HomeBelieve it or not, it isn't just funders who will learn about your new real estate brokerage business when you create a business plan. You can learn a great deal of important information from the process of creating a business plan which will better prepare you to manage the business going forward.
Market Research
You may think you've done market research, but creating a business plan requires you to look deeply into the industry, your customers' needs, and your competitors. The research must be systematic, looking not just at a couple of competitors, but at the entire field until you've identified your top opponents. Looking at competitors can also uncover some of the best practices of the industry which you may not have known, as well as weaknesses in other businesses which give you an opportunity to create competitive advantage. By delving so deeply into these areas that you can write a coherent and complete business plan, you will be armed to better deal with your market situation both before and after your launch.
Operations Plans
How the business will actually operate may become an afterthought until you are required to write it clearly in the business plan. By not putting off the work of planning your sales, administration, and marketing processes, you will discover additional costs to plan for and opportunities for savings. In the process, you will have to make decisions with a significant impact on the job descriptions of your team, better preparing you for hiring process. All of these activities within the business are key drivers of costs and revenues, and only by planning these systems can you project those costs and revenues accurately.
Projecting Financials
Finally, the act of creating detailed, multiple-year financial plans asks you to look behind the critical launch year to consider your firm's future potential. Only by looking three to five years ahead can you see if you are really launching a brokerage which will meet your personal needs for reward based on the risk you are taking on. You will also learn a lot in the process about what kind of business you are creating. Will you lead the company through rapid expansion to a multiple broker firm? Will you want to hire additional management help at a future date? Or is a small brokerage with consistent, steady income what you desire out of this venture?
