Caruso’s Business Plan!

A full business plan allows you (an individual or business) to detail a strategic operating plan, define and execute your value to customers and others in the market, and develop a robust financial model that details what you need to accomplish in order to meet your projections. This is an extremely valuable personal process and document. You will find that a business plan is also a valuable tool if you want to bring on a business partner or get in sync with existing partners or employees, and if you ever want to raise money, it will likely be required by a potential investor or for a bank loan.

The sections introduced below are the most valuable topics to cover in a business plan and some may be more relevant to you specifically, and others less relevant, so use this as a guide rather than a golden rule.

1.) Cover Page and Table of Contents:

It may seem simple, but these are important. The cover page should make it clear what the plan will discuss – it could be you as an individual agent or your plans for starting and growing your own brokerage. The table of contents will allow anyone reading the plan to skip ahead to the sections most important to them (sections may be more relevant to you personally and also to whomever is reading the plan too).

2.) Executive Summary:

The first step to creating a personal business plan is to develop an executive summary. If you are working as an individual agent, this “step one” (the process and the actual document) should be enough to help you successfully define your role in the market, set goals and optimize your results. If you have a team, or hope to open you own business and/or hire people in the future, you’ll also want to take step two – creating a full business plan.

3.) General Company Description:

Discuss where you (or the business) has come from, the current state of operations and where you want to go.

4.) Objectives & Exit:

What are your “end game” goals? Do you want to save enough money to retire? How about sell the business to a larger competitor? Pass along the business to your children or a protégé? It is important to honestly define what you want the outcome to be so that you can tailor the rest of your plan towards these ends. It is also important to set expectations for those working with you.

5.) Management:

Provide a detailed biography for all key leaders involved (even if it is just you), and discuss how prior experience and success will help achieve current goals. You should also discuss any leadership positions that will need to be hired for as your business (and the plan) matures.

6.) Product & Service Description:

Provide details on what you provide to your customers. You should prioritize the most important revenue streams first, but all should be mentioned. If you are an agent, you might talk about each step of the process towards closing a sale with your clients (i.e. listings for review, mortgage options, showings, title insurance options, escrow options, making an offer, appraisals, inspections and closings – give or take a few steps). You should also talk about how and how much you get paid for each product you sell or service you provide.

7.) Market Analysis:

This section should provide a detailed description about your specific market. Include objective details like total market size, growth trends and customer behavior statistics. You should also provide subjective analysis on where you fit in and where customer behavior is headed. This section should also detail your competition. You may want to list the other brokerages that specialize in your region as well as the top individual agents in your region (include how you will overcome each competitor). You may also want to do a SWOT analysis of yourself/your own company here (Strengths – Weaknesses – Opportunities – Threats). We’ll dig deep into SWOT in coming weeks.

8.) Marketing Strategy:

Detail your strategy to acquire and retain customers.

9.) Investment Opportunity:

This section is only relevant if you need to raise money to fund your business, but this includes both external money (i.e. bank or angel investor) and internal money (i.e. your savings or family money). Detail how much money you need, the premium that an “investor” will get for providing this money and how/when it will be paid pack. Even if it’s your money, you want to make sure you have a solid plan and a strong return on investment.

10.) Financials:

This is a vital component of every business plan, and as such, it will be detailed separately in coming weeks. Even if you only develop an executive summary and don’t do the full business plan – make sure you develop detailed financials. You need to build a sophisticated model that addresses all of your revenue and costs. You should not work backwards from your financial goals to build this model – that is a common, classic and huge mistake. You need to start with realistic business assumptions that match up to your plan and then work towards determining accurate final projections.

How to use your business plan

As with your executive summary, the process of creating this document is as important as the document itself. Once complete, your business plan is a detailed encapsulation of everything about you and your business. You can use it to recruit employees, add strategic partners in peripheral industries, and raise money. Do not ignore its value for you personally, though. Make sure your efforts are in line with the strategy you have mapped out. If market conditions change, then your plan likely has to change too. Finally, your financial model and projections should be used as an important (self) management tool. If your assumptions prove to be off, correct them and project how this will affect your business. If done well, this plan and your financial model will help you optimize your business and avoid problems as you grow. It will be your roadmap to success.

And thank you for making me Your Orange County Real Estate Connection.

Best regards,


Past President, Orange County Association of Realtors (949) 753-7900

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Certified Luxury Home Marketing Specialist  Member of The Institute Luxury Home Marketing   Million Dollar Guild Member  Member of Proxio Pro - The International MLS


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