The 5-Step Process for Writing a Simple Business Plan (That You Will Actually Use!)

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Here are two words that most real estate entrepreneurs don’t get overly excited about: business plans. Yes, most of us would agree they are important, but they are not always the easiest to create and follow. And they are not as fun as looking at deals and making offers. However, after starting a business over 10 years ago, I can tell you how imperative creating business plans is to your growth, progress, and achievement of goals. I am certainly not the ultimate expert in writing these business plans. However, I want to share a simple and even fun process to writing a business plan that you will use — not put away in some drawer and forget about. Before we get into this business plan process, I want to first discuss the purpose of business plans.

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Why Are You Writing a Business Plan?

Sometimes entrepreneurs write business plans because they are seeking investors in their business or they are seeking financing from an institution. These types of business plans might be more extensive than the business plan process I am going to walk you through in a moment. Please note, before writing a business plan, you want to be crystal clear on why you are writing this business plan. Who is it for? What is the purpose? Then, the answers to these questions will guide you on what type of business plan you will need to write.

For my husband Matt and myself, we wrote our first business plan back in 2006 — 10 years ago! We wrote ours with the sole purpose of getting focused in our business. For the first year of investing, we were all over the place. We were getting involved in rentals, flips, development projects, commercial buildings, residential buildings. You name it, we were involved with it.

Fast forward a year to 2007, and we decided we really needed to write a business plan to help us become more focused and strategic in our approach. I have to tell you that writing out a business plan together back in 2006 made a huge difference for us. Our business activity started to become more focused and strategic. We began to say “no” to activity that did not align with our vision, mission, and goals.

OK, let’s get into the structure of writing this one-page business plan!

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Structuring Your Business Plan

I want to recommend a phenomenal book and resource you should order immediately on Amazon called the The One Page Business Plan for the Creative Entrepreneur by Jim Horan. Before I get into how much I love this book, I want to add I have no affiliation to Jim Horan or his company. Jim Horan wrote this book in the ’90s. However, the process he lays out in this book is timeless and will help you today more than ever get focused and clear on your goals and plan. It helps define the “big picture” and the “details” to make it happen.

Related: Think Your Business Plan is Flawless? Don’t Forget This Key Element!

What I love most about this book is that it is more of a “workbook” than anything else. It is not some book that speaks of theory (which I am not a huge fan of). This workbook is structured in a way that helps you answer critical questions about your business. And as you gain clarity on these answers, he provides space in the book to write these answers in. He also includes a CD full of templates for you to use and download on your computer. I am going to walk you through the process on a high-level basis. However, I would highly recommend you purchase this book immediately.

The 5 Sections of Your Business Plan

The One Page Business Plan does something outrageous! It causes very busy people to stop and think. As they start to write […] It confirms both their clarity and their confusion.” — Jim Horan

There are five main sections of the One Page Business Plan. I will explain each section and share examples with you when we did this exercise back in 2006 since it was our first one. Before we jump in, please know that the best business plans evolve as you and your business evolve. They are not static; they are ever-changing and evolving. This is a “living” document that should get reviewed and tweaked on a continual basis. At the beginning, I would suggest at least once a month.

OK, back to the five sections:

1. Vision

It all begins with a vision. As the late Steven Covey said often, you always want to “begin with the end in mind.”

In 2006, here was the vision statement we came up with: “Within the next five years, grow DeRosa into the #1 recognized and sought out commercial and residential real estate redeveloper in central NJ. DeRosa will transform existing buildings into their highest and best use to suit the needs of the community and the tenants.”

The funny thing is that as I re-write this vision statement that we came up with 10 years ago, our current vision statement has not changed that much but has evolved. The key when writing an effective vision statement is to answer the question: “What are you building?” The vision statement answers who will your target market be, geographical focus, services offered, and how big the company will be. The vision statement should inspire YOU most importantly.

2. Mission

The mission statement answers the question, “Why does this business exist?” The vision is all about the “what” and the mission statement is the “why.”

Here is our mission statement from 2006: “Revitalizing urban America.” Again, our mission statement has evolved. Here is our current mission statement: “To transform lives through real estate.”

An effective mission statement will answer questions like “who will you serve?” and “what will you do for them?” What are you committed to providing your customers? A mission statement should also be inspiring and motivating!

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3. Objectives

Objectives define success in a measurable manner. Objectives answer the question “what will we measure?”

Here were some of our objectives from many years ago:

  • Finish first flip by 3/1. Agreement in place by 3/31. Twenty percent profit on sale price. (We ended up losing money on this deal unfortunately but it was a GREAT learning experience.)
  • Build a construction team of 10 people by 12/15/2007. (We did achieve this objective, but it took us much longer than 2007.)
  • By 3/30/07, purchase rental property (or properties) to generate $1,500 passive income. (We did achieve this, but it took longer than 2007!)

As you can see with these objectives, they are well defined, with dates and specific targets. The key when writing objectives is to focus on all aspects of your business — from revenue to profitability to marketing to people to processes. Objectives are so important because they decrease subjectivity. Objectives are black and white and move you towards your vision and mission!

4. Strategies

Strategies answer the question, how will you build this business?

Here were some of our strategies to achieve the above objectives:

  • Network and build relationships with local business owners, merchants, and local government.
  • Align with five financial lenders including banks and private equity.
  • Document systems and processes for evaluating, developing and managing properties.

You want to take each of your objectives and brainstorm the “how” you are going to make these happen. Think of these strategies as a road map to achieving your goals. Strategies are great because they set direction and values for a business. They help you stay on track and establish what you are willing to do and what you are NOT willing to do.

The best way to determine what your strategies will be is to study successful investors who have built the type of business you want to be build. Remember, success always leaves clues. Study others so you can determine “best practices.”

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Related: No Time to Write a Real Estate Business Plan? Here’s Your 30-Minute Solution.

5. Plans

In a nutshell, this section (which is the last section) answers the question “what is the work to be done?” This is where the rubber meets the road!

Here were a few of our action plan statements:

  • Hire an administrative assistant/bookkeeper by 12/07.
  • Write a detailed manual for evaluating, developing and managing properties by 12/07.
  • Build strong relationships with 3 new private lenders and 3 banks by 12/07.

Think of these action plan statements as plans to implement strategies and achieve your objectives. Again, the vision and mission is there to keep you on course and to inspire you. Keep in mind these action plan statements are not meant to be job descriptions. These statements should directly relate to either a strategy or objective. These statements should always involve a completion date and an actual description of the work that needs to be done.

Summary

I hope this overview of Jim Horan’s One Page Business Plan process has been helpful to you. Please note that I have only scratched the surface here. Jim Horan’s tremendous materials, books, and resources go into the type of depth you need to do this process effectively. I encourage you to make this happen sooner than later. Goals are great, but without the rest of this — vision, mission, strategy, and action plan — goals are just that: goals. I love this one page business plan because it starts with this huge vision statement and ends with the day-to-day plan that needs to happen to make the vision a reality.

I would love to hear from others who have written and re-written a business plan before. What has worked for you? What has not worked for you?

Thanks for reading and get moving on that business plan!

About Author

Elizabeth Faircloth

Liz Faircloth has been managing and investing in real estate since 2004, along with her husband, Matt. We have built our business from scratch and now own over five million dollars in residential and commercial assets. We love to help and educate investors. Our YouTube Channel, The Landlord’s Chronicles, offers short, yet educational videos that covers topics such as flipping houses, rentals, rehabs, property management, and lessons learned along the way. http://www.youtube.com/c/DerosaGroupTrenton

10 Comments

  1. Domenic Marchetti

    Great post. I have experience within business plans, but this experience has revolved around the manufacturing industry. Transitioning this skills into real estate will be a process, but I appreciate the great outline to help point me in the right direction.

  2. Elizabeth Faircloth

    Hi Domenic:
    You are so welcome! I find that these types of processes for many people (including myself) can be a bit overwhelming at times. I really love Jim Horan’s approach because he makes it much more engaging and fun experience. I am sure many of your skills you gained in the manufacturing industry are transferable in real estate in some capacity! Good luck to you as you transition and don’t lose sight of why you are doing this in the first place!
    Best,
    Liz

  3. Dmitriy Fomichenko

    Excellent post. A single-page business plan is what I think most entrepreneurs need in the first place, It is quite often that business plans with hundreds of pages often dust around in the drawers. Like you mentioned, putting a figure or objective to the plan is crucial. A real estate portfolio worth $1 million might sound overwhelming to a beginner investor but if you break it down into smaller goals, it is achievable over the next couple of years.

    Thanks for summing up these tips.

    • Elizabeth Faircloth

      Hi Dmitriy:
      You are absolutely right on point!! Every huge goal can get broken down in small steps. I also forget this sometimes but writing goals out and action plans to achieve these goals helps break down the big goals!
      Thanks for reading and commenting!!
      Liz

  4. Jerry W.

    Elizabeth,
    I love reading articles by you and Matt. They are based on real life experience and are informative and practical. I started writing down goals for the first time in 55 years and like how they have helped give me the ability to pick out concrete steps on how I will achieve them. Mine have just been written on a notepad I keep by my computer and I try to look at them when ever I clean my desk up which is about 2 times a year. Thanks for taking the time to write. Pity you guys are half a continent away I would love to view your operation and pick your brain.

    • Elizabeth Faircloth

      Jerry,
      It is so nice to hear from you! Thank you for the very nice message as well. I am so glad that you find value in the posts from my husband and myself. And I wish we lived closer as well!! By the way, we post on our YouTube Channel twice a week about our projects and offer tips and education to real estate investors. Just search “derosa group” and you will find us!
      And thank you for your comments with regards to this topic of planning and writing your goals down. I read my goals every day, but something I just did today was write two big goals of ours on a white board. Now I am looking at my goals a lot more than when they were written on a piece of paper.
      If you are ever in this neck of the woods or vice versa – would love to meet up!! 🙂
      Best,
      Liz

  5. Julie Marquez

    Hi Elizabeth. I really like this post. It is very simple with the steps spelled out, but with enough details to know exactly what to do. I’m sure that book will be really helpful too. My husband and I have goals, but we are going to go through these steps again and write it out in this format. Very encouraging, thank you!

    • Elizabeth Faircloth

      Hi Julie,
      Thanks for reading and commenting! Much appreciated! My husband always have current goals, but it is so helpful to try new processes and approaches! It keeps things fresh certainly!
      Good luck to you and your husband as you set new goals and use this process. It is great stuff!
      Best,
      Liz

  6. Alina T.

    Liz,
    Thank you for sharing a great book and spelling out what it details! After reading your article, I went ahead and ordered the book. Looking forward to reading it!
    I love how you explain simply, yet powerfully what each of the five sections of the business plan must contain and how they evolve over time!
    Thank you for a great post!

    • Elizabeth Faircloth

      Alina:
      So wonderful meeting you last night at the BP meetup event in NYC!!! I am so glad that this post has helped you and that you ordered the book as well! Love this process – it is simple yet powerful and useful. Looking forward to hearing your results and hearing how your investing business is progressing!
      My best,
      Liz

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