Property Business Plan Writing Guide for Your Investment
Every business will begin with a plan but the aim of the plan is to state what the business will do and how it will turn over a profit. However, if you want to own and run a successful property business, you are going to need a solid plan from the beginning. All successful property business owners will have a plan in place and will review it as the business grows.
So, this makes it extremely important to create a property business plan that underpins what you want to achieve and how you aim to achieve it.
What Is A Property Business plan?
Prior to making any decisions, you should have a property business plan in place. Your property business plan does not need to be too long or complicated. In fact, those business plans that prove to be highly effective are those that are concise, simple and easy to understand.
This document will essentially become the framework for business operations and your goals. It will also cover the goals you want to achieve and how you plan to implement the right steps to get there. Your business plan can be used for your own purpose of identifying where you want to go but it can also be used to attract investment from investors.
Essentially, it will become a blueprint that will guide you through successful times but also those times when things are not going to plan.
What Should You Include In A Property Business Plan?
As mentioned, your property business plan does not have to be lengthy but it does need to contain the right information and details. When writing a business plan, it is vital that you consider as much as possible. It’s not a simple process but that’s what makes running a business so rewarding and unique.
However, there are certain things that you can follow to create your business plan. This should include:
Your current situation or where you are now - this will cover the likes of your available finances and what you are willing to spend.
What you want to achieve or where you want to get to - you should think about your goals and this could include a sincere financial goal that will enable you to reach certain targets
How you will get there - you will need to cover the desired strategy that will align with your goals. This will make it possible to close the gap between where you are now and where you want to be.
How To Write A Property Business Plan
Step 1 - Discuss Your Existing Situation
Your current situation will become the building blocks of your business plan.
This will include:
The amount of money that you plan to invest
How you will obtain the money
How much time you plan to put into your business and whether you plan to run the business on a part-time basis or whether you will use a letting agent to manage certain elements of it for you
The amount of experience you have and how that relates to your business
Any training that you might require
When you consider these areas, you will need to be honest with the information as your business plan will become the blueprint for your business as it moves forward.
Step 2 - Where Would You Like to be in 3, 5 or 10 years?
Running a business is a journey but your business plan will become a road map of how you move through that journey. Where you are right now is the beginning but the end goal is where you would like to be in the future. Therefore, you should place an emphasis on considering your goals because you will need to take care when identifying them.
Do you have a certain number of properties that will make up your portfolio?
Will you actively manage your portfolio on a full-time basis?
Will you require a fixed income that will come from the business?
Do you have a short-term strategy to drive profit or do you plan to use your business to invest in the long-term as a way of contributing to your pension?
By identifying the answers to these questions, you can add more information and detail that relates to your long-term goals. It will require a lot of thought when it comes to determining where you want to be in a certain number of years. Discuss your strategy with others as this will enable you to spot any potential problems in your business plan.
The one thing to remember is to make sure that your goals are realistic. It is fine to be ambitious and driven but your strategy and your goals have to be achievable.
Step 3 - Create a Property Business Strategy
How you reach your goals will be underpinned by your business strategy. It is here that you will seek out solutions to any problems. If funding is a problem, then you will address the issue and explore how you will obtain funding. Essentially, it will explore the amount of work required to reach your goals.
A detailed business strategy is not always necessary at the start. Keeping it simple is the right approach because you will be able to remember it and revert back to it to make the right decisions in real-time. However, once more detail has been added to your main goals, you can then add more detail such as when, what, why and how.
When you put your solutions down on paper, it becomes a lot easier to solve problems as opposed to considering imaginary scenarios. Consider every possible problem that could arise and plan ahead. Then look at a range of investment strategies and identify which one is likely to work best for you.
Step 4 - Cash Flow Projections
A successful property business will require the right cashflow. This is where you need to determine what properties fit your business plan and your goals. You need to identify where you will generate income and how much you will generate, so you’ll need to work with all the figures you can find. Consider looking at mortgage deals and look at your options when it comes to financing property.
It’s really important to look at your expenses and how much income you will need to generate to cover all costs while still delivering a good return. Furthermore, you will need to consider your own expenses and how you will need to cover bills should problems arise.
Step 5 - Backup Plans and Exit Strategies
Every business should have a backup plan, even successful ones. With these plans and strategies in place, it makes it possible for investors to overcome challenges and problems. This will enable you to implement a plan of action should something go wrong while it will also allow you to deal with problems before they arise.
Effectively, you should consider the “what if” questions that a client, employee or lender might have. What if a sale falls through? What if a property takes a long time to sell? What if a property remains vacant for a certain period of time? These are the kinds of questions that you need to think about and consider when creating backup plans and exit strategies.
Property Business Plan Template
A business plan will stay with you for the duration of your business but a poor plan can prevent you from achieving your goals. Your property business plan is important and there is no denying that you have to get it right as this will help you to make decisions and it will inform investors too. Creating a business plan is not an easy task, but you can get it right with the correct planning. Therefore, follow this template and you’ll get your business plan on track.
Begin with an executive summary that provides an overview of the business
Include your company goals and how you will reach them
Highlight your expertise by carrying out market analysis
Include who will be working at your company and what they will add
Summarise how your property business will operate and how it will generate income and profit
Discuss the strategies that you will implement for the different areas of your property business.