G’day all,
I was just curious as to how many of you guys created a business plan (or something along similar lines) before you began investing in Real Estate.
One of my favourite quotes
“If you fail to plan, you plan to fail.”CATA
Asset Protection Specialist
[email protected]Cata is right on the money!
When i think of a business plan tho, it seems to hard and complex. Instead I just break it all down, starting with goals. Real life goals. From there its all just project management imho.
Start from the end and work your way back to your current position whilst breaking it down into milestones.
Eg, I want to own a helicopter or I want to buy a yatcht sail around the world or i want to live on $75,000 a year when i retire.
So, you now have a goal, but you need to quantify it.
How much is it going to cost? Research, find out how much a helicopter or yatcht is and all the assoictaed costs on running it etc as part of your Life goal.
When do you want to achieve this goal? 20 years from now? 10, maybe 5?
So now, you know your goal’s costs and how long you are willing to wait for it.
Now you have a plan (rough as it may be) on what you want to achieve from investing. This is most important step in my opinion.
And from here you can start planning your investments to match your goals.
If you need $100K in 5 years, you need to earn $20K in per year. (Note, this is not taking into account the power of compunding as well as associated investment costs. These are just simple examples to explain the concept).
So, you buy an investment vehicle that will provide $20K for the first year. Or try for 10K in the first year and then $90K for the next 4 years.
Eg You could leverage and buy a $200K house which returns > 10% return through +CF and/or CG. Or leverage shares to achieve the same.
Once you know what you want at the end, the investment plan creates itself almost.
Cheers,
Damon
In theory, there is no difference between practice and theory, in practice, there is….
Great messages guys, thanks for replying. I fully agree that planning its a vital aspect of success.
When I think of entering the investment world without first having a plan, it reminds me of a saying from one of Robert Kiyosaki’s books. Something along the lines of “trying to invest without first establishing your goals, is like trying to pack for a holiday without first knowing the destination. You know you’ll need clothes but how much? Shorts or pants? Jumpers or shirts?”. You get my point…
Hi There,
My accountant insisted that I make a busines plan. At the time I thought it was a bit of a waste of time, however in hind sight it was a good thing. It helps you focus on what you have/need to do and it also gives you a ‘plan’ on how to get to where you want to go, investing wise. It may seem hard but give it a go, add to it bit by bit and then at some stage you will have a complete plan.
Good luckCJ
ABSOLUTELY!!!!
I spent 3 weeks of solid work and came up with an 80 page business plan (40 pages of text plus contracts etc).
Only after this accomplishment did we finally start to see some money coming in.
3 things that are paramount to success are:
A Business Plan
A Marketing Plan
An Exit Strategy
And these should not be static documents either, they should be reviewed regularly and Key Performance Indicators measures to that you know where you are going!!!
Xenia Ioannou-Mena
Adprop Pty Ltd.
Property Management and Sales
E: [email protected]
M. 0412 437 582We wrote a business plan in 2005.
12 months later I suggested to my business partner that we should be reviewing our plan and updating it.That was over 3 months ago and that hasn’t happened yet! [blush2]
So, while I agree it is a really good idea to put a plan in place, I think it is also critical to review it at least annually, otherwise it becomes a bit meaningless.
Now to go and put my own house in order……
jebro
YES!
We wrote a business plan and found it fundamental for us. We are operating as a family group and found that the plan did two things for us:
1. Allowed us to see how we’d operate as a group on a small project (i.e. putting together the plan itself)
2. Aligned all of our goals to ensure that we’re all on the same page at all times.Plus all the other benefits that the business plan does, we used it to give our advisors (mortgage broker, accountant, solicitor, etc) an idea of where we were heading and also allowed us to guage how keen they were in assisting us to achieve those goals.
Long story short, do it, you won’t regret it.
D.
Business plans are great assets to anyones life.
I found an easy way to do a business plan instead of the 40page long issue. This is what I do…works a treat if you are a visual person like I am.
First I buy 2 large sheets of cardboard & divide them into 6 boxes. At the top I begin with January, Feb, March (1 in each box) then under neath the next 3 months (1 in each box). I then do the next 6 months of the year on the next sheet.
In each month I then go through how I will achieve my goals, what my budget is & how I will go about it. All things like marketing, PR and displays & important dates are listed dot form and then at the end of the month I go through my plans & mark what does & doesn’t work. I write up whether the budget was met or over/under and how I could improve it for next monthyear.
I then go on to put them on the walls so I can re examine my goals and objectives on a daily basis, monthly basis & yearly basis. I then go on to graph any budgets & improvements. These also get displayed on my office walls. I find it makes me more accountable to get things done if it is in my face.
I have been self employed in business for 16 years and tried many ways. This one was the most successful…try it. I would appreciate any feedback. It can also be done over a week period if you so choose. I like to decorate it & add pictures – helps with the visual.
Good luck…good work.
Cheers,
Dianne BurnsI totally agree with everyone that planning is vital for the success of one’s path. I am presently looking into some cleaning biz and appreciate guidance from anyone who can provide advice to this biz. What plan should I start off with.
thanksI have a really good, basic short but concise Business Plan template – if anyone wants a copy, send me a PM
Janie
Hi Housemender, could you please send me your business plan template?
Thanks,
Luc
I think that a business plan is essential however before you do that it is important to develop a life plan. Most people send there lives drifting and then get frustrated because of that lack of achievement. However it is important to work out what are your goals both personally and professionally. Try and work out a short, medium and long term plan. Once you start to work out what drives you, then you can develop a business plan as part of the life plan
Nigel Kibel | Property Know How
http://propertyknowhow.com.au
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