green holmes consultants llc. a. austin holmes (904) 318 2309...
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Green Holmes Consultants LLC. A. Austin Holmes (904) 318 2309 4166 Shadow Creek Circle Oviedo, FL 32765
Executive Summary
An industry growing by billions of dollars every year in a less than perfect economy should get a
lot of attention, and it has. Even the president wants in on this gargantuan field of commerce. So
much attention focused on the industry and everyone would sure want to get into that field. We
have another true statement. Everyone doing so is not doing so for the right reasons. They want
to help the earth, make it better for our children and our children‟s children. Others look upon a
vast world of technology to conquer. Both these reasons are good; there are many more just like
them. The real reason to get into the green industry however, is exactly that, it nothing but green.
Cold hard cash in a developing industry is the offer here. Safe and predictable is what we are
aiming for though, because it‟s all about applying models that have been successfully used in the
past for other industries here. This is the idea to take a highly segmented industry, simplify it for
the consumer, and reap the rewards.
By providing green products and services to all levels of homeowners using subcontractors for
the majority of work the venture is far less capital intensive and infinitely more efficient. The
purpose of the company again is to make money. With this green industry booming we have the
opportunity to do that. People want green, and we want to provide them with it. There is a real
need here with the transition of the U.S. in all realms to a more eco-friendly, sustainable building
attitude. This is made apparent by recent political events, social awareness of the issues surround
green living, the vast technological improvement in recent years, and certainly by the vast
economic movement to a greener purchase. The variety of services we can offer is a huge
advantage over typical contractors in that if we can‟t do it we can find one of our affiliate
subcontractors who can, and we still get paid for the work. Everyone in this industry is thick;
they are all stuck in the past and try to compete almost solely on price. This makes it that much
easier to steal market share and become a powerhouse firm who provides the best service and
quality of anyone in the craft. By providing a better quality product and the matching service to
go along with it, the customer is left happy and so are we, all the way to the bank. Of the key
elements of our marketing conspiracy the most important and hardest to achieve is the creation
of a true brand. This is what the company will need to move off the plateau of mediocrity and
into the big leagues. Much of the competition in the industry either focuses on commercial
accounts or too narrow of a specialty leaving plenty of room for the hard working new guy.
Above all we strive to work hard and serve our clients, the trust necessary to do business in this
environment is critical and once we get it we don‟t plan on losing it.
The management team is a group of young, energetic, and well connected group students of the
business world. The other half is old experiences mentors. Together the core members will have
few gaps in talents, skills, and knowledge. The company has almost limitless potential with a far
off aim of becoming an umbrella corporation for of the entire green industry. Short term sales are
in the single digit millions, which comes with a profit percentage of over 15 percent.
Breakeven is set to occur around month six after a positive cash flow in month four. Startup costs
for the purposed venture are under $100,000 and produce exponential results in months. Staffing,
an office and marketing are the first steps and everything else is covered by the great cash flow
model. The plan is to go big or go home, that is to say take the company global or retire young,
wealthy, and free.
This is the Table of Contents
Company Overview Product and Service Description
Industry and Marketplace Analysis
Marketing Plan
Operations Plan
Development Plan
Management
Financial Plan
Critical Risks
Offering
References
Appendices
Company Overview Introduction
Green Holmes is somewhat of a legacy business evolving from my father‟s background as a
successful green architect. As he one of my major inspirations, I wanted to continue in his eco-
friendly footsteps. This has led me to the formation of Green Holmes LLC. The company is
wholly owned by me, Austin Holmes, at this point in time.
Vision The vision which has been cast for this company is the movement of the American housing
sector into a planet conscious state of mind. This is to say we want to update the current housing
of the US to the standards that should be expected of a society like ours. This helps solve not
only current stress on our resources but moves toward providing additional and better resources
in the future for those generations. As society advances here and abroad the bigger picture is to
move the entire world in the same direction. Worldwide company presence is the way to
accomplish that goal. We live and prosper by green and that what we intend to perfect.
Mission Statement The quality of our people and our product is the example of driving force this country needs to
move forward.
Business Model The basic value creation for our customers is in the consolidation and presentation of green
products and services we offer. Each individualized recommendation is provided to the customer
based on the best green construction practices available put together by the best consultants
around. Our customers will be mostly private homeowners but will also include other house
ownership entities. Billing will be job specific, based on the work done to the home. Though the
initial network of subcontractors limits the geographic area of business, a gradual move to
national and then international market is planned. Much of the revenue for the business is the
result of percentages of services and products delivered to the consumer. These percentages are
negotiated with the sub-contractors. The low overhead of the industry creates a large gross
margin and will enable the company to breakeven and become profitable within the first few
months to a year. The sales are based on a high level of marketing and advertising culminating
with personal selling.
Value Proposition The mass movement of green has been taken up by the US as a country and is aimed at creating a
healthier more sustainable environment. This can affect the individual in ways such as reduced
power usage and cost, healthier quality of living and a pride in taking care of the planet. We at
Green Holmes seek to provide this advantageous lifestyle to our clients. Competitive Advantage Our major step up on the competition is there is not much, for the more long term we are
dedicated to have the finest customer service in the industry with an air of exclusiveness provided to our clients. Another unique characteristic of our operation is the simplicity with
which we convey our message; if it‟s simple you can get it 100% right.
Product and Service Plan Products and Services
We are Green Holmes Consultants LLC. We transform client houses into green homes. We
evaluate their home based on LEED standards. Using that evaluation we recommend products
and services to make the property greener. These are some of the green options we offer to
homeowners. Most of the work itself is subcontracted but we manage all the transactions and
client relations.
• Home efficiency analysis
• Solar and alternative power
• Green technology and appliances
• Organic gardening
• Greenhouses
• Snow melting
• Green interiors
• Environmental impact accounting
• Composting
• Green cleaning
• Insulation
• Water conservation and reclamation
• Windows, walls, doors and floors
• HVAC
• Fireplaces
• Land usage optimization
• Outdoor environments
• Gutters
• Roofing
• Electrical
• Painting
• Yard Maintenance
• Siding
• Automobile suggestions
With this wide variety of products and services we have many opportunities to get in the door
with potential customers. This allows us to up sell other products and increase sales. While there
are many firms who offer one or a few of these products we will be in a class by ourselves when
it comes to our offerings. Put alongside our superior customer service attitude we will become a
true authority in the industry.
SWOT Analysis
Features
Strengths
Customer convenience
Product knowledge
Superior service
Technological flexibility
Opportunities
Gaps exist in the supply
Awareness, demand of green
Florida market underserved
Current government incentives
Weaknesses
Limited brand awareness
Starting capital
Management experience
Subcontractor contracts
Threats
Lack of customers with economy
Low entry barriers
Large competitors infrastructure
Variety of substitutes available
While this world gets put under further ecological stress the people on it and especially in this
nation, as a world leader, it is necessary to take measures to create sustainable systems and repair
the damage that has been done. Many businesses and people are moving towards this. They are
becoming green. Each product and service we offer helps them accomplish that. We make it
easier for them to get it too. Green Holmes provides a one stop shop for all green services. By
making it convenient for clients to go green, we take away one of the primary reasons not to
become eco-friendly. This also gives us an opportunity to show them what it costs and how it can
benefit them. By presenting all this in a friendly service oriented style, we also create a unique
style of presentation in the industry. It is easiest to consider it as a blue label business in an
industry of well bottles.
Strategy As time goes on the complete offering of green service will be expanded to include new
technologies and requested services. All through this we will maintain the excellence in customer
service. This service will be made known through all of our advertising and will help build us
into a national brand a feat few construction related firms have accomplished. As the company
grows we will transition into other areas of the green industry through acquisitions and mergers,
diversifying the company and creating additional opportunities.
Benefits Here are some benefits given by the US Green Building Counsel. First, affordable green homes
provide healthier and more comfortable living environments. People in green buildings have 40-
60 percent fewer incidents of colds, flu and asthma due to access to fresh air, better ventilation
systems and use of non-toxic paint and furniture. Green homes also result in significant cost
savings.
Second, investing in green housing also makes good business sense. Studies show that green
design, construction and operations can be achieved without any additional upfront costs and can
result in lifecycle savings of 20 percent of the total construction cost. In addition, use of durable,
sustainable materials in construction can further decrease operating and maintenance costs.
Third, buildings account for over 40 percent of total energy consumption and produce 39 percent
of total carbon dioxide emissions. Green homes reduce the environmental impact of residential
units through sustainable design and construction and use of energy- and resource-efficient
materials. Green homes built in green communities also reduce sprawl and the resulting
environmental impact by providing easier access to shopping, jobs, recreation and public
transportation. We believe that affordable green housing is not just an environmental issue but a
social imperative.
True sustainability promotes the triple bottom line: economic, environmental and social
prosperity. These benefits are being widely taught and promoted by many different parties here
in the US. By providing these to consumers Green Holmes will help bring about the positive
results mentioned about.
Industry Development
The green industry is less recent than most of the general public would believe it to be. With a
fairly established background the industry has plenty to build on and it‟s doing exactly that.
Great technological and growth benchmarks are being achieved. The business entities truly
taking advantage of this are still limited however. Many obstacles remain until we reach true
sustainability but Green Holmes is ready to join the fight.
Market and Industry Analysis Market Analysis
The green industry market involves a huge number of sub-markets, one of which is the multi-
billion dollar housing market. With recent house starts and RMI numbers up it is a positive sign
for the industry. The green building initiatives have been a major contributor to those numbers
rising. Other green industry sub-categories have been growing well additionally. The public
awareness of „a greener way to live‟ has exploded over the past decade due to everything from
media attention to catastrophic natural disasters. Coming along with the rapid technological
advancements in the industry politicians have been using the green platform in elections. Social
acceptance has gone up significantly even if price has not noticeably dropped. The high demand
and low supply are major factors that add to the worries of many knowing the solution is needed
now. The opportunity itself comes from concentrating efforts on profitable and impactful areas
of the industry, furthered by the support of the majority of the public. This call for green is
largely due the needs of future generations. They will surely need every advantage they can get
and we are providing them with many.
While the whole green market is exploding the specific sector we seek to target is that of the
housing sector. Any homeowner with sufficient resources and a desire for the improvement of
their surroundings is a candidate in this market and can be generalized by saying homeowners in
the lower-middle class and above demographic. This can include millionaire multiple house
homeowners down to owner of a shack in the country each has different wants from the green
technology available but both are nonetheless in the market. Any homeowner is in that market to
simplify it further. The most desired market sub-groups are the higher income, more
environmentally conscious divisions. Both large home production businesses and the single
homeowner are desirable candidates. Region of the country does matter somewhat. California is
a prime area for green construction while the southeast is somewhat lacking. Certain areas can
use some technology while different areas must use other technology and practices. Green
conscious people join a group that has both positive and negative connotations. Negatively they
include tags like „hippie‟ and unsophisticated. On the positive side is earth-friendly and healthy.
Further green can be thought of as more expensive, when in reality in isn‟t all costs included.
For Green Holmes the best point of entry into the market is to focus on wealthier homeowners in
the urban areas of Orlando area who have aging homes that are in need of renovation or will
soon be there. This particular group is still able to afford the key projects we look to do and have
a growing need for it as well. They are also a group which wants to improve their property
values for the upcoming swing from a buyer‟s to a seller‟s market. While the commercial side of
the industry is well served in Orlando the housing division is not. As a company expands it is
almost forced to go into both sides of the segment, which can result in better economies of scale
but also creates more complexity for the business and its owners.
Industry Analysis
Many of the competitors compete a „professional‟ level where they the company knows all and
the customer knows nothing, which is too often the case. This is a point of sale for Green Holmes
as we help to educate the client and respect them as an equal party. The industry is organized in
small groups and companies mostly with specialized skills and project abilities. Few companies
in the industry offer extensive catalogs of products and services. Most of the bigger firms are
specialized as well. The customer delivery process is that of estimate, some work, an increase in
cost, more work, and then billing with no additional support. Multiple element projects require
the customer to hire new firms to complete the work because of the specialization of the different
companies. This lack of integration creates headaches and frustration on behalf of the customer.
On the supply end there are many small and few large merchants. A streamlining of this process
for all required materials for a house would greatly increase efficiency. A breakdown of the
value chain shows disjoined steps from each level to the next creating inefficiency all along. The
perception by each company that they are the best in their niche of the industry has led to a lack
of overall vision and lack of innovation for the industry as a whole. From design to completion
there is room for improvement.
The competition for jobs in the industry is fierce with many competitors considered, a few
picked to evaluate and give an estimate to the customer, and then one to do the work,
occasionally followed by another to redo the job because it was botched the first time. The main
competition is on price and credentials of the contractor, as well as the simple matter of how
trustworthy the contractor appears to be to the customer. Rivalries may be formed at different
levels of competition with small firms competing for individual projects and big firms fighting
over territory or market share. New competition is mostly ignored with the reasoning that the
more experienced firm will get the job over an equal but less experienced one. Customers enjoy
the market competition because it drives prices down, but they can suffer equally from
diminished quality of work. With such a fragmented market it is hard to state who the power
houses are, but they tend to move from small projects to large ones as the size of the firm grows.
A firm looking to acquire and standardize other firms and their assets could capitalize extremely
well.
The market is traditionally a simple market to enter because there are projects for every level of
business. One man weekend shows can grab projects to supplement income and large
corporations and take over development of entire neighborhoods. Having an existing network of
clients is a barrier and must be built up over time in this industry. Acquiring supplier and
partnership agreements can be a daunting task as well. If the firm decides to purchase equipment
there is a high risk of technological turnover, yielding that equipment useless.
Prices are set largely by material and labor cost but the margins beyond that are set by the firm
based on how they see themselves on a quality continuum. For the green specific building
industry this is more flexible in the margins due to the lack of long-running history behind the
prices. Customers also have the ability to counter offer and reply that another firm quotes them a
lower price, in a similar manner to the auto industry. Costs again are the major price determinant
and can vary greatly with the different economies of scale and different suppliers. License rights
to new technology items can be pivotal in a firm‟s success. Supplier influence, outside of cutting
edge technology, is low however, because of the variety of sources. Opportunity
The opportunity in this market exists in the lack of service, quality and convenience provided to
the consumer. By focusing on these factors instead of just price it is feasible to take and maintain
significant market share and run a strong and profitable business. By focusing on the right
clientele in the beginning and by forming a good customer base it is easy to expand and in a
sense dominate the industry. This analysis also shows that American are looking for a better way
to improve their homes after the years of industry conformity and lack of innovation focused
towards what the customer wants. The green trend also lends itself as the ideal direction to go as
its fiscally sound, environmental friendly and social acceptable. The coordination of efforts of a
few of the right people can drastically change the industry. We will be the company to bring
those people together.
Marketing Plan Customer Research
With the mass marketing currently being done under green banner public awareness of
conservation and sustainability has never been hirer. This knowledge creates the pull for
customers to do what they are being told is the right thing to do. This pull is what Green Holmes
must utilize to capture its customer volume. This mass knowledge also works in our favor
because of the positive light being shed on the situation. The products themselves are revered
and desired, but not sought after. This stems from the lack of convenience to obtain the products
and the high first glance cost. This cost is largely cut down by the current government assistance
and over time return on investment. By removing the inconvenience we make the customers
willingness to purchase jump dramatically in a positive direction.
While green is the way to go, the lack of technical understanding by the community of what
green really involves is a blessing and a curse to us. It is great because it creates a knowledge
barrier to the do it yourselfers and other basic construction and renovation firms, an opportunity
we intend to exploit. On the other hand the lack of true understanding of what certain products or
services provide can limit consumer interest. America‟s buyers like to think of themselves as
educated but more often than not only one source of information is used as a basis for a buying
decision. We strive to be that source. If we aren‟t that source it can diminish sales, along with
any thinking along the lines of green being “hippie-like” which can be countered by the financial
proof of green being the better choice. The last major reason to not buy would be the lack of
capital to complete the project which could range from a few hundred to tens of thousands of
dollars.
Target Customer Strategy The basic demographic is a single or couple homeowner with combined income over $56,000.
Most requests come from the female if it is a couple. Color is much less important than income
and can be somewhat ignored. Race however can be targeted when the individuals are from
certain other parts of the world i.e. Western Europe. While older homeowners will typically have
a higher income they are less interested in change and may not be as responsive to upgrading
their homes and/or lifestyle. As the green industry as a whole expands it will be an easy sell to
those who work or have a close relationship with the industry due to their public image coming
even more into the picture. Both rural and city dwellers are equal candidates, albeit for different
reasons.
On the more life style based factors an eco-friendly mindset of a homeowner is an obvious
advantage because they already want what we offer. It is then merely finding them and providing
it to them. Most belief systems have no opinion of the industry but the general teaching to be
caring and considerate can be applied to bring clients in. Homeowners interested in general home
improvement are good converts. Any type of naturalist is also a target group. The social status of
the potential client is anywhere from the lower-middle class up. Most of the business will likely
come from above the middle class however. Another potential client group is that of businesses
involved in housing management or construction. Larger organizations will provide for larger
opportunities but any size organization is a good selection.
In the case of the private homeowners; if it is a single person that person is the primary decision
maker with potential input given by the financial institution. In the case of a couple most times
the woman is the initiator of the interaction with the couple making the final buying decision
together. For a business it can vary greatly from the CEO to just a mid-level manager making the
decision. Most influencing the decision in all three cases is the perceived value of the product to
the customer. If it is more valuable than all the opportunity cost then they are more likely to buy.
Another major factor is personal trust in our company to provide a good product in the timeline
we have set. As our service comes to the owner‟s home no travel is required by them and is a
major upside for the customer. We also back up our work with a guarantee providing another
reason to select Green Holmes as their green service provider.
The sales cycle is fairly short making it important to build up the customers trust very quickly.
Moving from the initial contact through the start of the project(s) we must build trust and come
to know exactly what the customer wants for their home. The option for customers to call or
contact us over the web has been made available. Except the only way to get a true perspective
of what is need is to inspect the home, giving an estimate upon leaving the site. Although most
projects are single projects there are maintenance and repeat projects, but most important are the
referrals received from clients. Customers are billed for work done after a written estimate is
signed at the beginning of the project. Payment can be made by the customer upon completion of
the project or up to 30 days later. After the 30 days fees will be assessed.
Much of the time prospective customers will turn to the internet and friends and family in search
of information in regards to home improvement. Making sure we build good relationships with
clients and the community is vital to the word of mouth referrals. Having a strong internet
presence is the crucial element in the effort to capture the online prospects. When the customer
finds resources on the internet, if they find them at all, they are often confused or frustrated with
the complexity of the experience, information, products, or simply can‟t find all they wanted.
This low level of service in the industry is irksome to today‟s consumer. They are looking for the
easy way out, that‟s our role as a complete green service provider. This along with our service
compels clients to decide to buy. The client, beyond that, must be confident in the quality of the
product and the validity of its value to want to buy. The wonderful thing about our evaluation
process is it clearly explains exactly what we can offer the customer and they only get our
perspective for that meeting allowing us to be the first source which brings automatic credibility
with it. The customer gets further knowledge from us during and after the project for how to use
their product to the best of its abilities. Each product and service addresses a particular need of
our customers and the more services they acquire the greener they will see their lives become.
While some products have a more immediate return all have a greater or equal benefit of the cost
associated. Luckily there is little brand loyalty in the industry but building a word of mouth
brand can be greatly beneficial. Value Proposition
1. This proposition is being created for US homeowners.
2. The most valuable element to the market is quality of work and quality personal experience.
3. Green home improvement and sustainability products and services are being offered.
4. The market will benefit economically, environmentally and socially from the products and
services.
5. The market has the option of non-eco-friendly products to care out the tasks with.
6. The green industry is growing by billions per year.
Channel Strategy
Our products and services are delivered to the clients‟ homes after an initial evaluation
appointment. The delivery is completed by subcontractors under agreement with our company.
Reaching of customers is somewhat more varied. We use multiple sources to make first contact with our customers through advertising. Appointment setting is done either through our website
or by phone. Payment can be made by either of these or mail and direct payment to one of our
inspectors upon the completion of the project.
Positioning We are Green Holmes Consultants LLC. We transform your house into a green home. We
evaluate your home based on LEED standards and based on that evaluation, recommend
products and services to make your home greener. We strive to serve all your green needs and
want you to think, live and be green.
By taking this approach in talking to our clients we seek to focus the attention of the client onto
nothing but ourselves. This is to keep the client from even thinking about there being another
option. We have so much good that it‟s hard to pick up on the negative. This goes along with our
brand recognition strategy. Another approach is building community awareness by partnering
with local hardware stores for community teaching sessions about green building. We will set up
displays in the store to promote their products our company and eco-preservation.
Branding Strategy
The general public identifies Green Holmes initially by its name. Green represents the movement
to eco-friendly living. Holmes represents the creation of a home. Together they project the
picture of a better life. The overall feel of the company is that of a green structured lifestyle. This
comes through in the name, logo, website and general business marketing materials. It all lets the
customer know Green Holmes can be relied upon. One of luxury service and attention should be
the experience associated with the brand and the brand itself should be all around as a constant
reminder of the excellence that is Green Holmes. The expectation that everything will go right
should be the expectation of the customer when dealing with our company. Our offices, once we
make it to the level where it is necessary to have prospects come to our premises as clients, will
be exquisite and would put most offices to shame in design and service. All employees will be
hired with customer service as the number one priority. The advertising will be classy and have
an air of exclusivity. Above all else the goal of all interactions with the consumer public will be
one of eco-friendliness and sustainability. After all that is the true basis of the business.
Pricing Strategy As the main contingent of our target audience is in the upper to middle classes a quality service
oriented average pricing strategy is appropriate because it is the most common and effective
strategy this group sees. While not being the lowest price option will lose us some customers it
will be a much smaller number than from poor quality work and service would yield. Our
premium service is an intangible and does not affect the price we need to charge giving us an
enormous advantage. This pricing strategy has elements from value pricing and is based on cost
plus markup. A standard markup is 15 percent but can vary greatly depending on the product.
The 15 percent is also the difference between the total price and the subcontractor‟s percentage
but again can vary based on the project. The basic evaluation appointment fee will be $100.
Prices and services are job specific and cannot be accurately quoted but can range from a few
hundred to several thousand dollars. As technology changes current technology will likely
decrease in price, however the new tech will likely be more than the original price. Our strategy
creates prices that are mostly in the middle of the pack. With added government incentives on
certain products the affordability to customers is well within feasible.
Internet Strategy A major part of our marketing and advertising is through an internet presence. The first is
through our top notch website. It is crucial for it to be simple to navigate, informative, and easy
to find. The second internet resource is specifically targeted advertising drawing in prospective
clients, accomplished through means such as search engine optimization, email list generation
(direct response) and industry specific websites. The last major promotional tool is the use of
affiliate marketing through other companies, similar to the hardware stores concept, but online.
The first two years are crucial in the build-up of a true online presence. The website creation and
maintenance will cost less than one hundred per year due to the fact that the management team
has the skills to build and run the site. The advertising and marketing will be funded with 10
percent of sales after subcontractor expenses.
Communication Strategy
From the first contact with the client up to the evaluation all communication will be focused on
teaching them about how great our company is that we are what they need. This involves gaining
their trust and explaining what we do. To make this first contact we will advertise on radio and
television stations based on our target audiences preferences. Additional contacts will be made
through word of mouth, our internet resources and print advertising. Once these contacts are
made our sales staff will contact the prospect and attempt to set an appointment for an
evaluation. Once enough data is available, we will look at patterns to determine how many
attempts should be made to set the appointment.
At the evaluation the inspector has the job of sealing the deal on the sale. They take the client
from what green is to why they should go green and what it will do for them. This personal
selling is a skill and will be selected in the hiring process.
Being involved in the community is a key part of our marketing and public relations
management plan. Participation in green events and work days in the community as well as
community service will be on the company‟s agenda always. Additionally we will make
ourselves available at trade shows and other events of similar nature to provide a public
presence.
Each of the marketing and advertising strategies, except the inspector evaluations, falls within
the budget of 10 percent of sales after subcontractor expenses. The inspector evaluation is
covered by the $100 charged for each appointment. The cost is also offset by the commission
paid to the inspector for successful sales.
Sales Strategy
Initial contact with the consumer is made by television, radio, phone, and internet campaigns.
When interest is shown we set up an appointment over the phone for one of our certified
inspectors to go and evaluate the client‟s house, there is the $100 fee for this appraisal and free
advice of how they can be greener is offered during the appointment to justify the expense for
non-purchasing clients. While there they look at the options of how to improve the home and the
inspector gives the client a written estimate of products and services they are interested in. Upon
selection a project start date is selected and the sale is made. To do all this inspection personnel
must be LEED certified and trained by the company for the evaluation. The commission for the
sales force and inspector will be a percentage (2%) of work completed. All training and support
necessary will be provided to the sales and support staff.
Revenue Model
Year 2011 2012 2013 2014 2015
Sales $500,000 $600,000 $800,000 $950,000 $1,150,000
EBIT $39,000 $58,000 $50,000 $130,000 $48,000
Figure A: This shows five years of projected sales. Additional data is included in the financial
section of the business plan for the firm.
Project size is our primary revenue drive and this is growing over the entire industry. With a
growing market it in harder to increase market share but it is easier to grow the business as a
whole. Ideally our average project cost to the customer would be $8217 or above.
Operations Plan
Introduction
Our basic delivery service for our products and services is through a personal evaluation system.
This is done by one of our inspectors at clients houses. The evaluation is a top to bottom review
of the property and the practices of the people living there. During this process the agent informs
the client of all the available options we provide to make the house more eco-friendly and
sustainable. After the available options and recommendations are provided the homeowner
chooses what they would like to have done. A written estimate is given, then a start date is set
and work scheduled to begin on that date. The service is outsourced to one of the partner
companies and the start work on the date decided. On the start date the evaluator is present to
oversee the start of the project, he does not attend if it is a recurring service. He also attends at
the completion of work and either collects payment or presents a bill to the client.
This evaluation appointment does not come out of nowhere. The process to get to the main
evaluation comes from first contact with the consumer via web or phone communication. Our
marketing and sales staff runs various advertisements over various media to create a contact list
and then our sales staff contacts these and sets an evaluation appointment.
Operations Strategy At every step along the process all effort is put forward to making the customer feel confident in
the company and to get the best service possible. This customer service based approach is our
advantage on the competition and adds tremendous value to the customers as well as the local
community. Cost will not be our main consideration when providing service to our clients but it
will be a major factor. Service, completing projects on schedule, and giving the customer the
product they want will be the main considerations. Just as Augusta National is known for its
leadership in grounds, we will strive to have top notch customer service. Scope of Operations
All operations except most of the actual construction, renovation and home services will be in-
house. This includes accounting, advertising, marketing, customer service, tech support, web
services and home evaluation. In the beginning this makes the best sense for the business
because having everything closely linked reduces lag time and makes decisions easier to make,
without having to consult other companies.
The outsourced work falls largely under the category of sub-contracted construction tasks. This
work is subcontracted based on a percentage of the whole sale. Already having an expert as the
inspector it reduces the chance for lag time with proper communication with the subcontractor in
relation to project start dates. This is mostly because of the time gap between the evaluation and
start date gives enough time for exchange. Costs and Expenditures
Little capital investment is required as most of the tangible business materials will be leased.
This can have a negative impact of cash flow but is safer with the projected fast growth and
potential office expansion in the near future. Since little other than payroll is necessary to pay
before the reception of project income cash flow should rarely be a problem; with the delay for
paying subcontractors we have a great stabilizer for cash flows. Advertising cost will be one of
the major expenditures and must be effectively implemented to drive business to company. Sales
persons and administrative staff will receive a base salary of $30,000 and inspectors and
management staff will start at $40,000. Ten people are estimated to max out at around $1 million
in company revenue after subcontractor expenses. This translates to around $7 million in total
sales. The sales force is primarily entry level skill work. The ideal production load is three plus
major projects per inspector per week. If there are five sales force people per inspector that is
around 15 appointments per week per team. A leased office with space to hold fifteen is the first
size then moving into a larger office facility as business grows. Phones and computers as well as
all office equipment will be leased. The sales staff will be on a regular 9am-5pm schedule with
additional personnel having block options for their time. Vehicles used by inspectors will be
their personal vehicles and they will be reimbursed for mileage. Evaluations will be done using
portable computers paid for by the company and will have software for assessment and
presentation of the proposal. The primary bottleneck in all this will be man power as the
company grows, both on the sales team side and the inspector side. As the business moves into
in-house contracting work it will become necessary to keep inventory and hire additional
workers for the project tasks.
Development Plan Roadmap
Here is a basic step by step procession of the business in the first few years.
1. Fundraise; getting commitments of 150% of necessary starting capital from investors.
2. Find partner and create contacts for assistance with the business.
3. Make arrangements with subcontractors for the completion of projects.
4. Make subcontractor payment agreements for the first year and provisions for subsequent
years.
5. Secure investments for the first 6 months of operations. This capital will be used to pay for
the lease of the location, office and inspector equipment, advertising, and salaries for the
employees.
6. Go through licensing, permitting, and all other government regulatory actions.
7. Obtain all copyrights, trademarks, and patents needed.
8. Secure an office location.
9. Hire all additional necessary personnel.
10. Make office modifications. Move additional equipment and furniture into the building.
11. Start local marketing to create pull for Green Holmes evaluation appointments.
12. Opening day. Begin day-to-day operations.
13. Create initial report of business after first sales to find any changes needed.
14. Continue marketing efforts towards expansion of sales.
15. Start or support local community green awareness programs.
16. Start advertising campaigns and step up marketing efforts.
17. Pay off any remaining debt and buy out equity investors.
18. Begin transitioning from referrals to in-house work via asset acquisition.
19. Secure additional subcontractors in new areas of the state.
20. Expand staff to support the needs of exponential growth.
21. Secure out of state subcontractors. Work towards brand recognition.
22. Open branch offices to service all states and overseas.
23. Start ad campaigns to take national market share.
24. Create connections in political realm to advance company standing.
25. Sponsor events such as sporting events and national holiday celebrations to increase brand
recognition.
Development Strategy The first major milestone for success is the founding and acquiring advisors for the business.
This leads into the stage of hiring the needed personnel. Before that however is putting together
contracts with the key subcontractors. After all this is accomplished the next main objective is
creating buzz and a spread of demand for our services both from clients and subcontractors.
Financially the biggest step is the paying off of any debt and acquisition of any outstanding
equity investments. The last major stage of success is the transition from using subcontractors to
the internalization of work to increase margins and quality control on the projects.
Management Plan Management Recruitment
The key to the success of this company is its people and all importance will be placed on that as
this company is built up. Although as a manger I am young and somewhat inexperienced, I will
mitigate this by hiring individuals with the relevant experience and by recruiting strong board
members and advisors. As the management team is incomplete at this point it is a main focus to
find individuals who fit the requirements of the business in addition to the individual jobs they
will be performing. Key individuals will be offered the option to buy into the company
ownership or simply become an employee of the firm. All new hires will be considered an owner
though and five percent of the company ownership will remain available as an employee
incentive program. At the end of each year employees will vote on how much of their portion of
retaining earning will be distributed. This will create an atmosphere of ownership among
employees and generate better performance throughout all levels of the organization.
Management Structure
Structurally the company is divided into three parts. The first is the administrative personnel:
accounting and financial director, administrative assistant and appointment coordinator,
subcontractor and project managing director, and advertising and marketing director. The second
is the sales force lead by the sales director with all other sales persons reporting to the director.
The last category of personnel is the evaluation inspectors.
The tasks assigned to the accounting and financial director include billing, accounts
management, managerial accounting duties and all other financial matters. The administrative
assistant and appointment coordinator serves as a secretary to the other administrative staff and
in also in charge of the evaluation appointment coordination between the sales team, the
subcontractor director and the inspectors. Next the subcontractor and project managing director
is a hybrid position that works with subcontractor as their contact within the company, as well as
conducting all operations for in-house project work, but is also one of the certified inspectors.
Last the marketing and advertising director oversees the community outreach efforts, ad/pr,
marketing design and implementation, and technical issues around the office. These positions are
overseen by me in a CEO like capacity.
The sales force takes any form of customer contact with the company and attempts to create an
evaluation appointment from it scheduling it through the administrative assistant. The sales
director takes part in these actions but spends much of any available time teaching and managing
the other members of the team.
I am one of the inspectors and have acquired LEED certification and have extensive knowledge
of green home design and practices related to sustainability, this knowledge is require of all
inspectors. Along with the other inspectors it is my job to evaluate a client‟s house based on a set
of criteria of how to make the structure and surrounding land greener. Then selling the client on
all the services that are appropriate for that property is the next step. For this position knowledge
of green building and salesmanship are required.
Organization Chart
Ownership Structure
The ownership structure of the company is going to be divided among the partners at 75 percent,
equity investors at 20 percent, and the employees at 5 percent. All this is under a limited liability
company structure. Corporate Social Responsibility The business process itself helps the community but additional community support through
donations and community service will be promoted. Extra resources of the company will also be
donated to the community when feasible. All those involved as a stakeholder are responsible to
do their part but as a company it is a priority for us to create the best possible outcome for
everyone.
Boards
We will have a Board of Advisors and it will be comprised of experts in the industry, experts in
business management, and experts in experts in financial and legal matters. Additionally
investors will be included in the process. One of our main industry experts is Christopher
Holmes, LEED AP and Architect, of The Haskell Company. The resource of the UCF School of
Business is available in the form of professors of entrepreneurship, including Cameron Ford,
Michael O‟Donnell and Leon Schjoedt. Last our bank (TBD) offers professional account
managers who will be sought after for their financial counsel. Counsel in legal matters will be
received from the prestigious law firm of (TDB).
Austin Holmes
Inspector and Owner
Marketing and Advertising
Director
Accouting and Financing Director
Subcontractor Relations and
Project Manager
Sales Director
Sales Person A Sales Person B
Sales Person C Sales Person D
Administrative Assistant and Appointments
Financial Plan Key Drivers
The two main key financial drivers are customer sales and subcontractor gross margins. The
sales are driven by the number of potential clients talked to (awarded projects) and project size.
It is easy to get numbers but the choice of projects is totally up to the customer. This revenue is
the lifeblood of the business and cannot be a taken as a signal to relax when it is high. The good
cash flows of the business are created by this constant stream of revenue. The other good cash
flow contributor is the percentage difference between the subcontracts and Green Holmes. There
are two ways to achieve the desired 15 percent or higher split: place markups on the sale or
negotiate with the subcontractor to cut their margins for the benefit of our services. Most of the
time is will be a combination of the two elements working together to produce the desired returns
the company needs to survive. While employees are the companies highest cost it is not major
cost driver that would be suggested by that relationship. In fact the relationship between number
of employees and revenue is fairly static and therefore is somewhat irrelevant. Another
secondary cost driver in advertising but this is discounted but the tying of funding for it directly
to sales. Cash flow can be impacted more directly by advertising because of the lag time from
message to purchase.
Funding Requirements
The initial startup requirements as far as funding are concerned is $80,000. This will leave a
$23,000+ cushion after all expenses are covered. Many government programs assist in the
funding of green businesses. Microloans, Community Development Financial Institutions
(CDFIs), Microenterprise Development Organizations (MDOs), Peer-to-Peer Lending (up to
$25,000), New Micro-lenders ($50,000 - $100,000), Green Banks (up to $3 million),
Government-Backed Loans, The U.S. Small Business Administration Guaranteed Loan
Programs, U.S. Department of Energy (DOE) Loan Guarantee program, Federal Grants, Federal
Small Business Innovation Grants, State Renewable Energy and Energy-Efficiency Grants, Tax
Incentives, and Rebates, Weatherization Assistance Program, Community and Economic
Development Loans and Grants, and Fellowships, Competitions and Foundation Awards are a
short list of the programs to help green entrepreneurs start and run their businesses. Any
additional amount of the $80,000 not covered with these resources will be acquired via the
means below. Sources and Uses of Funds
Funding would be sought through private sources for a total of $80,000. It will be split between
equity and loan based commitments. Equity will not make up more than half the sum and up to
20 percent ownership is available for $40,000. The rest will be a 15 percent compounding load to
be paid off within two years. Friends and acquaintances will be approached first then the pool
will open up to other willing investors. All funds will be delivered up front. These funds will be
used for startup costs and day-to-day operations in the first three to four months of business.
After which the business will have positive cash flow. An office will be secured, key hires made,
and a marketing presence will begin. Any additional capital beyond these will be a part of
working capital.
Sources: Equity $40,000
Investor debt $40,000
$80,000
Uses: Losses in first
three months $56,783
Working Capital $23,217
$80,000
Note: Losses in the first months are due to office set up and hiring time in addition to the
completion of the first sales cycle.
Risks
The growing state of the market can create a lot of competition from expansion of both existing
companies and start-ups. This is overcome when you‟re the company people know and prefer to
go to. This is accomplished through positive reputation building. Advertising is the way to
accomplish this whether it is by word of mouth or other means. The other major risk is directly
related to this and it is a lack of customers. More customers are sure to come with current market
conditions but it is imperative to capture that volume. Luckily the sales cycle can be fairly short
and reduces the time lost if a client backs out or falls through. While we are choosing not to
compete on price directly it is a risk that we take on that we will be outbid. We just have to have
such superior quality and service that it is negated. While the window for the sale in almost
solely during the evaluation visit it is through personal selling that the sale comes to fruition.
This is good because the only challenge comes in finding the right personnel.
Another risk comes because of the necessity for partnerships with subcontractors specializing in
green practices. While the availability of such resources is somewhat available it is necessary to
develop and retain a positive identity in the community. This should be easy to do as long as
good business practices are used. Our job is to coordinate the efforts of all the subcontractors and
this can sometimes be a challenge but can be handled by proper planning of projects. To avoid
low quality of subcontractor work references will be require of workers. Some projects will
require permitting by the government and slow permitting can kill a project, so relations with
local officials must be firm and friendly. While the state of the housing industry is down this
branch of it improves the value of the house, which is something people are desperate to obtain.
Offering The high immediate returns offered through this business model alone present enough reason to
invest. The return the investor will see is through either equity, for up to half of the initial capital,
or a return of 15 percent yearly compound interest on the initial investment within the first two
years. You have the rights to the equity share for up to five years, which you can select to receive
the owned percentage of each year‟s earnings or leave them in the company, after which Green
Holmes reserves the right to purchase the percentage for book value. As a partial owner you
would have first right of refusal if the other owners decide to sell the company. The plan
however is to grow and operate the business indefinitely at this point in time.
By making your investment you can secure a 15 percent rate or an unknown potentially 100
percent plus interest rate through ownership. A jump from a value $40,000 to $47,800 is what is
currently projected for year one. That is equivalent to a 19.5 percent interest rate; not to mention
the projected 24 percent growth rate on retained earnings and initial capital for year two or a 29
percent rate of interest. Whether through loan or equity based returns, you will receive a timely
higher than market return on your money.
Appendices
Financial rewards More money to spend on fun
Eco-friendliness Feel good about helping Earth
Quality products Knowledge it will last
Top notch service Desire to recommend service
Convenient delivery Higher customer satifaction
Features Table Benefits
Revenue forecasts prices, They go higher volume, It is pulled from a larger demand discounts, not given, prestige branding margins. find ways to increase them What happens over the 5 year period? Cost of Revenue – goes up materials costs, tech changes and price goes up labor costs, stay fairly level major indirect expenses. Diminish as tech increases What happens over the 5 year period? Lots but nothing major Margins: based on the first two sets of assumptions, what is the gross margin? Gradually shrinks with occasional decreases What happens over time? The business is sold or transitions Sales & Marketing expenses – go down per product sold as expanding numbers of people, goes way up key salaries, go way up and out customer acquisition costs, lower as we go commissions, stay on the same level exhibitions, become a special division of the company advertising and promotion. The best way to go Research & Development expenses – none directly involved until much later numbers of people, slowly rise key salaries, huge
K & B Homes
• Major home builder
• Doesn't specialize in green
Central FL Solar and Lighting
• Only does limited projects
• Small ammount of market penetration
EcoPreserve
• Limited resource focused on commercial
• Lack of community brand recognition
subcontract, no patent applications, very secret and expensive any major items. No just incremental advancements General & Administrative expenses – stay constant for equal levels in the organization numbers of people, go up on each level creating new levels key salaries, huge growth profit sharing, for a select few rent, own the building and next door legal, don’t get me started any major expenses. Everywhere on anything especially lawyers Extraordinary income and I wish it were so expenses not really insurance Tax rate is ridiculous until government is overthrown Capital Expenditures – some mostly equipment one piece of land a building prepare a list of fixed asset items (equipment, office and assessment vehicles, new generation hybrid trucks buildings, two or three and a beach house fixtures, one hundred thousand decorations, boring except for the million dollar art computers and the best I ever had software, etc.) and proprietary systems are spawned indicate how much each will cost. A lot What are the depreciation rate assumptions? Little to depreciate to no to worried Working Capital – bill CEO gates accounts receivable, all too often but strict and profitable inventory, JIT to keep it real smooth accounts payable. None we use cash money Funding – self amount and timing none and never of equity and debt, I have all the equity interest rate. Private is the only way
AUSTIN HOLMES
1081 KELLY CREEK CIR. OVIEDO, FL
32765 904 318 2309
OBJECTIVE
MY CURRENT CAREER GOAL IS TO ATTAIN A PART-TIME POSITION WITH A COMPANY THAT I CAN
CONVERT TO FULL-TIME UPON MY GRADUATION FROM THE UNIVERSITY OF CENTRAL FLORIDA.
EMPLOYMENT HISTORY
LICENSED INSURANCE AGENT
SUMMER 2008, U.G.A, ORLANDO FL
HIT ALL NEW AGENT MILESTONE ACHIEVEMENTS WHILE THERE.
WAS FIRST IN MY HIRE GROUP TO FINISH LICENSING PROCESS.
I PROSPECTED, BOOKED AN APPOINTMENT, SHOWED THE PRODUCT AND MADE THE SALE.
CUSTOMER SERVICE REPRESENTATIVE
FEB 2007-MAR 2009, CS FOOD SERVICE OF CENTRAL FLORIDA, ORLANDO FL
ONE OF THE TOP PERFORMERS ON DELIVERY TIME AT THE COMPANY.
ZERO NEGATIVE CUSTOMER FEEDBACK DURING WHOLE PERIOD OF EMPLOYMENT.
I TOOK, PROCESSED, PACKAGED, AND DELIVERED ORDERS WHILE COLLECTING PAYMENT.
MARKETING AND RECRUITMENT MANAGER
NOV 2006-PRESENT, WILLIAMS ENTERPRISES, ORLANDO FL
FOLLOW UP ON CUSTOMER SERVICE AND WEB RELATED BUSINESS.
RESPONSIBLE FOR POSITIVE PROMOTION AND SALE OF PRODUCTS AND SERVICES.
INDIVIDUALLY QUALIFYING PROSPECTIVE MANAGERS FOR EXPANSION PROJECTS.
OUTSIDE ATTENDANT
SUMMER 2006, HONOURS GOLF GROUP, ST AUGUSTINE FL
GREETED CUSTOMERS AND ASSISTED IN ROUND PREPARATION.
MAINTAINED OUTSIDE APPEARANCE AND UPKEEP OF EQUIPMENT.
FOLLOWED UP ON ANY CUSTOMER NEEDS DURING SERVICES PROVIDED.
EDUCATION
AUG 2006-DEC 2010 UNIV. OF CENTRAL FLORIDA, ORLANDO, FL
B.S.B.A. BUSINESS MANAGEMENT, ENTREPRENEURSHIP
MINOR IN GERMAN LANGUAGE
LEAD SCHOLAR
OTHER EXPERIENCE
EXTENSIVE COMPUTER SKILLS.
4.0 HS FINISHING GPA.
2006 STATE CHAMPION FOOTBALL PLAYER WITH THE NEASE PATHERS.
REFERENCES
TROY WILLIAMS – BUSINESS COACH AND MENTOR – 941 524 7857
SAUM SHARIFI – BUSINESS ASSOCIATE – 407 435 5571
MITCH LIENAU – LONG TIME PERSONAL FRIEND – 904 483 8201
OTHER REFERENCES AVAILABLE UPON REQUEST.