Sample Business Plan
Sample Business Plan
Sample Business Plan
Business Overview
It is known fact that Serviced apartment businesses are responding creatively to the
increasing demand for, and undersupply of short-term rented accommodation in some parts
of the world. It is also known that the demand from businesses wanting short-term
accommodation – particularly serviced apartments – for overseas assignees has soared in
recent years and shows no sign of abating.
It was analysed that within the past seven years, the number of serviced apartments has
grown by 80 per cent and now totals more than 750,000 properties worldwide, some 61 per
cent of them in the US and 17 per cent in Europe.
The trend of the Serviced apartment industry looks set to continue, with the number of
apartments raising by as much as 18.2 per cent between 2014 and 2015. Also the fact that
demand exceeds supply puts upward pressure on occupancy levels. Showing the reason
why three-quarters of global operators report a year-on-year increase. Given these high
occupancy rates, it is no surprise that more hotels are moving into the market.
It is also important to note that the industry is showing a growing trend for ventures to locate
serviced apartments and hotels on the same site, producing savings during development
and operation. While short-term assignments are forecast to grow to more than a fifth of all
international relocations in the three years to 2019, long-term assignments are expected to
fall from 52 per cent to 45 per cent over the same period. Also the availability of short-term
rental accommodation is not meeting demand in many markets, such as Asia.
We at Liberty World LLC plan to provide clean, quality homes in the Auckland growing
markets to well qualified tenants and business patrons. We at Liberty World LLC also have
plans to purchase additional quality income producing properties huge enough to generate,
passive income streams. Our primary source of revenue at Liberty World LLC is rental
income. Supplemental income will include:
Forfeited Deposits
Bounced Check fees (NSF)
Late charges
Damage and Cleaning Charges
Application fees
Pet Charges
Lease Termination charges
Our mission at Liberty World LLC is to offer state-of-the-art living conditions reflective of the
rapid advancements in technology and a growing need for quality housing. We at Liberty
World LLC are very much dedicated to provide a hassle free living environment in which our
tenants can enjoy all of the benefits of safe, attractive, and inviting units.
Our Business Structure
It is very important to note that both Felix Cruise and Agatha Melvin will own and manage
Liberty World LLC. Felix will perform routine maintenance requirements and repairs. Agatha
will manage the daily bookkeeping requirements. Agatha will then pass on payments to
vendors such as trash service and recycling service, and forward the required information to
the company accountant for preparation of the annual income taxes.
Felix will also take care the day to day maintenance of the rental unit, and he will always
replace air filters monthly, inspect the grounds, and make notations of the overall physical
condition of the property. The tenant will be put on notice for example if the yard needs to
be mowed or weeds appear to be an issue. We at Liberty World LLC believe that the tenant
will have enough time to the notice and will be fined daily until the issue has been resolved.
We at Liberty World LLC know that the success of our business depends on an organized
division of responsibilities in order to run an efficient, diversified enterprise. Just we must
have start above, the main decisions and Responsibilities in the company will be divided
between the two top partners. They will focus on maintaining high quality and a cohesive
business entity. Here are the workforce we hope to start with:
Project Manager
He will be in charge of the planning, management and coordinating all projects on
behalf of the company
Supervises projects
Verify compliance during project executions
Provides advice on the management of projects
He will be in charge of carrying out risk assessment
Uses IT systems and software to keep track of people and progress of ongoing
projects
He will be in charge of overseeing the accounting, costing and billing of every project
Represents the organization’s interest at various stakeholders meetings
Verify that project desired result is achieved, the most efficient resources are utilized
and different interests involved are satisfied.
Company’s Lawyer
He will be in charge of drawing up contracts and other legal documents for the
company
Consults and handle all corporate legal processes (e.g. intellectual property, mergers
& acquisitions, financial / securities offerings, compliance issues, transactions,
agreements, lawsuits and patents et al)
Develops company policy and position on legal issues
Researches, anticipates and guards company against legal risks
Represents company in legal proceedings (administrative boards, court trials et al)
Plays a part in business deals negotiation and take minutes of meetings
He will be in charge of analysing legal documents on behalf of the company
Prepares annual reports for the company
Takes care the company’s portfolio of real estate assets (which are owned and
managed) through acquisitions, dispositions, and day‐to‐day operations, including
management of revenue and expense items; works to maximize the portfolio’s
performance.
Provides strategic oversight of existing and potential real estate assets within a
designated geographic area.
Manages business plans and budgets for properties.
Reviews the condition and maintenance of assigned properties; manages their
bookkeeping and cash flow accounting; handles rent reconciliation; prepares
property financial reports and annual budget forecasts.
Head of Construction
Business Developer
Identifies, prioritizes, and reaches out to new partners, and business opportunities et
al
Identifies development opportunities; follows up on development leads and contacts;
participates in the structuring and financing of projects; assures the completion of
development projects.
He will be in charge of supervising implementation, advocate for the customer’s need
s, and communicate with clients
Finds and qualifies land for development based on company’s land requirements;
maintains a land search database; initiates discussions with property owners about
the possible sale of property
Develops, executes and evaluates new plans for expanding increase sales
Documents all customer contact and information
Represents the company in strategic meetings
Help increase sales and growth for the company
Accountant
The fact that our facility and all or rental properties will be located in a growing
neighbourhood with easy access to neighbourhood schools, shopping and
restaurants. Located less than 5 minutes from I-65.
Liberty World LLC has an approved tenant in place with a security deposit. The
tenant has excellent credit and payment history. The patron is known by Liberty
World LLC and works as a teacher at the same school as Agatha Melvin
Upgrades to the property will be made by a reputable contractor with a 10 year
history with the owners of Liberty World LLC. Also the founders of Liberty World LLC
will paint the property themselves which will further reduce expenses.
We at Liberty World LLC will come out of pocket in excess of $82,000 toward the
house purchase and capital improvements resulting in a low, loan to value (LTV)
ratio of 50%.
The founders of Liberty World LLC have ‘day jobs’ and thus have additional income
sources and savings to draw from to support business operations.
Weaknesses
As New entrants into the Serviced apartment industry, Liberty World LLC has limited
experience owning and managing investment income properties.
Opportunities
We all know that Auckland has low vacancy levels at 5% compared to the national
average of 7.9%.
Our property is located in a strong growing community and the fastest growing city in
the state.
Liberty World LLC has an opportunity to participate in a $2.4 million local real estate
rental
Threats
We all know that Investment real estate is economically tied – changes in
unemployment, rent spikes and changes in the economy could adversely impact
demand for rental units.
Any Declination in the local neighbourhood could impact attractiveness of rents
Cost overruns in the construction budget and failure to complete upgrades in time
could impact our cash flow at Liberty World LLC
Market Trends
We at Liberty World LLC believe that our two prong approach to real estate will allow our
business to grow successfully in the rapidly changing real estate market. We also hope that
our business strategy will allow us at Liberty World LLC to offset the risks from each
business unit so that there is a diversified balance in our real estate portfolio.
This is especially important as the business uses leverage to finance the acquisition of its
properties. This industry is constantly evolving and leaving many inflexible companies
stagnant. One of the major trends is the need to adapt to technological advancements as
well as maintaining the overall appearance and condition of the complexes.
Also we have noticed that with the demand for serviced apartments growing exponentially,
an interesting phenomenon is becoming more and more prevalent in our industry, which
has caught on since the success of the TAS Alliance and the other ‘global’ hybrids –
businesses that operate their own units under the same name as their agency.
We believe that this is not new; it was how the original global programmes were won for the
past 15 years. But as we all know, being an agent is not easy, and its challenges should
never be underestimated. It is also important to note that Europe was the second-largest
global region for serviced apartments, although the relative maturity of individual country
markets varied considerably.
We at Liberty World LLC hope to build and operate among several different investment and
operating units, which is why it is nearly impossible or hard to characterize any specific
tenant that will occupy the our apartment complex property. But we plan to enact strict
tenant quality and credit review procedures to make sure that the revenues will not be
interrupted by tenant default at Liberty World LLC.
We at Liberty World LLC understand that the real estate is effectually one of the most free
market oriented businesses in the country, competition cannot be accurately categorized.
But we know that there will be a sizable amount of competition from both single owner
investment firms to large construction companies that are looking to ripe from the unusually
high real estate prices throughout the New York metropolitan area.
We at Liberty World LLC understand that there are very few apartment units that offer the
same level of quality and technological amenities as Liberty World LLC properties, but we
believe that we possess high regard for customer service; something that is not very
common in this industry.
We at Liberty World LLC believe that it is important that our customer feels he/she is being
treated with the utmost care and urgency. We will makes sure that all our staff and
personnel go through a training program that teaches many of the skills needed for
successful client relations and customer service.
Serviced Apartment Complex Business Plan – SALES AND MARKETING STRATEGY
Place adverts on both print (community based newspapers and magazines) and
electronic media platforms
Sponsor relevant community based events / programs
Leverage on the internet and social media platforms like; Instagram, Facebook ,
twitter, YouTube, Google + et al to promote our brand
Install our Bill Boards on strategic locations all around Auckland
Engage in road show from time to time in targeted neighbourhoods
Distribute our fliers and handbills in target areas
Contact corporate organizations by calling them up and informing them of our
services, and the advantage we over the others.
Passing general information via our social media handles like twitter, Facebook,
Google hangouts etc.
Ensure that all our staff members wear our branded shirts and all our vehicles are
well branded with our company’s’ logo et al.
Sources of Income
It is very crucial to note that the direct finance and purchase of apartment complex
properties is our main business at Liberty World LLC. We believe that residential real estate
will provide a continuous stream of rental income that we at Liberty World LLC will use for
reinvestment and profit stability for our business. We have without delay sourced a 20 unit
apartment complex that will be initial property acquired as a starting point.
We at Liberty World LLC plan to develop a complex economic pricing strategy that will
determine the fair market rate of a property based on its capitalization rate in conjunction
with the market values of residential property. Residential real estate is the least risky form
of real estate investing because the service offered is a necessity.
Our main source of income at Liberty World LLC is acquiring apartment complex properties
with the sole purpose of renting the properties to the general public. Liberty World LLC plan
to generate profits from both the ongoing rental income. While generating capital
appreciation from the long term holding of these properties. We hope that now the real
estate market has hit come to its bottom, that the market will have a future growth rate of
5% to 6% per year.
Sales Forecast
We will like it to be known that the founders of Liberty World LLC will personally lease their
properties and do not need to pay incentives to sales agents, and just like sales agents, the
founders of Liberty World LLC are motivated to lease properties quickly- after all vacant
properties do not generate revenue! Although that we at Liberty World LLC are motivated to
get tenants in quickly they will not ‘rush’ at the expense of sacrificing quality.
We believe that if we at Liberty World LLC is unable to find a perspective tenant in a
reasonable amount of time (approximately 30 days) then the cost of doing business are the
advertising costs associated with placing classified ads with the local newspaper and
Craigslist.
We at Liberty World LLC expect a gradual raise in the total number of units over the next
year. We believe that as time goes on; the monthly per-unit rental price will slowly ascend,
joined by the reduction in cost over time, producing an increased per-unit profit.
We believe that from our opening in January to June, we expect that all units will be
completely rented out. In the summer months we expect fewer tenants, so we have planned
on a rent lowering process to entice renters to stay. Also, we will only rent on yearly leases
to make sure that all rented units remain filled year round.
With the estimated profits from the previous months the annex will be completed in
September, adding 14 more units. Listed below is the summary of our sales projections:
Payment Options
We all at Liberty World LLC after our extensive research and thorough discussion
understand efficiently that different customers prefer different payment options as it suits
them but at different times and ways. We plan to make sure that we provide them with
payment options that will make their transactions less stressful and very open.
Listed below are the payment options we at Liberty World LLC plan to make available to our
customers;
We have also chosen to partner with a known bank in the United States in order to give our
customers the best they can ever get in the nursery school industry of the United States.
Serviced Apartment Complex Business Plan – Financial Projections and Costing
From our detailed analysis above, and after considering everything possible and legal, we
need approximately Six hundred and ten dollars ($610,000) to start up Liberty World LLC.
Generating Funding / Start-up Capital for Liberty World LLC
Felix Cruise and Agatha Melvin, the founders of Liberty World LLC have been interested in
locating a means to supplement their income. When Agatha’s mother passed away earlier
this year, she received approximately $300,000 in inheritance and she decided to use this
windfall to purchase and manage investment income properties.
Together with Felix Cruise who’s savings was enough, they decided to continue education
classes at their local community college and decided upon the subject property for their first
purchase. They own the business solely and for now hope to raise and run the business
themselves which is why the way of raising fund is subjected to just these few ways: