Construction Business Plan Analysis

This assignment involves analyzing a detailed business plan for a construction and real estate company operating in the UK. The analysis covers aspects such as target market identification, competitor landscape, financial projections (including break-even analysis), marketing strategies, and potential challenges faced by the business. The plan emphasizes serving customers with existing housing issues, particularly damp problems.

Business Plan
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TABLE OF CONTENTS
1. BUSINESS OUTLINE ...............................................................................................................3
2. PRODUCTS/ SERVICE PLAN..................................................................................................3
3. STATEMENT OF INNOVATIVE OPPORTUNITY/ STRATEGIC POSITIONING .............4
4. MARKET AND COMPETITIVE ANALYSIS..........................................................................4
5. MARKETING AND SALES.......................................................................................................5
6. OPERATIONS/ LOGISTICS/ HUMAN RESOURCES ............................................................6
7. FINANCIALS .............................................................................................................................6
8. CONCLUSION ........................................................................................................................11
9. EXECUTIVE SUMMARY ......................................................................................................11
REFERENCES .............................................................................................................................12
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INDEX OF TABLES
Table 1monthly and weekly cost data..............................................................................................8
Table 2Revenue per person..............................................................................................................8
Table 3Projected number of clients.................................................................................................9
Table 4COGS data...........................................................................................................................9
Table 5Expenses data.......................................................................................................................9
Table 6Expenses as percentage of revenue....................................................................................10
Table 7Income statement...............................................................................................................11
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1. BUSINESS OUTLINE
This business plan is all about providing housing facility such as buying and rebuilding
houses to the needed people in affordable cost. The objective of the F and RM is to serve real
estate services in local market of UK. Its motive is to serve every society people to afford the
services of this entity. The aim is to provide the comprehensive real estate services to the various
clients in order to earn profit by providing its services. F and RM provide full furnished new
homes, condos and retirement apartments. The company provides the various services and
facilities which help the customer to purchase the houses as the want such as home search
database, community information, property preparation, market ans seller analysis and loan per-
approval (Barringer, 2012). The new venture maintains the close contract with real state listing
services and comprehensive services for the clients in order to provide them consultation and
community information. F and RM chooses this business to increase the living standard of the
people by resolving all the problems faced by local residents. People who are not having the
proper housing facilities are having very low standard of living because there is no proper
sanitation and dumping and ventilation facility. Increase in standard of living will raise in GDP
of the country. The reason behind choosing this business is to make less investment and making
out more profit. As there are more partners in investing in the business so it will help to generate
more profit than making the investment.
2. PRODUCTS/ SERVICE PLAN
A) Residential services: This service include changing house into house, that means being the
house and rebuilding that house into the new house according to the customer needs. When the
customer need new house, he/she does not have any knowledge about it the out associate work
closely them to analysis their needs, location, space and any other facilities that the customer
desire and dreams for their home.
B) Commercial sales: This services is provided from business to business. Location is the first
factor for any businessman to get success and then other facilities like traffic, parking etc. our
company provides the associate that help you find out the best localities and make the
commercial building in such a way that if fulfill the client need and client customer need.
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C) Site or location analysis: The new associates new venture would help the house seller to
analyze the locality which they want and at what price they want. According to their need and
wants the company associate find the best locality where they get all the facility they desire for.
D) Community information: The business associate provide the information of the people that are
already living in that locality like about their living standard, culture, taste preference, income
earned (Bryman and Bell, 2015). This information helps the customer to easily adjust according
to the community people which are already living there and help them to choose accordingly.
E) Site price analysis: Every customer has their own budget to purchase the house according to
their need and income. The new business organization has houses for all the income classed
people which helps the customer to analysis all the site offered by firm and then choose as per
their budget.
F) Home search database: The new company has database of all the house that are offered
which helps the customer to select the best house for them.
G) Rebuilding: In this facility the house which is not according to the customer need or which is
not fulfilling the customer desire, rebuilding of that house according to the customer dream is
done by the new venture.
3. STATEMENT OF INNOVATIVE OPPORTUNITY/ STRATEGIC
POSITIONING
The firm would position itself as one that is offering houses at economical prices. This
would assist the local people in gaining suitable houses that can help in fulfilling their needs and
requirements to a greater extent. The innovative opportunity for the new venture is towards
building of the houses of the people who have migrated and are facing greater issues. With this
opportunity is being offered to the business towards attracting more number of migrants towards
the business (Neck and Greene, 2011). Thus it would be able to fulfill its targets to a greater
extent. It not only builds the houses but major focus is being given on renovation or extension of
the existing one.
4. MARKET AND COMPETITIVE ANALYSIS
Real estate industry is really very fragmented, where there is very large numbers of rivals
and clients deal with that company which is reputed and having quality of services offered to
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them but to obtain a reputation by those companies which is new to that industry, in that case
price and quality is the base to build a brand name. As it can be seen that in UK Market there
will be very healthy competition. So selling the new house and building the new house will cost
more than as renovating the old house into the new house. Our business is to buy the old houses
and renovate, repair and extended them and then sell them or rent them. Company will provide
the services of renovation, conversion, extension and landscape, selling and renting will provide
the full package to the company to sustain in the market. Company use the marketing strategy to
make aware about the company to the customer by utilizing newspaper, radio, phone directory,
mailing and internet. Market behavior states that people immigration has increased immensely so
they need houses (Jasra and et. al., 2011). There is healthy competition for the new comers who
needs houses as the local people which states that consumption of house is great in UK. The
company can gain the competitive advantage through building customer relationship, personal
contracts and behaving friendly with them and providing counseling contract. The company
market will be the local market and the people who migrates form one place to another and are in
search of new houses for their preferred location. The price and demand of the houses in south
and south east of England are in the favor of our organization so our organization will serve in
that area. Entering in construction and real estate business in UK. will be a challenging
competition but the company will focus on differentiation marketing strategy which help them to
serve their versatility to the customer and help to gain the competitive advantage
5. MARKETING AND SALES
Being new in this sector so brand awareness is more important. Company should be known in
the eye of the customer. Awareness is most mandatory in the introduction stage of the entity.
Organization will choose a) online and social platforms like LinkedIn, twitter and google+, b)
creating the commercial pages on social networks, c) keep the proper knowledge about the
competitor, d)use of local images of house, e) creating newsletter, f) start email nurture
campaign, g) build a website and make promotional events, h) can go for niche marketing where
they select the particular segment and serve in that segment to be specialist, e) provides the adds
in magazines which leads to generate the awareness in high class people, f) brochures
advertisement and sales channel like zoopia and rightmove. New venture can go for promotional
activities which create the brand awareness. Organization can create the virtual real estate video
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which provide the virtual image in the minds of the consumer (Osterwalder and Pigneur, 2010).
A virtual video hit direct to the minds of human being and retain in their minds which helps the
venture to generate the leads in future when so ever the customer need the houses. This
marketing techniques helps the new venture to grow in the competitive markets through that
sales of the company increases and there will be brand loyalty.
6. OPERATIONS/ LOGISTICS/ HUMAN RESOURCES
Every entity need to operate and make some operation and activities. The key activities
of the new venture will be purchase of old house renovate them and sell them to customer.
Engineer will make the blueprint and tell the entity that how much recourse will be required,
architect will make the interior of the building or house, sales personal will create the awareness
about the product or house and sales management will generate the lead or finally sell the house
to the customer (Tellis and Johnson, 2007). Logistics will be required are raw material like sand.
Cement, bricks etc., machinery and equipment for making raw material into the finished goods.
Personnel are appointed in the existing business plan in accomplishing all the business activities
in time as their basic motive is to complete the external market target within deadline. Various
human resources used in the current business plan includes building partners which can be used
to purchase the new building and old home in order to rebuild the same to provide as one of the
service to the external market. Transport partners and real estate agents will hep in attracting
variety of clients towards this business. Advertisement agents are appointed in order to create
awareness among variety of customers located in the external environment.
Human resources issues that would be faced by the new ventures can be related with
getting the employees having the required skills. Also it is difficult to gain personnel who have
experience in the similar industry. 5 Engineers, 4 architects and 10 lower level employees
wouold be employed by the new venture so that development of the houses or its modification
can be done in accordance with the requirement of the customers.
7. FINANCIALS
With the help of income statement, financial plan of F & RM organization is presented
here. Apparently, the level of revenue will keep on changing and this will also have a direct
impact on business sustainability and profitability aspects. According to the expected budget and
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financial requirements, F & RM organization will be managing all its functions and operations.
The business will also have to develop fund raising strategy so that investors can be attracted
who can help the business in raising funds. The business must have to adopt new technologies
and equipment so that cost of production can be reduced and level of profitability can be
enhanced. This will be beneficial for overall success of the business.
Table 1monthly and weekly cost data
0 Values in £
Revenue from selling houses per unit 150000
Revenue from rents per unit 2970
Revenue from repairs per unit 800
Cost of of house 135000
Cost of repair 720
Weekly cost data
Cost of of house 540000
Cost of repair 2880
0 0
0 0
Monthly cost data
Cost of of house 2160000
Cost of repair 11520
Table 2Revenue per person
Revenue per
person May June
Jul
y
Aug
ust
Septe
mber
Octob
er
Nove
mber
Dece
mber
Janua
ry
Revenue from
selling houses per
unit
15000
0
1875
00
243
750
2559
37.5
26873
4.375
28217
1.094
29627
9.648
31109
3.631
32664
8.312
Revenue from
rents per unit 5940
9355
.5
127
71
1340
9.55 11880 11880 11880 11880 11880
Revenue from
repairs per unit 2400 3320
424
0 4452
4674.
6
4908.
33
5153.
7465
5411.
43383
5682.0
0552
8

Revenue
15834
0
2001
76
260
761
2737
99
28528
9
29895
9
31331
3
32838
5
34421
0
February March April
342980.728 360129.764 378136.253
11880 11880 17820
5966.10579 6264.41108 6577.63164
360827 378274 402534
Table 3Projected number of clients
Projected number of clients for
each service in a month
M
a
y
J
u
n
e
Ju
ly
Aug
ust
Septe
mber
Octo
ber
Nove
mber
Dece
mber
Janu
ary
House 1 1 2 2 2 2 2 2 2
Rent 2 3 4 5 4 4 4 4 4
Repair 3 4 5 6 6 6 6 7 7
Total 6
8.
5
5
11.
22
5
11.7
862
5
11.63
4812
5
12.01
6553
1
12.41
7380
8
12.83
8249
8
13.28
01623
February March April
2 2 3
4 4 6
7 8 8
13.7441704 14.2313789 16.7429479
Table 4COGS data
Cost of goods sold May June July
Augu
st
Septe
mber
Octo
ber
Nove
mber
Dece
mber
House
1350
00
1687
50 219375
2303
44
24186
1
2539
54
26665
2
27998
4
Repair 1440 2268 3096 3251 2880 2880 2880 2880
1364
40
1710
18 222471
2335
95
24474
1
2568
34
26953
2
28286
4
January February March April
293983 308683 324117 340323
2880 2880 2880 4320
296863 311563 326997 344643
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Table 5Expenses data
Expenses May June July
Augu
st
Septe
mber
Octo
ber
Nove
mber
Dece
mber
Marketing expenses 500 500 500 500 500 500 500 500
Administration
expenses 600 600 600 600 600 600 600 600
Finance cost 250 250 250 250 250 250 250 250
Contracting cost with
partners
1080
00 0 0 0 0 0 0 0
Office rent 300 300 300 300 300 300 300 300
Logistics cost 1000 1000 1000 1000 1000 1000 1000 1000
Employee cost
6445
9
6445
9 64459
6445
9 64459
6445
9 64459 64459
Other operating
expenses 1000 1000 1000 1000 1000 1000 1000 1000
Sum of expenses
1761
09
6810
9 68109
6810
9 68109
6810
9 68109 68109
Net month profit
-
1542
09
-
3895
2 -29819
-
2790
5
-
27561
-
2598
4
-
24327
-
22588
January February March April
500 500 500 500
600 600 600 600
250 250 250 250
0 0 0 0
300 300 300 300
1000 1000 1000 1000
64459 64459 64459 64459
1000 1000 1000 1000
68109 68109 68109 68109
-20762 -18845 -16832 -10218
Table 6Expenses as percentage of revenue
Expense percentage of
revenue May June July
Augu
st
Septe
mber
Octo
ber
Nove
mber
Dece
mber
Marketing expenses
0.32
%
0.25
% 0.19%
0.18
% 0.18%
0.17
% 0.16% 0.15%
Administration
expenses
0.38
%
0.30
% 0.23%
0.22
% 0.21%
0.20
% 0.19% 0.18%
Finance cost
0.16
%
0.12
% 0.10%
0.09
% 0.09%
0.08
% 0.08% 0.08%
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Contracting cost with
partners
68.21
%
0.00
% 0.00%
0.00
% 0.00%
0.00
% 0.00% 0.00%
Office rent 0.19
%
0.15
%
0.12% 0.11
%
0.11% 0.10
%
0.10% 0.09%
Logistics cost 0.63
%
0.50
%
0.38% 0.37
%
0.35% 0.33
%
0.32% 0.30%
Employee cost 40.71
%
32.20
%
24.72% 23.54
%
22.59
%
21.56
%
20.57
%
19.63
%
Other operating
expenses
0.63
%
0.50
%
0.38% 0.37
%
0.35% 0.33
%
0.32% 0.30%
January February March April
0.15% 0.14% 0.13% 0.12%
0.17% 0.17% 0.16% 0.15%
0.07% 0.07% 0.07% 0.06%
0.00% 0.00% 0.00% 0.00%
0.09% 0.08% 0.08% 0.07%
0.29% 0.28% 0.26% 0.25%
18.73% 17.86% 17.04% 16.01%
0.29% 0.28% 0.26% 0.25%
Table 7Income statement
2017 2018 2019 2020 2021
Revenue 3604868 5407301 6759127 8448908 10561136
Less: Cost of goods sold 3097560 1239961 1549951 1937439 2421799
Gross profit 507308 4167341 5209176 6511470 8139337
Expenses
Marketing expenses 6000 9618 12023 15028 18786
Administration expenses 7200 11542 14427 18034 22543
Finance cost 3000 4809 6011 7514 9393
Employee cost 773508 812183 852793 895432 940204
Contracting cost with
partners 108000 307349 384187 480234 600292
Office rent 3600 4140 4761 5475 6296
Logistics cost 12000 19236 24046 30057 37571
Other operating expenses 12000 811095 1013869 1267336 1584170
Sum of expenses 925308 1979974 2312116 2719111 3219255
PBIT -418000 2187367 2897059 3792359 4920082
Tax 0 437473 579412 758472 984016
Net profit -418000 1749893 2317647 3033887 3936066
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2017 2018 2019 2020 2021
Marketing expenses 0.18% 0.18% 0.18% 0.18% 0.18%
Administration expenses 0.21% 0.21% 0.21% 0.21% 0.21%
Finance cost 0.09% 0.09% 0.09% 0.09% 0.09%
Employee cost 21.46% 21.46% 21.46% 21.46% 21.46%
Contracting cost with
partners 5.68% 5.68% 5.68% 5.68% 5.68%
Office rent 0.11% 15.00% 15.00% 15.00% 15.00%
Logistics cost 0.36% 0.36% 0.36% 0.36% 0.36%
Other operating expenses 0.36% 0.36% 0.36% 0.36% 0.36%
Table 8Break even analysis
Sales 3604868
Less: Variable
expenses 925308
Contribution 2679560
Fixed cost 100000
Breakeven point 0.037
Break even analysis is the one of the main tool that is used to measure the profitability of
the firm. Calculation is reflecting that after considering fixed and variables expenses firm needs
to sale 0.037 units. This means that firm needs to sale less number of units to cover its cost.
8. CONCLUSION
It can be concluded from the present business plan that stepping into construction and
real state business within UK is challenging as there is huge competition but the major benefit of
the present business plan is towards emphasizing on the customers who are already connected.
By knowing the needs and demand of the target market the success from the new plan can be
attained with greater effectiveness.
9. EXECUTIVE SUMMARY
The name of the business in the present study is F and RM. The company carries out
construction as well as remodeling business that would make purchase and rebuild the houses in
order to make profits and offers services. The major reason due which the business is developed
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is that most the immigrants are residing in the houses where damp is issue. Thus offering good
accommodation is the major opportunity for opening new business.
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REFERENCES
Journals and Books
Barringer, B., 2012. Entrepreneurship: Successfully Launching New Ventures.
Bryman, A. and Bell, E., 2015. Business research methods. Oxford University Press, USA.
Jasra, J.M. and et. al., 2011. Determinants of business success of small and medium
enterprises.International Journal of Business and Social Science. 2(20).
Neck, H. M. and Greene, P. G., 2011. Entrepreneurship education: known worlds and new
frontiers. Journal of Small Business Management. 49(1). pp.55-70.
Osterwalder, A. and Pigneur, Y., 2010. Business model generation: a handbook for visionaries,
game changers, and challengers. John Wiley & Sons.
Tellis, G. and Johnson, J., 2007. The Value of Quality. Marketing Science. 26(6). pp. 758-773.
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