The booming real estate industry has turned out to be an exceptional investment option. Many entrepreneurs are coming up with ideas to make the most of this industry. Therefore, there has been an expansion in real estate businesses over the world in the recent years.
Every business starting from scratch begins with the goal of success. However, success doesn’t happen overnight. To achieve success, proper planning is crucial. The first step is to draft a real estate business plan.
Why Should You Draft a Business Plan?
The path to success of your real estate business may not be as smooth as you expect. There can be various unprecedented glitches along the way. A concrete business plan can help you monitor the progress of your business. It allows you review the strategies you plan on implementing for your business’s success.
A plan for your real estate business will lay out the targets you wish to achieve in all the major areas like finances, sales, marketing, hiring and other goals. Once the goals are specified, it becomes easier to devise the right steps to deliver the performance you expect from your team.
A good business plan can become a fund-raising tool that will dictate the operations of your business and lead it to success.
What are the Steps to Draft Your Real Estate Business Plan?
Drafting a successful business plan requires careful planning. Let’s take a look at what your business plan should include and the steps to create one.
#1. Write a Strong Executive Summary
The executive summary should include the purpose of your business and how you plan on solving the problems in the real estate industry. It should be unique, precise and should be able to communicate the mission of your business to others.
Keep in mind that this summary will serve as a pitch to the investors. Therefore, it should be strong enough to convince your investors to fund your idea.
#2. Include the Services You Plan on Offering
The next part of the business plan should include the lists of products and services that you plan on selling. You would need to provide complete information about these. You should also include information on research and development activities regarding the products and services. You would also need to point out why your services and products are better than your competitors.
#3. Determine the Goal
The next step to drafting a real estate business plan is establishing a goal for the real estate sales production. This goal should be achievable and measurable. You can consider breaking down the goal into monthly and yearly targets. This will help you measure the progress throughout the year.
#4. Lay Out the Strategies
The strategies will define how you plan on achieving your goals. Defining the strategies will require proper analysis of the real estate market, its recent trends and your competition. Now you would need to specify what kind of properties you plan on targeting. For example, you could be focusing on multi-family, single-family, commercial real estate and so on.
You would need to include the operational processes, how you plan on seeking deals, how you plan on acquiring properties, financing options for your deals and so on.
#5. Add Your Team’s Description
The talent that you plan on bringing to your real estate business can help in determining your ability to achieve the goals you have specified. According to Hossein Rahnama, CEO and founder of a company dealing in business intelligence, “Investors want to understand how you will execute using your personal strength.”
A strong team will work a support system for meeting your goals, revenue generation and further expansion of the business. Andrew Witkin, CEO of a company that produces customised stickers pointed out, “If the leadership team has a previous track record of building and delivering businesses, this should be highlighted. Business plans serve multiple purposes, but one of them is to build trust, and the team is as important as the product to potential investors and partners.”
#6. Include the Technologies You Plan on Using
The real estate industry has come a long way from what it used to be before. With the evolution of technology, the business processes have transformed drastically. “Clients today are much more knowledgeable,” said Tamir Poleg, CEO and founder of an app associated with the real estate industry, “They do online research, know what they’re looking for, and know the neighbourhood.”
In addition to that, technologies like architectural rendering, interactive 3D animations, virtual reality and so on have enabled property listing and presentation scale new heights. Your real estate business plan should include strategies to augment these technologies in your business operations for improved revenue generation.
#7. Outline the Financial Details
Your real estate business plan should include details about your financial condition. For example, you can include how much you are planning on investing in your business, any loans that you have taken or plan on taking and their purposes, whether you have any equity that you can use and so on. The financial statement on your business plan should be updated as your business grows and transaction amounts and methods change.
#8. Mention the Detailed Marketing Strategy
Devising an effective and actionable marketing strategy for your real estate business is essential. You should have a market penetration strategy, communication techniques, distribution channels, growth strategies and so on. In addition to that, you would also need to focus on marketing research, advertising, real estate SEO, public relations and other aspects.
#9. Have a Backup Plan
The truth is, not each of your plans is going to work as you anticipate. Therefore, you would need to devise clear backup plans to keep your business afloat during the difficult times. Multiple, clearly defined exit strategies should be defined for every possibility of a risk. The risks should be identified by assessing the market condition properly. The backup plans devised should be actionable.
The business plan should accommodate enough room to include the changes that you would need to make as the company grows. Keep in mind that the business plan is meant to guide you and provide you the direction to attain your goals and help you stay focused on establishing your business.
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