Feasibility Analysis of the Launch of a Letting Agency in Middlesex Street - Case Study Example

Name Instructor Date Executive Summary Middlesex Street is one of the streets well located for various businesses because of the ready market that comes with the many students from the nearby universities. We cover a feasibility analysis of the launch of a Letting agency (The Greenhouse Letting Agency) in Middlesex Street. The study covers the opportunities, gaps in similar businesses, and the threats. There is the consideration of the best method on how to determine the best marketing strategies to help with standing out and the period required for the business to start running at a profit. We study the macro and micro market and the macro and micro industry that are directly linked to the business. The target population is that of the students of Coventry University, London. Middlesex Street is one of the common areas inhabited by the students Coventry University, London because of the many student accommodation premises in the street. Business Opportunity Letting agencies require substantial startup revenue and it is essential for a new agency business to ensure that it has all the equipment and skilled staff necessary for remarkable reputation and subsequent customer loyalty[Lan16]. It is for that reason that a study of the business environment is essential for the new business to ensure that it avoids the pitfalls associated with such a business. Besides the secondary research, questions are presented to the presented in the form of questionnaires for cohesion of the relevant information. The market research also gives the potential business the power to pick up on the gaps in the field of business and make up for such weaknesses[Eri13]. It is through such procedures and noticing such loopholes that the new businesses begin with an offer on the new services that are unique in the area. According to Brandenburg (2013), addressing various needs such as diversification and the use of reliable equipment gives the business a competitive advantage and ensure that the business is preferred by the customers over its competition. Most of the accommodation premises base their competition on their accessibility to various utilities and social amenities[The164]. The prior assessment includes the construction of a questionnaire and the selection of the subjects for the questionnaire. The target subjects are the students of Coventry University, London. The questionnaires are administered at the university gate, in the residence halls and the student accommodation premises where the caretakers put them at the reception for the voluntary participation in answering the questionnaires. The students are encouraged to participate by the use of a banner that explains the purpose of the questionnaire as the effort of an investor to set an agency that addresses all the questions of the students. The questionnaire is formed to gather information about the various issues related to real estate. It also gathers information useful for the determination of the gaps in the real estate and letting industry. The responses are recorded in the percentages for easier measure of the various variants. The Micro Level Market Assessment The focus of the micro level assessment of the feasibility study is the customer pain. The determination of the customer pain ensures that the business knows about the best approach to apply to the situation and competitive market to ensure that they are recognized and preferred among the customers. Most of the students seek convenience in the accommodation and the customer pain lies in the convenience first, the cost of the accommodation. A 75% of the respondents indicate the need for accommodation with 70% in need of special accommodation that suits their needs. Only 20% considered their previous renting experience as perfect whereas 70% said it was convenient. In addition to that, a 20% is currently not satisfied with their current accommodation. The highest ranked cause of dissatisfaction is the high accommodation fees. Taking into consideration the percentage of satisfied students with their accommodation as 80%, it is questionable that the 70% with special accommodation needs find accommodation that satisfies those needs. The conclusion made through discussions, reflections and research indicate the possibility that such students settle for less. They could have rented better accommodation if it was available at more student-friendly rates. A 50% also claim that they feel unsatisfied with their accommodation because of the lack of adequate information with regard to the information about accommodation premises It is only through the establishment of the customer pain that the new business ensures a successful startup with the subsequent application of the best marketing strategies to ensure an early breakeven point [Sha131]. Middlesex street is one of the busy streets and the establishment of the best competition strategies is essential for the prevention of the collapse of the new business upon startup. According to the statistics as collected from the questionnaires, Fig 1: Identification of the customer pain High costs and the difficulty in finding the appropriate accommodation are the main customer pain. It is for those reasons that a significant number of the students are willing to hire agency services to ensure expert advice with regard to their needs. 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]. The Greenhouse Letting Agency focuses on expanding to include diverse services at the same fee and the focus on the marketing team during startup to ensure that the students find the accommodation that best suits their needs and financial capability. The marketing team focuses on making sure that the business does not collapse through sustainable generation of income. The Coventry University, London, is an international standard university that admits students from all over the UK and even extends to other countries[FAQ16]. There are numerous foreign applicants that require careful guidance throughout the process of finding accommodation to settling. Such students are more than willing to pay for agency services for assistance with the search[The15] Macro-level Market Assessment According to the accommodation information offered online, the Coventry University, London, provides most of the accommodation information through their official website which contains various accommodation options such as private housing agencies, halls, and secure home stays. According to the advice offered on the website, the homestays are comfortable, cheap, and eventful, especially for the international students[Cov16]. According to experts, the identification and addressing of external threats gives startup business better chances of survival[Kat14]. Part of the information collected is related to the selection of rental property to determine the areas for emphasis and the gaps present in the industry. Addressing such issues creates a sense of customer satisfaction among the clients that encourages their loyalty. The most effective marketing strategy is the use of pamphlets where they are dropped in the resident halls for easy access to the students. It is also essential to identify the best strategies to partner with the nearby university for a feature in the university website[Mid16]. Online platforms such as the student forum websites and other social media pages such as those of Facebook also give a chance to marketing. According to research, students conduct most of their personal inquiries in the student forums on various social sites such as Facebook and the school discussion forums. The marketing team should be actively involved in the social media and try to address the issues faced by the students by answering to special inquiries and giving them the relevant references. Macro-Level Industry Assessment The responses show high rates of unmatched responses. Taking into consideration the percentage of satisfied students with their accommodation as 80%, it is questionable that the 70% with special accommodation needs find accommodation that satisfies those needs. Although there are online platforms with information about the various accommodation premises, many students move out of their premises within their first year of study. Most of the respondents also say that transparency is their most valued quality among letting agents. That is because accurate information matters to them where they enter accommodation premises that they are sure about. The students are mostly busy and they prefer to use the amenities that make their work easy and faster. It is for that reason that the high-end accommodation premises offer equipment such as dish washers, dry cleaner facilities, and food outlets. The accessibility to such social amenities as laundry shops, food outlet, and leisure activity joints is of the essence. The provision of the students with such detailed information is also important for the preference of the Greenhouse Letting Agency to ensure that it is the agency of preference among the students. There is a high possibility for a successful startup if the gaps are addressed by the Greenhouse Letting Agency as shown by the needs and wants of the students-clients. Besides transparency, timely responses to inquiries and competitive fees followed as the most important qualities of letting agents, each rated at 20%. A 60% report a semi-annual renting pattern whereas 30% have an annual renting pattern. Micro-Level Industry Assessment According to the primary research, there are various aspects of the industry that guarantee the high likelihood of the success of the Greenhouse Letting Agency. Secondary research, on the other hand, shows that the residential transactions bring in the highest income for the real estate industry in the UK[IBI16]. Despite the existence of numerous letting agencies that cater for the needs of the university students in London, the continued demand for the services makes the work of such agencies continue throughout the year. As recorded in the statistics, majority of the students rent their premises annually and semi-annually. That means that most of the students spend their time in their rented premises. As a result, the most frequent renting patterns are annual and semi-annual renting patterns because of students that spend all their semesters in session with internships of employment in London in between. The location and transport links are among the most important considerations when selecting rental properties where they are each ranked at 35%. Other factors such as the affordability and environment are rated at 10% and 5% respectively. That means that most prefer convenience over price but most settle for price over a given extent of convenience There is the possibility of a risk in cases where such students live in the same premises throughout that period. It is even more risky if such accommodation belongs to agencies other than Greenhouse. That is because the Greenhouse Letting Agency must wait longer to get additional clients. However, the upside is the case of the first-year students, most of who move out of their rented premises within their first year of accommodation to find more suitable rentals. Such happens because the students are more knowledgeable of the area and various accommodation premises through observation or advice from friends. Financials The startup of the business and the initial running is estimated to be capable of using up to US $40 000. 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 startup should include the money required to purchase the space for the office, the purchase of the special equipment and all other accessories, and the training and the wages of the staff. The need for careful records of the cash flow statement and the balance sheet is the careful tracking of the activities of the agency and the projection of the success of the business. Smart marketing strategies with a streak of uniqueness in startup businesses are essential for recognition by the potential clients and the subsequent success of the business[Tom16]. The business structure is also special in the potential success of the business. It is only through the efficient operations of the business that the success shall be achieved. Diversification and closing the gaps are essential for the business. The main focus is the success of the business. The business intends to have a streak of class and elegance while it caters to the needs of the average students as a whole. According to IBISWorld (2016), The UK gains 11 billion Pounds of revenue from letting agencies. The annual growth of the business between 2011 and 2016 is recorded at 4.6%. The study also shows the popularity of letting agencies where there are 17 972 businesses that offer letting services in the UK. [IBI16]. There is, however, stiff competition because of the strong agency businesses, some of which are mergers that occurred after the economic recession of 2008[UKC13]. The startup of a completely new small business explains the reason to take care because of the numerous threats associated to the same. The Greenhouse Letting Agency, however, focuses on covering the weak points of the other letting agencies to stand out and gain the trust of the customers. Fig 2: Greenhouse Letting Agency Business Structure With the initial small team, the greatest focus is in the general management and the management of the marketing activities. The importance of the marketing management comes as a result of the need to succeed in the startup in a highly competitive environment. There is need for the use of s customer-focused service industry to satisfy all the needs that remain unsatisfied by most of the other industries. Recommendations The key performance indicators are such as the positive financial projections, number of website visits and inquiries, the number of mentions of the Greenhouse Agency in online student forums, and the mention of the agency in the school website. The key performance indicators help in the determination of the position of the business[Mar14]. The initial monetary allocations focused on the wages of the team and the legal payments made on the property and other legal logistics associated with the business startup. However, after extensive study, it is established that there is need for special focus in the structure of leadership and operations and the operations team. A small operation team is essential to minimize on the startup allocation of resources. The extra resources should be re-channeled to the marketing activities and various interaction activities with the customers for efficient running of the business. The existence of established letting agencies is a matter of concern that requires consideration in every respect. Reflections The essay on the feasibility analysis shows the importance of research and firsthand information prior to the launch of a new business. The study shows the need to cater to a variety of needs under the agency services to increase the revenue generating activities under one business name. A small operation team is essential to minimize on the startup allocation of resources. The best practices are determined by the market analyses and the comparison of the competitors and the operations of Greenhouse Letting Agency to those of the competition. The students are mostly busy and they prefer to use the amenities that make their work easier and faster. The Greenhouse Letting Agency encompasses all the needs under one roof for the maximization of profits and ease of operations. References Lan16: , (Landlord Zone), Eri13: , (Brandenburg ,2013), The164: , (The Student Room Staff), Sha131: , (O'Connor), FAQ16: , (FAQ), The15: , (The Guardian), Cov16: , (Covent University), Kat14: , (Arline), Mid16: , (Conventry University, London Campus), IBI16: , (IBISworld), Mar164: , (Silva), Tom16: , (Bill), IBI16: , (IBISworld), UKC13: , (UK Construction), Mar14: , (Zimny), Appendices Appendix A Business Opportunity Questionnaire: Set to gather information about the various issues related to real estate. It also gathers information useful for the determination of the gaps in the real estate and letting industry. The responses are recorded in their percentages for easier measure of the various variants. Questionnaire We hope to get your input (through reviews, criticism, and references) for the enhancement of our efforts to offer you the most efficient agency services in Middlesex. 1. Do you feel the need to rent for accommodation? a) Absolutely-75% b) Sometimes-25% d) Never-0 2. Do you have special accommodation needs? a) Yes-70% b) No-30% 3. How was your last renting experience? a) Convenient-70% b) perfect-20% c) Horrible-10% 4. Have you ever experienced dissatisfaction with the accommodation and agency services offered the last time you sought them? a) Yes-20% b) No- 80% 5. Reason for the dissatisfaction a) Too expensive-40% b) Distance from some essential social amenities-10% c) The lack of adequate information before renting-50% 6. What are the most important qualities for a good letting agent? 7. a. Transparency 40% b. Quick response 20% c. Competitive fees 20% d. Good communication skills-10% e. Good knowledge of rental properties 10% 8. How is your renting pattern? a) Annual-30% b) Semi-annual-60% c) Quarterly-10% 9. Which factors do you consider when choosing rental property? a) Location 35% b) Affordability 10% d. Facility 15% e. Transport links 35% d. Environment 5% Appendix B: Micro Level Market Assessment Fig 3: Fig 1: Projected Breakeven Point Appendix C Macro-level Market Assessment Fig 2: Basis of renting rental property Read More