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Real EstateBusiness PlanEvery business needs a plan to succeed; a plan getsyou and your team on the same page and heading inthe right direction.1

A good real estate business plan shows you where you are today, where you want to be and howyou’ll get there. It also helps you measure your performance, and recognize where and when youneed to make a course correction.Our customizable template helps you create a real estate business plan that outlines what you’ll do,how you’ll do it and what success looks like—for you and your clients. Jot down your business goals,clarify the status of your finances, profile your target customers and more.To populate the template, simply place your cursor in a highlighted field and enter the information.After you populate your template, save it to your laptop. Remember that your real estate businessplan is a living document and you should expect to revisit and update it regularly.2

Our business plan template covers the following topics:Executive summary . 4Mission statement . 4Management summary. 5Target customer. 6Company goals. 7Keys to success . 7Financials . 8Startup Summary. 9Break-even analysis .11Cash flow .12Loan repayment .13Services .14Market overview .15Market segmentation .16Market size and growth .16Market trends .17SWOT analysis .17Competition .18Marketing strategy.19Lead generation .19Sales forecast .20Personnel plan .20Customer service .21Customer relationship management .21Measuring performance .233

Executive summaryWho are we? What services will we offer? Where will we operate? Whom do we serve?Example: Mud to Mountain Realty is a full-service real estate company serving clients—primarily first-time home buyers—in Western Washington. We offer home buying andselling, mortgage and title services.Executive summaryMission statementWhat is our reason for being, what are our guiding principles, what do we want to doand for whom?Example: With a passion for helping people find their way home, Mud to Mountain Realtyguides first-time home buyers through the process with a full complement of servicesincluding mortgage and title assistance.Mission statement4

Management summaryOffices: Where will we operate? What hours will we keep?Example: Mud to Mountain Realty operates in Western Washington, with its officelocated in Shoreline. Regular business hours will be 9:00 a.m. to 5:00 p.m., with ouragents understanding that they are “on-call” to clients outside those hours— withinreason — and round-the-clock in the 48 hours preceding a closing.Place of operationHoursOur Team: What staff will we open the doors with? Who will manage our day-to-dayoperations?NameFunction5

Target customerWho, specifically, is our target customer?First-time home buyersHome sellersRentersOther (e.g., relocations, retirees, investment properties, etc.)EXAMPLEWhat is our target customer’s story?QuestionAnswerOur StrategyWhere do they want toSuburban areas with openFamiliarize ourselves withlive?spaces; close to amenitiesthese neighborhoods; keepand public transportation.track of where light rail isexpanding and bus routesare being cut.QuestionAnswerOur StrategyWhere do they want to live?What is their age?What is their annualhousehold income?What is the householdmakeup?What do they want from theirhome?What are their feelings andconcerns about searching forand purchasing their home?6

Company goalsWhat are our top business goals for our first three years?Example: Break even within 18 months.GoalsKeys to successEXAMPLEWhat are the top three ways we will achieve business success? How will we carrythem out?Key to successActionDifferentiate ourselvesAnswer phones by third ring, return texts and emailsfrom the competitionwithin five minutes, acknowledge all comments onthrough exemplarysocial media.customer service.Key to successAction7

EXAMPLEWho owns the final decisions in certain areas of the business?AreaFinal decision makerMarketingCatherine Smith DoeHuman ResourcesJohn DoeAreaFinal decision makerFinancialsEXAMPLEOwnership: Who will legally own this business and how will we split up the equity, ifat all?Legal ownerPercent of equityJane Doe49%John Doe49%Catherine Smith Doe2%Legal ownerPercent of equity8

Startup SummaryWhat are our startup expenses, assets, liabilities and capital?Startup expenses to fund AmountLegalInsuranceRentUtilitiesAccounting and bookkeeping feesExpensed equipmentAdvertisingSupport staff salariesOtherOtherOtherOtherTotal Startup ExpensesStartup assets to fund AmountCash requiredOther current assetsLong-term assetsTotal Assets9

Total funding required (Expenses Assets) AmountAssetsNon-cash assets from startupCash requirements from startupAdditional cash raisedCash balance on starting dateTotal AssetsLiabilities AmountCurrent borrowingLong-term liabilitiesAccounts payable (outstanding bills)Other current liabilities (interest-free)Total LiabilitiesCapital AmountInvestor #1:Investor #2:Investor #3:Investor #4:Additional investment requirementTotal Planned InvestmentLoss at Startup (Total Startup Expenses)Total Capital10

(Total Planned Investment – Loss at Startup)Total Capital and Liabilities(Total Liabilities Total Capital)Total Funding(Total Liabilities Total Capital Loss at Startup)Break-even analysisWhat average commission rate will achieve an average profitability per month, perunit? How many homes must we sell at our average commission rate to reach thebreak-even point by our target goal?Profit and lossYear 1Year 2Year 3SalesDirect cost of salesOther costs of salesTotal costs of salesGross marginGross margin %ExpensesPayrollSales & marketing and other expensesDepreciationRentUtilitiesInsurancePayroll taxesTravelOther11

Total expensesProfit before interest and taxes(Gross margin – Expenses)EBITDAInterest expenseTaxes incurredNet profit (Profit – EBITDA, Interest andTaxes)Net profit/Sales (Net profit/Gross margin)Cash flowWhat is our projected cash flow for the first three years?Cash flowYear 1Year 2Year 3Cash from receivablesSubtotal cash from operationsSales tax, VAT, HST/GST receivedNew current borrowingNew other liabilities (interest-free)New long-term liabilitiesSales of other current assetsSales of long-term assetsNew investment receivedSubtotal cash receivedCash spendingBill paymentsSubtotal spent on operations12

Sales tax, VAT, HST/GST paid outPrincipal repayment of current borrowingOther liabilities principal repaymentLong-term liabilities principal repaymentPurchase other current assetsPurchase long-term assetsDividendsSubtotal cash spentNet cash flowCash balanceLoan repaymentEXAMPLEWhen will we pay off our short-term and long-terms loans?LoanLoanAmountInterest ratePayoff dateCatherine Smith Doe 3,5000.01%12/31/2020AmountInterest ratePayoff date13

ServicesWhat real estate services will we provide our customers?Home searchesComparative market analyses (CMAs)for sellersMoving consulting, quotes, planning,Appraisalsetc.Mortgage consulting and loan pre-InspectionsapprovalCommunity informationProperty preparationTitle transferOther (e.g., relocations, retirees, investment properties, etc.)EXAMPLEIf we have any partnerships with builders or lenders that we plan to leverage inmarketing our business, what services will they add to our repertoire?PartnerServiceACES Mortgage Co.Mortgage consultingPartnerService14

EXAMPLEIf we plan to outsource any services, which ones will we outsource and to whom?VendorServiceB&K PropsStaging equipment rental and designVendorServiceMarket overviewWhat is happening in the market our target customer operates in? How has themarket behaved in the past few years? Where do we see this market going in thefuture? What circumstances affect this market?Example: In the past six years, the housing market for first-time homebuyers in thePacific Northwest has been steadily growing at an average annual growth of 3 percent.This percentage is expected to grow in large part due to millennials—the biggest groupexpected to start purchasing their first homes—being attracted to careers offered bythis region’s financially stable tech industries.Market overview15

Market segmentationEXAMPLEWhat are the potentially different segments in our target market?Target market segment1. First-time home buyers, single family2. First-time home buyers, multi-generationalTarget market segmentMarket size and growthHow many total potential customers are in our market? How much growth do weanticipate during the next three years?Potential customersYear 1Year 2Year 3Target customerOther customerOther customerTotal16

Market trendsEXAMPLEWhat market trends do we see having an influence on our market segments and inwhat way?Market trendsPossible outcomesMulti-generational living is onClients may want larger homes, split levels or onesthe rise.with secondary suites.Market trendsPossible outcomesSWOT analysisEXAMPLEWhat are our strengths, weaknesses, opportunities and idOverstaffedRaise brandCash flow couldunderstanding ofawareness amongforce us to reducechallenges facingfirst-time homestaff.first-time Threats17

CompetitionEXAMPLEWho is our primary competition for this market and why? How will we address thechallenges?CompetitorStrengthXYZ Real Estate Inc 13 years in operation Multiple buyer and sellertrusted real estateagents and licensedadvisorassistantsOur action Focus on becomingHire licensed assistantas soon as is viableCompetitorStrengthOur action18

Marketing strategyWhat marketing materials and methods do we use to reach our target audience?Note: To create an in-depth version of your real estate marketing strategy, downloadEXAMPLEZillow’s free Real Estate Marketing Plan Template.ResourceKey featuresWebsite (Our own)Listings with at least five photos each, blog articles, reviews,white papers, MLS and IDX feeds.Social mediaOne listing for every three real estate–related (but nonsales) posts; congratulate clients on recent buys/ sales andanniversaries; fun real estate eye candy.ResourceKey featuresLead generationEXAMPLEWhat are our most effective methods of lead generation?Lead generation method# Leads per yearWebsite (Our own)480Lead generation method# Leads per year19

Sales forecastWhat is the breakdown of our projected sales for this year and for the next threeyears?ForecastYear 1Year 2Year 3Agent salesBroker salesReferralsOtherTotalPersonnel planEXAMPLEWhat are our anticipated hires and their salaries over the next three years?TitleFunctionYear 1Year 2Year 3TransactionProject coordination, client 40,000 42,000%45,150coordinatorrelations, scheduling; baseYear 1Year 2pay bonusesTitleFunctionYear 3Total payroll20

Customer serviceEXAMPLEWhat is the “perfect world” delivery of our customer experience?ServiceMeasurementResponse time to incoming queriesLess than one minute regardless of whether itcomes in by phone or email.ServicePossible outcomesCustomer relationship managementWhat customer relationship management (CRM) tool do we use?Market overviewWhat do we use the CRM for?AnalyticsMarketing automationAutomated lead capture,Performance metricsincluding website and thirdpartyCalendar and scheduling withProperty and listing detailsremindersChat supportReportingContact management,Sales trackingincluding profile and status21

Customer databaseSocial media integrationDocument managementTask listsEmail marketingWireless smartphone synchronizationEmail supportWireless supportMail merging for letters,envelopes and labelsWhat other tools do we use and for what functions?ToolFunctionWhat transaction management tool do we use?Market overview22