LSBM305 Small Business Management: Home Remodeling Company Plan

This report presents a comprehensive business plan for the Home Remodeling Company, a new venture in London focused on providing high-quality, sustainable home remodeling solutions. The plan outlines the company's objectives, mission, and vision, emphasizing a commitment to increasing market share while promoting environmental awareness. It includes a detailed market analysis, covering segmentation, targeting, and positioning strategies to effectively reach individual homeowners, apartment complex authorities, and housing construction groups. The report also features a marketing mix strategy utilizing the 4Ps (product, price, place, promotion) and a financial analysis with cash flow projections, income statements, and break-even analysis to assess the company's potential profitability over the next three years. The business plan highlights the company's dedication to entrepreneurial innovation by incorporating recycled materials and sustainable practices into its remodeling services.

Running head: MANAGEMENT
Management
Name of the Student:
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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