Real Estate and Business Lessons You Can’t Learn In School
There are different paths you can take to start a real estate investing (or other type of) business, and there are many ways to succeed. Some aspiring entrepreneurs go to business school, while others choose to learn through experience. Each method has its own strengths and drawbacks, and you should decide what’s right for you.
That said, we’re going to look at the essential business skills that schools don’t teach, that you’ll need to have as an entrepreneur and real estate investor.
Essential Business Skills For Investors & Entrepreneurs
1. Dealing with People. Sure, you can teach organizational management, and there is lots of advice on selling, buying, leadership, and all that. But can anybody really teach how to really connect with people? How do you figure out who’s likely to be a long-term ally, and who isn’t? Or figuring out that negotiating is largely based on listening first, and solving people’s problems?
2. Right and Wrong. Business schools do teach business ethics, but it’s not a one-size-fits-all proposition. You have your own internal compass, people have many different views on ethics, and social and cultural factors have to be taken into account.
You learn through your dealings how to get what you want, in an ethical way. You want to consider your reputation too. The real estate community is a network, and information will be shared about who does deals fairly.
3. Having a Life. You know already that running a business, plus buying, selling, and maintaining properties takes a lot of time and perseverance. But finding a good balance so that you succeed without burning out is something that you, and perhaps a mentor, have to work out as you go. No school can teach you that.
4. Managing Risk. That doesn’t mean formulas and numbers, because that is a big part of what business school teaches. Although you probably should be using those technical risk assessment tools and calculations, you have to figure out on your own how much risk you take with regard to your own comfort level.
Risk aversion is more of a personality trait, so you want to maintain a level of risk for your business and investments that won’t keep you awake at night with anxiety.
5. When to Stay the Course and When to Cut your Losses. Yep, that’s a tough one, and nobody gets it right all the time. The risk aversion mentioned above, plus many other factors, are in play. It involves a combination of guessing the future, assessing what’s at stake, and figuring out why the initial assumptions didn’t pan out.
You might run through different projections and determine if you can live with the worst-case scenario happening. If not, you may be better off rebooting and trying something else. Or you might feel that sticking with the plan will pay off. Either way, it’s something that only experience can teach us.
Real Estate Investing & Entrepreneur Success Conclusion
The bottom line is that learning by doing, versus learning from being taught results in different types of knowledge. While they can both be valuable in their own way, some lessons can only be learned through real-life experiences. Putting both types of lessons to work will make you a smart business owner and real estate investor.