Plan your Business like a business plans

Ok, so I have a gripe...There are too many people out there that don't treat their real estate investing like a business. It kills me to hear about people and businesses that treat real estate investing like a hobby or a side job. There is way too much at stake to be moving forward without a plan.

Your plan doesn't have to be a 200-page dissertation on the state of the market either. But you should have some goals, milestones and some sort of way to track your success.

I used to think that your business plan was like the ten commandments, you know, carved into stone and never to be changed. Luckily, business plans are living documents and have to change and evolve. Your business plan should have enough flexibility to stand the test of time and weather many storms.

The truth of the matter is that your business and business environment are always changing so you need to have a tool that is flexible enough to guide you and give direction, but if it is taking you down the wrong path, you better be able to change course before you are completely derailed!

Even if you only have a one page business plan you should address the nature of your business, what your goals are (short-term, intermediate and long-term) and attach a metric that can be measured...when you use phrases like, I want to be successful or have a bunch of houses, this is useless, because there is no identifiable quantity to measure against. Be specific.

There was a time when I would start writing a business plan with words, but I like to think that I have evolved to the degree that I start out by building a proforma to see if the business makes sense from a monetary stand point. The words are the easy part, but if the business is not a viable venture in the first place, there is no reason to even write one word. My advice is to hunker down and put your business into a spreadsheet. The mere exercise will make you a better business person as you have to ask yourself if you have all of the right numbers in place and whether or not you can accomplish the financial goals you have set for your business.

Once you have a spreadsheet that tells the story of your business, run it past somebody who knows anything about your business to see what they think. It is always best to be conservative when you are running your numbers. It is easy to get caught up in scenarios that show how you are going to make millions of dollars per quarter, but there is usually something that has not been taken into consideration.

Anyway, take the time to write a very basic business plan...just a couple of pages will be worth its weight in gold if you review it on a weekly basis and use it as the planning tool that it is designed to be. Be flexible though, the business that you are in five years from now may not be the business you started out building, but you just might find that the business you intended to start was not a viable, sustainable business...but that the business you ended up running is sustainable and viable.

Good Luck and Healthy Investing to all!

Rob


http://www.LocalRealEstateDeals.com