Marketing/Sales Plan
Marketing is essential to the success of any business, especially with your real estate investing business. People will call you only when they know about you. There are countless ways to market to your target market and you must determine the methods that will be the most effective for you. Check out our Ad Copy section for some marketing ideas and examples.
This section should be between one and three pages.
In this section you want to clearly describe your plans for how you will attract sellers and buyers. In addition to the types of marketing you will use, you will want to include a description of the competition in your market. You may be wondering why you need to describe your competition. Well, you need to understand your competitors very well so you can capitalize on their weaknesses with targeted marketing.
If you know your competition very well you can position yourself in a way to market to your strengths and their weaknesses. You may not know who your top direct competitors are as of now, but you should set out to learn as much as you can as fast as you can. The more you know the more you grow (I know that was kind of cliche but it seemed fitting 🙂
Marketing Plan
As I mentioned above, this is where you will lay out your entire plan for attracting customers. It may be easier to really drill down to exactly what type of marketing you will use by thinking of your target market and a timeline starting today.
You will want to answer the following questions.
- What types of marketing/advertising will you use? (i.e. direct mail, radio, TV, etc.)
- How often will you use it?
- What is your forecasted marketing budget now, 6, 12, 24 months from now?
- Will you do targeted marketing or mass “coverall” marketing? Or both?
- What mediums will you utilize? (i.e. radio, print, TV, internet, affiliates/birddogs)
- What is your plan for evaluating and tweaking your marketing?
- Will you perform the marketing yourself or hire it out?
In the earlier section of your business plan you established your target market. How can you get your message in front of your market as effectively and efficiently as possible? Will you use the Yellow Pages, post cards, bird dogs, or billboards? Basically, use this section to describe exactly how you will bring in customers and how you will adapt your marketing plan to meet your needs.
The easiest way to brainstorm ways to market is to think of who your target market is and how they live. For example, if your target market is people going through foreclosure you may want to obtain notices of default from the county courthouse and send them a series of six postcards over a period of 2 months in addition to strategically placed bandit signs at 50 locations within your target zip code. That is just one example, but you get the idea.
Once again, be as specific as you can.
- Drill down your marketing to exactly what types of materials and messages you will use
- Where you plan on utilizing your marketing (i.e. 1 billboard location at the corner of 111 Main St)
- The timeline for your marketing efforts (i.e. the first of each month mail 3,000 postcards to a list of owners in zip code 55555)
- What type of referral program will you offer? (i.e. a birddog program where you pay $1,000 for each property they bring that I purchase)
- Who will manage the marketing efforts?
Really, by the time you are finished with your marketing plan section you should know exactly how you will obtain and keep your customers. You can never be too thorough in this section because obtaining customers is perhaps the most important activity in your business. Without customers you don’t have much of a business. So, spend some time and research on your marketing plan. What you might do is visit your local real estate investing club and ask people what is working for them…and try it yourself.
Remember to look at this section from the perspective of a lender or prospective business partner. If a lender is reading your marketing plan can they be reasonably confident that you have a solid plan to generate customers and sufficient revenue to pay the loan back? If your plan is something like this…
“I am going to put an ad in the phone book and classifieds that says ‘I buy houses’. I will also tell my friends and family to spread the word”
…do you think a lender will be confident in your ability to bring in a steady stream of customers? I don’t think so (I am actually a lender and I would tell you to come back in a year or two once you get things together). Treat real estate investing like a business and show the lender that you are in it for the long haul.
Competition
When it comes to competition you should know everything about them. By knowing all about your competition you can pick up where they leave off or simply find a better way to serve the market. In this section you will want to perform what is called a S.W.O.T. analysis (Strengths, Weaknesses, Opportunities, Threats) . This part doesn’t have to be too awfully long, but be sure answer the following questions:
- Who are my top three to five direct competitors?
- What are my top competitors strengths and weaknesses?
- What makes your real estate investing business different from your competition?
- What opportunities do you have by capitalizing on their weaknesses?
- What possible threats does your competition pose to your business?
After you determine your top three to five competitors take out a pen and paper and just start brainstorming. Write down whatever comes to mind regarding the questions in the list above for each competitor. You should be able to come up with several things for each question. Once you do, break it down like the example below.
“S.W.O.T. Analysis of Competitors
#1: Buy More Houses, Inc.
- Strengths:
- Has 16 years of experience
- Has a recognizable name as a result of effective marketing
- Weaknesses:
- They are known as a “lowball offer” company who wants to “steal” your home
- They target an area of two states with only one house purchaser on staff
- They pass on a lot of profitable deals because they don’t have the time to pursue them with their small staff. They focus on deals with profit of at least $30,000
- Opportunities:
- We can position ourselves as a seller friendly home buyer who pays top dollar
- We can target deals with less than $30,000 in profit knowing that we will not have competition from them.
- Threats:
- They can hire on additional staff and pursue the deals they are now passing on
- They have a larger line of credit which means they can purchase more homes faster, which may put us out of the game on many deals
- They can develop a more comprehensive marketing plan that focuses directly on our main target customer/house”
See, the S.W.O.T. analysis is rather simple to do. Just sit down for 30 minutes and jot down everything that you can think of. You will be extremely glad that you took the time to learn more about your competition because it will help you with many aspects of your business down the road.
Once you have completed your S.W.O.T. analysis of your competitors fill out one for your own business. Perform the same steps, but for your business. This will help you to identify your strengths and weaknesses and enlighten you on possible ways that your competition can capitalize on your weaknesses. If you know your weaknesses you can develop ways to tighten up those parts of your business. If you never take the time to look at your company from the perspective of your competition you are leaving yourself open to future problems.
Click continue to learn how to write the Implementation section in step 5 of 8.
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