Do you have a master plan for your business? Can you articulate what you vision is for this year? The next five years? Tomorrow?
If not, it’s time to block off a little time. You may want to block out a whole day, or if you can’t do that – at least an hour a day until you get it done. You need time to get your plan down on paper (or word processor) and really understand where you are going with your real estate investment business.
Once you emerge from the cave, you should have a detailed plan for the following five areas:
Vision for your company
This is what you want your company to look like at the end of a year, two years, five years, etc. Five years is a good timeframe because you can set longer-term goals in the first one to three to get your business to that ideal in five years.
Questions to ask on this section -
- What value does your business bring to the investor?
- What makes you different than their other investing opportunities?
- How do you plan to grow?
Marketing plans
This is how you will find partners or buyers to invest in your properties, options or deals. You need to understand where to spend your time (networking, blogging, running a social media ad campaign, mailing yellow letters, meeting with distressed sellers, etc.) and where not to spend your time and marketing dollars.
Questions to ask on this section –
- What is your marketing budget?
- Who is your target audience?
- Where does your target audience hang out? What do they read? What do they search for online?
- How will you keep track of your marketing?
Business structure
This is how you will run your business. You’ll answer questions about whether this will be a supplement to your day job or whether you will go full-time by X date. This area of planning will help you understand how much money you need to tuck away before you make the leap to full-time REI investor.
Questions to ask on this section –
- How much money do you need in the bank?
- What will you do if this does not work?
- When will you do your business if you work full-time?
Finance plan
This is what you will be discussing with your potential investors the most. They will want to know how you plan to fund your deals, who you plan to fund them with and how they get paid. They will also want to know what happens if you go out of business or if something happens to you.
- What will you do to fund your deals?
- Who will your partners be?
- How do investors get paid?
- What happens if you go out of business?
- What do you do to protect investors’ interests?
Organizational structure
This is the how, who and systems you will implement to make your business happen.
Questions to ask on this section -
- What systems do you need to implement?
- How do you need to spend your time?
- Who do you need to establish contract and referral relationships with – realtors, contractors, bird dogs, wholesalers?
This is just a brief overview of planning your master REI business plan. Now is the time to do this, not later. You’ll get these questions and find many more as you process the ones above. Stay tuned to the Investor Insights blog for more on business planning this month.
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Tags: Business, Business Planning