Planning — This goes hand in glove with your Vision and Goals.
The poor investor reacts to things as they happen to him, winging it from deal to deal.
But, the smart investor plans ahead for what they want to happen. For example: Things like securing funding from private lenders ahead of time can open up your options to take advantage of opportunities when they arise later on.
Creating a business plan is one of the smartest investments of time a person can make. The process makes you map out what it is going to take to reach the goals and the vision that you've created. This is where you get more specific about what your strategies are going to be (such as where to find motivated sellers, how you'll finance deals, your preferred exit strategies, etc).
There are a TON of books and software to aid business owners with this, but I wouldn't bother making a formal business plan (lengthy, written-out, formulaic). I've done it twice and it has never paid off.
1. You don't need a formal business plan to get bank lines of credit. I showed mine before (to the wrong banks) and didn't get funding. I DID get lines of credit from simple one-page junk mail applications I got in the mail, so that's what has worked for me. By the way, you might want to read my post, “What Small, Personable, Community Banks are Good For” here.
2. You don't need a formal business plan to find private lenders. I found a private lender with $20,000,000 to lend, and the only marketing collateral I used was a tri-fold pamphlet that was so ugly, and I mean this pamphlet was UGLY!– it looked like it had been extracted from someone's colon minutes ago. What DID help me, though, was having a mutual friend with that lender who set things up for us to meet.
3. You don't need a formal business plan to…Oh wait, we've covered just about every reason you'd have to create a formal business plan. You don't need them to get the financing mentioned above, and no one else who would care about a business plan is going to give you funding anyway (angel investors, venture capital, etc–don't waste your time suiting up, pitching, and begging them. Did you know that only 2% of businesses who approach venture capitalists get funded? I'd rather be tied to a chair and forced to watch a week-long marathon of “Highway to Heaven” with my eyes clamped open)
If it's too long, you'll either never get around to it, quit halfway, waste time on it you could be doing other things with, or you'll never refer to it again because it's so voluminous. I think 2-3 pages is fine. Paragraphs. Just write the gist of your strategic plan that you'll use to write monthly goals.
This plan will end up being the bridge between your vision and you day-to-day activities.