IC elesson: So What About that Business Plan?
Maybe it got lost in all of the other stuff you received when you joined the Inner Circle/Express Success, but one of the the things your membership came with was a business plan template.
It’s right on the front page of the membership site, plain as day, ready for you to download and use it.
My question for you is, have you even opened it, much less filled it out? And if not, what’s your excuse?
Let me guess that (assuming you’re not saying, “Wait, there’s a business plan?!? right now) your reasoning is something like:
- I don’t want to plan, I want to get out there and make some money! or
- No one ever said anything about needing a business plan, so I don’t see the value in spending the time making one or
- I’ll do it as soon as I make some deals, I swear!
In what other business does one open the doors without a business plan?
No business, that’s what other business.
And yet, very few real estate entrepreneurs have a formal business plan, and here’s why:
We’re in a strange field where the most practitioners give lip service to being in the rental “business” or wholesaling “business” or rehab “business”, but are in fact self-employed people with a glorified job.
If the very fact that most real estate entrepreneurs don’t even think to create business plans isn’t evidence enough of this, watch how your colleagues behave and talk about the future, and you’ll see what I mean.
They say things like, “I have to figure out how to get more marketing out” instead of “I need to hire someone to get my marketing out”. They talk about how they need better time management, instead of more staff to do the work they can’t manage. They dream of the day when they can sell all their properties and live off the cash, instead of dreaming of the day when they have full time managers to manage all of their properties.
They think in terms of trading hours for dollars, and of getting more dollars for those hours. They don’t think in terms of systems and people to run the systems.
And if you don’t have a business, there’s no need for a business plan. Instead, you’ll probably have what most real estate entrepreneurs have, which is a GOALS list (“I’m going to buy 15 houses this year” or “I’m going to mail 100 postcards a week”).
There’s certainly nothing wrong with goals, and nothing wrong with being self-employed. In fact, most of the “gurus” out there fit the profile of “self-employed real estate entrepreneur” rather than business owner, which is why THEY don’t talk much about business plans, either.
So between the fact that our industry is full of self-employed people and short on business owners AND that, unlike most businesses, business plans aren’t needed to get funding for our asset, it’s no real wonder that you haven’t used the free resource that I selflessly developed for you and gave to you at no extra cost to you at all (pause to admire my dedication for a moment, please).
But let me give you some compelling reasons to take a crack at it anyway:
- Because a good business plan requires thought about (and often research into) such areas as customer base, marketing plan, and because it is written for an audience that has no idea what your business is “supposed” to do, the process of composing it helps you organize your thoughts about your own business and reveals the gaps in your own knowledge about it.
- Because a good business plan can expose major flaws in your plan before you’ve invested a lot of time and energy pursuing it.
- Because a good business plan begins with a vision statement and mission statement regarding your business, it helps you think about the ethical standards you’d like to uphold before situations arise that might tempt you. More on that later.
- Because a good business plan is a gauge against which you will later measure the progress of your endeavors and the effectiveness of your systems. Without a written plan that tells you where you’re headed, how do you know whether you’re getting there?
- Because a business plan does, in fact, help you to get financing. Not conventional FNMA financing–which is completely dependent on your credit score, debt-to-income ratio, and the value of the property–but certainly other forms of financing that become even more crucial to you when you are no longer qualified for FNMA financing because you became too successful. Private lenders are impressed with business plans, as are portfolio lenders (especially those where a single person, such as the bank’s president, makes the decision whether to lend to you or not) and lenders who are contemplating providing you with a “business line of credit” for your operations, as opposed to mortgages.
- Because a business plan reminds you that you are not your business. You most definitely should have personal goals, but your business should have a life of its own—so you can have a life, too.
So why not take a sec and download that bad boy. See what it can do for you. You’ll be a better BUSINESSperson for it.