Josh:    00:00-00:51        Welcome to the Work the System podcast where we help entrepreneurs make more and work less using systems and I’m your host, Josh Fonger. Today we have a special guest Mark Ainley. Mark is the founding partner of GC Realty and development, which is known to be Chicago, his most responsive property management company, with management of close to 1000 residential doors and 2 million square feet of commercial space. Mark is known to share his valuable feedback on his years of experience in the development, property management and growing a small business. He was featured on CNBC his TV show the deed, chronically in one of his rehabs and his company struggles with strong growth. In 2019, his company GC Realty and development made the influential ink magazine list, one of the top 5000 fastest growing companies in the US. Alright mark, looking forward to having you on the show. Why don’t you tell us the backstory. How did you get into this line of work?

Mark:   00:52-  Well, I got into, it is never a lot of times it’s not attended. This was truly an accident. Well, it’s so our main business today is property management. And we set out to be real estate brokers and grow this huge brokerage company and coincidentally in the beginning worked with a lot of investors that literally would say come on you manage your property we handle it we handle the day to busy and we fought it off to nail for four years, you know, no, we don’t do that. Personally, the first invest property ever bought years before we started the company, I had to evict my first tenant. So I had a crash course I said I’m never managing property again. Low behold, we did cap the thousand unit mark, actually this month. So ironic but we set off as being brokers. We had a couple of clients that ultimately talked us into managing the property. One of them was our attorney and he talked to me and we kind of started managing properties here and there. And what we manage is we manage whether it be condos or single family homes or smaller partners buildings for private investors. So we don’t do condo associations or anything like that. We got a cat association business, we said if we want to worry about our reviews, we got to stay away from that part of the business. But so we were we started managing properties for a handful of our clients. And, you know, he said, All right, we’re growing up brokerage business, this will be some good cash flow on the side, this will pay for the water cooler, this justifies us get a better coffee machine. So it’s just kind of a means to an end at that at that time. And then it wasn’t a it wasn’t just about 2012 where you know, things just started getting chaotic around the office and my partner’s like, Hey, Mark, what’s going on? Everything used to be so smooth around here. Now what why are we. Why is everyone pissed? Why is everyone mad? Why are people that want to show up for work? I’m like, Brian, yeah, and it’s Brian’s, my partner. I said, we manage 250 units and a million square feet of commercial space. And we don’t have a system in place. Like we don’t even we don’t have anything in writing. So at that point is we kind of realized that we actually had a business that wasn’t selling houses or selling commercial buildings.

Josh:    03:02-03:17        So what? What did you do? Because obviously, you’ve grown a lot. And we’ve talked about you know, before this, your team has grown dramatically. What were the steps you took? Or any what was the first step you took to finally building a business with systems?

Mark:   03:18-04:17        Well, you know, what, I think I took a path that a lot of people take, you know, and I think I started off with the E-myth. And then a couple of those other basic books in the beginning about running a business and eventually, you know, we knew we had to put things in writing and the way and even before I came across the work the system, you know, putting stuff in writing or put it in place, but we just did it in a I don’t know and I asked backwards sorry, language, but backwards way and, and so, you know, we tried we struggled, you know, back then video wasn’t as easy to do for a systems but you know, we eventually came across the book worksism. I think I read that book five or six times before I realized that you guys say your coaching thing. And we actually use that for a couple for about a year before you meet me connected, so but yeah, it was huge and kind of establishing a baseline of what we have to do.

Josh:    04:18-04:28        So what? What did your team think when you said, hey, we’re gonna start putting some systems and processes and procedures in place? Were they? Were they happy about that? Or did they not mind?

Mark:   04:29-05:29        No, no. So the reality of is the whole time I was trying to ever put anything in place. Everyone just thought was ridiculous. Because it didn’t make sense or you know, they couldn’t handle it. You know, we hired. We had it we back then we hired a bunch of people that were like us. And when I say like us is we were cool chaos. And we were cool with putting out fires all the time. So when we had to start adding, and the reason we only had those people around us is because anyone that wanted any sort of orderly wouldn’t come work for us. So if you want to be organized like they knew right away that we weren’t the place to work in it so, now we were trying to push what we thought was right for the company it was on to a bunch of people that were perfectly happy chaos, and it didn’t even make sense for them to put process in place so we struggled with that for a while. And you know, I think that ended up being as new people came in some people bought in some people end up not being the right people on the on the seat on the bus. And then some other people we ultimately as they came in, it was a new normal.

Josh:    05:30-05:50        Like, it’s a great story and hopefully entrepreneurs are listening to this no matter what kind of is they have is, is that when you as a leader, like you’ve changed a lot, and your charity changes, not everyone’s gonna necessarily stick with it, but ultimately, would you I mean, what is the chaos like now compared to back then when you were doing 10 times less than business?

Mark:   05:51-07:11        Well, you know,  this it wasn’t scalable back then because even with some of the products in place, or half price in place, or whatever, we had the whole, what do you call it hub and spoke model. So basically, we had me and my partner in the middle and we had a whole bunch of employees, we had 11 kind of gophers go for this go for that, where every decision, everything had to come through us kind of in a hub and spoke model. And we knew they were you know, about labor motivations, we knew that wasn’t scalable, and where it was, where the heck out of us on the day to day, you know, Friday came, it’s like, oh, my gosh, I still have so much more work to do, and nothing is going smoothly. So, ultimately, I mean, now. I mean, the systems are in place is it’s amazing. I’m always shocked to see what we have in place nowadays. And we need that because we have 40 people now and, you know, even before you know, this work from home, stay order that we have, you know, we had 12 of them that working remotely, so we had to have a lot of stuff in place like that. And, you know, we’ve created what we call it’s a website. It’s called our knowledge base. Our internal meant that, you know, we keep, that’s where it kind of our hosting where we post everything. You know, we post some announcements on there, we also post all of our procedures on there. And it’s pretty cool because we’ve set up where things become searchable and so forth.

Josh:    07:12-07:14        So you made your own cloud based storage for portal first, for all your procedures. Let’s go,

Mark:   07:15-07:23      Yeah, pretty much. Yes, I’m here.

Josh:    07:24-07:41      So did you  wonder we’re gonna say this. So when you decided, okay, I’m gonna build systems and your team was a little bit unsure. And your personality type is not the type that does this kind of things. Did you really rely on somebody in your company to do a lot of the heavy lifting and the writing of these things and implemented for you? Or did you do it or one of your partners to it?

Mark:   07:42-08:47        No, I had to do a lot of it myself. And the funny thing is, and if you remember this, you know, I did a lot of it before we met, but I had to scratch it off because it’s just so you know, I think you always we still use this term inside a company. Take each anyone should be able to come off the street and be able to read your process and make sense of it. And we could have people that were working there for five years make sense of some things. So we had a go back and do everything. And I think one of the most important things that I still reference is we still talk about now is the process of having to make a process. It sounds so stupid. And I think when you first introduced it to me, I’m just like, man, this is stupid. Like, you just write it down. And there it is. And then, of course, I know in hindsight now, I was totally not in my nowhere close to being no one was doing back then. But the process of making a process was like one of the most fundamental foundations that we could have put in place to start to make those.

Josh:    08:48-09:14        Well, that’s funny. Yes, the procedure for procedures, but when I bring that up, usually people roll their eyes like, yeah, this guy is going too far. That’s funny. Yeah. But it’s essential if you want to delegate it. Well, let’s Maybe you can share an example of why like, is there any one that kind of stuck out as a interesting story where your team wrote something? And then all of a sudden that the light bulb went on for somebody are you making do you have a different story or procedure or process that worked?

Mark:   09:15-11:04        You know what, we, so we were able to really start growing, we were able to start hiring more remote staff, we had more options for labor. And, you know, we’re property management. And it is there’s a lot of automation, but there’s a lot of touches on each step of the automation, and it’s the same. So there’s a lot of steps in us being able to outsource a large part of those repeatable tasks was, that’s how we ended up to where we’re at today. That’s how we’re able to successfully work from home today because we have all those things in place where we could all reference those things. And even before we build out our cloud website with all this stuff, you know, just using Google Drive having that in there in a Dropbox rather than drive, but having the opportunity, I mean, that’s a success, we wouldn’t be able to be where we’re at right now to do it. And then we even reference so the another success I guess you could say that came from what we initially started together back many years ago, was the shifting into taking the written systems and turning them into process maps. Now, I hated writing everything down and in adjusting a Mickey Mouse today, but the ability to process map which is a tool that we’ve used that I’ve kind of kicked over, which sounds funny that I’m just getting old and I have lessons to be excited about but lucid charts it’s been awesome for us to utilize where if anything, what I’ll do now is I’ll process map it out before I put in writing because I can find out all the really where the hang ups are. I’ll take things out that don’t make sense where I can really see a flow being hung up on.

Josh:    11:05-11:18        So what is the,  what’s the future of your business? So now that you’ve kind of gotten to, like you said on 40 employees there it is it going to be just more of the same? Or do you have to shift party’s strategy or your systems to go to the next level.

Mark:   11:19-12:17        So we’re going to be able to say, I think one of the steps we’re climbing into is for us training is becoming more important, be able to hire people and get them up to speed faster. Now, what we’re able to do now versus what we’ll do five years ago is a world of difference. But to take it to the next level, we have to go even further where we have somebody that is that owns the role of training, anyone in any department coming in and getting them up to speed as fast as possible? Because I thought this before, you know, before we had a lot of this stuff in writing our training program was basically sit next to that guy right there. Look over his shoulder in four or five months you better have it by that this are not gonna work out? So that was a horrible system back then. So, I mean, we’ve definitely improved on that where people go through about a week’s worth of trading. And ultimately, what we’re working towards is more, you know, some internal training, some external trading and having programs around that. But it all requires everything to be documented accurately.

Josh:    12:18-12:58        Yeah. I’m really curious about this, this next thing that’s, that’s helpful. What about? Because there’s some people who as I understand, I don’t know what kind of learner you are, they’ll go so far. So they’ll write checklists for every single step of every single thing and they’ll say, hey, do this and that person just sits there and does the checklist and they don’t miss it a little check. And other owners who are more like, hey, I want you to understand this and get trained, and then follow this process, but they won’t carry it around with them. They’ll just read it a few times, two to three times and they’ll file it away in your, your knowledge base. What side of the line do you fall on in terms of getting your team up to this size?

Mark:   12:59-13:28        So for us, I think we have people that fall on both sides of that line. Okay? But ultimately, the cool thing is when something goes wrong, or someone asks a question like, you know, why didn’t this happen? It’s like, what was the process? Say you revert back to it where then that person that wasn’t following it to a tee might all sudden start calling it because they realized that, that they missed two steps. And it wasn’t necessarily some fluke that something went wrong is because the process that’s in writing just wasn’t followed. So.

Josh:    13:29-13:48        That’s great. That’s interesting. So what would you tell an owner of a small business who, because you’ve really transformed over the years, who is you know, just now thinking about this, maybe they’ve read the book, and they’re thinking, gosh, I should probably do this. I’m not sure like, what would be the advice? Would you tell them to go for it? Or would you tell them, hey, make sure you do this first before you move forward?

Mark:   13:49-14:56        Well, I say this, and I say this to a lot of people I know, in the early stages, like, I would love to be able to look I don’t want to but if I had if I know I know right now. Being back in a one or two man shop, like, man, the rate that we could scale would be two or three times what we’ve done this in my career path, I guess. But the ability to do something when you’re small before you start hiring people, and then be able to adjust at each time you hire somebody. So one of the things that we always did wrong is we were always six months behind the curve of who we had to hire. And we are never hiring people. Because, you know, we did it, you know, it’s like, ah, you know, we don’t know what the executive they’re going to do even down to job descriptions, part of being a writing was something that was just lacking, and be able to take all of those things and apply them early on. So you can start hiring people faster, and ultimately, the hiring equals growth, which for most owners, the hiring means you’re delegating and be able to do higher level things. So you put stuff in writing and hire faster. That’s gonna take you to further points faster.

Josh:    14:57-15:22        So that’s a great that’s a great video advice. And I know that when my clients would say is they would say, but I don’t have the money or what you know, it’s the it’s the concern of hiring. But then do I really have the money to pay for them? And do I really know what to do? So would you say that you have to have some faith that they’re going to pay for themselves? Or you just have to be more well capitalized? Or how do you get over that fear as you’re as you’re hiring people?

Mark:   15:23-16:16        This is great. You couldn’t have planned this better this question, but so this is my motto when it comes to hiring people. You only hire people 152 at a time. So you know that 50 or 60 or even $30,000 a year person you hire, you’re only paying one week at a time. So you got to really figure it out that way. So every week you might not be productive and hire that person. Now, when you hire them, yes, you want to make sure they know what they’re supposed to be doing. And you’re supposed to give these people that you’re hiring stuff that is going to free you up as the owner time to be able to hire things they should pay for themselves because now you have delegated and elevated yourself up to the next level where now you can focus on getting a new big account versus trying to write checks on a Saturday morning. So when you’re freeing yourself up all that, that mundane stuff that someone else could be doing, your growth possibilities grow enormously.

Josh:    16:17-16:30        I like that cuts the reverse down instead of saying, I gotta pay someone $30,000 it’s, I’d have to pay this much per week. And can I make that much back per week? And usually, within a few weeks, you’d be like, yeah, I can, I’m sure I can.

Mark:   16:31-16:45        We start breaking it down, you start making decisions and like, alright, if I do this week, then I could justify him being here. So I mean, that’s a lot of how I break things down, even down to the daily and back that into the daily and the weekly type way of being effective.

Josh:    16:46-16:50        I suppose for you, it’s like, well, if I get one more tenant, because this person helped me this week, is totally worth it.

Mark:   16:51      Yeah. One new account. Yep.

Josh:    16:52-17:03        Okay. Very good. All right. Well, Mark, I won’t I won’t take any more of your Friday afternoon. What’s one question that I should have asked you, but I didn’t.

Mark:   17:04-17:07        Man, I you may have more questions for me. I’m not good with these.

Josh:    17:08-17:13        I keep you all day. Now this is where people find out more about you and how you got a podcast coming up soon. Where can people find out more information?

Mark:   17:14-17:40        Yes. So we are starting, you know, I’ve experienced on the property manager side and on the development side because we rehab close to 500 homes over the years. But we’re starting a podcast called Straight up Chicago investor that we’re going to roll out the first five episodes about two weeks from now. And we our target audience is out of state investors looking in the Midwest and local people in the Midwest looking to invest so you guys can check that out MCs finest iTunes here in a couple weeks.

Josh:    17:41-17:55        Good. Yeah. Well, I think that for those who have cash on hand, this is going to be potentially depending on what happens with this pandemic, as we’re recording this. It potentially could be a really good time to invest. If you have time to write. Yeah.

Mark:   17:56-18:00      I would think very cool.

Josh:    18:01-18:49      Mark. I appreciate you answering my questions and kind of giving people a snapshot of what it’s like to systemize a business and really proving the point of what can happen when you build your team with systems with courageous leadership. So it’s been really fun for me to hear from somebody years, years ago we met and to see what you’ve done now which is which is amazing. So everyone watching this podcasts or listening to it, stay tuned next week, I’m gonna have another guest, maybe a previous client, maybe one of my consultants, maybe a business expert, but somebody is gonna help you grow your business so you can make more work less. And again, if you want a copy of that book right there behind me, you can go to work the system dot com to download a free copy, or if you want one mailed to you leave us review, send a screenshot to info at work the system dot com. We pull in one name out of a hat a week, so maybe you’ll be the lucky winner. Otherwise, we will see y’all next week.