Business Plans, any thoughts?

Question

This week I ran across a Business Plan that an investor used to really get his rehab business going. The more I started reading it and studying it the more I liked the idea of doing one for my business. Here's the catch, I dont have a business yet. The BP that I read talked a lot about how he has already completed a handful of deals and has experience. I dont have any experience like that yet

I want to start my REI business by starting out in wholesaling then progressively getting more and more diverse such as, rehab, buy and hold, L/O etc. So what I am thinking about doing is writing a BP and using that as a way to reach out to potential team members such as CPA's, agents, lenders, and then obviously use that BP for my structure of my business.

I am curious to know if anyone else has done something similar or if you have any thoughts or opinions. Should I concentrate on doing a few deals first or write a BP first? Thanks.

JJ Gernaat · Answer

Financexaminer,
Great tips and ideas, thank you very much.

Bill Gulley · Answer

A business plan is simply a road map for your business, if you know how to get there without a map, like most people, go for it.

In the beginning, a BP is a good idea, if for nothing else, for you to identify who, what, when, where, why and how. Sharing a formal business plan with outers can be a plus, if well done and it can also backfire on you. With other individuals, they may take your plan as a representation of how things will be done, as a static function and it is not. Your plans will never work out (if they are detailed) as planned and adjustments will always need to be made. Your plans need to be flexible so that you can operate in keeping with the mission of your organization.

Showing you business paln to outsiders should be approached with care and diligence. Making it a part of a loan package is very different than showing it to some business guy who might provide seed money or someone to join in a partnership.

Another point is that you have no experience, so like a resume, don't dwell on that issue, simply state what you do have going for you and move on with your mission statements.

Be very careful amount making any projections or pro forma statements. If you must, make sure they are conservative, IMO, otherwise, expected profits should be something discussed face to face with principles. Good luck.

JJ Gernaat · Answer

Oops, I am new to these forums and just realized there is an actual category for this type of question.