Most people generally overcomplicate the idea of business planning. We think business planning is really big and scary, but international real estate speaker and consultant Valerie Garcia breaks it down and explains that effective business planning is simply just learning how to manage your time and your money so you can achieve your goals.

Garcia says with five simple steps, you can create an effective business plan to help you reach your goals next year.

Step 1: Set Your Course. It’s difficult to know where you’re going if you don’t know where you’re starting from. Garcia likes to think of this like a road trip. Figure out what path you’re going to take, have a look at the map and figure out what you already have at your disposal. Her favorite way to do this is by doing a SWOT analysis.

If you’re not familiar with a SWOT analysis, it stands for Strengths, Weaknesses, Opportunities and Threats. To get started, take a blank piece of paper and divide it into four sections. Label each section starting with Strengths in the upper left-hand corner, Weaknesses in the upper right-hand corner, Opportunities in the bottom left-hand corner and Threats in the bottom right-hand corner.

Each area helps pinpoint where you’re starting and where you should be focusing.

Strengths are the things you are naturally good at; areas in your business where you’re already strong, resources you can tap into. Examples include being good at networking, really organized, great time management skills, strong database of past and current clients or having a great team.

Weaknesses are things you could improve upon, things to learn or resources you’re missing. Garcia says it’s usually easy to think of these. Examples of weaknesses can be spending too much time on social media, not tech savvy enough, missing resources or delegating tasks.

Threats are the things that impact your business that you cannot control. Examples of threats are the housing or stock market, personal issues, the pandemic or the weather. Garcia says you don’t need to plan around threats, but it’s important to factor them in.

Opportunities are the flip side of weaknesses. These are the things to learn or to cultivate. Everything from the weaknesses box can go straight over to the opportunities box to help you reach your goals. They could be skills you want to learn or relationships to foster.

Step 2: Review. Now that you know where you’re starting from, what you’re working with and what you need to work on, you can see where you’re at. According to Garcia, this is the painful part for most people and the part of a business plan that most people don’t want to do. However, having a successful business plan means looking back and having a solid foundation.

To start the review, you have to look at two things: where does your money come from and where does your money go? Garcia has an entire workbook she’s provided for California REALTORS® which includes a worksheet to look at your income producing activities.

She recommends looking back over the last one to two years and identifying where your buyers and sellers came from. Were they repeat clients, referrals from past clients, from farming, open houses, networking events, etc. Put a check mark for each client into one of the boxes. Some of the boxes will have a lot of check marks and others may not have any. Both of these are areas for opportunities – either to do more or to start working that area of your business.

Next, review your business expenses. It is very difficult to have a solid business plan that will help your business grow and be more successful if you don’t figure out where your money is going. Another chart Garcia offers in her workbook itemizes the various components needed to operate your business: membership dues for professional organizations, entertainment expenses, conferences, technology, travel, auto, etc. Look at each category and write down the monthly, annual and projected expenses for each.

Garcia says this is the critical part of business planning because it helps you figure out what you have to bring in to stay in business and where your opportunities are in terms of profit.

Without looking at your money in and money out, you won’t be able to successfully implement step three because your goals won’t be rooted in reality.

Step 3: Set goals. Garcia says her clients always love this part of business planning and want to immediately start writing down goals. However, there are a couple of things to remember before writing goals that will keep you from falling into creating goals that are gigantic and nonspecific. Before jumping into goal writing, think about these four words.

1. Specific: We don’t buy plane tickets to wherever. We have a specific destination. Setting a broad goal, such as writing a book, sets us up for failure. Be more specific, like write 500 words a day or write for 20 minutes a day.
2. Smaller: Break down the goals into smaller goals. The smaller the pieces the better. Smaller pieces become daily routines you can accomplish.
3. Stretch: Stretch your goals and push yourself out of your comfort zone. Saying you’re going to do more of something or be better at something gives you a lot of leeway to cheat or let yourself off the hook.
4. Visible. Make your goals visible. Write them down and post them by your computer. Don’t write them in a notebook and put it in a drawer. Out of sight, out of mind. When you don’t make your goals visible, there’s no accountability. Get an accountability partner. Write down who is going to hold you accountable and how they’re going to do it.

Now it’s time to write the goals. Garcia says you should create both personal and professional goals. You’re not just a professional; you’re a human. You have interests, hobbies and friends. So create goals that benefit you all around.

According to Garcia, this is where most people stop and think their business planning is complete. However, Garcia emphasizes not stopping there because it means there is less of a chance you’ll achieve your goals because you don’t have the last two steps: Focus and Managing Your Time.

You can learn about these last two steps and get the link to Garcia’s free workbook by watching her session from C.A.R.’s 2021 REimagine Conference at reimagineexpo.org. The session is available to watch, for free, on demand until Dec. 31, 2021.