Business and Market Analysis - Ava Mobile Home Park - Case Study Example

Financial assistance is sought for the project to the tune of $87500 and the details of the funding and project figures are stated below. The owner of the park with (state no of years) years of experience in buying and selling mobile homes has absolute knowledge of the local market conditions. The park in the best of its condition will serve the housing needs of many citizens.

Market analysis: The Park situated half a mile from the lake is a prime occupancy place. The lead time for occupancy is a maximum of two months. The place is mostly rented by couples 80% of whom are young and 20% retired.  Tenkiller has 70.8 % of the population over 15 years that are under the now married category according to Onboard Informatics 2008. In addition, the park is situated in a geography with an extremely high floating population. The North Eastern state university has 6500 students on its campus and about 400,000 annually visit the Illinois River and 2,000,000 annually visit Lake Tenkiller. The current rental rates for mobile homes range from $325 to $475 this includes single and double wides.

Price, Placement, Product, and Promotion:

Price: The rent rates for the mobile homes are well within the average, reasonable, and competitive enough as the homes will be new, therefore higher attraction.

Placement: The Park is situated within half a mile from the lake making proximity to the lake and water sports viable and this will be a unique selling point for the park. In addition to this Lake Tenkiller being a major tourist attraction and place for camping will keep the homes at 90% occupancy.

Product: The Park after renovation and new homes with a children’s play area and storage units will prove money’s worth for tenants and prospects.

Promotion:

The promotional activity for the mobile park will take place in all the leading camping sites and water sports areas where tourist flood in addition to electronic and mailing channels. The park will also be advertised in the North Eastern State University and the neighboring towns.

Below is a business plan for a Mobile Home Park in the state of Oklahoma. The proposal states the viability of the business in alliance with the financials which includes the start-up accounts and the projected Profit and loss statements for the first 3 years.

 

Start-up expenses

 

 

 

Legal

$300

Stationery

 

Brochures

 

Consultants

 

Insurance

$200

Rent

 

Research and Development

 

Expensed Equipment

 

Other

 

Total Start-up expenses

$500

 

 

Start-up assets

 

 

 

Cash Required

$6,000

Other current assets

$0

long term assets

$91,000

Total assets

$97,000

Total requirements

$97,500

 

 

Startup Funding

 

 

 

Start-up expenses to fund

$500

Start-up assets to fund

$97,000

Total Funding required

$97,500

 

 

Assets

 

Noncash assets from start-up

$91,000

Cash requirements from start-up

$6,000

Additional cash raised

0

Cash balance on starting date

$6,000

Total assets

$97,000

 

 

Liabilities and capital

 

Liabilities

 

Current borrowing

0

Long term liabilities

$87,000

Accounts payable

0

Other current liabilities

0

Total liabilities

$87,000

 

 

Capital

 

Planned investment

$10,000

Other

0

Additional Investment required

$87,000

Total planned investment

$97,000

loss at startup

$6,500

Total capital

$90,500

Total capital and liabilities

$97,000

Total funding

$97,500

Proforma Profit and Loss

 

Pro Forma Profit and Loss

 

FY 2009

FY 2010

FY 2011

Sales

$28,080

$32,160

$36,240

Direct Cost of Sales

$1,500

$1,000

$1,000

Other Production Expenses

$11,000

$0

$0

Total Cost of Sales

$12,500

$1,000

$1,000

 

 

 

 

Gross Margin

$15,580

$31,160

$35,240

Gross Margin %

55.48%

96.89%

97.24%

 

 

 

 

 

 

 

 

Expenses

 

 

 

Payroll

$0

$0

$0

Sales and Marketing and Other Expenses

$4,500

$2,500

$2,500

Depreciation

$1,500

$1,700

$1,900

Leased Equipment

$0

$0

$0

Utilities

$2,000

$2,000

$2,200

Insurance

$300

$300

$300

Rent

$0

$0

$0

Payroll Taxes

$0

$0

$0

Other

$0

$0

$0

 

 

 

 

Total Operating Expenses

$8,300

$6,500

$6,900

 

 

 

 

Profit Before Interest and Taxes

$7,280

$24,660

$28,340

EBITDA

$8,780

$26,360

$30,240

Interest Expense

$1,716

$1,716

$1,716

Taxes Incurred

$2,184

$7,398

$8,502

 

 

 

 

Net Profit

$3,380

$15,546

$18,122

Net Profit/Sales

12.04%

48.34%

50.01%

The rent for the homes has been increased by $50 and by $5 for the storage units on Year on Year basis. Deposit amounts have not been included in the revenue earned. Even if the rent stagnates after the second year the deposit amounts can serve as a rolling cash reserve and a handsome return of a minimum of 40% or more on the Net profit can be seen.

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