Dan Hagberg is my business partner that I met in college, and we’ve grown together from launching Storage Squad in 2011, breaking ground on our first self-storage development in 2015, buying an increasing portfolio of self-storage facilities, and selling Storage Squad in 2021. He now runs the operations end of Bolt Storage, while I focus on deal acquisition.
Dan and I had a long conversation about the shift entrepreneurs face from doing everything on their own to delegating key aspects of business activity. It’s really hard for people that are used to doing a lot to do less, either in the form of hiring a CEO or delegating within the company, and there’s no right answer about how best to approach it.
The number one consideration is the type and stage of business you’re operating; if you don’t have strong profitability, it’s hard to delegate and hire outside of yourself. Our student storage business was heavily seasonal, and it was so we got caught up in the weeds of things because we could never really justify having full-time staff. The perfect business sets you up to do high leverage activities as the owner, not solving problems or handling day-to-day tasks. In one hour in the morning, I can figure out the price of $10 million of self-storage or have a call with a new banker who we may want to work with; Dan can meet with one employee and give them the chance to implement and execute new process improvements, we don’t need to be doing the minor stuff on our own. Your business needs to grow into a place financially where your involvement can be crucial but minimal.
Two Types of Delegation
There are two primary approaches to delegation: delegation through documentation and delegation through training. Documentation is simple, it’s very easy to set up a Google Doc containing the 10 steps needed to complete a task, but training involves teaching somebody how to think like you, and that’s hard. Business owners don’t trust other people to think and make decisions, but it’s critical to mentor competent mid-level employees. Decision-making is a muscle that can be trained, and too many bosses take the easy path of solving problems on their own every time. The harder way is helping an employee walk through the decision-making process by thinking about the end goal, potential solutions, and challenging them to think.
Some employees aren’t great decision-makers, and many roles don’t need great decision-makers. You don’t need to delegate to everybody, but learn to delegate to the right people and train those people. Simplify the jobs and processes in your organization to get the rest of the employees really good at what you need them to do.
Starting Small, Goal Setting, and Delegating
Whether you’re in lawn care, self-storage, or any other sweaty startup, you don’t need to hire somebody out of the gate. You should aim to make your first hire when you’re overloaded and can’t continue to grow the business while also taking care of everything that needs to get done in a day. Get your feet wet and work hard first; it will save you money and you’ll learn the business inside and out.
But also consider that some businesses may never need their first hire, or at least may never scale to having dozens of employees. Think about what the life of your dreams looks like, both financially and in terms of time commitment, and work from there. Maybe you don’t have to think about scale at all. Dan and I think about business in a unique way, we think about making bets and taking risks, but the average person needs to ignore that and focus on their own goals. Work towards a point where you can focus only on high-leverage activities that you enjoy doing.
There’s no secret sauce to growing a portfolio, whether that’s self-storage or otherwise. Be disciplined and do the unscalable work; build relationships, go out and earn business. The less capital you have, the more careful you have to be with each investment, but that doesn’t need to limit you.
Three Key Takeaways
- Prioritize profitability — you’ll never be able to hire yourself out of a business without it
- Mentoring competent mid-level employees to make decisions like you is a difficult task, but necessary if you want to be able to delegate
- Scaling and delegating aren’t for everyone, think about your goals and what your business will need to look like to reach them first
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