How to Write a Real Estate Business Plan. The real estate business is crowded with eager entrepreneurs who are searching for the right niche. While the housing and commercial real estate markets can be volatile, there is plenty of profit to be made by innovative business people. The first step toward success in the real estate industry is to write an effective business plan.
Plan for Success in the Real Estate Industry
Make yourself an expert on real estate trends before you write a business plan. The market for prime real estate and new techniques for reaching customers are only a few pieces of information you need to write an informed plan. Online magazines like Realty News will give you all the updated information you need to get your business started (see Resources below).
Explain your staffing needs when you write a real estate business plan. Your initial needs should include a small group of agents who will do the lion's share of location scouting and customer service. You should also account for graphic designers, Web consultants and other contractors that you will use initially.
Lay out your marketing and advertising principals succinctly in the business plan. Some real estate businesses utilize guerrilla marketing tactics like street teams, while others use traditional media to cater to established property owners. Research advertising and promotional costs before writing this section.
Provide biographies of each member of your ownership team. Readers of your business plan need to know that daily operations are managed by qualified and innovative professionals. You should highlight certifications and past real estate ventures in which your team has participated.
Elaborate on your company's plan for expansion and new branch openings in the short term. Your discussion of expansion should focus on how branches will serve your central mission without specific locations or facilities in mind. This section should follow profit projections as it flows logically from the idea of your agency's increased financial wherewithal.
List the operational costs you envision for the agency over the first two years. You should include initial real estate investments, facility costs and wages as the major aspects of this projection. Place this section at the front of the plan for easy access by investors.
Address the inherent gamble of opening a real estate business with an honest projection of first year profits. The process of purchasing lots and turning it around to commercial developers or home owners may require a high amount of funding in the initial year. Investors and banks take your frank assessments in account when they decide the viability of your business.