The Real Estate Investor Credibility Kit Part 7: Building A Business Plan

business plan

A critical credibility kit item to include when seeking any type of traditional funding is a #business plan# for your real estate pursuits. Since a business plan is a critical aspect of any business and warrants more than just a paragraph of discussion, I’ll be addressing it in more detail in this Section. For starters, a business plan is critical for the simple reason that improper planning and management are common reasons why small businesses struggle or even fail. Business experts have appropriately coined the following adage or clich to emphasize this point:

A business that fails to plan plans to fails.

With that said, it is clear that planning is one of the most fundamental benefits of a business plan. In addition, what other benefits do business plans give you? How about showing others how well you communicate? How about as a directional guide for the management of your business? Let’s discuss each of these three business plan benefits and how this applies to your business.

A Business Plan as a Planning ToolYour business plan will guide you through the phases of your business and help keep you on target with your stated goals. Day to day issues can steer a business off course and a good business plan can help a business refocus on the big picture. Plus, one of the biggest challenges faced by a new business is managing growth. A business plan lays expected growth out in a written format and is the foundation for smaller shorter-term goals in the interim phases of company growth.

A Business Plan as a Communication Tool A well drafted business plan is more than just a plan. It shows whoever reads it that you have more than just a good idea floating around in your head. The old adage is that if something is worth thinking or saying, then it’s worth putting in writing too. Your business plan is the written manifestation of all of your thoughts, dreams, and ideas. It shows that you are more than just a dreamer and can effectively communicate the merits of your business, a valuable and impressive touch for the reader.

A Business Plan as a Management Tool A well-drafted business plan can serve to provide significant direction for your business, and it also can help direct staff or employees. Within the plan, staff can clearly see your core product and philosophy, why customers or clients need the product, what makes you different from the competition, and how you will attract business. This level of clarity can drive the morale of those who you depend upon and can also be attractive to outside parties who review your plan for funding purposes.

Properly addressing pertinent issues in a business plan shows your readers a little bit about your business philosophy, your assessment of the competition, your marketing approach, and, most importantly, how they fit into your business equation.

There are a number of available resources that can assist you with building your business plan. Numerous books are out there on the subject, that addresses basic business plan development, in addition to Internet websites. In my next post, I’ll include a summary walk through of a plan, just to get the ball rolling.

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