Hitesh Mistry: “Scaling up my Serviced Accommodation Business”
This episode is the the first of a series of interviews exploring how entrepreneurs scale up their serviced accommodation businesses. In this first episode Chris interviews Hitesh Mistry as he talks through the different ways to scale serviced accommodation businesses, and the ways he has personally done so with his own business.
Hitesh is owner of Vision Lets who provide rooms with a difference: Modern, Bright and Clean.
Hitesh runs Vision Lets with his wife and focusses a lot on the lifestyle that being a landlord gives, and the passive income it can bring.
The Serviced Accommodation Podcast is a show brought to you by Chris Poulter and Ritchie Mazivanhanga aimed at new and experienced property investors alike. With each show we help you Start, Systemise and Scale your Serviced Accommodation Business.
If you would like to ask us a question or discuss anything in this episode, please join The Serviced Accommodation Podcast Community on Facebook, and ask away. To listen to more episodes or get more information go to www.thesapodcast.com.
Find out more about Hitesh and Vision Lets at: http://visionlets.com/
Chris: Hi, I am Chris.
Hitesh: Hi, I am Hitesh.
Chris: And welcome to the Serviced Accommodation podcast.
Chris: As you may have noticed, it is not Richie joining today, we have got our test results for our series on scaling up. So, we have been working Hitesh for a little while now and having been through the process of scaling up his business, and we thought it would be really interesting and useful (process) to talk about that painful process; right. So we are just going to have a kind of chat about the process you have been through, if there is any (parts) you can help people with — that kind of thing.
So it would be really useful for everyone, just to start off with — to kind of under a bit more about you; who you are; where you are based; what you have kind of been through; and tell us your background career?
Hitesh: Yeh nice one. Thank Chris. Thanks for inviting me today, I really appreciate that. I think when you said you have been working with me for a little while, a little bit longer than a little while. I think nearly around two years.
Chris: Really! That long.
Hitesh: Yeah, it’s been quite a long time and it’s definitely been a journey. I’ll tell you my background. It’s been a great journey though. Really hard.
My background, I am actually a corporate person. I work for huge corporate conglomerate, global company, for ten years. I haven’t been a serial entrepreneur at all. Hitesh ordinary average guy, you know, just…
Chris: That’s amazing. I find it hard to like envisage you in that whole corporate world. I guess the whole time I have known you, you have kind of been out of that you see.
Hitesh: Yeah, exactly right. That’s exactly correct. But you know, I have done a lot of academic studying, I have went through the kind of traditional study modes, the university, I have got an MBA as well. So academically, I have really studied a lot, I have really always (sealed) myself in the kind of corporate world.
But back in 2009, my wife and I, we started buying properties — our own properties — as buy to let. And that kind of got into the flavour of how we invested in property. And actually around 2004/2003… Sorry, 2013/2014, around there. Now we have we have get that decade…
I started getting a little bit itchy in my corporate role and I was thinking, we have started building up a property portfolio, and the income we were getting was quite good. If you kind of called it this passive income whatever. And I really thought of, you know, if I can do it more in property, and left in the kind of corporate traditional job side of things, I know it’s a bit of cliché but I read that kind of “Rich Dad, Poor Dad” book. It really did flick on a lot of light in my mind actually.
Chris: It might be a cliché but it genuinely does, kind of, I think the word is paradigm. I think it’s a great word, I don’t really understand it but certainly kind of, you can look at something and see it in a completely new light, and that’s certainly what it did for me. Because suddenly you will go, I can see the mistakes I am making, my money comes in and I spend it.
Chris: In I just… The money comes in and I put even a fraction of that away to invest in assets and then start sending your money from that, that’s the wealth. It’s such a simple concept and yet so powerful; isn’t it?
Hitesh: Really powerful. Really, really powerful. And really resonates very strongly enough for a while. And also, at that time, 2014, my son has been born and he is three years old. My wife was, in 2015, pregnant with my daughter. And I thought to myself, you know actually, in the first three years of my son’s life, actually… In fairness, because my job was a (field) based role, I generally have a lot of time and freedom to manage my own diary and my customers I was working with, so, I do get to spend quite a lot of time with him, probably more so than an average kind of person.
But, I wanted more than that, I wanted to spend even more time with my son and my family, and I really saw property as a vehicle to do that. And those few things in my mind started to make me think perhaps I should leave my corporate job and go full time property and kind of just go through it and see what happens. Because another thing that I thought was that if I go through it, even if it doesn’t work out, I am young enough just to still go and get another job again. Very employable in that regard. So, if I don’t try that I might have a lot of regrets and that’s really my background and how I got into property.
Chris: So what was it that kind of made you take the leap then — the final leap if you like, from the corporate world into the entrepreneurial world? Did you kind of have something (lined up); did you just go — I have got focus?
Hitesh: I mean the property portfolio was supporting us, not obviously replacing the whole income (with me), but, it was a nice cushion.
Chris: Yeah. So it was kind of a safety blanket, if you like. Whatever happens you would have some money coming in, at least enough to kind of live on. Even though it may be not as much as you used to; right.
Hitesh: Absolutely. But even it was still a just in time because Kim, my wife, she was on maternity, so actually she was picking up a new kid. All of that was becoming — it was a bit of a risk, really.
Chris: Particularly, because she is on maternity. Even that child too is on the way as well.
Hitesh: Exactly. The cost are about to go through the roof. I kind of leave my job…
Chris: So, was that something that Kim has always supported you in or was it kind of a battle? Because I think that a lot of people struggle with is that, you kind of start to come into this entrepreneurial world and you have a kind of mind-set around what you are doing. And if your partner doesn’t share that mind-set, it can be very hard to kind of communicate on the same level.
So was that something that you struggled with or…?
Hitesh: Yeah. I think Kim was — she was so supportive, like really supportive. You know, if you really feel that something you want you want to do, and it’s a dream, then go for it, I will fully support you — we will find a way of doing it. She really gave me that extra confidence to take that step (how) you want and really go through it.
The other really interesting thing as I have always been involved with — personal development, and psychology, and mind-set, and believe (system), and things like that — being involved in practicing, and trying to improve myself, and make myself more accountable for man years. And I thought to myself, you know what, let’s just go through it, one way or another I will just make it work. Do you know what I mean?
I think when you really are focused on something, like very focused, I think then you really do make it work. Especially, if you then say to yourself, you know; we needed to kind of live a good life as well. I don’t need more pressure but, it is true that… For me, I thought I didn’t think working and going major on property was going to work for me — that I just don’t think I would have the focus. I need to really, really, really focus in one thing only.
Chris: Yeah. And I would say you are absolutely right. It’s very hard to really make something successful unless you have the focus around it. Certainly for years I have like two or three businesses, really. At least three businesses going on at any one time, and none of them really did (anything) because they didn’t get the full focus and attention that they needed to really start growth. So, now I completely understand that.
When you went full time in property then; what were you focusing on that time; was it single let still?
Hitesh: I went for the rent to rent HMO model. That’s what we went for.
So we did setup our own HMO that we purchased, we just completed it, it was getting it to go live, so that was really exciting time. And then really focused it on rent to rent HMOs — that was what we focused on.
Chris: Okay. So I guess that’s kind of natural progression, you bought an asset which is an HMO. You have kind of been through that process, seeing how it works. And so, you know what, I could benefit from a lot of these cash flow without a lot of our capital input by taking on rent to rent.
Hitesh: Yeah. Definitely. Didn’t quite go very straight forward though, it took me seven months to get my first rent to rent HMO.
Chris: Yeah, I am sure that’s quite a common path; isn’t it. Because here is an interesting thing, people think if they are going to and get, say, three properties. And you won one every two months and then after six months you are having three properties. But it took you seven months to get your first HMO, but, on rent to rent; how many did you get in the kind of six months or so after that?
Hitesh: Yeah. Then they started to come through. (They first start to flow) through after that, until we got another four or five, quite quickly after that.
Chris: So it’s amazing how that looks; isn’t it. And it is kind of putting the time on it first. And you know when we are working with people in the quick-start program, you have to keep reminding them that okay, you are paying the work, and you are paying the work, and it doesn’t feel like it’s paying back, yeah, but it’s exactly the situation which you found several months of work and after six and a half months you just have been going kind of mental. You know what we are doing.
Hitesh: Definitely. That really does reminds me of about pushing a snowball up the hill. Do you know what I mean, this analogy, you know it’s hard work — pushing up the hill. And you think; what am I doing? This is not working. You can see, there is (someone mentioned), but it’s hard sometime to really think, you know what, I am close to doing it. And then all of a sudden something happens, it starts to come together, and you get a break. And then that snowball tips over and it starts to roll down the other side of the hill, and the momentum becomes somewhat self-fulfilling. You know, you still keep the focus, you still got to keep going. But, things starts happening for you, which is really nice. But you have got to do that bit first, of pushing up the hill, and the belief, and to keep going, and all other things.
Chris: Absolutely. It doesn’t matter what strategy on a guaranteed rent, for instance, the kind of typical one way. You are having to get around with the agents and explaining what we are doing, you feel like hitting break all of the whole time. And just throughout you are saying, eventually, you kind of hit that critical marks; don’t you. Management is exactly the same. At first you are having to, (it will be out there), kind of trying to find people you might be able to help with it. And then eventually you kind of get to that point where really people are referring people to you, or people are giving you a ring. So, it doesn’t matter what kind of structures you are using, there is a way that kind of critical (mass point); isn’t it. And a lot of effort required beforehand.
Hitesh: Yeah. Very much that.
Chris: So, if you kind of quit your corporate life and went rent to rent, which presumably a cash flow strategy. So what was it that attracted you to then do another cash flow strategy on top of that, in serviced accommodation?
Hitesh: This whole thing was kind of around with rent to rent HMO that you are going to make at least £500 a month.
Chris: I was for about a thousand pound a month per property, and I was about to say that sounds very familiar. Often that’s said about SA as well.
Hitesh: Exactly. And that was powerful, it got me into the rent to rent HMO. And the reality is that it was really different, quite honestly, really different. My result weren’t like a thousand pound a month, not at all. My first one wasn’t even £500 pound a month. So, actually if you look at it (and) the breakeven point, because you got a furniture. Actually I am still trading at a loss, in the first… As soon as you go live you are trading at loss. You know, that takes at least twelve months to break even.
Chris: Yeah, that’s true.
Hitesh: So that’s really interesting because I thought, well actually this is not as great as I thought it was going to be. You know, if I was taking five out, which I end up being leveraging so that to finance the outlay for it, but this will take a whole year to break even. Well okay, I have got to hang in there, it’s a waiting game… it will come good, that’s fine. But then I think maybe naively I fell into a similar trap with serviced accommodation.
Chris: I was going to say because that sounded very, very familiar to me. Because people do guarantee rent and a cashless strategy, but, you have got to claw back all that cash which you presented in the first place, and that’s usually a six to twelve month period. And of course ironically, most of the people doing this are doing it because they need money now.
Hitesh: Yes, that’s right.
Chris: So it always depends how you look at it. You can look at the money as well but now we have got the cash flow. But in financial terms if you don’t have the money then you are going to have to borrow the money or come to some arrangement and work with someone else, which means that you are not going to get that cash flow from day one.
Hitesh: That’s correct and the other thing that attracted me to serviced accommodation or changing was, I am a sort of person that I write like to, if you like, diversify, so I don’t really want all my eggs in one basket anyway. So, having the HMOs that (will) build up the rent to rent, you know, that was good and I thought to myself, well, I have got a good focus on this but you we have got rooms got rooms that are filling with pushing the market rent, good properties. But, I always worry about tomorrow, (if it’s) going to change.
So, having a new strategy and a new property business, if you like, means I am kind of de-risking myself in that regard. So as long as I keep the focus on the other thing and have the focus on this new thing, and I felt it was contradictory, you know, but we had systemized quite well, the rent to rent business, the HMO business. So, I felt the time was right that I could spend some more time now, looking at a new strategy and serviced accommodation was what I wanted to do.
Chris: Yeah, I think you are completely right. You need to focus at first, to actually build the business up, but then once you know how everything works, you can put systems and teams in place, you know, leveraging quite (hard).
Okay. So you kind of make the position into moving to SA, so did you start looking for deals or…?
Hitesh: That’s a foundational kind of trading and stuff like that, reading up and trying to understand how it works and comes together conceptually and theoretically. And then went out and started to look for…
Actually, you know what happened was, the first deal was a rent to rent, which originally was going to be an HMO. Yeah, it was going to continue to be an HMO. And the builder who was helping to do the work said, oh, there is a lady –you know, it’s quite close by — that’s operating serviced accommodation. And obviously being fresh in my mind from reading and learning and trading and what’s not. The (word) as an interesting thing, I haven’t originally consider it for this property but (why not) consider it.
So, she and I had a really good chat and she has been doing it for about one year, so, she had gotten some good underground experience, and we went through some numbers with what she was doing, and I thought it was really interesting. I have done some further research and felt that this could be a really good opportunity. So, we then went for it and we tried to a serviced accommodation instead of HMO. That’s kind of how the first one started.
Chris: Cool. So tell us a little bit about that first property, you said it was like an HMO. So where you kind of doing it as rooms or studios?
Hitesh: Studios. So, it’s a rent to rent deal, doing the guaranteed rents deal. And seven units in that whole studio, self-contained units. So you have quite nice, quite attractive proposition for the marketplace. But I thought if I can create a mixture and get an amount of money running a serviced accommodation, it was well worth trying. And the numbers really look like they were going to step up quite well for it. So, that’s what we have done, we went for it. When I say we, that’s really me, but the lady was very much helping me. We basically agree that she would help me with the day to day operation, so it wasn’t very much a (we) operation. She came in and she was absolutely brilliant at helping to get things moving in that property. Really-really good.
Chris: Does she have like an interest in anything or was she just being helpful?
Chris: Was she doing it for free?
Hitesh: No. We obviously set things up so that she would be rewarded on a commission kind of basis, so I set it as a commission type basis. Because I really wanted her to over deliver and really help us to… I wanted us to have some skin in the game. Do you know I mean. So, she is not investing any money in the property itself but if she is going to provide money from services if you like. I guess what it was really. And she was pretty much handy with everything, from the initial setting up on the portals and platforms, to the pricing, to the guest experience, the after sales, all that stuff, she was doing all of that. So, we set it on a commission type basis and we started… It flew out of the door, to be honest. It started really-really well.
Chris: Yeah. And it started with reasonable scale as well, you are not just like taking (on the)… I think the standard way would be take on a two or three bed apartments, and see how I have got to scale from there, so go in with seven studios.
Hitesh: Yeah. Absolutely.
Chris: So, what do you think you struggled with the most when you first get started?
Hitesh: In terms of that property or like…
Chris: Just common, in general. You know coming into SA, it is very different from anything else you might see in property, it’s a real whole business; isn’t it. So there is so many different moving parts to it, from the systems you might have in the background to the end product which people have to get right every time, or they get, you know, you don’t leave guests unclean towels, your (linen) or anything like that, Through to the kind of bookkeeping aspects for it. So it’s such a kind of high arena really, SA. Or was there anything specifically which you kind of struggles with, or it was new to you, or did you feel like it was just a big kind of learning curve but you took it all on board quite easily.
Hitesh: To be honest with you, I was terrible. I didn’t get very involved with the business at all. I went for an approach where I had leveraged this lady, because she has the experience, she knew what she was doing, and she was delivering pretty much everything, and I didn’t get involved really with it. I went back to this idea of spending a lot of time with my family and I was quite happy because I have leveraged out the whole function to her. But, in hindsight, I think that’s the bit I struggled with in that…
And the e-mist book is such a good book. Early on in that book they talked about delegation by abdication, you know, leveraging by abdication. You give someone a function but you don’t actually set the KPIs and measurable, to track actually how well they are delivering. It’s fine to leverage someone, but if you don’t really know what’s going on then what’s the point.
All I could (say is that) in a month money was coming in and I was making profit, (first of all), happy with that. But, by making tweaks and changes you can make that profit even greater, you know that’s the beauty of the business; isn’t it. So, in some ways and it sounds bad, I kind of leveraged someone. But, I didn’t really set anything up in terms of KPIs and measurables, to really understand the business myself in any real detail.
So I think I probably struggle with that because obviously at some point things started to change. You know demand changes, or the amount of profit I am making is changing, although I am actually…
Chris: And then you have no idea why the income is going down.
Hitesh: Yeah, I don’t know why. Because I don’t have a grasp on the business, and then you are really relying on someone to tell you about your business and it’s not even bloody their business. Sorry, I know that sounds a bit ridiculous.
Chris: That’s fair enough. It’s easy enough to kind of fall into, but then obviously at some point you kind of identify that risk and started involving yourself a lot more in the day to day operation of the business.
Hitesh: Yeah, very much so. And I think that’s probably about the time when you and I got involved because I am really a great believer of kind of working with people to kind of create best practice and systems, and have people that have good experience in what you are trying to do and we had a really great chat and I think (a) really good connection.
And it was from then that we started working together and you had helped me to kind of see the whole parts of the business, the different parts of the business, and to get me more involved in it, so that I have got more control — that was it — I think you really helped me to get more control of my business, but at the same time keeping this lady happy. Because (certainly) now I am starting to meddle in what she has been doing. But I have to because it is my business and I have got to get control of it, you know, and (deal) with myself in that regard and actually make sure that we are running a very smooth and profitable business for everyone. So that was the next kind of step, really.
Chris: Yeah. And it was taking it from a, you said, leverage by abdication, into the (thing) that we always talk about, the best way to leverage is you build a system get someone into the system and monitor their performance through KPIs.
Chris: And so, as I said, SA is quite a complex beast; isn’t it. So it’s just getting your head around all the different areas of that aspect and building your own way of doing things. It was what then kind of really built into a business for you as opposed to, essentially, more of a kind of hands off investment before, I’d guess.
So, what pointed you to say that you were going to start scaling up your business and from the kind of original units that you took on?
Hitesh: So, I always had in my mind… And again I think it’s one thing that we talked about in one of our mentoring sessions.
Because I had taken this lady on and I was paying her on a commission type basis. I was quite happy and understood that the concept of leveraging, you know, a staff member. So I was really happy, then I thought well, we definitely got capacity to take on more properties. And if I can do that I still have really good time free, but still making more money, we would be foolish not to do that. So, that was the idea that I really wanted to kind of move that forward and just take on some more properties. Yeah I obviously wanted to take more profit and be more profitable. But going out there and starting to leverage some of the relationship we have been building over for the last two years now, then it was good because some of the good properties were coming and we thought, okay well we can leverage this. Get more properties on, we have got the capacity to deliver and the expertise now, to deliver on a product. And that was just really a no-brainer to try that.
And then obviously with us working together, Chris, having more systems and controls in place, meant that I could be more kind of strategic, in terms of my involvement with the business and make sure that we are steering in the right way, and that we were really focusing on creating a very nice, really good customer experience, product, that was good for them, good for us as well.
Chris: Yeah. And that focus on the end product, which I think when you have got one property your first one and you are setting up you have such focus and attention to detail around it. And as you have started to scale this property, the biggest thing and the most important thing, which can kind of get lost along the way. Is that you have got people in all this different mechanical aspects of the business but you did have to be keeping an eye on the end product. You know, in the guest experience, (multiple) customers actually going in and experiencing. Very important for sure, very easy to get lost.
So when you were kind of going from that point and to scale up the business; what kind of models where you looking out for that?
Hitesh: Rent to rent. That was it, that’s all I knew, to be honest. That was it.
Chris: You had a bit of a false start with that really; didn’t you?
Hitesh: Yeah. And no one ever told me about something called VAT.
Chris: Until we spoke.
Hitesh: Until we spoke. And you said to me… are you joking; are you kidding me. Because that’s really a game changer, and not in a good way. You know that’s life.
Chris: Not a kind of positive impact really.
Chris: So we kind of have a look at your portfolio and I have to look at the different methods around it. In fact I think yours was genuinely the first review I ever did, you know, a couple of years back. And we have kind of been introducing you to some of the other modules and management was certainly one of those modules. And I seem to remember when we kind of looked over it. You went well, this is kind of a no-brainer; why am I doing this when I could be doing management, taking a similar amount of money and not having to put any capital (in); right.
Hitesh: Yeah. Absolutely. And it’s also interesting because, you know, going back to like owning your own assets, this kind of obsession of, sometimes you want to buy into that property, we want our own assets and we get a yield that comes off it, Actually a management module… You know, you don’t have the assets but the yield, and it’s fantastic, you know, you get a great amount of money from an asset that you are just managing but you don’t have any of that necessary (recycled) with it. You know all the capital outlay (actually) get going either. And it’s a really scalable module as well, which when you opened my eyes to.
Chris: Yeah. And I think we were looking at your financial targets, and we went okay so you need X many management properties to achive that andyou were off then, going straight to find these properties.
Hitesh: That’s right.
Chris: Okay. So, you started to scale the kind of management module, so how has that been going for you now?
Hitesh: It has gone really great, really-really well, it has been really game changing. We have taken on some pretty quite diverse properties, we have got some one bed property, we have got quite a few two bed properties, we have also gotten really interesting units that, you know, quite a large scale, and the management fee on those have been really great.
So, it has been a really enjoyable journey, to move up from. And then also with our rent to rent properties, we have also restructured that — you helped me with restructuring that. So moving away from rent to rent to become a more management property. By selling them as investments to other people but retaining the management on them. So, which have helped me from that capital perspective, in terms of paying off on my capital debt that I secured into the business to get going in the first early days, helped me to get rid of some of that. But I retained the management fee on that as well, which was really-really nice. That’s very scalable than to do it that way.
Chris: (I remember) because of that impact, stepping away from that and taking it below the VAT threshold, actually making very similar amounts of money, but you are also getting this nice capital input from having sales and deals.
So, how many guaranteed rentals do you operate now?
Hitesh: Now we have two.
Chris: So kind of scaled it all team way back to below the VAT threshold and all the rest of your business is around the management module.
Chris: And so, obviously you have scaled your management business to a reasonable level now, and that’s kind of the point that this series of interviews is really talking to people and seeing how they have scaled up. Because I know there is, to some degree, a sentiment now around scaling up in SA, though it can be very tricky, and very hard; so what do you feel were the most important elements to you kind of scaling your business up to the level that it is now?
Hitesh: It’s really good question. I think there are few things… When you say there is one thing — there is a few things. I think when you start to scale up it can be quite daunting, you know when you are taking on more and more and more, it can be quite daunting. And actually you come to this kind of feeling, I don’t know if it’s a psychological feeling. And when you think oh crikey, things are moving quite fast now, and wow… You already probably can actually do it, you start to have a little bit of self doubt.
There is also responsibility, you always have responsibility to the landlord that you are representing. And you know as management, you have a lot of responsibility to your staff as you scale up and take more people on. You have a responsibility to the customers that are going to experience the product, and try to get that. And all that combined, for me, it starts to create anxiety and worry.
So the mind-set stuff was really important for me, very-very important, I really went back to my (ways) to always do, which was running in the morning, doing a really early morning routine, I am very much a morning person. And starting my day with time for myself, to really get my mind-set in the right place so that I can really perform on my business. That was honestly so important.
It’s hard because sometimes you can’t directly attribute what you are doing today to your mind-set or some other things that you do on a day to day basis, but for me I am convinced it’s helping me to perform and do really well.
Chris: So do you feel that a routine and it’s very important to kind of bring structure to an entrepreneur’s life.
Hitesh: Yeah, I do.
Chris: You know, on the basis that you have not go to be in the office at 08:30 or 09:00 and you have not got someone looking over your shoulder to see if you are working or not and that type of thing.
Hitesh: Yeah, I think so. I am very much a quite structured near kind of person, anyway, organised. So for me it’s very important. I mean I do think it is, you can easily lose days, weeks on end, if you are not careful and you can get so easily dragged into things you shouldn’t be doing. You know as you scale up and get more involved, you know, you can easily get dragged into organizing the cleaning rota. Fielding the calls for the customers that are not happy or really happy. And actually you have got to really be very disciplined to what you want to do with your day that’s going to deliver and add more value to the guest, or your business, or your staff, or whatever it might be. I mean that’s definitely one, the psychology mind-set side of things. That was massive for me.
The second thing was really your numbers and your accounts, and your profit and loss, and that sort of thing. For me, it’s a very critical area, such a critical area. I think there is many of us, me included, would go on this journey and have no clue whatsoever about that business. And I don’t mean in a harsh way… But honestly it’s such a major problem, I think that we go up there and we are so focused on getting more sales and bringing more properties, just go and get them, just go and get them, set them up, just go, go, go. But actually when you measure them, some of them could be performing not very well, or with some small changes you can make them perform really-really well. You know, with some, you got a cull and say this is not the right way I am doing things, get rid of them.
But you only know that, for me, you only know that through your numbers, and you have to be (so) on your numbers, also setting up KPIs, I never had KPIs. My only KPIs was the kind of occupancy (rate).
Chris: And we both say what a great gauge that is.
Hitesh: Having KPIs in place, having your accounts, and actually looking at them all the time, like all the time, and making all your decisions based on it, you know, it’s very-very important. I think for me, scaling up, that’s a massive part of it.
Chris: Yeah. Definitely. Because otherwise, it’s very focus on scaling and lose the performance aspect of it. And realizing you are not really performing where you need to be. And actually it’s part of growth, and that’s always going to happen to various degrees. But like you say that, what you found certainly is that the biggest impact you can have on that is by having focus around the KPIs, having focus around the reports, and checking in with them a couple of times a week to see where you are at, what can you do to impact things, make a difference, etcetera.
Hitesh: Yeah, definitely. And you can become very busy otherwise, just running around as you grow; but is good running.
Good way of measuring. So that was very-very crucial for part of scaling up. I think also really embracing and leveraging people, systems, technology — huge — and what can be done with technology is just (depending on that)… But so powerful because it can give you really low cost, automation, much smarter way of doing things, and then we have talked about… And low cost can really make a difference to a business. You know leveraging people, very important, you know, part of scaling up as well. You can’t do everything, you are going to have the right people in place.
Chris: You wouldn’t want to be there
Hitesh: No, you wouldn’t…
Chris: It’s very hard; isn’t it? It’s very hard to let go of various aspects, you know, controlling the business.
Hitesh: Yeah. A hundred percent. And then also having peers, people that are operating similar business to you and being in the right network of people, I think it’s really important too. You know, regular meeting up with people, having contact with other people. You know, having people around you that have best practice, and are operating best practice, that know their stuff, you know, it’s really crucial to surround yourself with people like that as well.
Then the part of the mentoring and the coaching that we do together for this few years that we have been working together, Chris, it’s been really vital, because it’s part of that network. And when you are not sure, because you don’t ever have all the answers when you are not sure, you got to better ask somebody. And get answers to that instead of reinvesting the wheel, you can implement things that other people have done that have served them and worked really well for them. You know, you put it into your business and yeah, great, you are seeing almost immediate results.
Chris: And it’s also a kind of motivation as well; isn’t it. I was talking with Graham, he is also a member of the boardroom, and he was saying how when he comes each month, it’s like if someone has come along and they have taken on an extra block, and he is like, okay I better get my ass in gear, I feel like I want to come back…
He sees someone else and they have implemented a system which (is working) really well in their business, he is like okay, I am actually going to do that. So there is a lot of that kind of peer driving your business forward as well, in terms of healthy competition, if you like. Or getting ideas and kind of wanting to do that.
And if I can put words into your mouth, I think probably the element in your case was just scaling, and we have already kind of touched on it really with just getting the strategy right, because obviously if you continue to scale using the (guarantee rent) around what you are doing, then that would have ended quite badly. And so it was (all the) things are fundamentally important but getting that strategy right, I think without getting that in the first place, there is no foundations to build off.
Chris: Very true. And that is a great way, Chris. Again I think if you try and fly on your own — somehow you would be aware of some of this stuff. And when you surround yourself with people that are doing same business, operating a similar way, ahead of you then you can learn, you can learn and you can review things and go, do you know what, this is not quite working, this is the reason why it’s not working, you know let’s change approach, let’s try something new, something different. And then you can explore it, and then implement it and try and see what happens.
But the strategy — that was a real big game changer, that whole VAT thing, changing the module, going in the management module, and scaling upwards, it was a really game changer for me. It’s a very massive thing, thank you Chris.
Hitesh: So we talked about (build) to a scale module, and we heavily recommend to people that (are often) just scaling up straight away. You build a module, say two bed properties using half (mile) of your city center, targeting trades, and (tourists)… Whatever your module might be, on each specific module you test that module and make sure it works in the way you expect before scaling up.
So if you are talking to someone who have maybe been through that process, who have been operating it, you know, two or three properties for six and twelve months and now they are looking to really push forward and scale their business in the same way that you have; what kind of advice would you give to them?
Hitesh: Set up your KPIs, early (days), really early (days). Get your measurables in place and how you are going to measure it — your growth — I think that’s really crucial. I would say get up your game, kind of like mind-set psychology wise, you know, really, when you go to any level, it is very (testing) of the mind; do you know what I mean. And I think you are going to be prepared for that, and I think that’s a big thing. And make sure you got the right kind of structure in place, strategy and support in place for that next phase. You know people that you can turn to, work with, (help) with, and have the right systems, and process, and people in place. That’s what I would say.
Chris: Thank you. Thanks for joining us today Hitesh. I hope everyone found that very interesting and also very useful.
Hitesh: Thank you Chris so much for your help. And thanks for inviting me today, I appreciate it.
Chris: Cool. Taking you.
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