Real Estate Business: Eton Land Inc - Term Paper Example

ETON LAND INC. I. Executive Summary Eton Land Inc. is a Real Estate Brokerage Firm situated in Denver Colorado, capitalized by a single broker who has her own license and an impressive career in real estate for the past 10 years. The owner, who has been in the business for a decade now, has a network of brokers and agents who will serve either full time or part time. The company boasts on credibility and reputation as their main keys to success. They have a published real estate book and established real estate programs placed in local book shops. Professional and quality customer service are the principles the management live by. Eton will formally launch in December 2010, with an open house to feature its very own tie up with Sysco Development Corporation. The project is a low rise condominium with 70 units. Aside from forming partnerships with trusted developers, Eton will also market properties for sale by individuals and non professionals. Target market are the middle income individuals and families who wish to make long term investments in Colorado by acquiring properties. The company aims to provide buyers a chance to fulfill their dreams by getting the right properties at the right price. II. Business Description Eton Land Inc. primarily caters to sellers of Real Property. It assists property-owners to dispose of their land to prospective buyers. These sellers pay Eton land a portion of the sales as sales commission. The company’s aim is to provide sellers the opportunity to market their properties at the highest rates possible, and to assist in the smooth turn over. Another customer type is the property buyers, who wish to invest their hard earned money in their dream property. Eton matches the desired structure of this market to the properties in the market. It is during this point that the sellers meet the buyers, and the company brings them to agree to particular terms that would be beneficial to both parties. To do both, Eton employs professional and licensed brokers to meet the expectations of the clients. The company will hire full time and part time brokers, who will enjoy the best commission scheme in the industry. The company will also provide periodic trainings to equip the brokers with the competitive edge. On top of all these, Eton will have a solid platform that includes an updated website, showrooms, and merchandising support. Eton will partner with developers to be able to build low to mid-rise condominiums and townhouses that appeal to the low to middle income individuals and families. These are the low cost housing offers, developed by Eton. Eton Properties, Inc’s mission is to provide affordable and comfortable housing units in Denver and other parts of Colorado. Eton’s own projects boasts of state of the art living conditions that reflect the benefits of technology, hand-in-hand with the growing need for affordable housing. The company is dedicated to a hassle free living environment which promotes safety, attractiveness and well being among our clients. Eton would like to maintain competitive pricing to be able to create a place in the saturated market, while working to further expand their network, the number of properties being sold and thus increasing profits being earned. Another focus is on the development of existing structures and apartment complexes, hand in hand with partner developers. The company will endeavor in modifying and remodeling certain properties, as well as help clients sell on a “where-is, as-is” basis. The business development team will take extra effort in making sure that the properties being sold are at its best quality, priced sufficiently for the benefit of the market. III. Industry and Market Analysis As Colorado bounces back from the economic slump, there are still many challenges to overcome. Massive job losses and fluctuating housing costs are two of the important factors affecting the industry. However, the real estate business is still expected to survive, thanks mostly to the attractive 30 year fixed rate conventional mortgages in 40 years and the homebuyer’s stimulus tax credit (Colorado Real Estate Industry Snapshot 2010). Because of this, the industry looks at a better situation beyond year 2010. Approximately three fourths of the whole population are homeowners (Colorado Real Estate Industry Snapshot 2010). Looking at this number, it seems that the market has been saturated already. But there is another market for migrants or visitors who wish to invest in the area, particularly because of the state’s active tourism campaign, which help boost local industries and create jobs for locals. The local government’s efforts to strengthen the economy adds up to the excitement to open more doors for real estate industries to continue expansion and connect sellers to buyers, providing dream homes to many (Colorado groups release 2010 legislative agenda 2010). More homebuyers today are searching for the right investments. Eton wishes to take advantage of these opportunities to push the business and make each customer type achieve their respective objectives. To do this, the company will implement a 5-year marketing plan that would aim to guarantee to seal the company’s place in the industry. IV. Competitive Analysis, Number of Competitors, Competitive Advantage Colorado is home to almost countless number of real estate companies, among which are Aguilar Real Estate Company, Canon City, etc (Colorado Real Estate Companies 2010). All groups aim at giving the best prices to buyers and the best incentives to sellers, leaving management to be creative in management operations and capital investments. Eton’s main advantage over the rest of the real estate companies is its affiliation with media partners to maximize efforts to advertise and create awareness on the campaigns. Since budget is tight, and management must learn to augment requirements, tie ups will be utilized to ensure that the message goes to the target audience. The owner also has substantial experience in Marketing Communications, and has his own network of advertising network. The company will invest on creating well-balanced and informative brochures, pamphlets and materials to guide the buyers in the purchase of the units. These materials will be closely monitored, and shall be developed consistently as projects come. Agents will have their own sales kits comprised of brochures, CDs and other informational materials. The company also aims to offer a higher level of quality in terms of its own developed projects. To do this, partnerships with the best developers in the area will be established and utilized, a responsibility to be taken care of by the Business Development Team. V. Marketing Strategy Eton will leverage on media exposure by sponsoring ad spaces and offering particular sites as venue for media activities. This way, particular properties are marketed using very manageable media costs. Tie ups and partnerships are the main ways by which Eton plans to sell their products. Roughly about 35% of the company’s monthly operational budget shall be allocated to Advertising and Promotional strategies alone. This includes expenses to be incurred in utilizing mainstream media particularly print advertising; other alternative media; and design and production of merchandising and promotional materials. Mainstream-wise, Eton shall utilize print advertising particularly through tie-ups with different magazines. Although this would not be the company’s primary vehicle in promoting its products, it would just aim to maximize its relationship with these magazines whose websites Eton shall be utilizing in its online campaigns. Internet Marketing has become popular because Internet access is becoming more widely available and used. Well over one-third of consumers who have Internet access at home report to using the Internet to make purchases (Benefits of an Online Approach 2010). Eton shall utilize a website that contains pertinent details regarding the company’s profile and products. Advertising in the listings on the Internet can provide a website with a number of viewers. As such, Eton shall do Search Engine Optimization (SEO) by subscribing to the most popular search engines such as Google and Yahoo, among others. The company shall subscribe to advertising services such as Google AdWords, in which the company’s website would appear immediately following key word searches from Internet browsers. This would prove to be cost-effective since Search Engines charge a company only whenever a person actually accesses its website. Further, this would guarantee that the advertising effort would reach the targeted market because one can limit its ad to appear only to people searching in a particular city, state or region. Eton would also do Online Banner Advertising, as this is an effective way to promote company awareness. Online Banner Advertising allows a company to flash its brand name and other details to browsers upon prompting through specified keywords. Although this does not guarantee sales leads, it nonetheless promotes the brand through its repeated appearance on the screen, consequently leading to brand awareness and recall. To save on cost, Eton would employ a “cost per lead” or “cost per acquisition” strategy to ensure that it only pays for quality viewers or for browsers who actually expresses interest by logging in Eton website. This website would secure numerous key words to maximize the opportunity to flash its banners to Internet browsers. Eton would seek to further modify this means of communication by coming up with rewards for every referral made through its official website Registered members shall be given rewards or downloadable promo coupons for every 10 persons referred. Referral would mean that the website visitor has provided contact information regarding their referrals. Contact information such as email addresses shall be used to invite the referred customers to browse through the website or visit the branch. Coupons will serve as discounts to establishments or restaurants. Of course, this would be done through partnership with various local businesses. VI. Operational Issues Eton Properties Inc will operate in what it would call its Main Headquarters at Denver Colorado. This will serve as its main showroom featuring replicates of the projects that the company have. This will also serve as the main office for the in house and free lance brokers and agents, where they formally accept meetings and discussions with potential sellers and buyers. The headquarters also contain the documentations needed in the operations. Pocket events and booth activities will be conducted on a per location basis, with the freelance agents manning these areas. Eton will occupy small spaces in major shopping malls and other destinations to capture the market there as well. In these selling areas are small replicas of the condominiums and townhouses for sale, and pictures of properties being marketed. However, for deals being closed, clients will be invited into the main showroom/ headquarters for thorough discussion and documentation. Eton will uphold their principle of not dealing with middle men, who make pricing not manageable for the target market. The company will only deal with direct sellers, their own clients, and buyers as well. VII. Human Resources Requirements Eton Properties Inc operates under sole proprietorship, and the owner will serve as its Chief Executive Officer overseeing operations and support teams. Under him are various key people who will oversee the important areas of the business. The company will employ the services of one Chief Finance Officer to directly assist him with the Finances of the company. The CFO is to ensure company liquidity and to manage cash flow as well. He will be responsible in approving costs and targets. There will be one Chief Marketing Officer who will manage the advertising campaigns and needs of the organization. He is responsible in creating tie ups with various groups, planning and implementation of the advertisements, both above-the-line and below-the-line efforts. He is also going to handle the Public Relations aspect of the company, such that he will be in close ties with media groups to ensure that the efforts of the company are featured in tri media. He will also oversee customer relations as well. The Human Resources Manager will handle the recruitment, hiring and training of employees, both freelance and direct hired. He will have to find the right training materials to further equip the sales team in their selling activities. The HR Manager’s role is selecting and motivating the right people to achieve the corporate goals. The company will get a person who has had the same experience in the same industry. One Operations Officer is in charge of overseeing the logistical requirements of the sales team. He is to ensure that the showrooms are well equipped and that the support materials needed are in place. Under his team are the administration support, and the purchasing unit, in charge of managing the fixed assets of the company. He will also work hand in hand with the CFO to ensure that the company resources are maximized. Furthermore, under the Operations Officer are architects to be consulted for designs and structures, and who will determine recommendations for the clients. Another important person to be hired is the Business Development Manager. He will be in liaison with partner-developers in sourcing the right projects for selling to the market. He will ensure that the right projects will be sold. In coordination with the CFO, he will implement pricing on the units. He will also source out sellers who wish to dispose of their properties. The main people to help move the company are the people under the Sales Team, comprised of on Sales Manager, several direct hired sales people who are to manage their own respective properties, and would be accountable to 50% of the team’s sales targets. These should be people who have substantial experience in selling real properties, and are licensed to do so. There will also be many freelance agents, who will get compensation on a per project basis. The commission scheme is tiered, and they will also be given allowances depending on their performances and their goal setting activities. These Freelance Agents are accountable for the rest of the sales targets, getting the same support as the direct hired do. VIII. Financial Projection The total start up expenses includes legal materials, stationary and supplies, architect professional fees, brochures and marketing materials, consultants, insurance, rent, construction, equipment purchase and rental, and human resource expenses. Capital investments include short term assets and additional budget is required to pay zoning fees and government regulations. Start-up Funding Start-up Expenses to Fund $210,000 Start-up Assets to Fund $40,000 Total Funding Required $250,000 Assets Non-cash Assets from Start-up $35,000 Cash Requirements from Start-up $5,000 Additional Cash Raised $0 Cash Balance on Starting Date $5,000 Total Assets $40,000 Liabilities and Capital Liabilities Current Borrowing $0 Long-term Liabilities $0 Accounts Payable (Outstanding Bills) $0 Other Current Liabilities (interest-free) $0 Total Liabilities $0 Capital Planned Investment Owner $250,000 Investor $0 Additional Investment Requirement $0 Total Planned Investment $250,000 Loss at Start-up (Start-up Expenses) $250,000 Total Capital $290,000 Total Capital and Liabilities $290,000 Total Funding $250,000 IX. Appendices Works Cited “$60 Million financing will stabilize senior-living center.” Business Journal. November 25, 2010. http://csbj.com/category/real-estate/ Benefits of an Online Marketing Approach 2010. Retrieved November 8, 2010 from http://www.nextsbd.com/imarketing/benefits-of-online-marketing.php “Colorado Real Estate Industry – Snapshot”. Colodaro Association of Realtors. November 22, 2010. http://coloradorealtors.com/applications/Economy/2010/Colorado%20Real%20Estate%20Industry%20Snapshot%20v2.pdf. “Colorado groups release 2010 legislative agenda”. Colorado Environmental Coalition. November 23, 2010. http://www.ourcolorado.org/media-center/press-releases/colorado-groups-release-2010.html “Colorado Real Estate Companies”. November 23, 2010. http://www.coloradolinks.net/Colorado_Real_Estate_Companies.htm Read More