Episode 18: Mastering annual planning

Justin Piche (00:00)
Welcome to the Ground Game Podcast. This is Justin Piche.

Clay Hepler (00:03)
And this is Clay Hepler. And we're here to talk about how to win the ground game.

Justin Piche (00:22)
All right, Clay. Man, we were just talking before the call. It is busy right now, which is a good thing. I mean, I prefer it at least. Although, again, we've talked about this a couple of times, but it does make kind of the work-life balance challenging. I've got, my wife went back to her corporate job this last week, starting on the 13th of January. And so we're re-adjusted. There's a reason for it. There's kind of a...

I'm not gonna get into the details on this call, but it's a good opportunity to kind of get in type of thing, but it is with some growing pains. So she works.

Clay Hepler (00:53)
Yeah.

I'm gonna come I'm gonna fly down to see

you and I'm gonna take you out and I'm gonna say Justin Let's go out. Let's get some dinner. Let's hang out, dude You need a break, bro

Justin Piche (01:08)
Yeah.

I'm so, yeah, I'm over, I feel like I'm over committed on a lot of things, but it's okay. I like to keep things like totally full. I get too bored. I don't do well with boredom. I'm just gonna fill it with something that I like, but yeah, I mean, so we're just growing pains. She's working every other Friday. So kind of as a part of that, I've agreed to take off every other Friday to mainly watch the kids. But this last Friday was my first one kind of off with the kids.

and I had investor calls. I missed an investor call because I had scheduled, which was bad. It really kind of let you that's you never want to do that. It's just kids were crazy. It's like unpredictable. I was expecting to have certain blocks of time that I was available. Yeah. And it just it just didn't work quite that way. And I ended up spending a lot of them day on calls. My wife come out of the office and be like, I feel like you're just on calls all day.

Clay Hepler (01:57)
perfectly, perfectly fitting in.

Hahaha

Justin Piche (02:09)
It's one of the challenges

of being a business owner is that the business doesn't stop. Like it doesn't stop even though you want it to, it doesn't really stop. And yeah, you can set really strict guard rails on it, but it's hard. It's really hard to set those guard rails. So trying to get better. But this is not what this episode is about. This episode is about mastering annual planning and how you set goals and what are the measurables for your success. And I think a lot of our listeners and

you know, us included have meandered through business at times without clear objectives. Like what are we targeting? And so it's tough. mean, if you, you don't have clear objectives for what you're trying to achieve in your business, you don't know really where you're going. You may have a feeling you may like, you know, measure the improvements of your business by a feeling, or maybe you do a couple more deals, but like, what is your end goal for the year? You've got to have a measurable target that you're shooting for. So I just completed my annual planning.

I guess about two weeks ago, we've got seven key kind of measurables that we're going through and I've assigned some rocks for the first quarter to work towards those. So we're going to talk about those, how we came up with them, how the planning meeting went, et cetera. Yeah, what about you? When did you do yours? You did yours end of last year, right?

Clay Hepler (03:25)
Yeah,

so did mine end of.

And, know, quick thing on goals. They're important because they show us how to be appropriate in the moment. They are directional like a compass. They are not the end all and be all. But the reason why we have goals is because they define what we should do in the moment. Now that's stolen directly from Gary Keller's The One Thing, which is an incredible book for anyone that is struggling with

shiny object syndrome in multitasking. And you'll see my goals. You're like, this guy also has a lot of shiny object syndrome to a certain extent. Right. And, but the reality is I, I almost wrote about this in the land letter this week. I kind of talked about something a little different, but I was going to write about like the flywheel of business. And so as you get larger, as you have more people on your team,

And also you have a platform like the ground game. People bring us opportunities all the time. And they've heard, basically know us, right? They've heard us on the podcast, kind of how we view the world. It creates this flywheel of opportunity. And it's really through the relationships that you sort of had this flywheel of opportunity. So if you're starting out, you know, my first year was, hey, I just want to make a certain amount of money. Right? I wasn't thinking about potentially being a partner with other people on deals.

I wasn't thinking about potentially helping with someone wants help on a subdivide or private coaching. Those are all very synergistic with the current business. So when you listen to Justin and I talk about our goals, even though there will be an overarching goal, we do play in a couple of different arenas that are very complimentary. And that a lot of times is because

We have the ability to do that. We have the team and the administrative support to do that. And I just want to preface that. Justin, you have anything to add to that?

Justin Piche (05:36)
Yeah, no, that's great. think what I would say to the listeners, what you can expect to take out of this episode. What is our annual planning process? What does it look like? How do we set specific measurable goals? And then what are we doing to track progress? And how are we holding our team accountable? That's kind of like the real most important thing, I think, in this is how do you hold everybody accountable for their portions of that? So first topic here is like, why is

annual planning crucial. And we kind of talked a little bit about it in this opening, but it's really about being proactive versus reactive. That's that's maybe the first point I want to make is just. It takes a year is a long period of time. You know, it's a short period of time, but it's also a long period of time. And if you don't have an objective you're shooting for and then you break that objective down into quarters.

and then maybe even months and then maybe even weeks and then maybe even days of what you're supposed to be working on, you will quickly find that you've made it six months into the year, you're nowhere near the goal you set and you have no hope of achieving it anymore. And so it just, feels, you feel defeated, right? You feel defeated. You miss out on opportunities and there's just increased stress. It's just, it's not a good feeling to be halfway through a year having set a goal, not set a plan, you know.

in action to actually achieve that goal and then realize I'm not gonna, I'm not gonna, I'm not gonna meet it. So getting that annual planning process and setting those milestones, it gives you a clear focus. It gives your team a clear focus and direction for what you're working towards. You can keep your team accountable. You can celebrate the wins as they happen. And if you're analyzing where you are each step of the way, you have the ability to tack when needed.

Clay Hepler (07:25)
Yeah, I completely agree with that. I find that the the annual plan is like, this is where we're going. But really, where, where you need to focus is those quarterly plans, the 12 weeks, there's a great book called The 12 Week Year, you can use some sort of other planning methods like rocks, which is from EOS, Entrepreneur Operating System, you can use OKRs, which is basically Silicon Valley.

way of creating objectives and then key results contribute to that. really the annual planning is for me a lot less important than quarterly planning, right? So we set this big ambitious goal for, this is where we want to be annually. But really, the quarterly plan is what is bringing us to where we need to go. And so on the quarterly plan, there's 12 weeks in a quarter. It's like every week, we can really say, are we moving close to our goal? You know, in the fall, if you guys are

long time ground game listeners, and I were kind of giving an update on, this is where we're at with closed and projected profit, right? And that was the weekly update for you. But every KPI has that weekly update component to it. And the more you measure it, the faster you can kind of move and change, right? It's kind of like taking a weight every day or tracking your net worth. You're starting to see what things, inputs and outputs do I do.

that contribute to me losing weight, gaining weight or making more money or kind of decreasing my net worth. And that's what we're going to talk about a little bit today.

Justin Piche (09:01)
Yeah, let's get into like the actual annual planning process. And I think we probably have slightly different ways we do it. So maybe I'll talk to how I do it first and then Clay can add his incredibly smart ways that he does it that are different than the way I do it. So we use the EOS system, right? So we have the EOS meeting cadence. We're doing the level tens every single week. We're doing our quarterly planning. And then the annual planning is

Basically, it's just like a really long quarterly planning session because it goes on. You update and adjust your goals for the next year. You revisit all of your core values of your company. You go through what are your three uniques. The whole system of this, what they call the vision traction organizer. You go through it, you review it, you make any updates you need to, you reset your three year and five year or 10 year or whatever it is in this business.

I always do a five year target and not a 10 year target just because I feel like 10 years is a little too far out. So we do a five year, three year and a one year, adjust those. And then we agree on, hey, what are the measurables of that success at the end of one year? So that's like the first part. And then from there, we go into first quarter rocks. First quarter planning. What do we need to do the first quarter to make our one fourth of the way step?

to achieving this end of year target? And then what are the key things that we need to focus on? And it's not supposed to be a lot of stuff. I mean, we're talking three, four, maybe seven is like the most they recommend items to actually focus on because if you get too many things to focus on, you're not, it's like, if everything's important, nothing is important. So you've got to pick what are those absolutely critical things that you need to move forward to achieve your end of year goal and thus your three year and thus your five or 10 year, 10 year goal.

So we start by looking at 2024. How was our performance? Right? If our metrics were, we wanted to generate a certain number of leads. We wanted to close a certain number of contracts. We wanted to achieve a certain gross profit or net profit goal. We look back and we look at what did we actually achieve this year versus what our targets were for the misses. Talk about it. Why did we miss? If it's a big miss, it goes down to an issue that you then work through later in the meeting and solve that issue.

And if it's a success and it's like great, maybe we didn't set a big enough target, right? I think the the way the book says it is is you should be basically 80 % you should achieve 80 % of what you've set out if you're doing much less than that It's either because you set too many targets too many goals They weren't realistic or you didn't do what you were supposed to do and you've got to evaluate for yourself Which of those was it and I find that for me at first?

doing this process, was I was setting too many things. I was setting too many priorities for the business to focus on and we just couldn't manage the right amount of attention in each of those things. And so this year, the big press was, let's get that into a smaller number of key critical things that are going to move us forward. Everything else we can still work, but it's not our primary focus. We're not necessarily keep holding the whole team accountable for those extra things. As with as much rigor as we are, these specific key items we've identified.

That's basically our process. What's yours?

Clay Hepler (12:23)
Yeah.

Yeah. It's, I went into it a couple of podcasts ago, but it is really reflecting on, you know, essentially what did we do last year? you know, what was successful, what was it? and we recently implemented the EOS into our business. And so there is a lot of, there's a dearth of data. There's a dearth of, of understanding of our, the inner process, like the, the historicals of EOS.

And so we really just did a pretty significant quarterly reflection, right? So for us, that's the big part of our annual planning. We're looking on reflecting on the past year, and we're reconnecting to, know, where do we want to go? Who do we want to be? Which is very important. Who do we want to be? And then looking out and saying, okay, this quarter based on our personnel based on who we have, and our profit, how much cash we have in the bank, like

How do we grow? How do we hit our goals? And so that really, we set the specific targets in each individual department. So we'll have departmental objectives, like every department has its own objective, and then we have departmental KPIs and then individual KPIs that feed up to the department, which feed up to the greater goal of the business. And everything has to contribute to the revenue, the gross revenue,

goal of the business.

Justin Piche (13:55)
Yeah, yeah, that's great. So part of the annual process, planning process for a team like mine where I have department heads, I have key leadership that are responsible for their aspects of the business is getting input from that leadership team. This is a cooperative process. know, Clay went into this one of the last episodes about getting buy-in from his team on what their

you know what their milestones or what their improvement areas are and what they're committing to doing and achieving in the next year. It's the exact same thing with annual planning in your leadership team. Because if you come in as you know maybe the tyrant or whatever like the you know the business owner that's like we're going to do this we're going to do that without good input from your team on understanding what is actually achievable by them and what they see as realistic targets. It's going to be hard to get that buy in from everybody. The way that I approach it is I

before the meeting, had a quick kind of pre-annual planning meeting with my leadership team and I told them specifically, said, each of you need to think through your aspects of the business and bring three, four key critical measurables that will define our success towards achieving our revenue this next year. And then we're gonna bring all those into the meeting and we're gonna discuss and prioritize those and pick which are the actual top priorities. Everything else is gonna kind of either

be pushed to another quarter as rocks, like another quarter we're gonna focus on those objectives, or we'll implement some project to get it done, but it's not gonna be one of our key focus areas for the business as a whole. And I think that framing and then getting that feedback from them and having them come prepared to the meeting, it helped us move through things a lot faster. So when we got to the part where we're like, okay, what are all the things we wanna work on? We had a list of about 25 different things that the team brought.

across for me and the other leadership team. And then we spent basically the next hour or so agreeing on which which of those things are going to move us the furthest along towards our goal. Basically just ranking them or combining them if they could be combined because some of them are pretty similar across departments or whatever it might be. And then ranking them in the order of importance. And then the top basically I don't know how many it was. What is it one two three four basically the top four or so.

came into be our, this is what we're targeting first quarter as rocks.

Clay Hepler (16:24)
Yeah, okay. So was there anything in particular that stood out to you?

Justin Piche (16:32)
I mean, I was impressed by my leadership team and like what they wanted to achieve this year. That's probably one thing that stood out to me. And then I think the other thing that stood out to me is when you have people from different departments bringing items that they think are priorities, where they overlap, you can see the real and most important priorities. And so I'll give it, we're gonna kind of, I'll talk through my specific measurable goals for the year kind of in a few minutes here, but.

One of the ones that was pretty critical to us was our CRM. A lot of things, a lot of goals, a lot of the most important items for the sales team, for the acquisitions team, for transactions, for project management. It was all tied to data analysis, KPI tracking, and our CRM. And the CRM is this, you we use Notion, kind of go into this a little bit. We use FollowBoss and Notion.

Our Notion CRM is already very well built out. I use a template from a buddy of mine who's spent a lot of time developing it and then have over the last three years really changed the heck out of it to make it bigger and more effective for the team. But it's gotten to the point where it's kind of, it's not siloed enough. It's kind of a lot of information. So when the sales team is looking at certain dashboards, there's too much information that they don't need to see. Acquisition's kind of the same way. And so we're building out.

basically different dashboard views for each of the departments. We're building out document management automations where we don't have to upload into Google Drive and then copy links and stuff. We can just upload docs directly into Notion and have a sync each night that takes those docs and stores them in our Google Drive in a really organized manner. it's document retention is a lot easier, KPI tracking.

will be automated through from our other software programs, et cetera, into this. So we're not manually entering each day all the KPIs that we're trying to track. Cards will communicate better with one another. Project management cards will be better linked with transactions and sales so we can see updates easier across departments. Automations for tasks that are just more robust when certain stage changes happen or certain things happen. It kicks in tasks for other departments. Task tracking is going to be way more visible.

for the whole team to help hold everybody else accountable. There's all these, and the big one for me is the financial tracking. Like tracking basically each deal having its own ledger, each cost associated with it, investor funds, bank funds, funds coming in, payoffs, notes, note payments, note sales, all tied to single transaction with ledger in each one individually so that bookkeeping is easier. Reconciling by books is easier.

understanding what the real profit payouts for investors need to be without having to go into a bunch of different spreadsheets and look at a bunch of HUDs all the time will be easier. Calculating gross profit and commissions for the team will be easier. Everything will go just a lot smoother once this is rolled out. that kind of commonality across multiple priorities for the different departments made our notion build out and finalization be the number one most important rock for us to work on this quarter. So that kind of stood out in my planning process.

Clay Hepler (19:49)
For me, the, the one that felt like the most important and we've already kind of solved it was, leaf flow. you know, leaf flow is the blood of this flight. know, that it is, it is everything in, this business. And in order to keep our heart pumping, we need to just keep having opportunities and leads. And, and we had a department and outbound department that

had a little bit of a difficulty and You know in December under December and we're just facing record low leads and there I could load lead flow and we did this huge overhaul of that department and change scripts significantly change approaches significantly change data and targeting and We are now up to 2x what we used to have in our lead flow

So that was a kind of a big thing for us for me This this gets is that a little bit of an unusual time? You we had this large initiative which I I can't talk about today But one of our acquisition managers their our core acquisition guys is no longer gonna be with us he was spearheading an initiative and Kind of out of the blue It he's no longer gonna be with us and so now for us to kind of

This is natural. This happens at business. All plans aren't going to go according to plan, right? I wish they did, but we've kind of reoriented and now we're halfway through January, a little bit over halfway through January, we reorient and say, like what are our objectives now as it relates to the big goal? The big goal is the orienting thought. But I mean, I could go into each departmental goal. I don't know if that would be helpful.

What do you think we should do to discuss our goals?

Justin Piche (21:49)
Yeah, I mean in the spirit of transparency, I'm just going to talk through real on a high level what my key measurables are for the year. And then I'm going to translate those into basically discussing what are the rocks that I'm working on this quarter to work towards that annual goal. I think that's kind of what I want, maybe just to help illustrate how I think about the annual process and how those those annual measurables translate down into what am I working on this next quarter? So I'll just go through it real quick. So

Our revenue gross profit target for the, you know, the flipping and like minor development type business, the off market business essentially is $5 billion gross profit, which would be basically HUD minus HUD. So maybe a quick aside on gross profit. People talk about a bunch of different things. The way I see it is you have total sales. Total sales would be the total dollar amount of property that you sold, but that is not your revenue or gross profit. You've got to take out.

your cost of goods sold. The cost of goods sold is essentially your purchase price of the property, whatever you bought it for, and the cost that you can attribute directly to those properties. So if you're doing clearing work, then that gets added in. If you're doing a survey, that gets added in. you're so on and so forth, that all gets added in. So gross profit would be the net of those two. Take the total gross sales minus our cost of sold. If you're doing a double close, that'd be like what you get out of the double close, your double close kind of delta that you're making on the deal.

And then our profit goal is two million. So I'm setting a 40 % margin on gross profit target for this year. And that, you know, is okay. I would say you may, if you can get it up to 50 or 60%, who, yeah, that's amazing. You know, plug it, plug them, do it. We have a decent cost of capital. All right. So that, that, that plays into that cost of capital plays into that gross profit to net profit piece. And then I have a pretty big team, right? I got a lot of overhead.

Clay Hepler (23:33)
Yeah.

Justin Piche (23:43)
And as you scale up, generally your margins start to shrink. Ideally, you can try to keep a know, lean mean fighting machine, but I'm trying to be conservative. I don't want to set unrealistic targets. I think 40 % margin on gross profit is a reasonable estimate for us when a reasonable target to achieve. Key measure. Yeah, go ahead.

Clay Hepler (24:01)
Justin, what is

your cost of capital? You mentioned that if you feel comfortable sharing that, you don't have to share that kind of approximately. Just for listeners now.

Justin Piche (24:09)
Yeah, no, no, no.

I would say our average cost of capital is about 30%.

somewhere in that range. And that's with all taking title, that's no double closes. So, and I'll get to the deliverables and the actual percentages here in a second for this up. So, measurables, how are we gonna achieve this? Well, first is average gross profit per deal, $50,000. That's our target this year. 50K average gross profit per deal. So sure, we might do a flip and make 25K on it, great. Well, we better have a small subdivide with 75K or another flip with 75K.

Clay Hepler (24:19)
30%, 30%, yep.

Hahaha

Justin Piche (24:47)
gross profits offset it to keep those equal at 50k. That's basically what we're targeting 50k on the acquisitions. We're targeting 75 leads per week and three contracts per week. And those line up pretty good because we generally have about two thirds of our contracts go fully to close. So if we're doing two contracts a week, 104 contracts per year at 50k that gets us to just over 5 million gross profit. So those numbers kind of check out.

The next one is cost of capital less than 20 % of revenue. So right now it's about 30%. 20 % of revenue is where I want it to be. So how do I get there? The specific is one third of sales are double closes. If we do a double close, there's no cost of capital, right? Because we're not having to buy the property. And so we don't have to pay an investor. We don't have to take a bank loan out. So that's the goal to get that down from 30 % to 20 % is one third of our closes be double closes.

Clay Hepler (25:29)
Mmm.

Justin Piche (25:44)
Sales has some KPIs five properties under contract weekly And we find about 20 % of our sales contracts fall out. So the target is 200 properties sold lots sold in 2025 and the reason why that's way in excess of our acquisitions is because we do about 20 to 25 percent subdivides and each of those subdivides averages Four to five lots. So there's more lots being introduced than the properties that were we're acquiring. So sales needs to be

They need to have a higher output volume than our intake volume just to keep up with the number of lots we're creating. Average days in inventory for non-subdivides under 75. double close is to me, I know, I know. But that's inventory. When I say inventory, I mean we are holding the property. So for me, a double close would be zero days in inventory. If we are buying and selling at the same day, to me that's zero days in inventory.

Clay Hepler (26:25)
Whoa.

Okay. Okay. Okay.

Justin Piche (26:41)
factor into the average. So a third of double close is going to help significantly bring down that average. And then anything that we're holding, you know, that would factor in. So those are to be, you know, probably 90 days, 120 days kind of average in there. think we're right at 115 now. So we're not terribly far off, but I'd like to be faster. I like more turns on capital. Four large, new large development deals, one per quarter. And when I say large, mean one million plus gross profit potential.

And those are sourced from the business. This is not a people partner with me and we do deals together type of metric that's outside of this metric. This is for my acquisitions team to be good enough in negotiating and targeting these larger development potential deals in order to get one per quarter under contract. Those are our measurables for our year.

Hey guys, this is Justin interrupting your podcast as I usually do to just say thank you for listening. This episode is a good one. We're talking about annual planning. I just challenge everyone here if you have not done it yet, it's not too late. It's still January. Get your quarterly annual planning done. And as always, please subscribe, leave a comment, rate, review. We really appreciate your feedback and helps us provide more value every week. Thanks and back to your regularly scheduled programming.

Clay Hepler (28:04)
looking to go after 10 million. I'm just kidding.

Justin Piche (28:07)
Dude, go for it. I'm here to help. You let me know.

Clay Hepler (28:12)
No, no, so we settled at four and four million with 50 % margins. Again, I don't know if that's an accurate number. I really, really don't. We are leaning out our team a little bit this year, having more commission-based salespeople, not overhead like that.

and focusing on higher dollar value properties. So, you know, we're anticipating that to be plausible, specifically because we're going to be doing some low cost marketing to acquire opportunities. So how we get there is outbound marketing at $2 million, bringing in $2 million, a direct mail to half a million bucks, broker partnership acquisitions is 1.8.

$1.8 million.

That total target is 4.3. I would be happy at, again, 75 % of this, 80 % of this, I'd be really happy. That'd be really healthy year. But at this point, this is kind of where we are. As that breaks down, we're gonna target $100,000 in profit per 10,000 mailers. We're getting more targeted on higher quality deals, so when we're sending out our mailers, we're trying to go for the larger opportunities.

For outbound it's 1.5 quality leads per day per outbound associate Which which looks like about 15 leads per day, which is 75 leads per week, which based on our numbers Is is about a deal and a half a week of close closed deal and a half a week or 1.25 closed deals per week from that from that channel

As it relates to direct mail, we're probably only going to be direct mailing to close deals this year between March and June, right? Because our cash conversion cycles, we're assuming 120 days of cash conversion cycle. That means that, you know, if we acquire an opportunity in September, we might not make it, right? So basically, your year is written

between January and September for most land flippers.

Justin Piche (30:45)
Yeah,

I'd even argue it's written September of the previous year, to September, right? Because yeah, your intake pipeline, whatever you've got in the hopper right now, that's your first and second quarter, a lot of your first and second quarter revenue. So you got to keep that in mind, obviously, as you're coming up with these numbers, right? The goal is to make them not necessarily a stretch in the sense that you almost have no hope of achieving it, but certainly a stretch in the sense that

You might not achieve it. You better work your butt off to get there.

Clay Hepler (31:17)
Yep. Yep.

Justin Piche (31:18)
That's awesome.

I love how specific, we're, for the listeners, we have a notion that we're looking at, so I'm seeing these specific targets that Clay has in here, and this is really detailed, and I really like the way he presented this stuff.

Clay Hepler (31:29)
Yeah, thank you. Yeah, so then, you know, the outbound team, we have a very specific, like, this is how we're going to do it. And it's enhanced salary structure for retention, comprehensive training for our sales team and our outbound team. And then, you know, implementation timelines, Q1 implementation of this new training program for our sales team in order to get a higher quality opportunities is by

February Which assumes a full operation at this at this level of production? We're assuming about two hundred thousand per month Closed at a forty thousand dollar per deal gross profit per deal and Assuming March to August fully operational thirty that would be 35 deals at forty thousand dollars per deal which is a one one point four million dollars of

gross profit, realized gross profit. And then assuming that every quarter, Q1, Q2, Q3, we get the premium deals, right? Our assumption of a premium deal is 200,000. Again, that could be low. We got a premium deal in December that's half a million dollar deal, subdivide deal. But assuming conservatively, we have a premium deal in this outbound channel, which is about $2 million of total volume.

And if we're going down to marketing for direct mail, again, it's the 10,000 mailers for 100K in profit. And yeah, so very, very sales heavy. We can get into another, if you want me to get into another kind of objective, Justin, can kind of open up an operational objective to hit these goals. What would you like to do next?

Justin Piche (33:24)
Let's go into kind of what are we focusing on this quarter to move us forward. Because I think I'm trying to, if you are one of our listeners and your eyes just glazed over while we were talking about numbers, Clay and I had the benefit of looking at the numbers on paper. So the things he was saying, I was reading and it made a whole lot more sense. I think the important thing I want people to take away from this is like we are getting pretty specific with what we're trying to target and you need to.

Like you need to be specific. It needs to be measurable. You need to be able to go back and track it and keep keep it updated over time to see where you are versus your goal over a period of time. It's really important to have those specific measurables. Closing more deals is not a good objective. All right. And not to say that anybody really is setting that as their objective, but maybe you are. Maybe you're like, hey, I just want a few more deals this year than I had last year. I challenge you to set a target and then design your marketing.

design your team, design your lead flow process, design your funding or financing or however you're going to acquire these, all of your process and systems around actually achieving those goals. They all work together, right? We went through a kind of exercise of designing a business on a previous call and we kind of did it at a high level, but it's an exercise I do with every single coaching client that I take on, unless they're like really established and they already know what they're doing and it's more of a systems or a specific part of their business they want to work on, is we go over and we say, what is your...

What is your money goal for the next 12 months and the next three years? And then I work with them to design a business, a team structure, and a marketing outflow that can realistically achieve that target. So that's why these numbers are so important. So just that's what I want people to take away. All right, rocks. So what am I focusing on this quarter? This was our process.

This is the longest part of our annual planning is agreeing on like, are the key things that we're going to focus on? I already talked about it earlier, but my number one most important objective this quarter is our full notion CRM revamp rollout. So that is my number one priority. I own that as the owner of the business. Obviously each of my department heads has input because their portions of the dashboard, their portions of the CRM are all being designed custom for how they want to best see data and best use the CRM.

That's one. Number two is implementing a double close sales process and double close acquisitions process because we don't currently try to do that. Basically, we do a lot of due diligence. We've got a relatively long kind of marketing build up before we're ready to release a property. And we are very organized. I mean, it's great because we're really organized when buyers come in of how we're reaching out to them, the email templates that we have send.

the automations that are sent to capture those leads and get them the information they need. It's very good. It's great, but it takes a long time to get there. So we need to be faster. If we're going double close, we need to be faster. It's just a different sales process because it becomes essential to line up the buyer before you close. You've really got to find that buyer in the first 45, 60 days. You've got to be aggressive on price. You got to be quick on follow up. And we just don't have our sales process built out well to do that. So that's number two. We're expanding into another market. That's number three.

So getting the data ready, getting the marketing plan for a new state. We've got a lead engagement process build out as a rock. So that's more of buyer's list, automations, neighbor letters. Like how are we engaging our leads, our buyer's leads on our new properties? Coming soon, email chains, like all the stuff that goes around, Dispo and marketing more effectively, building that out better.

And then two more. The first one is four phase coaching plan for our cold calling team. So our new acquisitions ops manager is building out like a very in-depth coaching plan for each of our cold callers, our cold outreach team to upskill them. And then the last one is fully built out follow up action plans for every acquisition stage, every single lead that comes in, every person that we have any conversation with.

needs to be in a stage within action plan and a set follow up schedule. And that schedule has to be built out for a long period of time. So how are we doing that? Obviously we're we use follow up also we got the email stuff already built in, but texting Betty for texting and just trying to get make sure we can reach out to these people when we need to to get more leads out of good conversations that would they just couldn't connect on price or maybe they just weren't quite ready yet, but they're still good leads. We still had good conversations with them. How do we maximize return on those leads?

Clay Hepler (38:06)
Excellent, man. There sounds like some really, really good opportunities. As it relates to my business, we have the departmental objectives, right? So for our transaction coordination department, the number one thing that we find contributes the most to speed of sale, speed of a deal in inventory to change or move our money quickly is the time it takes for us to

Get a deal on a contract to get a title company. Land investors, a lot of times are moving from market to market and sometimes it could take someone a week to find a title company and that is a week or more delay in your closing process. And if you're doing 10 deals a month, that is 50 days of delay in your cash. That gets really expensive.

right, depending on what your cost of capital is, depending on your cash conversion cycle, that's the difference between successfully scaling a business or staying in a different revenue stratosphere, right? And so we really, really care about speed, especially in that transaction department. So that's like a KPI, that's an objective, that's like living or breathing, right? And so for our...

Transaction department that's that's what is so for our disposition department We I have an incredibly talented disposition associate and we're trying to sell this quarter half a million dollars of of deals and Get seven hundred fifty thousand dollars of deals locked up, you 250 to sell in the first quarter And that's the disposition objective

Justin Piche (39:37)
you

you

Clay Hepler (40:00)
for the acquisitions team, it's $800,000 of deals under contract off market opportunities, and then three quarters of a million in profit for broker opportunities, broker opportunities for our business. So those would be.

Justin Piche (40:11)
you

Broker

being on market deals. Yeah.

Clay Hepler (40:22)
Yep. And for those are kind of the big, the big objectives for the quarter for us, the Dispo, the transaction coordination and the acquisitions to two other kind of smaller objectives are hiring two acquisition managers, full time commission based all commission based acquisition manager and then hiring a

incredibly talented operations manager, essentially almost like a COO, but very, very talented operation manager. If you guys know kind of Justin's structure, I think about my business a little bit differently. The operation manager would sit directly below me like an integrator would. And then the dispositions, acquisitions, marketing, which is outbound slash scrubbing department data.

is is underneath that as well. Finances with vendors, they all flow up into the operations manager and that person would be responsible for strategic objectives, which is getting into larger opportunities development and entitlement opportunities, enhancing our brand image.

and then operating and kind of managing our team members day to day. They would be sitting in the one-on-one meetings. They would be basically a right-hand person to me. And the key, one of the key I learned about this process is there are so many different types of operation managers. And it's quite difficult to just say, I just need an operation manager. Because there are sales operations, which is what your person was. There is marketing operations. There is...

like a COO type, which is more strategic leadership and they delegate to other people. So this person needs to live between the grinding world, right? And kind of in between Justin, like I'm still doing a lot of heavy lifting, but also I'm able to think strategically. And so it's not gonna be necessarily an easy hire, but it's hiring, I'm hiring Global Talent for that. You know, quite expensive for Global Talent, Profit Share.

revenue boosts for that role and really excited for it. So hopefully we'll get that person in the business here in the next month. I'm heading to Norway in four weeks, so I wanna have them on, kind of at least picked out within the next four weeks. And that's a big goal. I think that's gonna be a business changing hire.

Justin Piche (43:08)
Yeah, mean, what a role. Because right now you're doing all that. Right. mean, that's a huge, huge lift type of a role. Yeah, I think that probably is the next logical leadership hire for me as well as somebody who's kind of sitting overseeing each of those departments. Right now, I like it. I hold it. And I think I've given each of my department heads a lot of ownership to think strategically, you know, but that could be kind of rolled up.

It's interesting. There's so many ways to structure these businesses. So for the listeners, there's no right or wrong way. I love the way Clay's thinking about it. Again, I'm thinking about it a little bit differently. you know, yeah, it's it's so interesting.

Clay Hepler (43:51)
Yeah.

And one other thing to add to that, right? So the reason why I'm doing this in this way is because I like sales. I like marketing. And so I want this operations manager to be a marketing oriented manager because I really want them to spearhead the new market initiatives, development, entitlement initiatives. But an operations manager,

in many cases is actually managing sales teams as well. And I actually want to keep that because I really like it. So the job description, when you create a job description, you can basically build what your organization needs. It's not what someone else tells you that you need, which a lot of time we get these prescriptions from a podcast or someone and they say, hey, this is the type of hire that you need.

That's not the question that needs to be answered. The question is, what is my business actually need? And really, what do I like we've gone through the time audit, delegation ladder, what do I need? Like what what what can fill me up? What do I really like to do? And sometimes if you hire that person, right, which I made this mistake hiring the acquisition manager when I did my previous acquisition manager, like I like that role, I like being in that role. And so at that point, I should have hired the operations manager.

But now I'm coming around and doing it and that's the different role and the reason why I'm hiring that. I hope that was helpful.

Justin Piche (45:26)
Yeah, no, man, that's great. So a more things to talk about here. I think we already talked about why it's so important to set concrete, measurable targets. I don't think we need to beat that horse any longer. How do you stay organized? So I think everybody knows I use Notion. That's how I stayed organized. I have templates built out or I've bought templates or I've created templates for how to track all this stuff because I want it to be visible. I want to be able to go back to it always. I want to be able to update it.

That's how I do it. You know, there's a million ways to do it. How do you track? I'm assuming you use Notion too.

Clay Hepler (45:59)
I don't, just,

I just all rattles in my brain. No, sometimes I feel like it's like that, right? Like, so we, we have Okay. Like an OKR section of our notion as well. Right. And again, notion works, monday.com works, Asana works. really, it all kind of works as long as you have a system that you follow. Google Sheets works, but we do have the notion system, right? We have a notion system that every week

Justin Piche (46:02)
In your prayer.

Clay Hepler (46:29)
We do our quarterly or our level 10 meeting, our weekly meeting with leadership and we go over, hey, how are we doing with these things? Like, how's it going? So we built that out. And then we have a level 10 master KPI tracker. So we talk about that and we talk about like how's the KPIs contributing to our greater goals? Like, do we need to shift? Do we need to pivot? What are our biggest issues here? And so yeah, that's it.

Justin Piche (46:58)
Yeah.

Challenges. So what would you say are the biggest challenges that you've seen in the annual planning process? And maybe not just the planning process, but actually achieving your goals over a year. That's a long time.

Clay Hepler (47:13)
Without question, it's the quantity of goals that people have. Without question, without question. You know, get invited to a mastermind to speak. You get an opportunity that comes across your desk that is too good to be true, right? You're too good to pass up, that is. You, all of a sudden, something happens, something derail you, like your core, a key member of your team leaves.

a life event happens. These types of things are natural. There are things that are outside of our control. There are things that are in our control. And those both cause frictions to... Most of the people listening to GroundGate Podcasts, I'm sure they're not procrastinating, right? But it's really the lack of staying with it, right? And then the shifting of priorities because of Shiny Object. And again,

when you keep orienting around like, am I going? Where's my business going? And you could start a funding company. You could build a SaaS. You could flip Infill Lots. You could flip or recreational tracks. You could develop. You could subdivide. There are so many different things to do, but really the way that we get to where we want to be is not by saying yes, it's by saying no. And I think the biggest pitfall is people's inability to flex the no muscle.

Justin Piche (48:40)
Man, that is so true. I agree 100%. I also think maybe for us, what is the biggest challenge we faced is not keeping and holding the team accountable in kind of our weekly level tents. I have seen this in myself that if I've had a really busy week and I'm like behind on a bunch of things,

and we get into the level 10 meeting. I almost never postpone it or cancel it. Although every once in a while something comes up where we just have to. But I really, that's like a sacred meeting. You really can't cancel it if you want to, if you want to keep track of everything and move through. But I do find occasionally I will have a significant lack of energy going into that meeting. And that is not good because it means that.

I'm not going to be as focused of holding the team accountable and pulling the updates out of them or pushing for the right updates that I need to hear to help get us back on track while we're off track. And I think as a leader of your team, it really, it all falls to you. mean, yes, they're responsible, but what people will learn is just kind of human nature. And I've seen this time and time again in the corporate world is if people aren't held accountable and they're not responsible for reporting on their progress or their updates.

In general, they aren't going to volunteer those updates and it may deprioritize it in their mind just enough to not make the type of progress that you need. So as the leader, if you've had this leadership team meeting, you know, this annual planning, this quarterly rock objection objective setting, and you've gotten commitments from your leadership team to move these things forward, you have to every single week talk about where you are in respect to those goals.

You have to bring it front and center. You have to do it publicly with the rest of your leadership team. You can't let anybody hide behind skipping over that part or going slow or like, you know, moving quickly through that part so that maybe they don't give their update. You've just got to keep it in the open. And I mean, that's the hardest part about accountability. It's just keeping everything in the open and keeping things moving. So I find that if you're not on it and if I'm not on it, then things will start to slip. So I've just got to be on it. Right.

That's probably it for me and then I agree with shiny object syndrome priorities can shift in the year I just think if you're gonna hold true to your plan and you really are going after these goals with a conviction

If something does come up that supersedes these priorities, you need to have get together and get a new quick priority setting meeting or like a, you know, a session where you adjust the priorities. You have to be able to tack. I definitely am not saying to anyone, set your annual plan and do not deviate from it. Obviously that's not the right move, but if competing priorities or more important priorities come up, it needs to be a discussion and you need to get that buy-in again from your team.

Clay Hepler (51:41)
Yeah. And let me just sprinkle a little bit extra on that because this is where a running mate, a consultant, a coach, another land investor that you know and respect and maybe is a step ahead of you or you maybe feel embarrassed to be around a little bit. Having that other person that you say, I'm going after this, this is what I'm doing.

Justin Piche (51:45)
Yeah, please.

Clay Hepler (52:11)
and they can call you out, I think is a cheat code. Right? You might not need a coach, you might not need a consultant, but you might need a friend. You might need someone that is going to be honest with you when you need to have that honesty. And that has always been helpful for me because in our businesses, we are the CEOs.

And of course there is a culture that we want to foster of no people, right? We don't want yes men and women. But we're still the CEO, right? And that means that a lot of times there are people that will hold back the punches. Not because of any other reason, because they're respectful. They are maybe...

You said a president that you're a little bit harder. You're a high D like I am, like I'm a very high D and I speak with conviction. And so a lot, sometimes people that are not high Ds, um, are not willing to really communicate unless you really bring it out of them. And sometimes you need someone to come forward versus try to bring it out. And so friends, colleagues, coaches, consultants is really the cheat code to overcome the challenges. Have that person, a running mate to say,

What are you doing this quarter? you actually doing this? Or are you just saying you're doing this?

Justin Piche (53:39)
Yeah. I mean, even you need to be held accountable, right? Who's holding you accountable to do what you need to do? So you need to be that for your team. But I agree, man. I it's one of the reasons why I love this space and kind of the collaborative nature. I've got at least like 10 people in this space that I could call, you know, and ask for just brutally honest feedback. If I had if I was wrestling with a priority decision or whatever you, for example. Hey, Clay, I'm thinking about doing this. What are your thoughts?

poke holes. I'm thinking about switching my priorities to do this. Having that person is super, super important. Obviously it can be a coach or mentor, but over time, a lot of those relationships end up turning into, you know, friendships, friendships that can, that can help keep you sharp. I love it. All right. Well, we've talked through quite a few topics here. I think it's time to, to wrap it up. maybe just a Annual Annual planning is the guiding light for your business in this next year.

And without it, you are like a ship navigating in the night in a storm with no lights. You're going to crash on the rocks. And I'm not going to say you're going to because obviously ships may not crash on the rocks, but you have a chance and you don't know it's there. But with those goals in mind, think of your goals as the lighthouse. The lighthouse is the thing that's steering you in the right direction. Save you from those, the catastrophic crash or collision or destruction of your business.

You know, might not all be doom and gloom, but certainly if your goal is to achieve a certain set of goals and you don't know what those goals are, you're not gonna achieve them. Leadership team is critical to getting buy-in from your leadership team, critical to setting your annual goals in quarterly rocks. You've gotta get buy-in from the team. It can't just come from you. I mean, it can, it's just without the buy-in, you're not gonna have as much creativity.

Effort ownership is probably the main main word from your leadership team to achieve those goals. They've got to be measurable, very specific and measurable so that you can look back and say, yes, I achieved this. No, I didn't. I missed it by this much. This is why. If you don't have the data to support what you're actually trying to achieve, you won't know. Like when you're doing your annual planning next year and you're looking back and reflecting on 2025, you're going to say, you know, I didn't quite know why we missed that. We think we did everything right.

Clay Hepler (55:48)
Mm-hmm.

Justin Piche (56:02)
But if you don't have the data to support, you're not gonna know for sure. And then I think those are my main takeaways. That's what I people to leave with.

Clay Hepler (56:09)
Those are great

takeaways. So if the ground game has been your lighthouse in your sea your storming sea, please Subscribe leave a review Share this episode with the people in your life that could really benefit from it And let us know if you really enjoyed this if you enjoyed this format We're trying a new format is long time ground game listeners know Many of you guys can ping us on social media

Let us know, hey, I like the new format or maybe do more deep dives, deal deep dives or maybe go back to what you guys were doing, team building tactic. We are doing this to help you guys out. And so that feedback really, really matters. Justin, anything else?

Justin Piche (56:56)
That's it. Love it. Back to work.

Clay Hepler (57:00)
Let's do it.