Here are my thoughts on the value of business plans and some tips for getting your business off the ground.
You can watch it in this video.
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Read Transcript for “How Do I Create A Business Plan For My Real Estate Investing Business?”
“I’d really like to get started with your group. How do I put together a cost effective business plan that provides for minimal investment and provides cash flow for growth?”- Brian
Joe: A business plan is if you’re going to go out and raise money. We don’t raise money. A lot of people think, ‘I went to business school and business school says before you start a business you need to have a business plan because you’re going to invest a certain amount of money and you need to see how long it’s going to take before you get that money back.’
Joe: I understand that. I understand having a plan for going forward and doing things, but what you could do is you could emulate a plan that we know works. I have a plan, the “For Rent Method”, that works very well, and we have other things that we do as well, but the “For Rent Method” is a great one to get started with. It’s very easy, it doesn’t require cash and it doesn’t require any credit, so the first time you make money on it, you get an instant return on your business and you can start living on that almost immediately.
Joe: It does cost you some money to learn how to do it and go through that process, although I give away so much free information on this blog that you can probably get all of this information for free. Or, you can buy my book on Amazon, “Automated Real Estate Investing” for $2.99 – just type in Joe Crump and you’ll see a couple of books. One of them is a green cover and one’s a red cover – buy the one with the red cover because that’s about automated real estate investing, so it’s very cheap to get going and it is a business plan in itself. It shows you what you need to do, i.e. step one, step two, step three, etc. – it teaches you step by step what needs to be done.
Joe: I had a fellow come to me and say, ‘Joe, I need to create a business plan so that I can give this to my dad so that he’ll give me enough money to afford your business program.’ And I told him the same thing. I said, ‘We don’t really create business plans. It’s not really necessary. You don’t know where your business is going, so whatever you write down in your business plan…’ – I’ve talked to so many startup people, whether they’re in software, real estate or whatever business they have going that’s not a franchise (because franchises already have a step by step in place and don’t require business plans) and if you don’t have anything in place to start with, what you do is start taking action on things that seem reasonable to make money or you use a system like mine which is similar to a franchise where you already know what you need to do, and then you can grow from there.
Joe: If you want to go off and do wholesaling deals, you can do that. If you want to do rehab deals, you can do that. I do all of those things as well. I have some students that do short sales, real estate agents especially, and they do them, which I find to be a pain in the butt, but I can see how they can be valuable.
Joe: There have been times when I’ve built and done new construction that made sense. Most of the time right now, I don’t see that as making a lot of sense – the loan market is very tight, so I try to do things that don’t require any loans or any conventional lending or hard money or private investors, and if you can set up deals that do that, it’s going to be a lot easier for you to build a business and if you use a step by step plan that somebody else has already created, that’s also going to make it a lot easier.
Joe: If you want to create a Subway store, go buy a Subway franchise. They already have it broken down exactly what you’re supposed to do, i.e. the type of advertising, the menu – everything is all laid out – they have got a proven system. Now, you have to work 80 hours a week and you make $60,000 a year doing it and it sucks – everybody I’ve talked to that has a Subway thinks it suck unless maybe they’re in downtown Manhattan or something. But if you want to take a business where you can work 3 to 10 hours a week and have an income that makes you as much as a Subway sandwich company does, you can do that; I work less than that and I make more than that.
Joe: You have to decide what kind of business you want and start by emulating something that already exists. Alright, I hope that helps.