Most of the time when people think about real state, they think about the typical scene that involves an agent handing the keys of their new home to a young family. While this is the most popular scenario, it only shows one of the many aspects of the real estate industry. There are different types of real estate companies. They can focus on residential, industrial, commercial properties or even vacant land, or they could be in charge of managing third-party properties. Regardless of the approach you decide to take, starting a real estate business is an excellent entrepreneurial opportunity. In this business plan you will find different strategies and guidance on how to enter the real estate business.
Business Model
The real estate business involves facilitating the selection, purchase and selling of real estate properties. Moreover, there are other services a real estate company can offer, like providing real estate search database, mortgage consulting, or even loan approvals. Real estate purchases have always been a popular choice for people who want to make a solid investment, which makes it a very profitable business opportunity. In this section of the plan, you will find a list of the basic real estate license requirements as well as the most lucrative types of real estate businesses to outline how your business will work and get its clients.
Business Summary
Market Positioning
The real estate industry has been steadily growing over the past years. From new families searching for the perfect home to start their life to people looking for a property to enjoy their retirement, the market is wide open and full of opportunities. In this kind of business, market research is vital, so this section will provide the information needed for the company to focus its services towards the right market. In this part of the business plan there is also detailed information about potential competitors and what they are providing and charging.
Operations Plan
This section of the real estate business plan presents and proposes the organizational structure of the business. This includes the services to be offered, the chain of command within the company, and the responsibilities of the real estate brokers as well as their commission structure. This section also includes objectives, targets and actions to properly track the functioning of the company’s core processes.
Marketing Plan
The real estate industry is highly competitive; this is why the marketing plan is such an important element of the business. The right marketing strategies presented in this chapter will set the company apart from its competition, get it in front of the right clients and consequentially increase sales. This section includes a solid marketing plan that shows the best approach to get into the marketplace and acquire new customers.
Market Segmentation
The main market segments of the real estate business are residential, commercial and industrial real estate and each of them have different characteristics and necessities. This is why a real estate business must understand its target audience correctly. This section describes the client’s profile in detail in order to develop the right strategies to get them on board.
Promotional Strategies
Even though, the variety of marketing strategies might seem overwhelming, in this specific industry there are some proven marketing methods to guarantee success. Competition to get clients is a big factor in the real estate business and that is why the company must not spare efforts on promotional tactics if you want to succeed. In this segment there is a list of the promotional strategies for the real estate business including a functional website that displays all the available properties, social media presence and advertising and traditional methods like newspaper listings.
Financial Projections
The following section outlines the financial projections for the real estate business in the next three to five years. These projections represent a conservative estimate of revenues, expenses, and growth.
Revenue Assumptions
In the real estate business, revenues are based on commission percentages. However, there are also various revenue recognition methods depending on the type of sale. Here you will find a list with a description of each of them and other possible sources of income.
Projecting Expenses
In comparison to other businesses, the projected expenses on a real estate business are modest. That is of course, after the initial investment is made and as long as sales are constant. The list of operating expenses includes taxes, advertising expenses, and office services and equipment.
