The Home Remodeling Company

In this document we will discuss about The Home Remodeling Company and below are the summary points of this document:- The Home Remodeling Company is a new home remodeling company in London. It is offering high quality home remodeling solutions to the customers, which includes sustainable products and recycled products like the furniture, lights etc. The company not only aims to increase its market share by 5% at the end of 2019, but also aims to create a better living for the customers by installing sustainable remodeling solution and create awareness about sustainability. This report presents a business plan for Home Remodeling Company and this document contains its objectives, mission and vision, market analysis, financial analysis and its entrepreneurial innovation practices.

Running head: MANAGEMENT
Management
Name of the Student:
Name of the University:
Author note:

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Executive summary
The Home Remodeling Company is a new home remodeling company in London. It is offering
high quality home remodeling solutions to the customers, which includes sustainable products
and recycled products like the furniture, lights etc. The company not only aims to increase its
market share by 5% at the end of 2019, but also aims to create a better living for the customers
by installing sustainable remodeling solution and create awareness about sustainability. This
report presents a business plan for Home Remodeling Company and this document contains its
objectives, mission and vision, market analysis, financial analysis and its entrepreneurial
innovation practices.

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Table of Contents
1.0 Introduction................................................................................................................................3
2.0 Organization overview...............................................................................................................3
3.0 Objectives..................................................................................................................................4
4.0 Mission and vision.....................................................................................................................4
4.1 Mission:.................................................................................................................................4
4.2 Vision:....................................................................................................................................4
5.0 Products and services offered....................................................................................................5
6.0 Market analysis..........................................................................................................................5
6.1 Segmentation.........................................................................................................................5
6.2 Targeting................................................................................................................................7
6.3 Positioning.............................................................................................................................7
7.0 Marketing mix...........................................................................................................................8
8.0 Financial analysis.......................................................................................................................8
9.0 Business description................................................................................................................13
10.0 Market analysis worksheet....................................................................................................15
11.0 Industry analysis worksheet...................................................................................................18
12.0 Conclusion.............................................................................................................................20
References......................................................................................................................................21

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1.0 Introduction
Home remodeling is a trending concept in recent days. To increase the value of the
homes in the market, its energy efficiency and appearance, home remodeling has become quite
popular among the home owners and the sellers. One of the most popular home remodeling
services is the kitchen and bathroom renovation that brings out the most value to the customers.
Home Remodeling Company is a new home remodeling company in the UK that works in the
Enfield area of London. The company has been starting the home remodeling business that
includes an overall remodeling and renovations in the old homes to give it a new look and feel
with a sustainable approach. The target markets for the company are the individual home owners,
apartment complex authorities and housing construction groups, who are buying and selling
residential units. This report will present a business plan for the Home Remodeling Company to
start their business in the home remodeling and improvement industry. The business plan will
contain a brief organization overview, its objectives, mission and vision, products and services
offered, followed by market analysis, marketing mix, financial analysis. The report will also
highlight entrepreneurial innovation.
2.0 Organization overview
Home Remodeling Company is a new home remodeling and improvement company that
has established its business in the Enfield area of London. The Home Remodeling Company has
decided to start its business with home renovations for the individual home owners, real estate
construction companies and apartment complexes. The company focuses on entire home
remodeling using older products, that furniture and lights and kitchen equipment. It has been
putting a special focus on the kitchen as kitchen is one of the most essential areas in the home, in
which the residents spend quite a substantial amount of time and hence the customers want an

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improved kitchen in their homes. Thus, Home Remodeling Company has focused on to give the
customers a renewed look and feel of their homes in their home improvement services. The
company is also focusing on installing sustainable products in their remodeling services to create
sustainability awareness among the customers.
3.0 Objectives
The objectives of Home Remodeling Company are:
- To increase the market share by 2% by the end of 2019
- To improve the revenue by 2% by the end of current fiscal year
4.0 Mission and vision
4.1 Mission:
The mission of Home Remodeling Company is to provide most affordable and highest
quality products, in home remodeling. Home remodeling services include improvement in the
sections of bedrooms, kitchen, bathroom, storage, and garage. The company wants to provide the
most cost effective home remodeling by using the customers’ old furniture or new in some cases
along with installing sustainable practices whenever possible to provide not only the best living
experience but also to promote sustainability.
4.2 Vision:
Home Remodeling Company wants to be one of the top home remodeling service
providers in the UK that is committed to offer the highest quality home remodeling products and
services to the customers, with efficient services like on time delivery, maintenance and utmost
care.

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5.0 Products and services offered
Home Remodeling Company offers high quality and sustainable home remodeling
products and services. For example, it remodels the old homes with recycled furniture, lights and
other decors. For the rooms, it often uses recycled furniture to reduce the unnecessary wastes and
the decors are made to match the old furniture. Sometimes, it also installs more improved and
sustainable products when it is required, such as, in the kitchen area, it provides finest granite,
marble and quartz countertop surfaces along with engineered stone, natural stone and recycled
and eco friendly countertop and modular cabinet options. Moreover, it also replaces the lights,
sinks and plumbing facilities with sustainable equipments as per the requirement. After
remodeling, the company also provides high quality maintenance service for one year.
6.0 Market analysis
Market analysis is required to understand the segments, targeting and positioning for
Home Remodeling Company. It helps in creating the marketing mix for the target market.
6.1 Segmentation
The market segmentation for the company is based on the following four factors. It is
required to create target markets and create a positing strategy for the markets (Liu et al. 2019).

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Segmentation
Types
Criteria for
Segmentation
Target Market for Home Remodeling Company
Geographic
Region Domestic (Enfield, London)
Density Urban
Demographic
Age 30 years and above
Gender Males and Females
Income Low, middle and high
Behavioural Degree of
loyalty
Switchers
Benefits
sought
Cost benefits, life style benefits
Personality Easy-going
Status of User Household requirements
Psychographic Social class Lower, working and middle classes and high income groups,
housing construction companies and business groups running
apartment complexes
Lifestyle The ones who want to live in a better household with
improved facilities and home decors. Hence, a cleaner and
space saving residence is preferred by the individuals.
Table 1: Market segmentation for Home Remodeling Company
6.2 Targeting
Targeting helps a company to focus on particular customer groups and prepare marketing
mix accordingly to effectively reach out to the target group (Dolnicar, Grün and Leisch 2018).
Home Remodeling Company targets the individual house owners, apartment complex authorities

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and apartment construction companies. These markets will have the requirement for home
remodeling. People who stay in rented houses or apartments will not spend their incomes on
remodeling the home and hence, only those who have house or apartment ownership and the
companies that are in housing construction business and those groups that have apartment
complex properties are the targets of the company.
6.3 Positioning
Positioning for a company is essential as it helps to create an image about the company
and its product and services among the consumers against its competitors (Tanner and Raymond
2015). The company will position it as the one that provides high quality home improvement
services with the specialty in offering sustainable products at an affordable price. This will create
an image of affordable and cost effective business for home improvements to all income groups.
As using the older and recycled furniture during remodeling the homes is a practice of
sustainability, the company will also promote sustainability in its products by applying
environment friendly equipments and energy efficient lights and water efficient plumbing
facilities so that the customers also become aware about sustainability.
7.0 Marketing mix
The company will use 4P’s of marketing mix to reach out to the target market. This mix
includes product, price, place and promotions. These factors are the combination of marketing
factors that help the company to create a market position and influence the consumer behavior
(Fan, Lau and Zhao 2015).
Product  Finest quality home remodeling equipment

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 Recycled older furniture for home remodeling
 New sustainable furniture as per requirement from client
 Energy efficient lights
 Water efficient sinks and other plumbing equipment
Price  Competitively lower price than the market standard
Place  In and around the city of London
Promotion  Print media, that is, newspaper, magazine advertisements
 Digital media, that is, advertisements in television and radio
 Social media, that is, Facebook, Instagram, YouTube advertisements
 Billboards and hoardings in the city
Table 2: Marketing mix for Home Remodeling Company
8.0 Financial analysis
This is the most significant element in any business plan. There are several key factors
that affect the cash flow of the company and thereby affect the sales and profitability. The
company needs to have a record of cash flow projections, income statement, balance sheet
forecasts and break even analysis to assume how the company is going to perform and earn
profitability in the coming three years. The financial analysis is necessary to keep the operations
under a cost control and also to make contingency planning (Cucchiella, D’Adamo and Gastaldi
2015).
Cash flow projection

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Starting date Mar-19
Cash balance alert minimum 150,000 150,000 150,000 150,000 150,000 150,000 150,000 150,000 150,000 150,000 150,000 150,000 150,000
Beginning Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Total
Cash on hand (beginning
ofmonth) 100,000 100,000 129,790 173,910 217,570 265,805 316,720 375,270 435,690 501,805 563,270 615,517 672,250
CASH RECEIPTS
Cash sales 45,000 49,500 52,200 52,650 56,115 59,355 63,000 67,500 61,425 60,822 70,200 73,800 711,567
Returns and allowances 12,000 10,000 11,230 8,000 7,850 5,500 9,000 10,000 8,500 13,000 14,000 7,500 116,580
Collections on accounts
receivable
- 5,000 5,500 5,800 5,850 6,235 6,595 7,000 7,500 6,825 6,758 7,800 70,863
Interest, other income 150 200 300 450 400 360 500 250 300 450 450 420 4,230
Loan proceeds 250 250 250 250 250 250 250 250 250 250 250 250 3,000
Owner contributions 1,000 2,500 1,200 1,000 900 3,500 3,000 4,500 5,000 4,000 3,000 1,500 31,100
TOTAL CASH RECEIPTS 34,400 47,450 48,220 52,150 55,665 64,200 64,345 69,500 65,975 59,347 66,658 76,270 937,340
Total cash
available
100,000 134,400 177,240 222,130 269,720 321,470 380,920 439,615 505,190 567,780 622,617 682,175 748,520
CASH PAID OUT
Advertising 600 200 100 150 300 100 50 50 50 100 150 300 2,150
Contract labor 350 400 250 150 100 450 400 350 700 500 750 600 5,000
Employee benefit
programs
350 350 350 350 350 350 500 650 750 800 800 750 6,350
Insurance (other than health) 150 150 150 150 150 150 150 150 150 150 150 150 1,800
Interest expense 45 45 45 45 45 45 45 45 45 45 45 45 540
Materials and supplies (in COGS) 400 500 750 850 900 1,000 2,000 2,500 1,500 3,500 4,500 5,000 23,400
Meals and
entertainment
250 120 350 125 45 65 75 70 120 180 225 350 1,975
Mortgage interest 120 120 120 120 120 120 120 120 120 120 120 120 1,440
Office expense 450 300 250 120 650 480 125 225 350 450 750 600 4,750
Other interest
expense
45 45 45 45 45 45 45 45 45 45 45 45 540
Pension and profit-sharing plan 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 14,400
Purchases for resale - - - 500 650 850 - - - - 420 320 2,740
Rent or lease 780 780 780 780 780 780 780 780 780 780 780 780 9,360
Rent or lease: vehicles, equipment 520 520 520 520 520 520 520 520 520 520 520 520 6,240
Repairs and maintenance - - 140 - - 150 80 - - 70 60 50 550
Supplies (not in COGS) 120 100 50 60 180 90 250 350 400 500 65 85 2,250
Taxes and licenses 150 150 150 150 150 150 100 100 120 150 100 100 1,570
Travel 1,200 1,300 1,450 980 750 685 875 175 640 325 650 750 9,780
Utilities 400 500 650 500 400 300 200 100 50 100 100 200 3,500
Wages (less emp.
credits)
650 250 450 300 800 900 450 150 650 400 700 400 6,100
Miscellaneous 1,000 450 280 680 475 950 320 125 450 675 1,500 3,500 10,405
SUBTOTAL 8,780 7,480 8,080 7,775 8,610 9,380 8,285 7,705 8,640 10,610 13,630 15,865 114,840
Loan principal
payment
2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 30,000
Capital purchases 520 250 230 450 300 200 620 750 620 240 375 120 4,675
Other startup
costs
500 750 140 260 410 380 590 420 360 120 180 190 4,300
To reserve and/or
escrow
400 400 400 400 400 400 400 400 400 400 400 400 4,800
Owners' withdrawal 250 250 250 250 250 250 250 250 250 250 250 250 3,000
TOTAL CASH PAID OUT 4,610 3,330 4,560 3,915 4,750 5,650 3,925 3,385 4,510 7,100 9,925 12,405 161,615
Cash on hand (end of
month)
100,000 129,790 173,910 217,570 265,805 316,720 375,270 435,690 501,805 563,270 615,517 672,250 736,115
Small Business Cash Flow
ProjectionHome Remodeling
Company
Table 3: Cash flow projection
Figure 1: Cash flow projection

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Income statement
Income Statement
Revenue
Gross Sales 937340
Less: Sales Returns and Allowances 161615
Net Sales 775725
Cost of Goods Sold
Beginning Inventory 65000
Add: Purchases 7500
Freight-in 7500
Direct Labor 6000
Indirect Expenses 2500
Inventory Available 88500
Less: Ending Inventory 50000
Cost of Goods Sold 38500
Gross Profit (Loss) 737225
Expenses
Advertising 2150
Amortization 500
Bad Debts 220
Bank Charges 350
Charitable Contributions 2000
Commissions 980
Contract Labor 5000
Depreciation 1000
Dues and Subscriptions 680
Employee Benefit Programs 8000
Insurance 1800
Interest 540
Legal and Professional Fees 1500
Licenses and Fees 1570
Miscellaneous 10405
Office Expense 4750
Payroll Taxes 1570
Postage 500
Rent 15600
Repairs and Maintenance 550
Supplies 2250
Telephone 2200
Travel 9780
Utilities 3500
Vehicle Expenses 4000
Wages 16100
Total Expenses 97495
Net Operating Income 639730
Gain (Loss) on Sale of Assets 737225
Interest Income 4230
Total Other Income 741455
Net Income (Loss) 1381185
Home Remodeling Company
Mar 19 - Feb 20
Other Income
Financial Statements in £
Table 4: Income statement

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Balance sheet forecasts
Current ratio [A/ B] Working capital [A-B]
Quick ratio [(A-C)/ B] Debt-to-equity ratio [(G+H)/ F]
Cash ratio [D/ B] Debt ratio [(G+H)/ E]
% of
ASSETS
% of
ASSETS
Current assets Current liabilities
Cash and cash equivalents [D] £65,000.00 29.4% Loans payable and current portion long-termdebt [H] 12,000 5.4%
Short-terminvestments £20,000.00 9.0% Accounts payable and accrued expenses 24,000 10.8%
Accounts receivable [I] £0.00 0.0% Income taxes payable 25,000 11.3%
Inventories [C] £200.00 0.1% Accrued retirement and profit-sharing contributions 35,000 15.8%
Deferred income taxes 0.0%
Prepaid expenses and other current assets £15,000.00 6.8%
Total current assets [A] £100,200.00 45.2% Total current liabilities [B] £96,000.00 43.3%
Fixed assets Other liabilities £0.00
Property, plant and equipment at cost £56,000.00 25.3% Long-termdebt [G] £5,000.00 2.3%
Less accumulated depreciation £560.00 0.3% Accrued retirement costs £3,500.00 1.6%
Total fixed assets £56,560.00 25.5% Deferred income taxes £45,000.00 20.3%
Deferred credits and other liabilities £11,960.00 5.4%
Other assets
Long-termcash investments £35,000.00 15.8%
Equity investments £200.00 0.1%
Deferred income taxes £4,500.00 2.0%
Other assets £25,000.00 11.3%
Total other assets £64,700.00 29.2% Total other liabilities £65,460.00 29.6%
Total assets [E] £221,460.00 100.0% Total liabilities £161,460.00 72.9%
Total owners' equity [F] £60,000.00 27.1%
Total liabilities + owners' equity £221,460.00 100.0%
Home Remodeling Company Balance Sheet Forecast For the Period Ending [March 2019 - February 2020]
ASSETS LIABILITIES & OWNERS' EQUITY
1.04
1.04
0.68
£4,200,000.00
Stated in 000s
0.28
0.08
Table 5: Balance sheet forecasts
Break even analysis
This analysis is required to get an idea about the point in which the company will earn no
supernormal profit and below that revenue, the company can go out of business. This includes
the fixed costs, variable costs, total costs and total revenue analysis that changes with the level of
output (Morano and Tajani 2017).

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Cost/
Revenue
(£)
Unit sales0 5 10 15 20 25 30
Total cost
Total
revenue
10000
20000
30000
40000
60000
50000
Figure 2: Break even analysis
(Source: Based on hypothetical data)
Thus, it can be said that Home Remodeling Company can stay in the business if it
remodels 20 units of residences and earns $40,000, which makes it break even.
9.0 Business description
To sustain in the industry in the home improvement, a company needs to be innovative.
Similarly, Home Remodeling Company will also have to be innovative in its products and
services to capture a good market share. It is starting its business as an innovative and
sustainable home remodeler in Enfield, London. To promote sustainability and reduce
unnecessary wastes, the company aims to use older recycled furniture of the clients and
sometimes when new furniture is required, it provides environment friendly furniture. Apart

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from that, for further entrepreneurial innovation, the company will focus on environment friendly
kitchen remodeling services out of total home remodeling solutions. As a new company in the
industry, the company should first focus on providing a specific service and then as the revenue
expands, it should venture into total home remodeling. Thus, it should promote sustainability in
its solutions. Sustainability is a major concerning issue in the world. To protect the environment,
it is essential to implement sustainable practices in businesses and daily lives. Thus, the company
is introducing various sustainable kitchen remodeling solutions for the customers that would not
only make the living better for future but also would contribute in building awareness about the
necessity of sustainability. Home Remodeling Company will provide sustainable products to the
customers, such as, engineered stones and recycled stones for making the countertops. Eco-
friendly sunmica will be used for the modular cabinets all along the home. It will also provide
water efficient sinks and other plumbing systems in the entire house and energy efficient lights
will be used. These measures can save water as well as energy. The company will start installing
solar panels for lighting and running the home appliances as part of their innovative home
remodeling solutions. This initiative will be undertaken after one of business and depending on
the business growth. These factors will help the company to create awareness about its
sustainability practices, as a part of their CSR activities and also help it to create a positioning for
itself in the market.

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10.0 Market analysis worksheet
Data Source
1. Market size, ideally
measured in any or all of the
following ways:
 No. of customers for the
category of goods or
services
 Total spending in the
category
 Total units bought in the
category
4 million
household in
London
(Hiscox.co.uk 2018)
2. Recent market growth rate,
measured in any or all of
 population changes
 total spending in the
category
 total units bought in the
category
There is
growth in this
industry from
3% in 2013 to
15% in 2018
in London
(Hiscox.co.uk 2018)
3. Forecasted market growth
rate from credible sources,
measured in any or all of:
 population changes
 total spending in the
category
 total units bought in the
category
27% of the
young
generations
(millennials)
are preferring
the home
remodelling
services and
the number is
rising every
year
(Hiscox.co.uk 2018)
4. Favourable trends, with
sources cited, in any or all of
the six macro-trend
categories:
People now
prefer to
remodel their
homes rather
than moving
(Murraylampert.com 2018)
(Hiscox.co.uk 2018)

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a. demographic
b. sociocultural
c. economic
d. technological
e. regulatory
f. natural
due to factors
like, taxes,
cost of living,
convenience
cost etc.
Under the
technological
category,
kitchen and
bathroom
remodelling
trend is new.
5. Unfavourable trends, with
sources cited, in any or all of
the six macro-trend
categories:
a. demographic
b. sociocultural
c. economic
d. technological
e. regulatory
f. natural
The impact of
Brexit has led
to a fall in
demand for
the housing
and also led to
uncertainties
regarding
employment
and hence,
affecting the
demand for
home
remodelling
also.
Cost of
supplies are
also getting
high, and thus,
rising prices
of raw
materials and
other supplies
pushing up the
remodelling
cost.
(theweek.co.uk 2018)
It has been found from the industry reports that the market for home remodeling industry
is rising at a rapid rate. There has been growth in the number of millennial customers, who prefer

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to remodel their homes rather than moving to a new property due to factors like high property
taxes, cost of convenience, relocation cost etc. Thus, there has been increase in the number of
companies in the industry, which aim to provide sustainable as well as customized services.
Technological advancement is a highly important macro trend, coupled with increasing
population, environmental and sustainability issue and improving economic condition are some
of the factors that are making the home remodeling business attractive. The customers are aware
about the sustainability issue and as the companies are now focusing on providing sustainable
products and solutions, that raises the market size for those companies. The improved solutions
are supported by the technological advancement in this industry in terms of the quality and
durability of the products along with maintaining sustainability factors. Thus, it can be said that
the market of home remodeling business is quite attractive as seen from the market growth data.
However, in the recent times, the Brexit referendum has significant implications on the
economy and thereby affecting all the industries. It has brought uncertainties in the economy in
terms of business growth and employment, and hence, the loss of single market in the EU has
been pushing the price of supplies up in the economy of the UK. This is a risk factor for the
home remodeling industry, as the cost of services will increase and the demand may fall. On the
other hand, the property taxes are rising very fast and those are quite high, hence, people are
expected to prefer the remodeling rather than purchasing new properties. Thus, it can be said that
this industry is attractive for a new company, which could provide sustainable products and
services and deliver more value to the customers.

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11.0 Industry analysis worksheet
Five Forces Highly
favourable
Favourable Unfavourable Highly
Unfavourable
1. Threat of entry
-Economies of Scale
-Product differentiation
-Capital Requirements
-Control of Distribution
-Proprietary Knowledge
-Government legal barriers
Threat of entry
of is high but
given the
factors, it will
face moderate
threat
2. Supplier Power
-Size of suppliers vs focal
companies
-% of suppliers products
Purchased by focal companies
-Importance of suppliers input to
final product
-Switching costs
Being a new
company in
the industry,
it will face
high
bargaining
power from
the suppliers
3. Buyer Power
-Size and concentration of buyers
-Cost savings of buyer
-Focal companies cost structure
-% of focal companies products
purchased
Sustainable
and
differentiat
ed products
will be
offered at a
lower cost
and hence,
will give
more value
to the
buyers
4. Threat of Substitutes
-Buyers propensity to sub
-Relative price performance
There are
other
companies
providing the
same
services,
however at a
higher price.
5. Competitive Rivalry
-Number of companies
-Industry Growth Rate
-Exit Barriers
-Diversity of competitors
-Product Differentiation
More than 10
companies
operate in
Enfield region
and the
industry growth
rate is 15%
(Hiscox.co.uk
2018), low exit
barrier,
however, the

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diversity and
product
differentiation
is low.
From the above table, it can be said that the industry is moderately attractive industry.
The threat of new entrants and the threat of substitutes are moderate, while buyer power is highly
favorable, that is, there is a large and growing market, which demands for high quality
sustainable products at a reasonable price. The supplier power is unfavorable as with a new
company, the suppliers will try to make profits by charging higher price. Lastly, competitive
rivalry is favorable and moderate, with low exit barrier, diverse and differentiated products and
services. All these factors make the industry moderately attractive for a new company.
Severe threat of entry is a problem in this industry as the market is still growing. In a
region like Enfield, if the number of new firms starts to increase, it would bring down the
competitive price in the market and that would affect the profitability of the business and
eventually many companies may shut down due to losses. The demand for sustainable products
and the trends for kitchen and bathroom renovations are rising and as a new firm, The Home
Remodeling Company should take advantage of these trends. It should focus on delivering
environment friendly and cost effective solution to the customers to create a unique position in
the market. On the other hand, the Brexit and loss of single market to EU will affect the supply
prices, and thus, the company should focus on the local suppliers, which will benefit both the
company itself and the local supply market.

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12.0 Conclusion
From the above business plan for Home Remodeling Company, it can be said that, the
company needs to focus on innovative home remodeling service while starting out in the
industry. There are many competitors in the market and to gain a competitive advantage, the
company has taken the cost differentiation approach to create its position in the target market
along with introducing sustainable home remodeling solutions for the customers. From using old
and recycled furniture in a new décor and using engineered stones and recycled stones for the
countertops in the kitchens to installing energy efficient lights and water efficient equipments in
the entire home, the company aims to build not only a sustainable business practices, but also to
create a mass awareness about the importance of sustainability. The financial analysis shows that
the company can achieve a profit in the coming three years provided it continues to maintain its
breakeven point.

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References
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[Accessed 8 Mar. 2019].

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