On The Market

How to Know Whether You’ll Scale (or Fail) in Real Estate

Sep 23, 2024

Discover the fine line between scaling and growing in real estate business. Learn why WeWork faltered while competitors thrived, and uncover vital questions to assess your growth strategy. Kathy and Rich share insights on the dangers of overexpansion, the significance of hiring the right talent, and avoiding burnout. They introduce practical frameworks for navigating risks, reward, and maintaining financial health. Tune in for invaluable tips on creating a sustainable business model and enhancing your pathways to wealth.

49:38

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Quick takeaways

Rapid scaling can severely jeopardize financial stability, as illustrated by WeWork's failure to manage growth responsibly.

Distinguishing between growth and scaling is essential for long-term sustainability, with scaling prioritizing efficiency over increased operational costs.

Understanding the underlying motivation behind business expansion is crucial to prevent burnout and maintain a balanced, fulfilling life.

Deep dives

The Risks of Rapid Scaling

Rapid scaling can lead to significant financial risks, as illustrated by the WeWork case. Despite its early meteoric rise, WeWork failed to maintain fiscal responsibility, showing losses of $219,000 an hour before filing for bankruptcy. Their horizontal expansion strategy, which included ventures like WeLive and WeGrow, distracted them from their core business and ultimately contributed to their downfall. In comparison, more stable companies like Regis focused on steady growth and controlled expenses, demonstrating the importance of sustainable scaling strategies.

Intro

2min

WeWork vs. Regis: Lessons in Scaling

8min

Navigating Real Estate Scaling Challenges

2min

Evaluating Ideas for Business Success with the BOA

2min

Navigating Risk and Reward in Real Estate Investing

2min

Navigating Growth in Real Estate

11min

The Financial Backbone of Business Success

4min

Scaling Real Estate: Strategies for Success

16min

Unlocking Real Estate Success with Expert Insights

2min

Your real estate business could fail if you don’t do this right. We’ve seen it happen time and time again. A business finds success, starts growing at lightning speed to capture all the demand, and then burns out, leaving the business owner or investor (i.e., YOU) cleaning up the pieces of spectacular debris. Growing your business can be a HUGE mistake, but scaling it rarely is.

Today, we’re teaching you how to do just that—scaling your business to new heights so you can work less, your team (or future team) can accomplish more, and your wealth compounds in the background. And one person on the On the Market panel knows how to scale a business arguably better than anyone else—Kathy Fettke! Today, Kathy and her husband, Rich, are on to teach you how to start Scaling Smart (which is also the name of their new book!).

Kathy and Rich touch on why once-giants like WeWork failed so fast, how overgrowing can kill everything you’ve worked for, how to start hiring (and who to hire first), and the “never enough” trap that can keep you working for years (or decades) longer than you should. Plus, they even coach Henry and James on their own scaling struggles!

In This Episode We Cover

Why “scaling” (NOT growing) your real estate business is the smartest way to build wealth

The thirteen questions that will stop you from growing too fast (and failing)

Defining your “why” and the reason most investors burn out even after building wealth

When to start hiring employees, and what tasks you should outsource to them

Incentivizing employees to work hard for you while they build their own financial freedom

Being a “humble leader” and realizing that you’re NOT the best person for every job

And So Much More!

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