The analysis of business plans primarily defines real estate strategies. These business plans involve various scenario-based hypotheses that facilitate your future decision-making. How can you make these simulations quicker and more readable? Let's explore the best practices.
What is a business plan?
A business plan is a set of hypotheses that can be used to analyze business multiples and IRR (internal rate of return) or the long-term returns on a given scenario. Asset and fund managers rely on simulation and forecasting tools to analyze business plans. Their main challenge is to choose the best strategy within the best timeframe; given today's economic instability, being proactive is essential in real estate management.
How to efficiently design and analyze business plans? The following 6 tips will help you tackle these challenges using MYRE.
1. Make sure the desired outcome is clear.
Every business plan must reflect the desired outcome, which is the primary goal of your strategy. Your goal could be to achieve lower costs or higher profitability, optimize your building's occupancy, and so on. The desired outcome serves as a guideline when developing hypotheses. Later, you may have to update these goals to ensure they align with each step of your portfolio's lifecycle.
2. Automate the calculation of your analytical data
Use automated calculations to make your business plan prospective in a timely manner. By doing so, you will benefit from direct insights into fluctuating factors that impact your Key Performance Indicators (KPIs).
3. Use interactive simulation tools
Interactive and flexible tools allow you to edit your data to simulate, analyze and compare your different scenarios with just a few clicks.
4. Standardize your calculation methods
Using a single reference point, you must standardize all calculations to compare various business scenarios. Additionally, a standardized algorithm helps you create business plans in no time by duplicating an existing calculation system or by using management data rather than starting from scratch.
5. Making sure your data stays up to date after each investment
Asset managers can keep their strategy up to date by connecting the simulation tool with the already available data. In sum, since simulations are based on existing data, there is no need to re-enter any information at a later point in time.
6. Go for a user-friendly tool
An ergonomic tool will always improve your browsing experience. Not only does it speed up the creation of prospective business plans, but it also makes it easier to analyze and compare scenarios. In other words, a user-friendly solution allows you to visualize your business plan easily while clearly revealing all your strategic options, a key factor when transferring files from one asset or fund manager to another.
We hope our six recommendations will help you choose the right management tool, considering flexibility and ergonomics. Our specialists are always ready to assist you, so feel free to contact us!