Care Build Construct Pty Ltd Business Plan

CARE Building and

Construction Pty Ltd

ABSTRACT

(Construction Accolades Residential Entrepreneurs) Building and Construction Pty Ltd Business Plan Document dated 13th Oct 2014

by JOEY LOH, FERNANDO FREITAS, ROLAND LING for BUIL1249 CONSTRUCTION ENTERPRISE

CARE Building and Construction Pty Ltd

Business Plan

Page 1

Table of Contents 1.0 Executive Summary ................................................................................................................ 2

1.1 Purpose of Business Plan .................................................................................................... 2

1.2 Description of Business ...................................................................................................... 2

1.3 Target Markets ................................................................................................................... 2

1.4 Market Positioning ............................................................................................................. 3

1.5 Strategic Direction.............................................................................................................. 3

1.6 Executive Management Team ............................................................................................ 3

1.7 Financial Factors ................................................................................................................ 4

1.8 Summary of Risk & Opportunities....................................................................................... 4

2.0 Business Description .............................................................................................................. 5

2.1 Registration Details ............................................................................................................ 5

2.2 Company History ................................................................................................................ 5

2.3 Company Legal Structure ................................................................................................... 6

2.4 Business Organization Chart ............................................................................................... 7

2.5 Vision Statement ................................................................................................................ 9

2.6 Mission Statement ............................................................................................................. 9

2.7 Key Business Objectives ..................................................................................................... 9

2.8 Roadmap ......................................................................................................................... 10

3.0 Products and Services .......................................................................................................... 11

4.0 Markets and Competition .................................................................................................... 12

5.0 Marketing ............................................................................................................................ 14

6.0 Financial Goals and Requirements ....................................................................................... 20

7.0 Positioned For Success ......................................................................................................... 21

APPENDIXES .................................................................................................................................... 22

APPENDIX A1 – CASH FLOW MODEL ........................................................................................ 22

APPENDIX B1 – PUBLIC LIABILITY INSURANCE POLICY............................................................... 22

APPENDIX B2 – BUSINESS INSURANCE POLICY.......................................................................... 22

CARE Building and Construction Pty Ltd

Business Plan

Page 2

1.0 Executive Summary

1.1 Purpose of Business Plan

In any successful business, having a well thought out business plan and strategy is key to

business survival and winning in the market. This documents aims to succinctly and

concisely lay out the game plan of our company named CARE (Construction Accolades of

Residential Entrepreneurs) Building and Construction Pty Ltd.

1.2 Description of Business

CARE Building and Construction Pty Ltd is a small medium business company established in

July 2014. Core business model is to be Melbourne’s top SMB firms that provide one stop

profession service provider for residential and commercial properties with a keen niche

specialisation of Victorian heritage home restoration works and services. Business core

values hinges on energy saving technology and environmental sustainability factors where

appropriate during the planning and design process with our clients and customers.

1.3 Target Markets

Target markets are centred on Melbourne inner city property owners, both residential and

commercial as well as Victorian home owners living in Melbourne City.

Key target market segments in the heart of Melbourne City as follows:

• Residential properties

• Commercial properties

• Modernising Victorian houses - niche capability

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1.4 Market Positioning

CARE Building and Construction Pty Ltd will be positioned as a diversified construction and

design company positioned for strong success and growth in the Melbourne property

market with limitless potential with strong trends of city living being prevalent with high

flyers and corporate professionals. More detailed market positioned is outlined in the later

section of this document at section 5.2

1.5 Strategic Direction

Key strategic direction of the company is to become one of Melbourne’s top Small and

Medium Construction Company in the next 3 to 5 years with AUD$100M annual revenue

achieved and high market capitalisation achieved. Being able to differentiate ourselves with

large pool of competitors is a key element of success and we believe in building a high

performing culture. Attracting and retaining top talents in the construction industry will

form a core component of our company’s strategic plans and future direction that is

ffocused on providing the best service to our customers and partners.

1.6 Executive Management Team

CARE Building and Construction Pty Ltd executive leadership team is backed with

international and a successful track record in the construction industry. With a strong

executive leadership team with clear business strategy that can be executed effectively as

well as having lean company structure with right people and right skillsets the company is

set up well move forward successfully.

Below are the executive management team: -

Ms Joey Y S Loh, CEO & Managing Director

Ms Loh is appointed as CEO brings a wealth of experience in leading marketing and

customer relationships in her various management roles at JTC Corporation for more than a

decade. She has been awarded and recognized as a winning innovator and forward leader in

the commercial property and construction industry in Singapore and Asia Pacific.

Mr Fernando M Freitas, Managing Director

Mr Fernando is appointed as VP of Sales and Operations. He has more than a decade of

successful track record in the industry and is reputed as a thought leader and upcoming

executive to watch in the construction industry in Asia Pacific region.

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Mr Roland Z L Ling, Managing Director

Mr Ling is appointed as Chief Financial Controller and company secretary. He currently sits

on the board of various start-up companies head quartered in Asia Pacific and Japan region,

as non executive advisor. He is a veteran who brings in a depth of financial management

experience with an impressive track record in leading start-up companies to navigate and

grow beyond the USD $1B mark.

1.7 Financial Factors

Business start-up capital: AUD $1.5M

Our financial forecast and outlook for the first quarter of business operation is AUD

$105,000 and net income of AUD $151,300 by end of year one.

High level Revenue goal and financial projections: with a target of YOY 40 % growth rate and

estimated return of investment estimated at 15-20% growth.

o Year 1: AUD $420,000

o Year 2: AUD $600,000

o Year 3: AUD $780,000

1.8 Summary of Risk & Opportunities

Market Slow down

Suppliers/subcontractors going out of business

Lack of good skilled workers/team

Risk

Diversified services . Be a preferred approved vendor for Melbourne city council and relevant government entities

Establish more than one supplier and contractor relationship to mitigate this risk.

Attract and retain top talents in construction industry with good career growth prospects and professional training

Opportunities

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2.0 Business Description

2.1 Registration Details

Business name: Construction Accolades Residential Entrepreneurs Building and

Construction Pty Ltd

Trading name(s): CARE Building and Construction Pty Ltd

Date registered: 1 July 2014

Location(s) registered: Victoria

Business structure: Company

ABN: 47396824574

Domain names: www.carebuildconstruct.com.au

Business location: 1 Queens Road Unit 201 St Kilda Road Towers Melbourne VIC 3004

2.2 Company History

CARE Building and Construction Pty Ltd is a small medium business company established in

July 2014. The company’s key value hinge on being a one stop profession service provider

for Victorian heritage home restoration, as well as restoring old residential and commercial

fit out in the Melbourne city area. Special care on ensuring environmental sustainability are

factored and integrated into the planning process of all projects undertaken.

We are starting the company to achieve our following goals:

Financial independence

Create jobs

Self achievement

Work-life balance

Sustainable development

Preserving heritage

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2.3 Company Legal Structure

CARE (Construction Accolades of Residential Entrepreneurs) Building and Construction Pty

Ltd is incorporated as a private limited company. We have decided to operate the business

in this structure for the following reasons:

liability for shareholders is limited ease of ownership transfer by sales of shares to another party shareholders (e.g. family members) can be employed by the company the company can trade anywhere in Australia favorable tax rate of 30% access to a wider capital and skills base

The shares distribution is illustrated in the following Figure 2.3.1: -

Figure 2.3.1

35%

35%

30%

CARE Building & Construction Pty Ltd Shares Distribution

Fernando Frietas

Joey Loh

Roland Ling

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2.4 Business Organization Chart

The following organisation chart Figure 2.4.1 shows our organization chart at start up phase.

Figure 2.4.1

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In 36 months, the company aims to bring house the supporting functions of Legal and

Human Resources as outlined below in Figure 2.4.2

Figure 2.4.2

There will be minimal changes planned to the organisational structure to ensure a good

stable organisation structure design on the onset where possible. There may some

reallocation and renaming of duties. Possible expansion with hiring a suitable candidate for

the fourth director position, or invite a suitable shareholder to head the Legal and Human

Resource Department. In addition, we will smaller functional teams managing the scope

under each director.

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2.5 Vision Statement

“Living the Melbourne Dream and restoring Our Victorian Heritage”

2.6 Mission Statement

CARE Building and construction Pty ltd aims to provide our Melbourne city dwellers a total

end to end, one stop residential property restoration service and specializes in modernizing

Victorian heritage homes.

2.7 Key Business Objectives

The company aims to grow its current portfolio to AUD $100M revenue and 10-20% margin

growth YOY, with a high appetite and aggressive strategic growth plan to establish itself as

one of Melbourne’s top SMB (Small Medium Business) construction firms for residential

property restoration in the next 3 to 5 years.

With its strategic focus on Victorian heritage residential restoration as a niche market in

Melbourne City, CARE Building and Construction Pty Ltd sets itself apart from key

competitors in the industry. While Melbourne’s inner city property scene is booming, there

is also a huge market of ageing properties, which equates to business opportunities for our

company.

Being a one stop service provider in this niche market will require the company to build key

and successful relationships as well as a wide network of suppliers, contractors and

potentially distributors and channel partners in the ANZ region. This will be one of the key

success factor and element that will form part of the company’s strategy and growth plans.

Environmental sustainability is core to the company’s vision to integrate into the solutions

provided to their customers and the need to balance cost effectiveness with energy

efficiency is paramount to the company’s promise and aim of providing high quality

solutions and services to their customers in all projects undertaken.

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2.8 Roadmap

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3.0 Products and Services

Our products and services offer our customers end to end solution on renovation works for

Melbourne City residential and commercial properties. From the initial consultation process

all the way through to the end of the project, our team will work with you to ensure you

achieve the desired results for your home. We can assist with: -

Design and construction services

House Build & Extensions

Interior Design

Project Management

Kitchen Specialists

Bathroom Specialists

Decking / Flooring

Rendering

Structural Welding

Roofing

Plumbing

Plastering

Cabinet Making

Rising Damp

Waterproofing

Paving

Concreting

Underpinning

Insulation

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4.0 Markets and Competition

4.1 Target Market

Our extensive market research shows that Melbourne City and city fringe houses have a

high potential for renovation. Also, In view of the property boom in Melbourne currently,

there are also high business opportunities to work with established builders as a building or

fit out subcontractor. The high density of commercial units and small business owners are

also potential business opportunities.

SOURCE: RESIDEX REPORT

SOURCE: Australian Bureau of Statistics

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4.2 Competitive Factors/Strategy

To build our customers database, we will be keeping ourselves updated on the property

launches. We believe by placing the company out in the market will gain us visibility. We will

also link up with established realtors such as Central Equity; we offer attractive value for

money renovation package for house buyers.

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5.0 Marketing

5.1 Market Research

SOURCE: RESIDEX REPORT

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5.2 Market Positioning

•Construction & Renovation company

•Property renovation & modernization

•Specialise in Victorian Heritage restoration

Core Business

•One stop shop for residential and commercial renovation needs

•Consultation on design and construction requirements

•Energy efficiency consulting and implementation Services Provided

•Melbourne City home owners and developers

•City commercial and residential properties

•Victorian house owners

Target Market

•Backed by an experience Executive Management Team with international construction expertise

Credentials

•Aims to be the one stop professional service provider for Victorian heritage home restoration, Melbourne city residential and commercial properties Key Message

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5.3 Target Audience

5.4 Marketing Strategy

With thriving social media, internet advertising is an affordable and efficient way of getting

noticed. We plan to engage wed designers for a professional website, which will feature the

company’s completed projects. We believe in word of mouth, and clients’ testimonials will

be our best advertising tools.

We will also market our business through traditional way of publications in the local news,

trade industries journals and newsletters, distribution of brochures in the indentified

suburbs, attending property launches, and participating in property shows.

SOURCE: RPDATA

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5.5 Client Service/Follow-Up

Customers remember businesses that provide good customer service. As part of our commitment to customer service, we ensure maintaining strong relationship with clients and partners. This helps build customers' loyalty and generate repeat sales

We know all customers appreciate personalized care and attention, we make it part of our business to pay attention their needs and interests. We also engage our customers by keeping in touch with festive greeting cards, personalized birthday cards and social media channels such as Facebook and Instagram.

We also offer incentives for business recommendation or new customer referrals if they are satisfied with our service.

5.6 Company Location

We are located at St Kilda Road Towers at 1 Queens Road, right in the heart of the St Kilda

Road business precinct; only 5 minutes from the Melbourne CBD and variety of tram lines

and buses allows clients to reach us easily. Affordable monthly rental of AUD $1,000 is

within our budget, and having a fronting office allows for professionalism, reliability,

reputation and provides exposure in the vicinity. Strategically located in the business

precinct also allows for business opportunity in the area.

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5.7 Insurance

Having adequate insurance coverage for our business is important. CARE Building and

Construction Pty Ltd is covered by CGU Insurance. Below is the list of insurance covered by

CGU for CARE Building and Construction Pty Ltd, more details on the policies can be

referenced in APPENDIX B section.

On Workers compensation: All employees will be covered under Workers Compensation

during their employment term with us.

On Public liability insurance: We are covered under Public Liability Insurance up to AUD

$5M.

Trade Insurance

Construction Insurance

Public Liability

Tools Insurance

Machinery & Equipment

Worker's Compensation

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5.8 Risk Management

Part of our risk management strategy is to ensure we undertake project size above AUD

$1M. In addition, below is a summary of the potential risks identified with corresponding

potential impact analysis and recommended strategy to mitigate these risk scenarios.

Potential Risks Likelihood Impact Strategy

Market slow down Likely High Diversify our services. We planned to prequalify for council jobs in times when the construction industry slows down. Always stay abreast of what is happening in the industry.

Suppliers/subcontractors going out of business

Likely High Establish a list of reliable supplier/contractors; maintain good working relationships with them.

Lack of good skilled workers/team

Likely High While most of our employees are offer contract based jobs, we plan to convert them into permanent staff when our business takes off. And to retain good staff, regular training is necessary.

Figure 5.8.1

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6.0 Financial Goals and Requirements

6.1 Financial Goals and 3-Year Projections

CARE Building and Construction Pty Ltd has a start-up seed capital of AUD $1.5M funding

from its founders.

Revenue goal and financial projections:- with a target of YOY 30 % growth rate. Estimated

return on investment estimated at 25% YOY (Year on Year)

Year Annual Revenue Projections Target Margin % Growth

1 AUD $ 420,000 15-25 %

2 AUD $ 600,000 20-25 %

3 AUD $ 780,000 25-40 %

Figure 6.1.1

6.2 Financing Needs

As a growing small and medium business, especially in the construction industry, achieving a

healthy cash flow is paramount to business continuity and capacity to growth and diversity if

required to win competition.

We have a business credit arrangement with Commonwealth Bank Australia for an initial

amount AUD $5M in the event that we require this credit line to ensure smooth running of

our business operations.

In the next 3 years financial projection, our financial needs will certainly evolved and we will

assess as required best possible options with our banking partner Commonwealth Bank

Australia to support the expected business growth and financial needs where appropriate.

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7.0 Positioned For Success

We are a diversified construction company that is positioned for success and open

possibilities to grow.

Key market target segments in the heart of Melbourne City include:

Residential properties

Commercial properties

Modernising Victorian houses - niche capability

Strong executive leadership and operationalised business strategy:

Clear business strategy and KPI established

Lean company structure

Experienced team and supporting functions set up

People culture:

Key differentiator is our people and culture

Hire and retain top talent in the construction industry

Strong performing culture focused on providing the best service to our customers

and partners

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APPENDIXES

APPENDIX A1 – CASH FLOW MODEL

APPENDIX B1 – PUBLIC LIABILITY INSURANCE POLICY

APPENDIX B2 – BUSINESS INSURANCE POLICY