your business to a wholesale model, and pass that part onto another company which is set up to handle that more effectively and efficiently.
Find out more about investing in secured debt and real estate, go to NNG Capital Fund.