Measure everything- If the process is not measurable, it can’t be improved. We have over 70 KPI (key performance indicators). We were able to make incremental improvements that made a big difference. If you buy a house and we can save 1,000 dollars on our budget and we flip 500 houses a year, that’s 500,000 dollars a year. We’re able to reduce our house time from six months’ to four months’ time from buying to flipping it. We figured out a process to shorten that within a year.
As part of my series about the “How To Take Your Company From Good To Great”, I had the pleasure of interviewing Andrey Sokurec, a native of Belarus. He obtained a degree in Finance and Banking at Belarus Economic University where he won a full scholarship and graduated with honors. After college, he landed a position underwriting commercial loans for a large Russian bank. He left that job to come to America, believing it to be the best place to realize his dreams. He co-founded Homestead Road to integrate the entire process of buying homes, restoring them to marketability and “homesteading” families.
He has become a recognized authority in Real Estate as the founder of Midwest Real Estate Investment Association, as a host of the TV Show “The Real Deal in Real Estate” and as a frequent guest presenter at investment summits and training seminars. Andrey released his first book, “Total Financial Awakening” in September of 2020. Mr. Sokurec is a big believer in education and is currently enrolled into Harvard Business School (OPM Program).
Thank you so much for joining us in this interview series! Before we dive in, our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
I came to Minnesota from Belarus in 2004 because the U.S. is a great land of opportunity. I won a green card lottery, and I needed to pay my brother back from a loan I took for a failed business. I thought I would work here for a while and then come back home. I had my kids here and ultimately decided to stay.
I took any job I could when I got here. I was a pizza delivery driver and a construction worker before I used my Finance degree as a loan officer. It was a humbling experience. I worked 70–80 hours a week. I was making decent money, but I had no time to spend with my family. I received a wake-up call when my young nephew died. Family is everything, and I needed to find a way to prioritize them.
Real Estate Investing was something I was passionate about, and it didn’t require a lot of resources. I learned that I can attract private and bank capital without having my own money in order to invest in real estate. I found a mentor to help me figure out how to build my business. I made 12,000 dollars on my first home that I flipped. My company, Homestead Road, has since sold more than 1,000 homes, we’ve been on the Inc. 5000 list of fastest growing companies for the past two years and we recently expanded from Minneapolis to Milwaukee and Tampa.
Can you tell us a story about the hard times that you faced when you first started your journey? Did you ever consider giving up? Where did you get the drive to continue even though things were so hard?
One of the struggles was having the money to get started. I had to be very disciplined and make a lot of sacrifices so I could set aside money to invest in real estate, but I had the vision of what I wanted to do and nothing was going to stop me. The hardest thing to do was to purchase my first property.
When I made an offer on the house, I was incredibly nervous and didn’t want it to get accepted. It is difficult to take the first step when you are close to making a big and wonderful change in your life. I’ve seen so many people not pull the trigger. The right time to start is right now. I think a quote from the author Nora Roberts is appropriate for people starting their first business. “If you don’t step forward, you’re always in the same place.”
Having someone you trust who believes in you is also so important. When I told a mentor about my trepidation to buy the first house I put an offer on, he said he would swoop in and close the deal if I didn’t. He then reassured me I was doing the right thing. I needed that confidence boost. Conversely, it’s important to stay away from naysayers. Some relatives may even tell you your ideas won’t work because they’re trying to protect you from failure.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘takeaways’ you learned from that?
When I purchased my first house, I wanted to be a master of delegation. I hired a painter, and he asked what color I wanted the house to be. I said, “You’re the professional. Do what you think.” He chose pink. Not red… pink. I couldn’t believe it. The lesson I learned is to delegate but verify. I still keep that picture of that pink house to remind me.
What do you think makes your company stand out? Can you share a story?
The special sauce is a group of talented people who have defined roles and responsibilities. The unique combination of people brings a unique culture. It’s the people who have ideas. They build relationships with customers. They build creativity, the intangibles.
I think understanding that we’re here for the long haul is also important. We have no intention to sell our company. Many times, when smaller businesses have investors or private equity, they lose the culture.
We made a decision we wouldn’t take outside investors early on. It helped us be resourceful. We didn’t have a lot of money to buy fancy furniture or rent a big office, but the lack of outside influence kept us from being pushed to generate short-term profit. We’re focused on the long term health of the company. When private capital is involved, it’s hard for the CEO to make the right decision for the company, for the community and for the culture.
Which tips would you recommend to your colleagues in your industry to help them to thrive and not “burn out”?
I learned quickly that you need to schedule vacation first at the beginning of the year. When you are on vacation, don’t look at emails. Entrepreneurs are workaholics and need to be trained how to rest. It helps you rejuvenate. Don’t be reactive to all problems and challenges. If you’re not rested, everything seems to be a challenge. Also, celebrate your successes. Before you plan your week, write things you are proud of before deciding what needs to be accomplished next.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?
I have a lot of life mentors like Harvey Mackay (NYT Best Selling Author of “Swim with the Sharks without Being Eaten Alive”) and Roberto Rodriquez (Business Advisor and Homestead Road Board Member). I also get inspired by reading people’s biographies like Andrew Carnegie. Carnegie spent the first half of his life building a company and the second half of distributing wealth. I want to do the same thing. It’s really critical to find role models or people you like in different categories (Business, Health, etc.).
Ok thank you for all that. Now let’s shift to the main focus of this interview. The title of this series is “How to take your company from good to great”. Let’s start with defining our terms. How would you define a “good” company, what does that look like? How would you define a “great” company, what does that look like?
A good company has the foundational elements and is seeing success in the markets it serves.
A great company has a well-defined long term vision and purpose and has also found its unique culture to enable it to move toward that vision. Homestead Road prides itself in being a broad based, culturally diverse company. We have people who speak more than 10 languages in our office. They are all unique pieces to our puzzle and offer invaluable perspectives. We want to consider many viewpoints when we’re solving problems. Finally, a great company is socially responsible. Homestead Road donates 10% of our proceeds to various charities.
Based on your experience and success, what are the five most important things one should know in order to lead a company from Good to Great? Please share a story or an example for each.
- Have a vision or dream- It’s important to have a big, audacious goal. Something that makes you excited. You have to chase your dream and money will follow, not vice versa. Adapt best processes and systems. We want to become a household name for people to sell their house as is and stress-free. When you have a huge goal, you attract like-minded people who want that excitement.
- Build a great team. In order to succeed, you need to have a good army. It’s important to surround yourself with people who are better than you are and get out of their way. Don’t explain what they need to do. They’ll figure it out. When I started, I had to do everything myself; finance, accounting, marketing. When I brought in chief marketing and financial officers, they were much better than I was, and it has improved all of our results. It’s hard for entrepreneurs to let go, but you have to in order to succeed. I was looking for someone with experience in a company 10 times bigger because they know where I want to be.
- Measure everything- If the process is not measurable, it can’t be improved. We have over 70 KPI (key performance indicators). We were able to make incremental improvements that made a big difference. If you buy a house and we can save 1,000 dollars on our budget and we flip 500 houses a year, that’s 500,000 dollars a year. We’re able to reduce our house time from six months’ to four months’ time from buying to flipping it. We figured out a process to shorten that within a year.
- Be curious and strive for constant and never-ending improvement- We’re all used to certain ways of doing business. You have to ask, “Why can’t we do something another way? How can we respond to customers faster? How can we improve?” Just because you haven’t done something before,it doesn’t mean you can’t in the future. If there is something I like, I take a picture and implement it.
- Surround yourself with mentors and a board of advisors- When I got started in real estate, I didn’t know anyone. I identified top people in real estate. They didn’t know who I was. I sent letters asking if they would talk to me. There are so many people who want to talk to you and are willing to share their perspectives. Steve Hoyt in Minneapolis was the first person to answer me.
Extensive research suggests that “purpose driven businesses” are more successful in many areas. Can you help articulate for our readers a few reasons why a business should consider becoming a purpose driven business, or consider having a social impact angle?
With our company, we want to serve our customers better than anyone else. We’re proud to be the best in our industry based on reviews, Google, referrals and the Better Business Bureau.
While we certainly want to be better than our competitors, it goes beyond business. It’s really about our highest level purpose as a company which is to positively impact others. This is important for us because we have the resources to help people in the communities we serve. The more successful we become, the more financial help we can provide for people and have a positive impact on them.
If you only have money as a target, it won’t excite you personally or your employees. When you have a certain level of financial security, money doesn’t mean much anymore. The biggest satisfaction people can get is from helping others as part of a purpose-driven business and brand.
What would you advise to a business leader who initially went through years of successive growth, but has now reached a standstill. From your experience do you have any general advice about how to boost growth and “restart their engines”?
Hit the restart button and purposely try to look at things through a new lens. Lean on your network and ask your mentors or contemporaries about their favorite books. Reading can spark so many good ideas. Travel the world and see museums and see how other people live. It is very motivating to go to Europe and see the culture there. When you always stay in the same place, you become comfortable with your own lifestyle. It’s good to see other perspectives. After you go through this process, you may just find you’re bored and you need to start something else.
Generating new business, increasing your profits, or at least maintaining your financial stability can be challenging during good times, even more so during turbulent times. Can you share some of the strategies you use to keep forging ahead and not lose growth traction during a difficult economy?
During turbulent times (like the ones we’re experiencing with COVID-19), it can serve as an opportunity to re-evaluate your business model and explore new opportunities. In terms of re-evaluation, take the time to sit back and better understand your customers, your competition and the category you compete in, while also evaluating your business operations and processes including zero-based budgeting. You have to adapt to reality and constantly adjust your processes. You can’t just continue to do the same thing.
And in respect to exploring new opportunities, when you take the time to step back from the day-to-day, it’s easier to identify or recognize synergies or adjacencies that are a fit with your existing business and customer base. In fact, we recently started a real estate brokerage. We recognized the strong fit, which presented an opportunity to add 1 million dollars to our bottom line.
In your experience, which aspect of running a company tends to be most underestimated? Can you explain or give an example?
In my experience, running a company with a large financial risk is underestimated. Homestead Road guarantees 30 million dollars in loans for the homes we invest in. Managing financial liability is an incredibly difficult part of running a company. The challenge is doing it and not worrying too much, especially about the things you can’t control. Dale Carnegie wrote a book called “How to Stop Worrying and Start Living,” that has been very helpful to me.
You need to expect that something will go wrong. Like with COVID-19, you have to be prepared to lose everything while navigating those challenges.
As you know, “conversion” means to convert a visit into a sale. In your experience what are the best strategies a business should use to increase conversion rates?
Track everything. If you don’t measure, you won’t improve. Build as many Key Performance Indicators (KPIs) as possible. At Homestead Road, every department has a scorecard with particular focus on those KPIs that relate to converting a lead into a sale. When you look at those on an ongoing basis, you can establish best practice benchmarks and optimize your entire business across functions.
Of course, the main way to increase conversion rates is to create a trusted and beloved brand. Can you share a few ways that a business can earn a reputation as a trusted and beloved brand?
In general, the real estate industry doesn’t have a great reputation, so we wanted to establish a premium brand with a premium service model focused on customer experience. Our goal is to consistently delight every customer much in the same way Lexus or Ritz Carlton might. It’s why we have over 100 5-star reviews and many customer referrals. Beyond that, our customers value the fact that we give back to the community in many ways. We opened an office in Florida. Someone accepted an offer because they heard of our brand from someone who liked us in Minneapolis.
Great customer service and great customer experience are essential to build a beloved brand and essential to be successful in general. In your experience what are a few of the most important things a business leader should know in order to create a Wow! Customer Experience?
The little things you do for your customers go a long way to build your brand. In fact, 10% of our business is referrals. We build lasting relationships with our customers and it really helps us grow. Also, it’s so important to put in place your outside-in metrics to understand every customer touch point from the customer’s perspective.
I started paying attention to Nordstrom, Disney, Zappos, Amazon and other brands I like so I could learn from them. Zappos Insights has a lot of good information on culture and customer service. We used some of that information and built our proprietary Feel the Joy process. When you sell your house to Homestead Road, we offer a flexible closing time to make sure everything is done on your timetable. You get to see your home one more time after we’ve done repairs and other updates. We give you a watercolor painting of your home.
What are your thoughts about how a company should be engaged on Social Media? For example, the advisory firm EisnerAmper conducted 6 yearly surveys of United States corporate boards, and directors reported that one of their most pressing concerns was reputational risk as a result of social media. Do you share this concern? We’d love to hear your thoughts about this.
I do share this concern. We live in such a fast-moving time. People want instant response and instant gratification. You need to allocate resources to respond to complaints otherwise you could have a situation like United Airlines did when they broke a guitar and did not reimburse its owner. With social media today, it spreads like fire. Expectations from customers are very high. At the end of the day, we just want to do the right thing and take 100% responsibility for our actions in a genuine and transparent way.
What are the most common mistakes you have seen CEOs & founders make when they start a business? What can be done to avoid those errors?
Some CEOs try to do everything by themselves. Michael E Gerber wrote the following in “The E Myth Revisited”: “If your business depends on you, you don’t own a business — you have a job. And it’s the worst job in the world because you’re working for a lunatic!”
CEOs should focus on hiring the right people around them. Ideally, the business should be able to run smoothly if you (or any other employee) leave. Consider bringing in consultants to start in order to put your company on a solid path. CEOs should also make sure their companies build or adapt proper systems from day one. Finally, they should dream big. “Shoot for the moon. Even if you miss, you’ll land amongst the stars.” -Les Brown
Thank you for all of that. We are nearly done. You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂
I hope to teach kids how to be an entrepreneur. I would establish a mentorship tribe for teenagers. When I was looking for mentors, I looked everywhere. There should be a program that teaches kids from diverse backgrounds and income levels how to build their own businesses.
How can our readers further follow you online?
Readers can follow me on Facebook, LinkedIn and Twitter. They can check out my company, Homestead Road, at homesteadroad.com. I’m also proud to announce I’ve written a new book called “Total Financial Awakening” which provides a starting point for people who want to generate wealth while being truly happy through passive real estate income.
This was very inspiring. Thank you so much for the time you spent with this!