Would you like the two magic words that have helped me get more private money than I ever thought possible?

What would a few extra hundred grand or a few million in private investor money into your business mean for your investing goals?

Here are the two magic words: Business Plan

Wait a minute, you’re thinking…I’ve heard this whole thing before, right?

Would you go out into the freezing cold naked? Would you go fishing without bait, a fishing pole and net? Then, why approach private investors without having a business plan?

A business plan puts you on the most solid ground and sets you up to get the most private money in the shortest period of time. Now, I’m not talking about the doodle on the back of a napkin or pizza box, or the goals you set in your head but did not put down on paper. I’m talking about a formal business plan -  a document that details your business operations, marketing, financing sources and serves as virtual magnet for private investors.

Want your attorney to send private investors to you? Give them 

a copy of you rock solid business plan

Want people to be impressed with your opportunity and eager to place funds with you? Walk them through your business plan.

For many entrepreneurs, real estate investors especially, the business plan is really a breaking point. Most entrepreneurs don’t have one for their business (pizza shop, software company or otherwise) and not having a business plan is linked to many small business failures, according to the U.S. Small Business Administration.

Remove all doubts and obstacles to having a great business plan by using the following guidelines:

• begin with your end financial goals in mind – what profits do you want to make? what is the time frame? all businesses are in operation make money (lots of it) – don’t be shy with this part
• summarize concisely how you will make money - lay out the details of your operation and walk the reader of you plan through the results and milestones of your operation
• focus. focus. focus - having a focused approach or strategy will accelerate your progress and make for a better business plan. Don’t try to be jack of all trades – if you’re going to fix and flip houses, don’t wander your business plan off into mobile home parks. If you do plan on graduating up the investment scale, beginning with single family houses and then moving up to commercial, infer but do not focus on this in your plan. Keep it simple.
• marketing - this is the absolute most important part of your business plan – you must show how you’ll find your investments (apartments, houses, discounted notes, etc.) and how you will attract tenants or buyers and how much this will cost. Ignore marketing and you’re ignoring the fundamentals of a successful business
• cater the plan – a lot of entrepreneurs build their business plan around getting financing from a bank for an SBA loan or to get venture capital investors for their start-up. On the other hand, you should be catering your business plan for private investors. This means that your focus should be on things that will pique their interest (the “hook” of your private money approach – learn more about this HERE)

Business planning has been a very big factor in my real estate investing success and raising private money to do more and more deals. My business is up (way UP), even in what many people call a down real estate market. If you spend just a little bit of time on your plan, you can  have the same result.