Business Plan
Business Plan
Business Plan
COMPILED BY :
AMRITA SHRESTHA
NITESH SHRESTHA
MOHIT DAGA
RAJ SAIFI
COURSE: MSc CIVIL CONSTRUCTION & REAL ESTATE MANAGEMENT
Riga - 2014
Table of Contents
1.0
2.0
3.0
Executive Summary
1.1
Business Opportunity
1.2
Product/Service Offering
1.3
Marketing Plan
1.4
Management Team
1.5
Financial Plan
Business Opportunity
2.1
Business Opportunity
2.2
2.3
2.4
Market Analysis
3.1
Industry Analysis
Elements of Success
4.1
Target Market
4.2
3.2
4.0
5.0
6.0
Marketing Plan
10
5.1
Marketing Objectives
10
5.2
Marketing Mix
10
10
5.3
Action Plan
11
5.4
11
11
12
6.1
12
6.2
12
12
12
13
Risk Management
13
13
14
7.1
Organisational Chart
14
7.2
14
14
14
14
15
15
6.3
6.4
7.0
7.3
7.4
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8.0
Financial Worksheets
16
9.0
Appendices
17
17
18
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1.3
Marketing Plan
The marketing will differentiate the business from competitors by clearly positioning the business as
a specialist in this niche market, targeting working professionals and private firms for commercial use. The
key marketing goal is to gain a 80% occupancy rate within the next 12 months.
A competitive pricing strategy will be used in the initial stages to win work and gain occupancy for
the desired location. This will be supported by the DIRECTOR of "ANM construction", proven design
capabilities and excellent reputation in the construction industry for last 25 years. Both the competitive
pricing strategy and architectural skills and experience of the company will be used to differentiate the
business and gain housing share.
There will be a special launch event at the Company's office for key clients and stakeholders in this
housing industry. The office is in a prestige apartment development that the company designed &
constructed. This gives the company employees the flexibility to take their car to visit clients and also it is
convenient for clients to visit them and the site as well. The personal marketing activities of the company
employees will be the primary driver of business where 20% of the employees time will be spent on
business development activities. The company employees will have the latest mobile communication
technologies so that they can work remotely and still be highly responsive to client calls and emails at all
times. A marketing consultant with be engaged to develop an integrated marketing strategy and also will
be responsible for setting up the website and developing marketing collateral.
1.4
Management Team
The Director of "ANM construction" is the owner of the business. He has a degree in architecture
and over 35 years of design experience, specialising in multi use building developments. The company has
an excellent reputation in the industry as well as a network of contacts with key clients he worked with
previously.
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1.5
Financial Plan
Net profit (before tax) of 206941.86 EURO in the first year, growing to 1595477.83 EURO in the second
year of operation.
Break-Even is estimated at first year sales level of 33.45%
Total cost has been calculated at 5150605.35 EURO and is to be funded by way of a 2008039 EURO
secured bank loan and 1506028.5 EURO in owners and investors equity. It is proposed that the loan be
paid back over one year period from strong profits in the next few years when the economy starts growing
again.
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Business Opportunity
There is a rapidly growing demand for architecturally designed Multi use building in the centre of
Riga, Latvia because of peoples desire to live in close proximity to where they work, play and socialise.
This demand is fuelled by the 0.85% per annum population growth in Riga, Latvia where in two decades
time it is expected to increase by 3%. This will place even greater demand for more multi use buildings and
inner urban apartments. In addition, government is supportive of high density urban development's where it
assists with infrastructure development (e.g. public transport services and bikeways) that makes these
developments an even more attractive proposition for many people.
While the Global Economic Crisis has caused a severe downturn in the building and housing
industry there is still projected growth for inner urban apartments and commercial space for the next few
years. More importantly, this presents an opportunity to gain a foothold in this niche market in the next few
year and become a leading specialist in order to take full advantage of the predicted strong cyclical
upswing from 2015-16 onwards.
2.2
Vision Premier Multi use building with commercial and residential apartment in Riga, Latvia for creating
contemporary urban development communities in the centre of Riga, Latvia
Mission Construct creative and community friendly inner urban apartments for the home and lifestyle of
the working professional with practical and creative commercial space.
2.3
Goal one: To construct premier Multi use building with commercial space and residential apartments in
centre of Riga, Latvia
Goal two: To achieve 60% occupancy rate for both commercial and residential space in the first 18 months.
2.4
The Construction and business is based in Riga, Latvia where the Director, has over 35 years
experience as an architecture with proven design capabilities in designing creative and practical solutions
for inner urban apartments and commercial space. This business will be construction of Multi use building
with commercial space and residential apartments in centre of Riga, Latvia.
The majority of the work will be the construction of the building with small to medium apartment
developments and commercial space in the first floor because of their high architectural design content.
Most of the business will come from successful sale of the apartments and commercial space.
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STRENGTH
STRATEGY
Strategy Clear focus and positioning of the Architecturally designed multi use building with
property in this architectural development area.
commercial and inner urban apartments to meet
the lifestyle requirements of the working
professionals and private firms.
Sales & Marketing Very good reputation and Spend 20% of the time on business development
network of contacts in this industry
with key contacts, clients and property investors.
Skills Over 25 years of experience and
specialist expertise in the design of high density
residential developments
Structure Modern architectural building with
latest technology.
WEAKNESS
Sales & Marketing Limited contacts and
networks with clients and customers which is
difficult to find.
STRATEGY
Collaboration with real estate agencies to
expand the network of contacts and build
partnerships with full-service providers for sales
and marketing.
OPPORTUNITY
Demographic Riga's population projected to
grow by approximately 5% in 2031. Also, 60%
projected increase in couples without children
and lone-person households this will generate a
huge demand for high density developments by
working professionals
STRATEGY
Business to be positioned as a leading
architectural building by creating several concept
designs for inner urban apartments and
commercial space.
Physical Factors Better infrastructure in the Develop relationships with key stakeholders and
form of better public transport services and businesses that play a part in the development of
bikeways as well as community hubs
these community hubs.
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THREAT
Economic Global Financial Crisis has caused
a severe downturn in the housing market
Multi use building - Disturbance to residential
floor customers due to commercial space
3.2
STRATEGY
Position the business to take advantage of the
projected cyclical upswing in 2015-16.
To provide separate entrance gate to residential
apartments and separate security barriers.
Industry Analysis
The industry is going through difficult times at the moment but the inner urban apartment market
segment and commercial space demand in the centre still presents both short-term and significant longterm growth opportunities. The main challenge is to prove your design and construction capabilities in this
market and have a luxurious residential space and modern, practical commercial space for big firms.
There is high level of competition which comes with many very small scale firms and sole
developers in this industry. The Global Financial Crisis will increase this level of rivalry even more because
there are lot more firms competing for fewer jobs as a result of the economic downturn. In addition, building
design and construction firms are now competing in this space which also increases the level of
competition.
The key industry success factors are concerned with the following elements in the marketing mix:
The industry is fragmented, characterised by many very small scale firms which operate in local niche
housing markets.
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Target Market
Riga, Latvia was selected as the primary market because it is a large city in Latvia with a population
of 2.03 million people. It is projected to grow by approximately 5 % in just over two decades time. These
growth rates are stronger than any other major city in Latvia. This has resulted in significant short to longterm demand for inner urban apartment developments to accommodate the large number of people who
want to live in close proximity to the city.
In addition, the Office of Economic and Statistical Research forecast in the next two decades the
two main household types will be Couple without children and Lone-person households. Based on this
information and affordability of these apartments, the target market will be working professionals who want
the convenience and lifestyle of inner urban living. They are also in a better financial position to afford the
higher price tags for these types of apartments.
However, the business will need to build business-to-business relationships with property
developers who invest in these projects as well as form strategic partnerships with the marketing agencies
to achieve the desired goals.
4.2
The main source of competitive advantage is the wealth of experience and talent of the company
employees in terms of proven design capabilities, excellent reputation and delivery of service within agreed
costs and timeframes.
This is where marketing will be used to clearly position the business as a specialist in this industry
with a proven track record of success. This is also the unique selling proposition for the business as most
competitors do not specialise in one particular area.
This strategy enables the business to focus on this niche housing market to gain an even greater
understanding of the needs, wants and expectations of people in this market. It will enable to business to
design even better inner urban developments that command a higher price tag which in turn delivers
greater returns on investment for the property developers.
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Marketing Objectives
To achieve 80% occupancy rate for both commercial and residential space in the first 18 months.
To promote the space most efficiently in the housing market and also increasing the reputation of
the company.
5.2
Marketing Mix
All seven elements in the marketing mix have been used to differentiate the business from
competitors and position the business as a leading one for this niche housing market:
Product/Service Specialist knowledge and access to Housing markets and also providing specialised
architectural building with a creative and practical solutions for inner urban apartment and commercial
developments that just focuses on this niche housing market.
Table 2: Value Propositions
Features
Benefits
Importance
(1 to 10)
10
Unique?
Y/N
No
Yes/No
People - one of the best construction company with over 25 years of experience and proven design
capabilities specialising in inner urban apartment and commercial developments.
Process Invest in mobile communication technology to enable the business to do work away from the
office and be highly responsive to calls and emails from clients. Also, because of the nature of the
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business, 20% of the time is allocated to working on the business, particularly in terms of business
development.
Physical Evidence
The most important tangible for the business is the employees and staff themselves, which is why
their professional attitude and appearance will make a good first impression on prospective clients. Also, to
reinforce the calibre and credentials of the business, the office will be located in the place where the
company has designed which will provide the best possible tangible proof about the creativity, practicality
and quality of the company's work.
5.3
Action Plan
The key clients for ANM Constructions are the property investors, private firms and families. The
company will devote one day a week to build strategic partnerships with these key clients. The Director will
be responsible for all the active planned promotional strategies, such as:
Personal marketing to the key decision makers in key firms and customers ( Families).
Building relationships with Real estate agencies in parallel professions (e.g. Housing market)
Participating in industry events (e.g. active member of Build Designers Assoc. of Qld)
Writing articles for industry publications as well as speaking at networking events
Launch event at the office to showcase the business to potential clients
The passive promotional activities, such as marketing collateral, website and advertisements will
handled by a marketing consultant with the start-up and overall marketing strategy for the business in
which the performance will be reviewed in six months time.
The employees will be developing their business development skills by attending professional
training courses as way to better personally sell and market the business to others.
5.4
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ASTOR Residence will be set up under a Trust name of ANM Constructions. This is part of a risk
management strategy to protect the assets of the business in the event that the business is ever sued.
6.2
Description of Registration/License
Registered Architecture
Registration of Trust
Registration of Business Name
Latvian business number
Design clearance from various
departments
Building permit with other provisions(water,
sewage, fire and safety)
6.3
Agreement/Contract Type
Contract or
Agt
Yes/No
Business Purchase/Sale
No
Franchise
No
Yes
Advertising Contracts
Yes
Intellectual Property
No
Distribution Rights
Yes
Purchase/Supply Contracts
Yes
Service Contracts
Yes
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Loan Documentation
Yes
Yes
6.4
Yes
Risk Management
Table 5: Risk assessment
Likelihood
Impact
Priority
Preventative Action
Dependency on
small number of
large clients for
work
VL
VH VH
Theft of
equipment
Equipment
malfunctions
Unable to find
occupants
Risk Description
Contingency
Plans
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Organisational Chart
DIRECTOR
PROJECT
MANAGER
DESIGN
7.2
CONSTRUCTION
MARKETING
ADMINISTRATION
LEGAL
SERVICES
Name
Position
Director
7.3
Name
Position
Director
Project Manager
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7.4
Administration
Architectural
Accounting/ Bookkeeping
Construction development
Site maintenance
Computer
Business Development
Legal Matters
Marketing/ Sales
Management
Personnel
Production
Research/ Technology
Secretarial
Strategic Planning
Other
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9.0 Appendices
Appendix 1: Situational analysis external environment
Threat
Influence
(1-10)
Yes
Yes
Yes
No
Family structure
No
External Environment
Opportunity
ECONOMIC:
DEMOGRAPHIC
Geographic distribution
Yes
Level of education
Yes
Yes
Yes
TECHNOLOGY:
SOCIAL/CULTURAL
No
Yes
7
No
Standard of living
Yes
8
8
POLITICAL/LEGAL:
Regulatory environment and legislation
Yes
Yes
ENVIRONMENTAL
Climate Change & Carbon Trading
Yes
6
Yes
Eco-efficient Construction
PHYSICAL FACTORS:
Climatic conditions
Yes
Water restrictions
Yes
Yes
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Strength
Weakness
Factor (1-10)
STRATEGY
Competitive advantage - able to differentiate
Yes
Yes
Yes
Yes
Yes
10
Yes
Yes
Yes
Yes
Yes
Yes
Organisational Structure
Yes
Yes
Yes
Yes
Yes
STRUCTURE
Yes
SYSTEMS
Information and management systems (e.g.
CRM)
Yes
Yes
5
Yes
Yes
Yes
Yes
Yes
Yes
7
8
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Internal Environment
Weakness
Factor (1-10)
Yes
Yes
Strength
Yes
Yes
10
Yes
Yes
Yes
Yes
Yes
SHARED VALUES
FINANCES
Yes
Yes
Yes
OTHER FACTORS:
Rating: 1 = Low, 10 = High
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