When starting a real estate business, you need a solid plan in place to keep moving forward. This plan will outline everything about how the business will operate and grow, and it’s a must-have to ensure long-term success.
What is a real estate business plan?
A real estate business plan is an organized document that outlines details such as:
- Business structure
- Business goals
- Who the business serves
- Growth strategy
The core purpose of a real estate business plan is to identify business opportunities, analyze the feasibility of goals, and outline how you will achieve them.
How to write a real estate business plan: A 7write real estate business plan: A 7-step template step template
This outline will walk you through how to create a winning real estate business plan. Fill out this template to have each important step covered:
1. Writing an executive summary is the first step. This overview of your business’s purpose hits on the topics mentioned above with brief details. It should be short and sum up how the business will operate and grow.
2. Define your real estate business goals and mission statement. Next are the short-term and long-term real estate business goals. Perhaps a goal is to have a certain number of clients in the first year or hit several successful property closings within a set time. This is also the place to include your mission statement and discuss core values. What is your purpose for doing business?
3. Research and identify your target market: Who are your buyers and sellers?
Real estate professionals need to know who they’re marketing to. What are the demographics of buyers and sellers? What does the target customer care about most? How big is the audience?
Provide an analysis of the specific market. This should analyze your biggest competitors and give an overview of the industry’s current growth projections. For instance, how will the business change depend on shifts in the real estate market? What does the industry currently look like, and how are you (and your customers) responding?
4. Outline the core home-selling products and services you’ll be offering important part of a business plan is being clear about what the business provides and why. Outline specific services and products in detail. Describe how these offerings will benefit customers and meet their needs and goals.
It is also essential to talk about how the business stands out. What makes you unique compared to your competitors?
5. Outline your real estate team structure. Here is where you should dig into what the organization structure looks like. It outlines details like
- Who holds management positions and what they do
- Which employees are critical to the organization
- How the overall hierarchy works
- What responsibilities does each team member have, and who is in charge of managing and evaluating them
- What technologies will team members use—for example, client communication software like Aloware
To create a highly efficient real estate business, it must be clear who will do what and how the structure operates.
6. Outline financial requirements, goals, and budgetary information
This section is about numbers. Include all financial information from the past, a snapshot of where things are currently, and detailed estimates for the future based on this data.
In addition, a realistic forecast of income statements, cash flow projections, and perhaps other relevant financial reports should be created. It should be clear how income and funding will be used and how expenses will be covered. This part of the plan ensures that there won’t be any issues with cash flow, which is the top reason small businesses fail.
7. Outline your marketing strategy: How will you find homebuyers and sellers?
The last component of the plan is marketing. You, of course, need to find home buyers and property sellers to have a business.
A description will outline how customers will be obtained. Which marketing strategies and channels will be used? How do these plans relate to the target audience and their preferences? The marketing budget and projected cost also need to be outlined here.
Tips and examples for a great real estate business plan
In addition to the template, there are some best practices to implement along the way. Here are a few pro tips for a real estate business plan:
Use the SMART framework
The SMART framework sets up better goals, which stands for: Specific, Measurable, Attainable, Relevant, and Time-based. For example, instead of creating a goal of “get new customers,” it needs to be “get five new customers in May.”
Provide supporting data for any claims
All numbers and projections need to be based on actual data about performance and the industry as a whole. For example, a business can use data about lead generation to project how many potential leads they’ll get in the next quarter and how many will turn into customers.
Don’t be too wordy
While the business plan is full of details and financials, it must be clear and concise. Otherwise, it may be too overwhelming or confusing for people to understand.
Customize your plan
The plan may need to be presented to different audiences, such as investors. The project needs to be appropriately customized for each presentation.
Projections must be realistic for the size of the business, experience level, location, and the real estate industry. For example, it may help to bring in numbers from a similar company to show that estimates are, in fact, attainable.
Ready to start drafting your real estate business plan?
These are all the tools and tricks to get started. Remember that the real estate business plan needs to be clear, brief, and realistic so that investors don’t think owners have their heads in the clouds. It needs to be based on SMART goals and actual data about the market and the target audience.
One way to improve a real estate business plan is to outline how to bring in technology to communicate with clients. With Aloware, customers get a comprehensive solution for unlimited calling, texting, and automation so agents can better support their customers.
Schedule a demo now to learn more.