The central focus of my company is to arm the self-storage investor with the specific tools necessary to identify potential acquisition candidates, to acquire and manage those facilities once they have identified them, to implement sound techniques for creating value, and finally, to capture all of that value through various exit strategies. The process by which all of this can be accomplished rests on five keys that I feel are crucial to success. These keys do not deal with the mechanical processes involved in buying and selling self storage facilities, but are grounded in principles that are fundamental to life itself. These laws deal with the human psyche and govern our thoughts, which in turn, direct our actions. The failure to understand these keys, which have proven to provide the foundation for success, continually result in many investors'defeat.
Principle # 1 – Overcome Fear of Failure
Probably the greatest obstacle to getting started in any business venture is that demon we call FEAR. Just as we have to include risk in our equation of success, so must we include fear. This is not to say that we have to fail first to become successful, rather we must acknowledge that the possibility of failure exists. Failure is a natural part of learning, and as crazy as it sounds, I am extremely thankful for the MANY failures I have endured over my real estate investment career. It is a completely natural process, and just because you fail, doesn't mean you are a failure. Unfortunately, however, I have seen many people that have been defeated by the fear of failure.
Some don't even make it to the failure stage because they were too afraid to try; they were afraid of failing. Some people fear the unknown because it represents areas beyond the boundaries of their comfort zone. Mostly, they fear what others may think of them! They fear ridicule by their friends, and even worse, ridicule by their own families. This fear has stopped more would be successful investors than all other factors or considerations combined.
Some friends act as an anchor placed around your shoulders, holding you firmly in place, keeping you from reaching your true potential. I have done my best to surround myself will people who act as buoys, who lift me up, rather than hold me down. I am more selective in whom I spend time with as I grow older, choosing to spend time with people who have a similar, positive approach they take to work while glorifying God with the time they spend on his earth. As your friends and your family witness your progress, eventually, their attitudes will change, and you may even discover that they will probably start coming to you for advice from time to time.
Principle # 2 – Setting Goals
A BHAG's (or Big Hairy Audacious Goal) are defined by Jim Collins in his books “Good to Great” and “Built To Last”, as a huge and daunting goal-like a big mountain to climb. It is clear, compelling, and people “get it” right away. A BHAG serves as a unifying focal point of effort that keeps you striving toward a pre-defined finish line. I would compare it to the 1960s NASA moon mission where President Kennedy's goal of reaching the moon captured the country's imagination and grabbed people in the gut. Your BHAG should be quantifiable and possess some timeframe associated with it. Jim Collins went on to describe the five criteria of a good BHAG as follows:
1. Are set with understanding, not bravado.
2. Fit within the parameters of what you are deeply passionate about, what you can be the best in the world at, and what drives the economic engine of your company.
3. Have a long time frame – 10 to 30 years.
4. Are clear, compelling and easy to grasp.
5. Directly reflect your core values and core purpose.
It is much easier to become a great organization than to remain a great organization over time. To remain great over time requires, staying focused on what you are deeply passionate about, what you do the best, and what is most profitable in your investing career. For me and my company, my clear and quantifiable BHAG is to reach 1,000,000 square feet within 5 years. This will allow my organization to be elevated to a place in the industry that opens up a whole new world of opportunities with regard to lending, vendor discounts, and status within the various trade associations. However, this is not at the expense of compromising my core values and purpose, which are intertwined with my BHAG and communicated to every member of my organization.
Principle #3 – Establishing Priorities
Setting goals however, doesn't do you or your organization any good without a game plan in place to achieve them. This starts with prioritizing your activities on a daily, weekly, monthly, and yearly basis to ultimately conquer your BHAG. John D. Rockefeller, The founder of Standard Oil who went on to build one of our country's most successful organizations, was a master at prioritizing the activities of his firm to ensure that it attained his goals. After studying his biography “Titan” by Ron Chernow, I was compelled to adopt his principles of prioritizing my activities by breaking them down into different levels. I have now established the top 5 priorities for the year and quarter and a clear top 1 priority along with an appropriate theme. Beyond that, everyone in my organization has their own handful of priorities that align with my firm's top priority.
To reinforce this and to ensure we're all rowing in the same direction, I review our company data on a daily and weekly basis to verify each team member's performance. I also conduct weekly meetings to maintain alignment with our goals and to drive accountability. Remember, if it isn't written down and measured, it doesn't get done. These priorities change from year to year, but as an example, we recently set a priority to keep collections below 5% beyond 30 days across all our properties. The manager's report on this weekly and at our meetings we strategize and share ideas and best practices that the managers have used to successfully reach their goals.
Principle # 4 – Perseverance
The will to persevere is not only crucial to one's success in the real estate investment industry; it is crucial for success in all aspects of one's life. The ability to endure whatever challenges life throws at you is essential for personal development and growth, and it is especially true for the attainment of wealth. If you wish to accumulate wealth, then you must be willing to dedicate a great deal of effort to that end. Creating wealth by building a self storage empire is just like any other skill you choose to master. It takes persistence, patience, and the will to persevere.
Think of a skill that you are particularly adept at. Whatever that skill is, if you are like most people, you have honed and developed that skill over the years and you now possess it as the result of your dedication and the will to excel in your chosen field. In other words, it wasn't handed to you; nothing in life worth having is. A good illustration is that kid we all knew in school whose parents gave him or her everything they wanted. Remember the way they took care of what was handed to them? I remember a friend of mine who didn't care if he broke his toys, left his bikes out in the yard, and eventually destroyed every car he ever owned because he knew it would always be replaced by his parents. Eventually, these kids grow into irresponsible adults who lack crucial skills necessary to not only navigate life, but rarely do they learn what it takes to accumulate wealth.
Perseverance is a conditioning process that is best learned in our youth. Perhaps, like me, you have been conditioned by your environment in your formative years. Family and friends have told you that “you cannot do it; you don't have what it takes; that's a risky idea; or I know someone who tried that and failed miserably”. This continual negative assault may have slowed or halted your progress. Perhaps some of your past attempts did fail, bruising your ego, and you began to believe what the naysayer's were throwing at you.
I know some people who were in this same situation, and to alleviate the pain, they just gave up. It was too hard for them to see through the darkness and trust that things were going to turn around, and that success was not as far away as they had thought. In order to persevere, you must recognize that the short term sacrifices you endure now will be well worth the long-term benefits you will eventually enjoy.
After all, they say Thomas Edison experimented with over 6,000 different materials before he was able to find a suitable filament for the light bulb.
And in the often quoted words of Winston Churchill to Great Britain when it seemed that all hope was lost and the Germans were invading his country and threatening to overthrow him, “Never, ever give in”!
Principle # 5 – Developing your Purpose
I firmly believe that it is just as important to know why you are going on this journey as it is to know where you are going on the journey. And on a more philosophical level, you may be asking yourself, what is my purpose in life? What exactly is it that I hope to achieve in this process of wealth accumulation, and what do I plan to do once I have achieved my goals? The answer will be different for everyone, and may take some genuine reflection and or prayer to find the answer.
For me, my ultimate goal was to “build a business that would provide enough cash flow to meet my financial needs both today, and the future, and allow a great deal of free time to serve God, and be with my family without having to be overly active in the day to day operations of those businesses”. I have been extremely blessed to edge ever closer to achieving that goal and I am beginning to reap the rewards after many years of following my plan. One such benefits is having enough time to write this home study course in an effort to help others, and to give of myself as so many people have given to me.
The challenges of wealth accumulation challenges one to grow in ways you never thought possible. It provides a bridge to a higher plane in life by empowering you to reach your full potential. Wealth enables you to enrich the lives of those around you who may not be as fortunate for any number of reasons. I believe that purpose is much greater than to amass riches simply for the sake of serving myself. Once you are fortunate enough to have achieved your objectives, much happiness lies in the giving of yourself and of that which you have attained through your labors. I believe that God gives me what will flow through me and that if I honor him as the steward of the business which he has entrusted to me, then he will enrich me knowing that I will pass those blessings along to others. This sense of purpose gives me hope, everyday, for a higher quality of life, and hope to someday ease the pain of those with heavy burdens.
A sense of purpose can help us to defeat the demons we call Fear and Despair. A sense of purpose can act as a compass by showing us the way when we are confronted with these challenges and providing us direction. I refuse to settle for a life of mediocrity, or succumb to fear, or whatever enemy that happens to obstruct my path to success. And for those of you who believe that perhaps it is too late, I invite you to draw from Napoleon Hill's classic book, Think and Grow Rich:
Seldom does an individual enter upon highly creative effort in any field of endeavor before the age of forty. The average man reaches the period of his greatest capacity to create between forty and sixty. These statements are based upon analysis of thousands of men and women who have carefully been observed. They should be encouraging to those who become frightened at the approach of “old age”, around the forty year mark. The years between forty and fifty are, as a rule, the most fruitful. Man should approach this age, not with fear and trembling, but with hope and eager anticipation. (Page 190)
If you are between 40 and 60, I am sure you take great comfort in Hill's remarks. This represents a period of time when you can fully apply yourself. It is a time when you can embark on the greatest journey of your life – the pursuit of a higher quality of life through the accumulation of wealth.
The laws for success in the self storage industry have been outlined in the pages of this home study course. It describes the merits of numerous financial concepts and principles that, when properly applied, will enable you to attain your goal of accumulating wealth. In addition, it provides you with the precepts necessary to master the human psyche, that element of our being that gives us the strength to persevere and to conquer our fears, gives us the wisdom to accept responsibility for our actions, and gives us direction in our lives by providing us with a sense of purpose.
It is the combination of these laws of success serve as the catalyst you can apply to propel yourself to heights you may have never before believed possible. And to quote Donald Trump in his book The Art of the Deal, “if I'm going to be thinking anyway, I might as well think big”! I couldn't agree more.