Download - KORNER BUILDER AND RENOVATOR
KORNER BUILDER
AND RENOVATOR
Business Plan
(2021-2024)
2020.11.21 Korner Builder and Renovator Business Plan Small Business Plans by Assent© 2
Contents
1. Executive Summary ....................... 3
2. Business Description and Details ... 5
3. Market Analysis .............................. 8
4. Operating Plan and Staffing ......... 13
5. Marketing and Sales Plan ............ 14
6. Financial Plan ............................... 16
Appendices ........................................... 24
Trading Name:
Korner Builder and Renovator Pty Ltd (KBR)
Address:
Any Street, Any Town NSW, 9999
Email:
Website:
www.kbr.com.au
ACN/ABN: 12345678
Prepared by: Small Business Plans by Assent
Website: www.smallbusinessplans.com.au
Date: 21 November 2020
2020.11.21 Korner Builder and Renovator Business Plan Small Business Plans by Assent© 3
1. Executive Summary
Name and Structure
Korner Builder and Renovator is a Pty Ltd Company.
Location
Korner Builder and Renovator (KBR) based in Any Town, which is a district of Any
Suburb in NSW, 9999.
Owner(s)
The business is the name(s) of John Coats and Mark Jacket and each is a 50%
Shareholder in the Company.
Products and services
The products and services provided will include:
• Home renovation
• Home extension
• Home decoration
• If required – interior design
Market Focus
The segmentation of the local market will focus on:
1. Home extensions, major renovations (more than one room) and Granny Flats.
2. All Sydney suburbs with above average: population growth, household size
with older children still at home, average or slightly above average household
income.
The geographic segmentation will be the five adjacent suburbs to Any Town, which
comprises 215,000 large (4+ bedrooms) in the target segment.
Opportunity
The Marketing Analysis in this Plan of the local competitors shows there is an
absence of a mid-market to slightly premium and small builder in Any Town. The
brands of products used in the service-delivery and those retailed will be of a high
quality.
Three tradesmen will complement the Owners, Jean and Mary’s skillsets. Together
these factors will result in an affordable but high quality offer of both products, and
services.
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Financial Goals
• Year One sales revenue: $1,328,820
• Gross Profit: 67%
• Start-up costs: $44,500
• Net profit: 4%
• Initial investment: $116,500
Vision
To lead the South East Sydney home extension and renovation sector with
transparent and accurate estimates, professional renovations and extensions, and
professional visualisations of use and space and design.
Goals and objectives
• Quarter One: to have opened successfully and have three projects in XX.
• Quarter Two: to have consolidated the opening business and grown by 25%
with an increased focus on Granny Flats, and Battle Axe smaller properties in
the rear of large blocks.
• Quarter Three: to have extended into the adjacent suburbs through our
marketing and on-line presence; Google Analytics metrics XYZ.
• Quarter Four: to wrap the year up with a direct mailer to all target suburbs
offering extensions and renovations at a xx% discount in the first Quarter of
2021.
<End of Executive Summary>
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2. Business Description and Details
Trading names
The Korner Builder and Renovator Pty Ltd.
Product and services
At this point Small Business Plans by Assent (SBPA) states all of the potential
products or services that your business can offer. The purpose of this Section
of your Plan is to focus on where your business will generate most revenue,
and prepare for the forecast coming later in this Plan which tells you how much
you are going to make by each product/service.
Premises owned/leased
KBR will operate out of a serviced office in the centre of Any Town. This space will
be leased for a period of 12 months. All of the appropriate directories and Google
Maps will have that address as the focal point to maximise Search Engine
Optimisation (SEO). Prospective clients will be met there, when not met on site or in
their home.
Proposed operational structure
The Managing Director will “double hat” by both managing Contractors on site, and
looking after estimates, and the sales and marketing. He will be backed up by a full-
time Assistant Estimator who will also “double hat” as a Foreman on a second site as
the business picks up.
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Pricing
Project value will range from $50,000 to $225,000.
These numbers are based on industry data for property extension, major
renovations, and Granny Flats Sectors. The umbers exclude the more competitive
and low-margin area of ad-hoc casual job renovation, and single room upgrades.
This sector will require longer lead times and more marketing collateral. Therefore a
slightly higher injection of working capital be required.
Recruitment, training, retention
This section of this Plan is where SBPA writes about the specific training that
would be required for staff roles need, for example in the area of safety. It will
also detail which staff need to be Contractor or employees,
Qualifications/certifications
All tradesmen, and the Owners/Directors are qualified and certified, or are registered
Apprentices within the appropriate State and Federal programs. Certified/qualified
staff will be available at all times. Apprentices will be under direct supervision of a
qualified Builder.
Systems/ICT
This section of the Plan details the systems for your business. This is important
in your Plan because systems gather cash and measure where you make most
money by area giving insight on for your pricing, quotes and estimates. This
system needs to be set up early in the business, so that you are measuring
performance against your Business Plan from the get-go.
Intellectual Property (IP) strategy
If needed, SBPA helps you with your Intellectual Property by advising you on
when is the right time to get some protection, how much it will cost and what is
the right type of IP protection for you, then writing this into your Plan.
IP protects your business name, trademark, and anything that may be unique to
the way you deliver or formulate your service and products once it is
successful.
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Sustainability (environment, risks strategies)
SBPA will advise if some of your customers will expect your business to have a
position on recycling management/removal of waste, and will expect to see
commitments to that in such areas as solar, absence of contaminants. SBPA
writes this into your Plan.
Key Suppliers
The following suppliers will be necessary for the Company:
• Taxation and finance
• Legal advice
• Insurance advice and risk minimisation
• Health and safety strategy
• Graphic design and brand guidelines (in the early days)
• Digital, social media, Analytics expert (in the early days)
• Communications and marketing strategy (in the early days)
• Market research (in this Plan)
• Professional bodies and Industry groups
• CRM Integration Specialist/Consultant (in the early days)
• SEO Specialist (in the early days).
Not all of these would be required for your business in Year One, but as your grow
some of these may be added on and included in you costs and expenses, if cashflow
and profit permits.
<End of Business Description>
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3. Market Analysis
SBPA recommends this section of the Plan will typically be four-to-five pages in
length. The role of this Section is to ensure that the local market has been
understood and scanned for opportunities of and are in place, and the business
has a solid foundation to start its marketing, and production of its products and
services.
The two or three focus areas for Any Town will be XXX. This focus will be aligned
with the target consumer segments of XXX.
National Overview
Industry Data At a Glance
Sector Revenue $Bn
Growth Past Five Years %
Growth Next Five Years %
Profit Margin %
Wages % of Revenue
Increase in # of Businesses %
Home Construction, Renovation and Extension
56 -0.4 1.1 8.2 8.9 1.0
Interior Design
5.6 1.9 2.2 17.4 23.4 1.4
There is nothing intrinsically adverse in this industry – it is rated as average in the
competitiveness by the industry research company IBIS World. This means that
professional businesses such as Any Town will thrive.
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Products and services
The national picture for products and services in builders at the moment is:
Local Competitors
1. There are indirect competitors in the local suburbs and these can be classified
are direct and indirect. There are <xxx> direct competitors:
Direct and Indirect Competitors
More detail is provided in the Appendices.
2020 Industry Revenue: $6.8bn
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Competitor analysis
SBPA determines what your prospective customers want and compares you to
your competitors in this section. If necessary, SBPA recommends or does
mystery shopping of your customers.
Feature/benefit/emotional benefit Competitor Name
Competitor Name
Competitor Name
Features and claims:
High quality work guaranteed with zero defects ✓ ✓
Choice of finishes and accessories ✓ ✓ ✓
Specialises in Granny Flats and battle axe properties ✓ ✓
Benefits:
Highly experienced team, specialises in local area ✓ ✓
Based in the area if early starts and late finishes are required
✓
No jargon, friendly, reasonable service ✓
Ecommerce features:
On site cameras so you can see work progressing and for extra security
Ezy pay and other credit terms available online
Consumer Market Segmentation
In this section SBPA analyses your local suburb for opportunities that your
competitors may have missed.
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Business Market Segmentation
The growth corridors are:
• Xxxxx
• Xxxx
• Xxxx
The demographics and data shows a high number of households in the 34-55 group.
The data also shows high levels of consumer disposable income and consumer
sentiment and household income.
• Advertising to consumers, will focus on the higher population areas of XXX
More details of the suburbs, and growth corridors in South East Sydney can be
found in the Appendices.
The Marketing and Sales Plan section addresses this in more detail.
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SWOT Analysis
STRENGTHS
• SBPA analyses
your business for
products / services /
experience / skills
that are better than
your competitors or
could be.
WEAKNESSES
• SBPA analyses your business for products / services / experience / skills for weaknesses compared to your competitors.
OPPORTUNITIES
• SBPA analyses the
local market and
your competitors for
opportunities and
areas they are weak
/ things they are not
doing/good at.
THREATS
• SBPA identifies things that could impact on your business and lists them.
Insights from the SWOT
• There is a significant opportunity in the area of e-commerce – be that allowing
prospective customers to register for updates, changing their specification
online, or being reminded when a product that they have bought from the
suppliers may have run out. These tactics are all not being done by competitors
in the immediate area, but they are trends in building nationally and
internationally that could be used by KBR.
• The threat of a price war can be avoided by KBR not going below the current
market rate for popular, bestselling accessories and by only periodically offering
excessive promotions to existing clients and avoiding publishing discounted
prices or discounted days for new clients. The Marketing Plan shows other ways
that the business can be grown while avoiding price discounting or price
reduction or promotions.
• Lower household disposable income and consumer sentiment can be offset by
regular reminders of appointments falling due, and on-selling products discreetly
where there is consumer interest in the Company.
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4. Operating Plan and Staffing
People
The Managing Director will “double hat” by both managing Contractors on site, and
looking after estimates, and the sales and marketing. She will be backed up by a full-
time Assistant Estimator who will also “double hat” as a Foreman on a second site
when the business gets busier.
• The Receptionist role will be a hybrid between Receptionist and Social Media
Manager.
• The three Tradesmen roles will all be Contractors, (these numbers are captured
in the ‘Financials’ section of this Plan)
• The Owners/Directors are John Coats and Mark Jacket.
Opening hours and days of trading
• Monday – Friday 8am to 5pm
• Saturday – appointments and discussions: and emergency work from 9am –
2pm
• Sunday and other hours are available by appointment only.
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5. Marketing and Sales Plan
SBPA writes a detailed marketing plan based on the Business Description on
the SWOT and the Market Analysis Section of this Plan.
Brand Identity
• Any Town must have a strong visual brand identity communicated through
consistent website and social media image integration approach. In addition, it
will quickly determine the key messages that it wishes to express, in concise,
clear language in it written communications. This will be basis of its
conversations with stakeholders, prospective clients, and industry bodies.
• Both a written and visual set of brand guidelines will be produced at the very
beginning, or before the company begins its life.
Customer Relationship Management (CRM)
• HubSpot, a CRM app will look after CRM, bookings and most of the marketing.
Website
• Websites are becoming increasingly sophisticated as the market becomes more
advanced. An interactive website has been included in the start-up costs, and
this will, by integrating with the CRM System, ensure that it is functional and
helps develop and grow the business. The website will have an immediate lead
magnet, and people will be able to enquire, download and book.
Digital Advertising – Facebook, Instagram, Pinterest, LinkedIn and
other specialist media platforms
• A media schedule and cost of creative has been factored into the start-up costs.
• Mary & Jean will continue to develop their LinkedIn profiles to ensure that she
becomes the spokesperson and standard bearer if the business wants to expand
into other areas, and to ensure free publicity from professional associations with
big brands.
• Successful local business people will be targeted, and LinkedIn therefore is more
important then, it is usual in the Hairdressing marketing.
Electronic Direct Mail (EDM)
• A mailer should be tested to the 8,000 or so businesses in the area promoting
the gift of a visit to the Salon for employees who excel in their roles or as
Christmas gift, or as an incentive.
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Public Relations
• Any Town will have an event to celebrate its opening, which can be recycled
every year to celebrate its birthdays.
Referral sites
• All of the appropriate referral sites such as True Local and aggregator sites
should be checked to ensure that they have picked up the listings appropriately
from Any Town Google My Business (GoogleMB) and Google Maps listings. In
particular, photography that is been used for GoogleMB and on Google Maps
should be accurate and submitted if the Goggle algorithm has picked up the
wrong image. Ideally the image should be of the Shopfront, but other images can
be submitted of innovative haircuts or popular ones. And the logo
All of the foregoing have been reflected in the marketing spend within the start-up
costs which can be found in the ‘Financial’ section.
Marketing Calendar
SBPA includes the key marketing strategies in the ‘Events’ column that will help
grow your business.
Events Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Brand identity and messaging ✓
CRM ✓
Website ✓
Digital Advertising ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
EDM ✓ ✓ ✓
Public relations ✓
✓ ✓
Sales Plan ✓
Price increase plan
✓
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6. Financial Plan
At a Glance
The following two financial statements show key results as follows:
The initial costs of start-up are $18,500 to $23,500 depending on how the first two
months sales are
• Year One revenue of $220,604 yields a good profit. If start-up costs of $23,000
are all factored into Year One this would still represent 14% EBIT – above
average
FY2021 FY2022 FY2023
Gross sales revenue $1,328,820 $1,342,940 $1,357,770
Gross margin 67% 67% 67%
Net sales revenue $113,377 $117,533 $117,703
Net profit 4% 5% 5%
Industry Benchmarks – industry
Many new businesses have no data. SBPA provides reliable accurate benchmarks
when the client has no “figures”.
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Summary Charts – Revenue, Expenses/Costs, Profit
Financial Highlights by Year
Revenue by Month
Expenses by Month
Net Profit by Year
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Assumptions
Revenue
Actual revenue from FY2019 and FY2020 has been used in the forecast for FY2021.
• This has assumed that COVID-19 based recessions will impact and therefore the
share of the delivery business has been increased
• This has been offsetting the decrease in store traffic and will help with any post
COVID recessionary downward pressure on sales.
• Cost of sales has been reduced from 31.77% to 29% based on supplier
rationalisation and discussions regarding pragmatic approaches to developing
the business post COVID-19 and new ownership.
• Marketing budget has been allocated to ensure that these new revenue streams
online.
The marketing plan addresses improving the delivery options and the general
revenue and profit growth of the business.
Cost
Increases will come from the following:
One salary of $1,000 per month is in Direct Costs – because he/she will only be
needed when the business is busy at peak times. The other staff are in Expenses
Margins
It is expected that net profit margins will be double the forecasted ones in the
following tables/pages. However, the higher expenses which are forecast in
marketing and staff areas will make the business much busier and successful.
FY2021 FY2022 FY2023
Revenue $328,820 $342,940 $357,770
Gross Margin % 67% 67% 67%
Net Profit $13,377 $17,533 $17,703
Net Profit / Sales 4% 5% 5%
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Financial charts and tables
For a new start-up business or small builder SBPA provides the following
populated tables. We analyse these carefully to make sure that there are no
major cashflow, profit and loss, start-up costs or errors. We do this by
comparing your business to nationally available benchmarks for thousands of
cafés to make sure wherever possible that you are not spending too little or too
much on any particular area, and that your forecasts are realistic.
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Projected Profit and Loss with (monthly forecast revenue)
FY2021 FY2022 FY2023
Revenue $328,820 $342,940 $357,770
Direct Costs $108,581 $114,518 $118,851
Gross Margin $220,239 $228,422 $238,919
Gross Margin % 67% 67% 67%
Operating Expenses
Salaries & Wages $77,000 $92,880 $102,858
Employee Related Expenses $15,400 $18,576 $20,572
Rent $69,600 $69,600 $69,600
Utilities $6,050 $6,600 $6,600
Insurances $1,800 $1,700 $1,650
Certifications $150 $150 $150
Marketing / Ad Words / SEO $1,800 $1,800 $900
Flyers and e-Direct Mail $1,011 $750 $200
Signage / Menu / Photography $1,500
Equipment $15,000
Legal costs / lease / company name change
$850
Accounting fees $935 $1,020 $1,020
Equipment repair $500 $500 $500
Bank charges $200 $200 $200
Inventory $1,800 $1,600 $1,550
Sundries - paper, straws, cloths $1,200 $900 $700
Outgoings inc waste $1,200 $1,200 $1,200
Total Operating Expenses $195,996 $197,476 $207,700
Operating Income $24,243 $30,946 $31,219
Interest Incurred
Depreciation and Amortization $2,667 $2,666 $2,667
Gain or Loss from Sale of Assets
Income Taxes $8,199 $10,746 $10,850
Total Expenses $315,443 $325,407 $340,067
Net Profit $13,377 $17,533 $17,703
Net Profit / Sales 4% 5% 5%
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Projected Balance Sheet
FY2021 FY2022 FY2023
Cash $33,932 $54,504 $75,267
Accounts Receivable $0 $0 $0
Inventory
Other Current Assets
Total Current Assets $33,932 $54,504 $75,267
Long-Term Assets $8,000 $8,000 $8,000
Accumulated Depreciation ($2,667) ($5,333) ($8,000)
Total Long-Term Assets $5,333 $2,667 $0
Total Assets $39,265 $57,170 $75,267
Accounts Payable $0 $0 $0
Income Taxes Payable $2,667 $2,687 $2,710
Sales Taxes Payable $8,221 $8,573 $8,944
Short-Term Debt
Prepaid Revenue
Total Current Liabilities $10,888 $11,260 $11,654
Long-Term Debt
Long-Term Liabilities
Total Liabilities $10,888 $11,260 $11,654
Paid-In Capital $15,000 $15,000 $15,000
Retained Earnings $13,377 $30,910
Earnings $13,377 $17,534 $17,703
Total Owner's Equity $28,377 $45,910 $63,613
Total Liabilities & Equity $39,265 $57,170 $75,267
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Projected Cash Flow Statement
FY2021 FY2022 FY2023
Net Cash Flow from Operations
Net Profit $13,377 $17,533 $17,703
Depreciation & Amortization $2,667 $2,667 $2,667
Change in Accounts Receivable $0 $0 $0
Change in Inventory
Change in Accounts Payable $0 $0 $0
Change in Income Tax Payable $2,667 $20 $23
Change in Sales Tax Payable $8,221 $352 $371
Change in Prepaid Revenue
Net Cash Flow from Operations $26,932 $20,572 $20,764
Investing & Financing
Assets Purchased or Sold ($8,000)
Net Cash from Investing ($8,000)
Investments Received $15,000
Dividends & Distributions
Change in Short-Term Debt
Change in Long-Term Debt
Net Cash from Financing $15,000
Cash at Beginning of Period $0 $33,932 $54,504
Net Change in Cash $33,932 $20,572 $20,764
Cash at End of Period $33,932 $54,504 $75,267
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Other charts and tables available
Break even
Cash flow with monthly detail
Profit and loss with monthly detail
Balance sheet with monthly detail
….Various financial reports.
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Appendices
Appendix A: About this Plan
Timeframe
Financial Year 2021 to 2023, Plan commences in <month> 2020.
The timeframe for this plan is 12 months firm with projections out to three years.
Abbreviations and terminology
These used as follows:
• Australian Bureau of Statistics (ABS)
• IBISWorld (IBIS)
• Financial Year 2021 (FY21)
• Search Engine Optimisation (SEO)
• Google My Business (GoogleMB)
• Marketing and Communications (MarComms)
• Average Selling Price (ASP)
Sources
• ABS for numbers of <enter industry>, household disposal income and population
demographics of the xxx and ABS Quick Stats
• Statista – Statista is a high-end subscription only global database that includes
data from multiple reputable sources, for subscribers only. Searches were done
for builders and construction in Australia, a revenue, growth, consumer trends in
shopping these types of businesses, inflationary pressures, consumer sentiment,
year on year, etc.
• ATO Costs and Margin Benchmarks.
• Google Searches.
• Euromonitor Consumer Trends Tracker.
• Google maps for competitors and Google for competitors’ websites.
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Appendix B: Consumer Trends
Sydney South East Growth Corridor
2020
• xxxxxx
• xxxx
2021
• xxxx
• xxxx
2022
• xxxx
• xxxx
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Appendix C: Data on Statistical Information
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Appendix D –Benchmarks