Feasibility - Greenhouse Letting Agency - Case Study Example

Name Course Institution Executive Summary The presentation is the feasibility study prior to the launch of the operations of the Greenhouse Letting Agency to ensure that the benefits of the business override the risks and losses. It includes a cash flow statement and research on the micro and macro markets. The financial projections show that the agency should operate at a profit. However, the constant income needs change as discussed in the article where there is the inclusion of diverse activities that are unique and sustainable in the long term. There is the analysis of the micro and macro industries with an analysis trends in the Estate Agents Industry they are characterized by mergers and small size businesses are few and under threat. With a 90% response of students that need to rent accommodation in London, the market size is good for the success of the Greenhouse Letting Agency. The Greenhouse Letting Agency has the opportunity to expand to include agency services to help the students with finding the accommodation that best suits their needs and financial capability. All the logistics and organizational structure are discussed. Accommodation agencies are responsible for the maintenance of private property and responsibilities such as the collection of rent and the sourcing of the tenants. It is, therefore, essential for the accommodation agency to understand the market within their area of operation, the requirements of operation, and the best approach to use in the sourcing of clients for maximum benefits for the agency and the property owners. In this case, the agency targets to offer accommodation to the students of the Coventry University, London, whereby the property is at Middlesex Street. There is competition from other agencies such as the “The Arcade,” London, located in Islington, North London. Among the activities involved to increase their marketability is running events that engage the students and aid interaction among strangers[CRM16]. The Coventry University, London, works on the establishment of connections with letting agents, estates, and local landlords who have comfortable accommodation intended for the students of Coventry University, London. With such links, the university acquires all the relevant information with regard to the accommodation to provide its students with all the relevant information concerning the accommodation[Mid16] The University charges a fee for the registration of property owners, agencies, and real-estate agents with the university. Such registration is essential for the marketing of their accommodation structures within Middlesex and its environs. The requirements of the registered premises are proximity to the two campuses of Coventry University, London, and the availability of rooms that are fully furnished. Micro-level Market Assessment The identification of the Customer Pain point was done through secondary research and the survey of the students of Middlesex that reside in Middlesex Street. There are numerous accommodation agencies that offer their accommodation to the students of Coventry University, London. It is only upon the identification of the customer papain point and the establishment of solutions to such situations that a business knows what special services and products to offer the clients. Therefore, the establishment of the customer pain point is essential for the success of the accommodation agency in Middlesex Street that intends to stand out among other agencies. Customer-centered services are essential for the success of the agency. According to the attached questionnaire, the Greenhouse Letting Agency gathers information about the needs and concerns of the inhabitants of Middlesex Street with regard to accommodation. The “Why,” questions are the best in obtaining the customer pain. The survey shows that 90% of the students need to rent accommodation. Out of the total number of students that have rented accommodation before, 50% consider their previous renting experience quite expensive. That presents the cost of the rent as one of the pains. A 70% of the students need rent out such accommodation annually. The flats and private accommodation premises are expensive and most of the students that prefer cheaper accommodations go for halls instead[The164]. However, there are problems with finding the best accommodation that matches with the distance of the accommodation premises to the school. According to secondary research and a review of the online student discussion forums, the most asked questions with regard to accommodation focus on the proximity of the available to the campus and the cost of the accommodation. A significant number of students also ask questions about the environment and the accessibility to utilities such as partying joints, malls, and food outlets. Most of them prefer halls because of their setting and affordable rent[The164]. However, there is a significant percentage that prefers private accommodation in flats. Such are those that register late and find that the halls are all occupied, or students that seek a little more comfort and privacy. There are websites that cater to the needs of such students as in the Study Inn Trinity Street and the Merlin Point apartments[Stu16]. The Greenhouse Letting Agency has the opportunity to expand to include agency services to help the students with finding the accommodation that best suits their needs and financial capability. The Coventry University, London, is an international standard university that admits students from all over the UK and even extends to other countries[FAQ16]. Therefore, many students report without any knowledge of their way around in finding accommodation. According to the research, most of the students are willing to pay a substantial fee for agency services with regard to finding accommodation[The15]. A majority of the students are also willing to pay for agency services whereby 40% are willing to pay 100-200 dollars whereas 35% are willing to pay between 200 and 400 dollars. From the results, the standard charges should range between 100 and 300 dollars. Macro-level Market Assessment The Coventry University, London, provides most of the accommodation information online. The suggestions vary from halls, private housing agencies, to secure home stays that are comfortable, cheap, and eventful, especially for the international students[Cov16]. The selection of rental property is mostly influenced by the location of the premises and the transport links available at such locations whereby each of the two preferences ranks at 35%. There is a 10% portion of the students that considers the affordability and only 5% choose on the basis of the environment. Such includes partying joints, proximity of shopping malls, and the safety of the environment. With a 90% response of students that need to rent accommodation in London, the market size is good for the success of the Greenhouse Letting Agency. The number of students that go for private accommodation as opposed to accommodation halls also shows the direction to take with regard to the best accommodation to offer the students. The only times that the cash flow shows negative balances is the times of the year during the period of paying rent which is paid semi-annually. The UK construction sector is among the largest sectors in the UK economy. That proves the feasibility of the launch of the Greenhouse Letting agency where more people need agency services in the newly constructed buildings[UKC13]. Proper and strategic marketing and offering of agent services are among the critical success factors for the Greenhouse Letting Agency. The international students are most likely unfamiliar with London and its environs. The same applies to most local students that are non-Londoners. The agency uses the survey to get the information with regard to the most effective marketing strategy. Since most students (50%) use online marketing as their source of accommodation information, online marketing is listed as one of the essential tools of marketing the accommodation premises. It is also the platform that the agency uses to gather information with regard to the preferred changes in the accommodation tradition in Middlesex. However, it is also essential to consider the 20% that rely on magazines, the 20% that rely on posters, and the 10% that obtain the information from newspapers. Macro-level Industry Assessment According to the Cash flow statement, the projections show cash flows that present profits after the investment of the money in the startup and the initial running of the business. However, the $11 750 profit is way too risky to allow losses. The identification of external threats to a business is essential for the timely improvement of the business strategy and the mode of leadership[Kat14]. The increase in the number of students in search of private tenancies and the role played by the letting agents by the provision of top-notch customer service becomes more important as times change in Britain[Mar164]. The letting agency business is on the rise as more importance and recognition is attached to their contribution to the housing industry. The main competitors of Greenhouse Letting Agency include the Estate Agents, Cameron Group, and Turbervilles, which are famous and recognized. Therefore, there is need for the formulation of effective marketing strategies with a streak of uniqueness for recognition by the potential clients[Tom16]. The trends in the Estate Agents Industry show a 11 billion Pounds of revenue and an annual growth of 4.6% between 2011 and 2016. The estimated number of businesses that offer letting services is 17 972 with a total employment of 142 931 people[IBI16]. There was a recess in the industry between 2011 and 2013 after which the estate agency services have made a comeback. However, they are characterized by mergers and small size businesses are few and under threat. There is a gap in the online presence of most letting agencies in Middlesex. We shall engage in the student enquiry forums to offer free simple advice and send refer to the Greenhouse Letting Agency for further inquiries. The Five-Force Analysis Micro-level Industry Assessment The business shows a constant cash outflow with regard to the fixed annual, semi-annual, and monthly expenses. The cash inflow is also constant whereby the cash receipts are 20833 throughout the year. That shows that the agency is only involved in tenant services from which it collects revenue and the share from the landlord. According to the cash flow records, the sustainability of the agency may be at risk in cases when the tenants do not book with the agency as expected. There is need for the inclusion of additional revenue-generating activities with variable income throughout the year. The assistance services that should accompany the letting services shall include assistance in finding the most suitable accommodation, the establishment of reliable transport within the areas that are not very strategically positioned through collaborations with private transport services of Middlesex. There is consideration of the key performance indicators for business tracking services[Mar14]. Team Assessment The team is still small and the interconnection upward and downward is strong. The incorporation of reforms for the improvement of the project is easy because of the small size of the team. The team involved in the finer details works with the clients to ask about the problems experienced with other rentals and the specific preferences of the premises that the students hope to get. When the staff members involved in the collection and addressing the finer details need an extra hand, other team members such as the field staff involved in the letting activities such as showing the clients around the preferred premises should help and vice versa. The wages must me contained to ensure that the expenses remain at a minimum. Therefore, the roles could be shared between the team members where some are free and other departments are swamped with work. Therefore, all the training sessions must be attended by all the team members so that each is capable of all the roles of the operations carried out by the agency. The number of students that go for private accommodation as opposed to accommodation halls also shows the direction to take with regard to the best accommodation to offer the students. The only times that the cash flow shows negative balances is the times of the year during the period of paying rent which is paid semi-annually. That means that some times of the year are characterized by more activities than others in various functions. Conclusion The fiscal analysis reveals the potential of the business and the need for improvement. There is need for the inclusion of additional revenue-generating activities with variable income throughout the year. The team responsible for online presence is an essential part of the agency company student enquiry forums to offer free simple advice and send refer to the Greenhouse Letting Agency for further inquiries. The identification of external threats to a business is essential for the timely improvement of the business strategy and the mode of leadership. The financial projections show that the agency should operate at a profit. However, the constant income needs change as discussed in the article where there is the inclusion of diverse activities that are unique and sustainable in the long term. Launching the business is a beneficial move and the change in the strategy is important to ensure that the agency overcomes the competition and survives in the business. Break Even Chart Month Total cash receipts Cumulative cash receipts Total cash outflow Cumulative cash outflow Profit/ loss year to date January 20833 20833 51583 51583 -30750 February 20833 41666 9083 60666 -19000 March 20833 62499 9083 69749 -7250 April 20833 83332 9083 78832 4500 May 20833 104165 9083 87915 16250 June 20833 124998 9083 96998 28000 July 20833 145831 35583 132581 13250 August 20833 166664 9083 141664 25000 September 20833 187497 9083 150747 36750 October 20833 208330 9583 160330 48000 November 20833 229163 9083 169413 59750 December 20833 249996 9083 178496 71500 The breakeven point is in the month of April where the first positive profit is made. Bibliography CRM16: , (CRM, 2016), Mid16: , (Conventry University, London Campus, 2016), The164: , (The Student Room Staff, 2016), Stu16: , (Student, 2016), FAQ16: , (FAQ, 2016), The15: , (The Guardian, 2015), Cov16: , (Covent University, 2016), UKC13: , (UK Construction, 2013), Kat14: , (Arline, 2014), Mar164: , (Silva, 2016), Tom16: , (Bill, 2016), IBI16: , (IBISworld, 2016), Mar14: , (Zimny, 2014), Read More