The basic component to becoming a real estate investor is the ability to turn an idea into fruition – but it doesn’t happen overnight. Instead, it commands a well-devised game plan furnished with the tools and mindset for success.
In How To Get Started In Real Estate (Part One), I examined the entrepreneur mindset and daily habits to refine it, including the importance of real estate education when first starting out. This week I’ll center around how to get your business off the ground, discussing the keys to writing a real estate business plan and how to establish brand recognition.
Getting Started With Your Business Plan & Branding
As you enter into the real estate investment world, beginner investors need to first understand that a business plan is your compass to success. This plan is what will keep you on course to achieving the goals you originally set out to accomplish. There is nothing that has the power to put you on the path to success quite like a well-devised business plan.
To write a business plan that will have an impact, beginner investors should consider the following:
Structuring Your Real Estate Business Plan
Executive Summary: This is essentially an elevator pitch for your company. It will be comprised of a mission statement, company description, growth data, products and services, financial strategy, and future aspiration. When drafting the executive summary, be sure to be concise as this will serve as the first impression for your business.
Company Description: This is where you paint a picture for readers on the purpose of your company. It will include an in-depth review of each individual element of the business, and it should include the following:
- Identify your business and how it will meet the needs in a marketplace.
- Repeat how the services and products will meet the needs of the local area.
- Construct a list of consumers, organizations, and businesses you intend to serve.
- Explain in detail what advantages your services and products offer over the competition.
Market Analysis: One of the more important aspects of your business plan is the market analysis as this is the section where you’ll need to provide hard data to support your business venture. Done right, your market analysis will enable you to attract customers, sidestep pitfalls and lure investors. When writing your market analysis, make sure to include the following:
- Industry description and forecast
- Information regarding your specific market
- Identifiable characteristics
- Market size
- The volume of market share you hope to gain
- Pricing and gross margin targets
- Competitive analysis
Organization & Management: This section highlights the company’s organizational hierarchy. It reveals details about the ownership and management team, including a detailed description of each department and its function, as well as the skill sets in place to provide successful implementation of the business plan. In addition, this section should include the legal structure of your business and whether it’s incorporated.
Services & Products: This part is dedicated to the goods and services you intend to offer customers. Make sure to provide the benefits of your offerings for the market, as well as how it meets the demographic of your target audience. At the least, this should explain why consumers should choose your product over the competition.
Marketing Strategy: How do you intend to reach your audience? This section will describe your marketing strategies for your product and services, as well as how to increase business exposure. According to SBA.gov, your marketing strategy should be part of an ongoing “business evaluation process.”
How To Build Your Real Estate Brand
The second phase of the business plan is establishing brand recognition; one of the most important aspects of your real estate business. In fact, the most successful real estate investors are always the most successful marketers. The importance of brand recognition comes down to building trust among customers.
“Your brand makes your customers trust you before you deserve the trust,” says Barbara Corcoran, a real estate mogul and Shark Tank celebrity. In order to fortify trust, investors will need to develop a brand strategy.
This will explain how, what, where, when, and to whom you plan on communicating and delivering your brand message to. To get started, I recommend the following four strategies:
Define Your Brand: What is your competitive advantage? What makes you remarkable? The key to branding yourself is the ability to identify your business’s purpose, strengths, values, and passion. I recommend investors first pinpoint phrases that best describe their expertise and then identify words that best describe their personality. This will help to formulate the basis of your brand.
Define Your Audience: Similar to your business plan, you’ll need to determine who your target market is. This will entail age, gender, personality and profession, as well as identifying how to solve your customer’s needs. Consider niches in your local market that aren’t be capitalized on. Once identified, your brand should be tailored to speak to this specific audience.
Define Your Competition: The key to standing out among your competitors is understanding how they operate. As a beginner real estate investor, it’s important to gather intelligence on who you’re up against in order to understand your brand position in the market. This will also enable you to understand your competitor’s strengths and weaknesses, including the potential threats they may pose to your business.
Bring It To Life: Once you’ve formulated the premise of your brand, it’s time to get the word out. Today’s modern age of technology affords investors with limitless channels such as websites and social media to promote their brand. The key is to be persistent, no matter what channel is used. Research shows that consistent brands are approximately 20 percent more valuable than erratic brands.
Getting started in real estate takes a commitment to not only building a business but building a brand; The two are intertwined and essential to succeeding in real estate. As a beginner investor, it’s vital to understand the importance of your business plan and branding, and how they help guide your business on the path to success.
Author Bio: Than Merrill, founder of FortuneBuilders, is considered to be one of the nation’s most successful real estate investing moguls. As a Yale graduate, former NFL player, and star of A&E’s “Flip This House”, Merrill attributes his success to coaching and education. Currently residing in San Diego, CA with his wife and son, Merrill continues to pursue his passion for inspiring his students and all those around him. Follow him on Twitter @ThanMerrill.