Ryan McLean : Slightly Unconventional

Creating a Business Plan – Day #26 – 365 Days TO Wealth

I have just started reading one of my Rich Dad Advisor books “How To Create A Winning Business Plan” and it an extremely challenging book.

I know that I want to be financially free in 5 years. I also know that I want to achieve this through investing in positive cashflow property. I even know my first few property deals and the return I can expect on them but I really don’t know much beyond that.

I don’t have a complete business plan to map out how I am going to get from where I am now to where I want to be in 5 years.

I think the main reason I lack a business plan is because I lack experience. Part of my ‘plan’ is to continue to learn better ways to invest in property. So I don’t know now the things I will know in 3 years time, so how can I write that down in my business plan?

Thinking about a business plan has been great because it has helped me define

My Exit Strategy – For each property deal I need to have an exit strategy before I purchase it. I hadn’t really thought about my exit strategy before, so it is helpful to start thinking about that now

How To Pay Back Capital – People investing their capital with me will obviously want to know what return on their investment they are going to get. But just as importantly they want to know when they are going to get their capital back. So I have really had to put my head down and work that out. Can I achieve that through rental income, or do I need to wait until the property goes up and refinance. How am I going to get their capital back

Worst Case Scenario – I have already gone through a few of these, but when investing by yourself you REALLY have to know the worst case scenario and whether or not you can afford it.

Scaling – Scaling is simply repeating what you did on a bigger scale. Instead of doing just one property do two, or do a unit block. In order to scale you need to have skill and capital behind you. My business plan is making me think about how I can scale my property investing effectively

So there you have it. Today what I did to move towards wealth was think about my business plan for property and I started to work out in even more detail exactly what I hope to achieve and how I plan to achieve it.

4 responses to “Creating a Business Plan – Day #26 – 365 Days TO Wealth”

  1. Hermann says:

    Awesome post Ryan.

    One strategy given to beginning property investors who have a goal but find it hard to set the milestones along the way to account for their growing expertise, experience and capital is the half-life theory.

    Say you have a money Goal of $2,500,000 and the timeframe is 10 years. The Half Life theory says to each time divide the timeframe by 2, while dividing the $ by 3. For example the next step would be 5 years and $833,000 and the next step 2.5 years & $277,777.

    This is said to account for you gaining experience and increasing your capital as you do deals.

    It’s a bit simplistic but can can be quite helpful to beginners. I’m unsure if it applies to your situation and strategy.

    Good Luck!

    • ryan says:

      Actually I really liked this. I just did the calculations on a bit of paper and it seems to work really well. I didn’t know you were into property investing…doing well?
      Thanks for the example

  2. Hermann says:

    … This is something we learnt from Steve Mcknight & his coaches.

    This is under the premise (as in Steve’s latest Wheel of Wealth or Monopoly theories/models) that you would invest the lump sum in commercial property getting a minimum 8% return – and in the above example earning $200k gross a year.

  3. Hermann says:

    We settled on our first property 13 months ago, and last year got more serious and specific with our goals, and now we’re deciding what the best way forward is now for us.

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