Before you rush over to the computer

Before you rush over to the computer and begin to hammer out a business plan, you need to do some heavy duty and serious research. Visit your Library and check out some books on preparing a business plan. See what the elements make up a business plan. Then after you've digested the information, speak to your Banker. Ask what they want to see in the way of a business plan that will help them fund your new business. You might want to invest in a copy of a "Business Plan Development" software program that will guide your efforts in creating that plan. Let's examine these six points. 1. Undercapitalized. As a minimum, you should plan on being able to sustain the business for 12 months, and be able to cover all expenses for that time. You'll need either up-front capital, or a guaranteed line of credit that you can draw upon during that first 12 month period. Your business plan needs to spell out all of the expenses you'll incur during that first 12 month initial start-up period. Don't forget advertizing, property acquisition, living expenses, property maintenance and repairs, property holding costs (if you finance your investment purchase, you have monthly mortgage expenses, utilities, gardening and upkeep, etc. while you fish for tenants). hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio hohodio 2. Weak Management. If you've never managed a business, you're in for a rude awakening. Typically, the owner of the business is his/her own worst enemy - you'll find yourself talking to yourself in the mirror:?Why are you wasting time (shaving/putting on makeup/etc) when you should be out "doing business"?? How do I get clients? How do I get renters? How do I find investors? A strong business plan will help you identify these 'time traps', and hopefully, guide you away from them. 3. Wrong Product. Are you trying to flip properties in a falling market? Do you find that you can't rent a property so that it has a chance of getting a positive cash flow? Are there any takers out there? A well-thought through business plan will minimize the chances of that happening. 4. Wrong Market. An extension of #3 above. After fixing that old place up, you find that it's now too costly for any one in that area to buy. Your business plan may have been able to flag that one before you started. 5. No Exit Strategy. If you don't have a roadmap of where you're going, then you'll never get to where you want to be. Of course, if you didn't sit down and decide where you wanted to be in the first place, you'll surly succeed in getting there! A well-developed business plan will help you lay out Who, What, When, Where, and Why, in addition to How. 6. No "Vision". A business plan not only establishes your goals, but it does one thing more: remove the 'emotion' from the decision. Getting emotionally involved is not the same as being enthusiastic about what you're doing. If your vision is to have a string of positive cash-flowing properties that are easily rented, easy to maintain, and low overhead, then your business plan should prevent you from "Gold-Plating" those properties so that you never achieve that goal. Article Source: http://EzineArticles.com/4887353