Even with the recent popularity of real estate investing and the acceptance of it into the world of academia, many still see it as a get-rich-quick scheme. That mindset paralyzes both potential and existing investors, resulting in them giving up before they even begin to develop a business. Many investors narrowly miss the opportunity of success because they fail to realize that if you know and apply proven real estate investing techniques the profit potential is unlimited.

As with any business, deciding on the type of business is the first step. Once you’ve decided on real estate investing, you know you have to learn the business of real estate and how to make money at foreclosures, property management, wholesale buying, etc. It is obvious that you have to know the strategies and continue learning to stay current with these strategies. However, many forget the other side of the equation that involves how to set up and operate a business.

All businesses, including real estate investing, begin and operate on similar principles using a business plan as a road map. Also, the majority of business plans have some version of the following four components listed by the Small Business Administration

1. The mission, purpose, or vision of the business.
2. A description of the business including marketing strategies, competition, and operating procedures.
3. Financial information including start-up capital, loans, loan applications, inventory sheets, balance sheets, profit and loss projections, and cash flow projections.
4. A statement about the management of the business.

In addition to the Small Business Administration, there are books, software programs, trained professionals, and web sites that address business plans. The disadvantage of using these tools to develop your business plan is that you lack the experience to know how to develop your plan for success. This is one of the advantages of using a Mentoring Program for your real estate business. You have an experienced business owner that also knows how to assess your finances and goals, based on your own unique situation, and help you develop a successful business plan.

You must have a business plan! Businesses without a plan fail because they have no target to aim for and no direction to move in, so they just stagnate and eventually fail. Utilize the resources available to learn the concepts of business planning, prepare a draft of your plan, and then find a mentor.