Starting and running a note business is an exciting prospect because it is an opportunity to be your own boss and run your own small business. It is important to realize, however, that being your own boss also creates new challenges, such as standing on your own two feet and fending for yourself. It is like leaving home for the first time – there are many risks and uncertainties, but also opportunities: big rewards, a sense of achievement and peer recognition.
The wise entrepreneur has chosen the note business because he or she knows what kind of work they do best and it is a field in which he or she is interested in (real estate). The greater the individual’s passion and enjoyment, the greater chance of success in the note business. In addition to technical expertise and product knowledge of the note business, it may also be necessary to be able to manage cash-flow, accounting, budgets, bookkeeping and taxes. Having chosen the wonderful niche of seller financed notes the individual now needs to acquire some skills including marketing, negotiating, phone skills, calculator skills and (what this article is about) business management skills.
Individuals in the note business are absolutely entrepreneurs. Entrepreneurs spot opportunities and organize resources to create their own businesses. They have the vision, business skills and courage to take risks and possess the necessary leadership qualities to overcome problems. Entrepreneurs normally have a strong internal control (their destiny and success are determined by their own actions), self-confidence, passion, determination and the management skills to plan and control the process.
Just like any other business, Note Business entrepreneurs have to manage with management being defined as the process of ensuring that the business achieves its goals and objectives. Note business management, as in any small business, is essentially the management of your note business on a day-to-day basis, which includes activities in functional areas, such as marketing, production, finance and building your team.
The four fundamental business management activities are all connected together and include the following:
1. Planning – Adequate planning is needed – in the long, medium and short term. Good note business management includes goals and a written plan of attack. That will include a Marketing Plan and a Business Plan. I’ve written plenty of articles about both (I provided a template in a previous article) and encourage you to take a day out of your life, sit down and really think about what your short (6-12 months), medium (2-3 years) and long range (5-10 years) goals and plans are exactly. When we have a clearly defined plan with goals, milestones and benchmark’s it makes accomplishing them that much easier, even if we do not quite accomplish all of them, we will get much closer to them by having them in writing. Planning also includes having a daily, weekly and monthly schedule of routine tasks and duties (see Organization).
2. Organizing – This means making decisions on how to divide up the work that is to be completed. Good note business management includes good organization and good organization is a learned skill that includes time and priority management, both personal and professional. If you do not practice good time and priority management in your personal life how do you expect to have it in your note business? For Time Management: eliminate unnecessary tasks, make lists, focus, take breaks and identify your productive times. On Priority Management, do this… goggle “The Eisenhower Box”, I’ve been using this as long as I can remember. Dwight Eisenhower, 34th President of the United States said it best, “What is important is seldom urgent and what is urgent is seldom important.” He explains it in diagram form using important and urgent as the scales. Everything you do every day can be put into four categories including 1 – Have to do’s (things that are important and urgent) 2 – Need to do’s (things that are important and not urgent) 3 – Want to do’s (things that are not important but urgent) and 4 – Wish to do’s (things that are not important and not urgent). By looking at the things you do on a daily basis and putting them into these four categories it will help you prioritize your tasks in an efficient manner which in turn helps you manage your time. There is also something to be said for getting things done through other people (your team) who we may be able to delegate some of the things that we do not necessarily have to do ourselves (licking, stuffing and stamping envelopes, processing, taxes, etc.).
3. Leadership – This involves the effective supervision and motivation of you and your team. Leadership is a vast topic yet so very fundamental to note business management. Even if you are a one man operation demonstrating leadership characteristics is a developed skill everyone can acquire. It includes among many other things: good communication skills (clear and direct, using open ended questions), listening skills (actually listening not just hearing;, restating, reframing and rephrasing questions), decisiveness and knowing what motivates you and your team members (not everything motivates everyone). Do yourself a favor and read the book Think and Grow Rich by Napoleon Hill or at a minimum google “21 PRINCIPLES OF LEADERSHIP FROM NAPOLEON HILL”. That includes his 11 major attributes of leadership AND 10 major causes of failure in leadership. It can be very enlightening.
4. Control – This includes monitoring performance, in other words, comparing what should have been done with what was really done. Corrective action should be considered if a gap is found to exist in your note business. This ties in directly with time and priority management, having control over your time and priorities. In addition, tracking your marketing, keeping statistics and having a paper trail (both online in emails and off line in a file cabinet) for all communications and transactions. It also means having emotional self-control, being professional, keeping a positive attitude and eliminating negativity.
Each of the above management activities can be an article, book or workshop in itself. The idea is to be highly aware of what these note business fundamental business management activities are and to begin incorporating them into your note business on a daily, weekly, monthly and yearly basis. An important focus area of effective note business management (and self-management) is getting things done through other people, not doing everything yourself and to ensure that tasks are accomplished and that note holders, investors and your team are satisfied.
There is, however, no doubt that if a note business is to be successful, entrepreneurship and business management go hand-in-hand and the two cannot be divided from each other. Remember success demands action, keep on marketing, it’s going to work! TWITA! (That’s What I’m Talkin’ About!)
Jeff Armstrong of Armstrong Capital, your favorite Master Buyer, has been in the cash flow industry since 1991. Specializing in the private mortgage note niche and seller financed notes he can be reached at 818-865-2322 or by email at firstname.lastname@example.org. For beginning to advance training opportunities, resources, to learn more or to obtain a quote visit armstrongcapital.com and secretsofpaper.com.