The Verte View Strategic Business Plan - Term Paper Example

Verte View Business Plan “CONFIDENTIALITY INFORMATION: The Verte View strategic business plan is intended for use on a confidential basis only. The use of the plan document for purposes other than the review of the company’s proposed structure, operations and performance might involve serious legal consequences. This plan contains information that is proprietary and confidential to Verte View. This obligation of confidentiality shall apply until such time that Verte View makes the information contained in this Business Plan available to the public, if ever. With receipt of this plan, recipient acknowledges and agrees that: In the event the recipient does not wish to pursue this matter, this document will be returned to the address listed above as soon as possible. The recipient will not copy, fax, reproduce, divulge, or distribute this Plan, completely or in part, without the express written consent of Verte View. All of the information contained herein is to be treated as confidential material with no less care than that afforded to your own company’s confidential material.” Verte View Knoxville, TN Executive summary Verte View is a residential complex with two duplex apartments and five townhouses catering to the senior citizens of the US. It is owned by Frazer Johnson, who brings with him almost 3 decades of experience in townhouse development, and Thomas Drew. It is founded on the belief that every customer will opt for a Verte View home as its obvious choice to relax and rejuvenate. With this mind, Verte View is working hard to ensure exemplary service leading to complete value for money to its customers. The Customers Verte View will target the senior citizens and the retired population of the state of Tennessee and the theme of the complex will be around this target group. Verte View faces stiff competition from The Haven, which is a leading green complex in Knoxville, TN. Verte View offers a comfortable home at an affordable price which gives it an edge over the Haven. Management Verte View is solely owned by Frazer Johnson, who has 28 years of experience in townhouse development. Thomas Drew-President, will be responsible for marketing and promoting Verte View. Verte View has forecasted a 28% market share. The business will generate a 95.34% gross margin, a 13.40% net margin after year one in the business and 28.94% after year three. 1.1 Objectives The objectives of Verte View are as follows: To make Verte View a premium choice for the retired population of the state of Tennessee To achieve and maintain gross profit margin of 95.34% To maintain a net profit of 21.73% To expand and set up a new Verte View complex in each state, every 2 years 1.2 Mission Verte View strives to be a premium name in residential complexes by offering comfortable homes at affordable prices. Verte View is dedicated to providing a truly rejuvenating experience. 2 company Summary Verte View is owned by Frazer Johnson and Thomas Drew who will contribute $4600 each to purchase 12000 square feet of land for the Verte View complex (2009, November). 2.1 Company Ownership Verte View is a registered incorporation owned by Frazer Johnson and Thomas Drew. The company will be a private limited by guarantee with funds being pooled in by the owners. Frazer Johnson will be guided by his father Denver Johnson, who owns two complexes in Nashville, TN. 2.2 Start-up Summary Our start up costs have been listed in the following few pages (Hingston, 52). Major costs will include the purchase of land, raw material, labor, and logistics. We would require an initial funding of $21,310 and the purpose of the business plan is to secure the financing for that amount. Upon negotiations of debt amount and terms, modified charts will be provided upon request. Start-up Funding Start-up Expenses to Fund $12,110.00 Start-up Assets to Fund $9,200.00 Total Funding Required $21,310.00 Assets Non-Cash Assets from Start-up $9,200.00 Cash Requirement for Start-up $12,110.00 Additional Cash Raised 0 Cash Balance on Starting Date 0 Total Assets $21,310.00 Liabilities and Capital Liabilities Start-up Funding (CONTD) Current Borrowing $12,110.00 Long-Term Liabilities $0.00 Total Liabilities $12,110.00 Personal Investment $9,200.00 Other $0.00 Additional Investment Requirement $0.00 Total Capital and Liabilities $21,310.00 Total Funding $21,310.00 3 Market Analysis Summary The complex will be built in Knoxville, Tennessee. The Haven homes, although a premium name in green complexes, focus primarily on the working population of Tennessee, catering specifically to the IT workforce. Verte View has established its marketing strategy with the retired population and the senior citizens as the target customers. The design of each Verte View home caters specifically to the needs of this target group. It offers amenities such as a general store, and a jogger’s park. Verte View primarily aims at offering comfort at an affordable price. 4 Strategy and implementation summary Verte View follows a simple strategy: Please the target customer. Our target customers are the retired and the senior citizens. The theme of the complex is ‘Relax and Rejuvenate’. Advertisements in the local newspapers, sponsoring for local events and expert opinions in magazines such Home & Lifestyle and the Second Innings, will be the promotional strategy adopted by Verte View. 4.1 Promotion Strategy With 28 years of experience in townhouse development Frazer Johnson is certain about one fact: The value of a complex is gauged based on its surroundings. Knoxville was a conscious decision made by the team of Verte View. Knoxville offers a great mix of urban areas and natural beauty. The marble city besides being rich in heritage is also popular for the annual arts festival and some fine restaurants such as The Calhouns (for barbeque), Ruth's Chris Steakhouse and The Melting Pot, for Fondue (2009, March). Advertisements in the local newspapers, sponsoring for local events and expert speaks section in magazines will be our secondary strike with an aim to grow our business to achieve our goal of setting up functional units in every two years (Hingston, 90). 4.2 Pricing Strategy Verte View offers comfort at an affordable rate. The price per townhouse/apartment is determined after weeks of survey across the state of Tennessee (2009, November) Verte View pays close attention to the needs of its senior citizens and the retired population of the state of Tennessee who want to relax and rejuvenate, and at the same time not spend a massive amount in purchasing their homes. After weeks of survey, we have arrived at rates that not only go easy on the wallet but also provide a positive ROI for its customers. 4.3 Sales Strategy Since Verte View is a new entity, we are aware that we will have to earn the respect of the customers. The company has to prove its worth. We plan to build this trust and earn respect by putting the customer before all. We will earnestly strive to provide value for every dollar spent by the customer. One thought to increase sales is to couple add-ons to enhance customer delight. 4.4 Sales Forecast We are expecting sales to grow quickly in the first two years of operation and grow steadily form year three when we move in to realize another Verte View complex. 5 Management Summary Verte View is a small company owned and operated by Frazer Johnson and Thomas Drew. Frazer will be guided by his father, Denver Johnson. Denver Johnson owns two complexes in Nashville, TN and has a total experience of 35 years in townhouse development. Thomas Drew, the President, will be responsible for marketing and promoting Verte View. James Schiver will be the accountant and also help develop a strategic vision for Verte View. James is a family friend and is the accountant of Denver Johnson’s company. The initial management comprises of the founder and some of the family friends, with little back up. As the company grows in different states we plan on hiring more personnel. 6 Financial plan The financial plan outlines the financial development of Verte View. Raw material, labor and logistics will be the major expenses. We wish to finance growth mainly through cash flow which means that we may grow slowly. Any profit made will be used to satisfy the long term debt first post that the profits will be used to finance growth. We hope to set up a new complex every two years after the third year of being operational. It is envisioned that an outside loan or equity funding will be sought at that time. 6.1 Break-even Analysis For our break-even analysis, we assume the running costs which include raw material purchase, labor, logistics and an estimation of other running costs. Based on our anticipated margin, what we need to sell two townhouses to break even is shown in the table below. Our sales forecast indicates that sales are expected to be much greater than the break even point mentioned in the table. Break-Even Analysis Units for Break-Even 2 Revenue Break-Even $22,000.00 Assumptions Average Per-Unit Revenue $11000.00 Average Per-Unit Variable Cost $1100 Fixed Cost Per-Unit $1244 Work Cited Hingston, Peter. Starting Your Business. Laing, Great Britain: Dorling Kindersley Limited, 2001 Landsale Listings. 12 Nov. 2009 http://www.landsalelistings.com/usa/tennessee/ Lee, Jim. Knox County real estate transfers the week of November 8th. Realty Executives. 8 Nov 2009. Knoxville, Tennessee. 12 Nov. 2009 http://knoxvilletennesseerealestateblog.com/archives/1449 Parks, John. The Marble City. Articlesbase.com. 25 March 2009. 13 Nov 2009 http://www.articlesbase.com/destinations-articles/the-marble-city-834318.html Read More