Real estate investing, like any business opportunity with potential to develop into an on going business enterprise, is well served by preparing a thorough written Business Plan. Here's why...
The very process of writing your plan will require research and thoughtful analysis. Your marketplace will be examined in depth, your competition identified and evaluated, your readiness–both personal and financial– quantified, and financial projections developed to predict the potential income or profits to be earned from the venture. The income projected is of course critical to the success or failure of your venture.
A Written Marketing Plan = Sales & Profits!
Unlike the movies, where ‘If you build it they will come,’ the very creation of a product or service is no guarantee of sales. Entrepreneurs very often rely solely on a great location, or ‘we’ll offer unusual/tasty/home cooked/fast food at a great price,’ only to find less than an overwhelming reception, and disappointing receipts. The best of concepts can falter in the absence of thoughtful planning and preparation. Sales are developed by the preparation and execution of a Marketing Plan. Better sooner than later!
In real estate there is a common presumption the finished product (the completed rehab, the rental house or apartment) will be sold or rented by any one or more of the many brokers active in the particular market. While in general this may be the case, in practice you will find these professionals are often ill equipped or insufficiently motivated to address your immediate situation. You don’t want to be just another client, just another ‘listing’ in that broker’s inventory. As a practical matter, you the Builder have the greater credibility in the marketplace.
You Need To Be 'Proactive'
To be successful, you as Investor or Rehabber must be proactive, with a clearly defined Marketing Plan addressing your needs. Such a plan may very well include engaging agents or brokers to facilitate sales but, as with every aspect of any business, agents like consultants must be directed in ways that best serve your needs. Furthermore, to focus only on identifying a particular agent to ‘market’ a specific property is to ignore the on going marketing needs of your business.
If all goes ‘according to plan,’ this first property is just that–the first of many to follow. To discount or skip entirely the preparation of a thorough marketing plan is to risk falling into a pattern of crisis management occasioned by ill conceived eleventh hour sales pushes and ongoing cash flow problems. As the saying goes: “That’s no way to run a business!”
Marketing Is Everything You Do To Promote Your Business
Properly understood, marketing is more than just selling, more than salesmanship. Marketing is everything you do on a regular basis to to promote your business–from the moment you conceive your business, to making your first sales, to your follow-up efforts to assure customer satisfaction. We are really describing a programmatic approach to assure regularity and and consistency in your ‘message'. Selling is only one part of the program; similarly, advertising is only one part.
Your approach should be based on a written plan, revised and updated periodically, that lays out in detail just what actions you will be taking, within specific time frames, and at what cost. Recognize your Marketing Plan is initially just that: a plan, useful in helping you think through the issues ahead, but it is only an exercise absent follow-through. To be successful, you as the the entrepreneur must be: (1) committed to the your program, (2) view your program as an investment, and (3) must see to it that program is consistent.
3 Marketing Secrets
‘ Guerrilla Marketing’ guru J. Conrad Levinson called these three elements “The three most important Marketing Secrets of all!” To be sure, these three elements are closely intertwined. For the program to be consistent there must be commitment. That commitment is reinforced by recognizing the entire program is an investment in the overall success of your venture. And, ultimately, it is the staying power of your message, the steady consistence of your message that will reassure your present and future customers of the value of your product, in this case housing. #
From Philip Elmes, "Marketing Your Project"