A business plan is the most important part of owning and running any business that you aspire to engage in. Your business plan will offer you the ability to organize your ideas into clear and presentable objectives and outline the mechanisms that you will employ in the event of managing your activities. A successful business has a solid foundation in a clear and precise planning stage.
Defining your goals and objectives with specificity will help you observe the golden rule when it comes to business planning: SMART goal setting (Specific Measurable Attainable Realistic and Time bound). This rule will measure your ideas and give you the analysis you need for you to proceed to the next stage of having a successful business. Wouldn’t you adore that?
Now that you have the golden rule on your fingertips, you begin by defining your goals and objectives for your venture into real estate. You will have to be very precise at this stage to eliminate all ambiguity from your objectives.
Having clear objectives will ensure that you will go through the entire process smoothly and successfully. Give yourself enough time in this stage to do some good amount of thinking. Analyze your ideas and envision yourself actualizing them. Create a straight path for each of your ideas separately from start to end and merge them together and imagine all possible outcomes. The most efficient routes will be your beginning options which you will have to carefully weigh and analyze for you to derive the best possibility.
When describing your goals you should ensure that you have the answer for the following questions:
A good example of a goal can be like: buy a four story residential property in Kingston for $800,000 in two months’ time and lease to family tenants. The aim here is to have a clear and concise description of your goal in order to develop precise strategies and plans of action to realize them.
Have Measurable Goals and Objectives
Can you measure your goals and objectives? Each of your goals must be able to be broken down into measurable units. It defines the outcomes and effects of achieving your goals. When defining these elements, you will need empirical evidence to describe your goals. You may have to present your goals through both qualitative and quantitative analysis. By doing this you will be able to scrutinize your goals objectively and have a bias free analysis.
Having such kind of goals will be of much profit to you and your business by refining and sharpening your focus. Outlining the actual realization of your objectives is like viewing your target through the scope; clearer and easier to hit.
From the example above, the objective can be broken down into measurable elements as follows:
- Type of property
- Size of property
- Cost of property
Have Attainable Goals and Objectives
You must be able to demonstrate how your goals and objectives can be achieved. Show the logic behind each of your strategies and how they will be effective at realizing your goals. This is where you will prove that your abilities are in line with your goals and objectives. Analyze your strengths and weaknesses and see if you can achieve what you propose. Weigh how much effort and resources will be required to achieve your goals and how much you will gain if you achieve them.
Here you will also have to rely on the S.W.O.T. analysis (Strength, Weaknesses, Opportunities, and Threats) for your goals. You will be able to identify and describe internal and external factors that are both favorable and unfavorable to the achievement of your goals. By doing this, you will be able to identify the most favorable path to direct your business through to have the maximum profit. You will know which obstacles to avoid and which opportunities to capitalize and concentrate on.
This is where you must judge whether reaching your goals are relevant to you. If, for example, your goal will evolve into a multinational organization, do you have the relevant skills to manage an entity of such a magnitude? Or if your idea will require a lot of resources to implement is it a worthy enough venture to deploy resources on?
Assess the amount of impact your achievement will have to the local economy. Is the solution you are proposing solving a relevant social or economic problem? If you’re proposing a solution for a felt need, achieving your goals will mean that you have addressed a relevant solution and the scales of the economy will favor you. The basis of this is to measure the objective behind the goal. The question to ask is why have this objective? This should show the reason for the desire to achieve the particular goal you have.
Another feature to look at here is the notion that you claim an advantage towards achieving your goal but will the advantage work for you?
Make Your Plan Time Bound
This is a very crucial aspect that will have several impacts on your business. All investors pay a keen eye to this aspect for time is money. You must portray that you understand the chronology map for your business. You must show how your idea conforms to the expected timeline and how you achieve the business milestones. The most important part of this aspect is the break-even analysis. This is the amount of time it will take for your business to make the amount of financial capital that was invested into it. The shorter the duration, the more attractive that your business will be to investors.
At this stage, the time aspect will have more effect in the planning of your business more than it will attract investments. You will have to install deadline for meeting certain milestones for you and your team. Let the timing be realistic and flexible. Give enough room for postponing the deadline with specific allowances. This will make your business an enjoyable venture rather than being too strict on timeline making your business a venture of racing against time.
After going through this rigorous stage, you will have covered the planning part of your business. The next stage will be implementing the idea. But before we get there, we must go through the plan several times to fine tune the details.
Proofreading is also important for your plan as it will display how orderly you which will show how skilled you are in business planning and management.
You should have already built a checklist for your business venture and built other important business notes which can include the following highlights:
- Your main objective in investing in owning rental properties
- Information that you possess on the different types rental properties
- Location of the rental properties
- The cost of owning the rental properties
- The marketing strategies
- Management of tenants
- Maintenance of the properties
- Exit strategies
The statistical part of business planning is very important to the success of the venture. Having clear figure of what you are going into can save you a lot of trouble when things won’t work to your favor. You will be able to detect danger before the calamity strikes. This is important as you will know what is coming your way and prepare for the impact. Better yet you will be aware of the course you are to take in the unmarked ocean of business uncertainty.
A business plan is comparable to a compass. It points you towards a certain direction which you have to take in order to reach a particular direction. A good compass will direct you more effectively and you will reach your destination with precision. A bad compass will result in you losing your way and never reach the destination.
Your plan will most definitely affect the outcome of your business in owning rental properties. Venturing into this business without a plan is a definite failure for your idea. The thesis statement definition for this kind of business will describe a number of resources needed in purchasing or building the properties; the purpose of this is to provide a clear organization schedule and proper planning. All the best with your business plan!
Author Bio: Lori Wade is a freelance content writer who is interested in a wide range of spheres from education and online marketing to entrepreneurship. She is also an aspiring tutor striving to bring education to another level like we all do. If you are interested in writing, you can find her on Twitter or Google+ or find her on other social media. Read and take over Lori’s useful insights!