No matter what your field, the fact of the matter is that planning for setbacks can really carve your way onwards and upwards towards your goals. This form of business planning is often called risk management – but it’s essentially the same thing, it’s just that planning for setbacks doesn’t sound quite so business like.
I’ll bring it all into focus by returning to something we care very much about – and that is real estate investment business planning. I’ve said it before, and I’ll say it again:
If you have money invested in real estate, and you don’t have a real estate investment business plan, then it’s just a hobby. If you are serious about real estate investment, then you need to get serious and start planning for success.
The act of sitting down and sorting out your business plan will, if it’s done correctly, identify not only potentials for growth and profit, but also areas in which you can do better. If you’ve really done a good job you might even be able to identify potential and actual threats to your business and take steps to address them.
Plan for what exactly?
This might mean that you have your Business Plan A – which when you are sailing along nicely is great – but you also have numerous back-up plans just in case. You may need to consider what you will do in case of the unexpected – that’s just part of being successful in business.
There are of course things that we can’t expect to happen, including divorce, disability or other health challenges – but we really need to put in place contingency planning structures in the event of such things.
Something that Robert Kiyosaki said that always stuck in my mind was that the best business continues to run well, even without you there. This is a kind of business model that we should all aspire to. Sure, our business is in real estate, but if for some reason we are unable to be there, can it continue to operate and profit?
If the answer is ‘yes’, then happy days – we have a good, solid business which is well placed to continue to run well, and at profit well into the future. If on the other hand the answer is ‘no’, then it’s time to take a seat with a strong cup of coffee and re-examine your business plan.
When we consider setbacks that may beset our businesses, we aren’t planning to fail, we are planning our reactions to those possibilities – and therefore our success. Failing to plan for success is guaranteeing failure.
Burying your head in the sand is not a winning position. Risk management is all about running your business with your eyes wide open, with successful alternative plans in place for any number of contingencies.
This is vital for all businesses – particularly for us in the business of real estate. As most will likely agree, the best way to minimize risk is by having your finance well structured – but that’s just the beginning.