Business Plans

coastal · #**1 Business Plans** 10-16-2007, 02:13 PM

Ok, I know we are all supposed to have business plans but how many of you actually do?

Does anyone mind sharing theirs with us?

I'm trying to sit down and put one together but really don't have a clue as where to start.

With so much probably change in the future I have no idea how we are supposed to map it out. A 5 year plan? 10 year plan? Are you kidding me, I don't know what I'll be doing 6 months from now.

While trying to answer my own question I found these:

createaplan. com/

smallbusinesspoint. com/sbprealestate.aspx

bplans. com/Sample_Business_Plans/Real_Estate_Business_Plans/Real_Estate_Brokerage_Business_Plan/executive_summary.cfm

NealRM · #**2 Re: Business Plans** 10-16-2007, 03:58 PM

Business plans are only important if you plan on making money. If you don't care about making a profit; go ahead and wing it.

Get with your local SBA, they will be able to provide you with templetes and instruction. They may even have someone that is willing to sit down with you and help you write it out. They are a great resource.

Your business plan needs to include both a plan for your business, a market analysis, a competitor analysis, and a cash flow projection. Do cash flow month by month for 1 year and yearly for 5 years. Include all expensis and incomes in the cash flow. Once you are done with the cash flow decrease your income by 10% and increase your expenses by 10%.

If you have any more specific questions, please ask.

Eric Blackwell · #**3 Re: Business Plans** 10-16-2007, 04:07 PM

I plan 6 to 12 months out with DEFINITE strategies...further out than that with goals, but with more flexibility.

My wife and I are taking the weekend to do some of that planning for the next year.

My thoughts are that you NEED to plan, but you cannot be a slave to that plan when market forces change.

Eric

darrenwoodard · #**4 Re: Business Plans** 10-16-2007, 05:33 PM

I completed a business plan 3 1/2 years ago when I started this real estate venture and not much has changed thus far. The only things that have changed are some of my marketing ideas. I am doing less mailouts and more personal networking. I am doing less cold calling and more Internet Leads. As far as numbers, I am pretty close to where I anticipated. I am about to draft a new plan for goals involving forming a team.

Steve Didier · #**5 Re: Business Plans** 10-16-2007, 05:57 PM

That is the problem with the way most real estate agents approach this business - they have no plan. Real estate has to be run like any other business.

Everybody's plan is going to be different depending on the business model they are following. No matter what model you are following, you have to know where you are going. This is a subject that is really to in depth to address completely in a forum setting, but I think the following points are critical to any plan:

1. Establish your goals, ie: sales volume, income, # of transactions for the year (or whatever time frame you are dealing with in your plan).

2. Identify what activities and tasks you are going to have to do to hit those numbers.

3. Schedule each day, week, and month so that you can complete those activities.

For someone who develops most of their business primarily from prospecting and listing, the basic model could look like this -

A. I want to earn $250,000 in the next 12 months. I know that my average commission check is $10,000 so that equals 25 deals closed in 12 months. ($250,000 divided by $10,000)

B. I know I’m taking 2 weeks vacation, so I have 50 weeks.

C. Since I know that 75% of my listings are selling, I know I need to list 34 homes in those 50 weeks to sell 25. ( 25 divided by .75)

D.If I convert 50% of the listing appointments I go on to actual listings, I know that I have to go on 68 appointments for the year. ( 34 x 2 )

E.If I keep track of my statistics and I know that I have to talk to 25 people to schedule one listing appointment, I know then that I have to talk to 1700 people over the course of 50 weeks to get those 68 listing appointments. (25 x 68)

F.That means I have to talk to 34 new potential sellers each week.(1700 divided by 50)

G. This boils down to talking to 7 new prospective sellers each day.

And like I said, everybody's model is different but the process is the same - if website generated leads are the focus of your business, then you have to know how many leads are coming in and how many you have to convert to hit your numbers. Write down what you are going to do in terms of promotion and SEO to ensure that you generate the # visitors that you need, etc.

jessiesc · #**6 Re: Business Plans** 10-16-2007, 06:08 PM

I did a business plan for a previous business. It was needed to get financial backing from angels and VC's not to mention the bank.

I have a step by step template I used (it's free) if you'd like it I can mail it to you privately. It's not very difficult, but it does require quite a bit of effort and alot of Fore thought.

Questions I would pose:
What is the purpose of creating a Business plan?
Is an actual business plan really necessary or rather than go through the entire process, perhaps Goals and aspirations for the next 5 years would suffice?

As someone above pointed out, the details may be all you need to keep yourself focused if that is the intent. On the other hand, if you require financial backing then a business plan is a must.

My 2cents worth

ericbramlett · #**7 Re: Business Plans** 10-16-2007, 09:45 PM

Mike -

Unless you're going to the bank for a loan, you probably don't need a business plan. Written goals and an informal action plan should do the trick...

svrpaul · #**8 Re: Business Plans** 10-17-2007, 06:53 AM

Two takes on the business plan... one reason for a Business plan is to get a loan, VC, etc..where you should get a professional program such as Business Plan Pro and the other is a plan on what you want to accomplish and is more like a blueprint of what you need to do on a daily basis to get there much like Steve has touched on.

You need to decide what numbers you want to hit and what it's going to take. One thing I really liked about The Millionaire Real Estate Agent is they provide avg. response rates for activities such as direct mail, etc..

Long ago we took CRS 200 (Business Planning) that provides a nice plan on creating your yearly goals and what it will take to get there. It's a two day class that goes over creating your goals and blueprinting a yearly plan to get there. What works, what does not.. etc..etc..

I would really look into taking this course when it comes around in your area since you also may be able to pick up CE credits.

Steve is spot on and something tells me he has all of this information.

jessiesc · #**9 Re: Business Plans** 10-17-2007, 07:10 AM

What 'Driven' has posted (which is very good, I agree) is a goal oriented outline/operating manual not a formal business plan, which has it's own merits. Goal outlines and a formal business plan are two different things.

Goal outlines are contained in a business plan but not vice versa.

It takes weeks to develop a full business plan (and weeks more to develop the presentation) and only days or hours to develop the goals outline driven2succeed has proposed.

I'm not discounting either approach, but I do feel a full business plan takes too much time to develop unless you are going for financial backing when a goal oriented outline will suffice.

It really depends on the purpose of the plan.

coastal · #**10 Re: Business Plans** 10-17-2007, 09:13 AM

I'd really like to thank everyone for their detailed replies. My first two years were 100% winging it. They were still great years but we had no idea of what the future had in store for us. At that time it was just my wife and I. This year in particular we have experienced a large deal of growth. I've added 5 new members to my team. I am slowly getting away from selling and putting most of my effort into web development, building a new CMS robust enough for a team of 20 agents, finding leads and managing the team. For the last three years my income has almost doubled each year. How do you plan for that??? If you asked me last year if I would be running a team of five I would have laughed at you. Lady luck has really smiled on me and I have a lot of catching up to do on the planning/tracking side.

I'll be back in a few hours to digest the rest off this but at the moment I've got to run off to a meeting with my financial adviser

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