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:

[email protected]

Website:

www.kbr.com.au

ACN/ABN: 12345678

Prepared by: Small Business Plans by Assent

Website: www.smallbusinessplans.com.au

Date: 21 November 2020

http://www.smallbusinessplans.com.au/


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.


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>


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.


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.


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>


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.


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


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.


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.


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.


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.


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.


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

✓


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”.


Summary Charts – Revenue, Expenses/Costs, Profit

Financial Highlights by Year

Revenue by Month

Expenses by Month

Net Profit by Year


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%


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.


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%


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


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


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.


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.


Appendix B: Consumer Trends

Sydney South East Growth Corridor

2020

• xxxxxx

• xxxx

2021

• xxxx

• xxxx

2022

• xxxx

• xxxx


Appendix C: Data on Statistical Information


Appendix D –Benchmarks

korner builder and renovator

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