Real Estate Business Plan: Lee County, Florida USA

EXECUTIVE SUMMARY 

Product 

The product presented by the company is real estate. The real estate industry in Lee County, Florida, United States has been on the rise within the last few years attributed to significant investment in the sector (Connolly, 201). The provision of this product for the company works as a critical structure to meet the strategic objectives of the real estate market. 

Customer 

The customer targets married couples between the ages of 35 years and 55 years within the middle-income economic level. The focus of the company is to create a local experience for these families as a way of ensuring that the customers understand the value of real estate in the county. 

What Drives Us 

The motivating factor for the company is the demand for real estate in Lee County, Florida. The high demand for real estate has been driven by the fact that majority of the people living within this county seek to find locations that they would be able to build their own houses. That acts as a driving factor for the company as a way of ensuring that it provides these customers with the best possible experience. 

COMPANY DESCRIPTION 

Mission and Vision States 

Mission Statement: To create an honest environment within the real estate industry matching customer needs and demands. 

Vision Statement: To be a market leader in the real estate industry in the United States connecting customers to their futures. 

Principal Members at Startup 

Team Members 

The team members for the company will include: 

Office Manager – The office manager will have a crucial role towards handling all matters associated with the business while supervising all critical activities in the industry to ensure that they fall in line with the company's mission and vision. 

Supervisor – The supervisor will have a crucial role to play towards ensuring that he/she engages all employees within the company to ensure that they deliver based on the laid out expectations. 

Accountant/Finance Officer – The accountant, who will also be the finance officer, will be in charge of all matters associated with finance in the business. The accountant will be a vital member of the team, as he/she will be expected to determine whether the company is moving in the right direction. 

Realtors – The company will also hire three realtors at startup. The role of the realtors will be to engage customers directly with the sole focus being towards selling some of the properties that the company may have in the market. 

Support Staff – These include drivers and cleaners, who are essential for the running of the business including ensuring that the firm can undertake visits to some of the real estate properties in the market. 

Planning 

Leaders/managers (unit 1)	When needed (number of months/years after opening)	Outside Services Needed
Key Functions
Office Manager	Six months	Consultation on effective management practices within the company to help build a possibility of enhanced performance.
Supervisor	Six month	Training and development of supervisors to ensure that they understand their roles in effective management
Accountant /  Finance Officer	Three months	External audits of reports with the aim of determining business performance
Realtors	Three months	Training to ensure that they match set objectives for the company
Support Staff	Three months	Cleaning services among others

Legal Structure 

The legal structure of the company will sole proprietorship. The company will operate as a small limited liability company (LLC) with a single employee. The employee will act as the realtor, who will be responsible for having to collect data on specific real estate opportunities in Lee County, Florida. The collection of such data will be important in selling the same to individual clients, who may intend to invest in the real estate market in Florida. 

MARKET RESEARCH 

Look With Cook's main consumer base with be families intending to buy houses within Lee County, Florida. Having an in-depth understanding of the industry will be an essential step for the company, as it will help in highlighting any significant trends in the market to assist in the smooth running of the firm. Additionally, this will also contribute towards understanding the market further with the focus being towards promoting the overall possibilities of success for the company based on its venture into the real estate industry. Allen (2010) anticipates growth in demand for real estate by a margin of between 5% and 7% annually, which would translate to the abject demand for housing. That will act as a guarantee that the company intends to build its market position by working towards projecting a high possibility of positive financial outcomes. 

Industry 

The real estate market in the United States has experienced a significant shift regarding demand for housing, which acts as one of the strategic approaches that Look With Cook intends to capture. The real estate industry is continually evolving, which, in turn, creates a situation where a majority of the inflexible companies are left stagnant (Shiller, 2008). Inflexibility arises from a situation where it becomes difficult for companies to deliver upon some of their strategic approaches matching the demands of the industry. The industry has experienced a significant avenue for growth attributed to considerable investment in the industry both locally and foreign investment. Individually, the real estate industry is considered as one of the economic drivers of Florida with more people investing in this industry within the state. 

Another critical aspect to note is that the real estate industry has been primarily impacted by the increased demand for having to use technological advancements as a way of building progression for the companies involved. That is a loophole that Look With Cook seeks to consider in defining its market position, as it focuses on using technology as one of its relative advantages over a majority of the companies operating in the industry. One of the dynamic aspects associated with the real estate industry is that each target customer market tends to have a specific demand regarding quality, comfort, and amenities. That is a crucial aspect to consider in projecting that overall structure of success for the company, as it creates a high stakes platform from which real estate companies need to establish in defining their positions in the market. 

Customer 

Look With Cook believes in its unparalleled abilities to deliver the best quality of products that would match varied demands for the target market, which is Lee County, Florida. The specific target market for the company is married couples between the ages of 35 years and 55 years within the middle-income economic level (U.S. Small Business Administration, 2017). The company targets a consumer market that participates in activities within the real estate industry for domestic purposes. In other words, this means that the company will focus on engaging married couples that intend to find houses within Lee County for domestic purposes. The company intends to focus on the delivery of products that would be appealing to this particular target market. The products offered will reflect more on areas such as cost and comfort, which are the main areas of focus for this target market when looking for real estate projects (United States Department of Labor, 2017). 

The following table presents different characteristics of the target customers for Look With Cook Company. 

Married Couple:
Age:	35–55
Income:	Medium
Sex:	Male or Female
Family:	0 to 2 children
Geographic:	Suburban
Occupation:	Varies
Attitude:	Security-minded, energy conscious

Competitors 

Look With Cook anticipates essential competition within the real estate industry in Lee County taking into account the number of companies currently operating in this market. Competition will touch on areas that include the quality of the products offered by the companies operating within the market. On the other hand, it is essential to take note of the fact that the company anticipates indirect competition from real estate companies operating within the larger State of Florida. These companies may seek to offer real estate projects for investors outside Lee County, which would act as a critical source of competition for the company. However, Look With Cook will focus on improving its capacity to identify housing units that match the target customers in a bid to building its market share. 

The following table presents significant estimates of the competitors concerning their market shares and strengths in factors such as quality, product line, and pricing strategies. 

Estimated Market Share	Competition 75%	Look With Cook 20%
Product Line	5 ‘	5
Quality	4	5
Technology	4	5
Advertising	3	4
Sales Force	3	2
Distribution	4	4
Price	4	4
Installation	4	5
Responsiveness	3	4
Availability	2	5
Technical Expertise	4	5
Efficiency	4	4
Industry Reputation	3	5

Competitive Advantage 

Earning a competitive advantage in a given industry requires the implementation of appropriate strategies that help in overcoming the strengths and weaknesses of the competitors. The plans focus on ensuring that the company is in a position to remain competitive despite factors associated with changing trends in the industry. Additionally, the company will focus on engaging in strategies that focus on identifying various opportunities within the industry. 

Regulation 

The company will focus on ensuring that the necessary regulations regarding the operating the business within the industry are maintained with the aim of enhancing credibility in various operations. The business laws and regulations will help the company to engage in appropriate actions as defined within a given region. 

PRODUCT/SERVICE LINE 

Product or Services 

The product that the business will offer to its clients is real estate property with the focus being towards ensuring that it focuses on the individual needs projected by its clients as part of the real estate industry in Lee County, Florida. Look With Cook expects to operate within the real estate industry meaning that it will be involved in the process of connecting investors in the real estate industry with properties that they would buy as part of their investments. The business expects to operate in Lee County, Florida, thus, meaning that the firm must focus on understanding the market and some of the needs projected in the real estate market. The fact that the company will deal with real estate seeks to define the overall possibilities of increasing its reach not only in the county but also in the State of Florida. 

Pricing Structure 

Pricing of the real estate properties that the company will offer to its client will focus on a specific pattern of pricing. Firstly, the company will focus on the initial pricing of the property from the seller. Munteanu (2017) indicates that the pricing of property focuses more on the price markets offered by sellers, this would act as a determinant of the price margins. Secondly, the company will also focus on the commission from the sale, which would serve as its cost for sale. One critical aspect to note is that the company will not be involved in the buying of property, as this would increase operational costs significantly. Instead, the company will seek to link the buyers and sellers while profiting from the commissions of such sales. 

Product/Service Life Cycle 

As opposed to a majority of the products in different markets, the products offered by this company tend to appreciate concerning their value within different periods. To help in meeting its sales targets, the company will focus on finding lucrative properties in high-demand areas where it would become much more comfortable to sell the same much faster. However, it is essential to take note of the fact that the company will also look for other investment opportunities in the real estate industry with the focus being towards creating a front where investors would benefit significantly. The outcome of such investments would translate to more profit margins for the company considering that this would play a critical role towards boosting its position in the market significantly. 

Intellectual Property Rights 

Look With Cook will focus on protecting intellectual property rights through engagement with its legal frameworks as a way of ensuring that it operates within its constitutional boundaries. The company seeks to engage with different stakeholders in the real estate industry, thus, meaning that it may find itself in a position where it would need to define its legal limits. These legal limits will be significant for the company in ensuring that it maintains its intellectual property rights while protecting the interests of its customers. 

Research & Development 

To help in meeting some of its strategic objectives, the company will focus on research and development as one of the critical approaches that would be of value towards understanding the market or promoting efficiency in its ability to engage in sales. One essential aspect to take note of is that the company operates in a very competitive industry, which translates to high demand for the company to work on repositioning itself effectively with the focus being towards boosting its position. Research and development for the company will focus on two key areas. Firstly, research and development will focus on market research with the focus being towards understanding the trends in the real estate market and industry. Secondly, research and development will focus on customer demand analysis with the emphasis being towards ensuring that indeed the company can deliver based on the needs and demands among its clients in the market. 

MARKETING AND SALES 

Growth Strategy 

The market penetration strategy that the company will focus on is cost leadership. Cost leadership is a strategy in which a company focuses on ensuring that the pricing of its products remains lower when compared to those offered by its competitors (Kobylińska & Cellmer, 2016). Look With Cook, being a startup company, expects to encounter significant competition as part of its engagement in the market, which acts as a clear indication that indeed the company requires a strategy that would attract more clients towards its products. The growth strategy that the company seeks to use in its engagements is the partnership. 

The channel of distribution strategy that the company will focus on is the internal sales force strategy in which the company will focus on hiring a sales team of realtors, who will be expected to engage with the customers as part of the sales process. The realtors will work towards ensuring that the company can meet some of its sales targets attributed to their ability to engage with customers. The communication strategies that the company seeks to adopt are an advertisement and personal selling (Hoesli & Lekander, 2008). The company will engage in vast advertising of its products after which realtors will be expected to participate in personal selling while focusing on the benefits that the customers would gain from their investments. Usage of these two communication strategies would act as one of the critical factors that seek to promote business performance for the company (Figurska & Wisniewski, 2016). 

Overall Sales Strategy 

The company plans to use an internal sales force that would be comprised of realtors with an understanding of the real estate market in Lee County, Florida. The idea of using an internal sales force seeks to ensure that the company is well positioned towards not only meeting the demands in the market but also providing that it progresses regarding capacity to establish itself a leading brand (Kazak, van Hoof, Świąder, & Szewrański, 2017). The sales activities will involve engaging with clients intending to invest in real estate within Lee County where the sales representatives will be expected to provide the clients with a highlight of principal investments. Additionally, this will also mean that the sales representatives will also ensure that they accord the clients visitations to the different projects as a way of boosting their confidence. 

Communication Strategy 

Internal Strategy 

The internal strategy that the company intends to use is the memo. Usage of the memorandum will be a critical communication approach focused on ensuring that the company can meet set out standards regarding the ability to convey messages regarding the performance of the company (Siemińska & Krajewska, 2017). It will be expected that the members of staff will abide by the policies laid out in the memo, as has been presented. 

Tracking ROI 

The strategy that the company will use as part of tracking return on investment (ROI) is financial reporting. Financial reporting reflects more on ensuring that the company can report on its financial positioning as a way of providing that it highlights critical strategic decisions that would be value for the investors (Temelová, Novák, Ouředníček, & Puldová, 2011). Financial reporting will also help towards highlighting whether the company can meet its market standards based on the set out strategic objectives as part of its market policy approaches (Beł ej, Cellmer, Źr ó bek, & Kovac, 2016). 

Assurance of Ethical Practices 

To help in creating the confidence that ethical practices are used as part of the marketing and selling process, the company will focus on defining the expected ethical standards for its employees. The ethical standards will act as a measure to ensure that indeed the employees can deliver based on the set out strategic goals (Munteanu, 2017). 

FINANCIAL PROJECTIONS 

Profit and Loss 

	Year 1 ($‘000)	Year 2 ($‘000)	Year 3 ($‘000)
Sales	120,200	136,500	142,400
Costs/Goods Sold	55,000	62,000	71,600
GROSS PROFIT  OPERATING EXPENSES	175,200	198,500	214,000
Salary (Office & Overhead)	2,500	3,100	3,500
Payroll (taxes, etc.)	1,500	2,000	2,200
Outside Services	100	700	1,000
Supplies (Office & Operation)	950	1,450	1,850
Repairs & Maintenance	1,000	1,600	1,800
Advertising	7,500	8,000	8,300
Car, Delivery & Travel	500	1,100	1,500
Accounting & Legal	3,500	4,000	4,200
Rent	900	1,500	1,800
Telephone	500	1,000	1,400
Utilities	500	1,100	1,300
Insurance	1,200	1,700	2,000
Taxes (Real Estate, etc.)	3,500	4,100	4,500
Interest	900	1,400	1,600
Depreciation	100	700	1,000
Other Expenses	500	1,000	1,400
TOTAL EXPENSES	25,650	34,450	39,350
NET PROFIT BEFORE TAXES	149,550	164,050	174,650
Income Taxes (16%)	23,928	26,248	27,944
NET PROFIT AFTER TAX	125,622	137,802	146,706
Owner Draw/Dividends	31,405.5	34,450.5	36,676.5
ADJUSTED TO RETAINED	94,216.5	103,351.5	110,029.5

Cash Flow Statement 

	Pre-Startup  EST. ($’000)	Year 1 ($’000)	Year 2 ($’000)	Year 3 ($’000)
Cash on Hand	-	450	131,960	279,470
CASH RECEIPTS
Cash Sales	-	120,200	136,500	142,400
Collections from CR Accounts	-	26,600	28,400	32,700
Loan/Cash Injection	7,500	-	4,500	1,000
TOTAL CASH RECEIPTS	7,500	146,800	169,400	176,100
TOTAL CASH AVAILABLE	7,500	147,250	301,360	455,570
CASH PAID OUT
Purchases	1,500	900	1,300	1,700
Gross Wages	-	350	700	1050
Outside Services	1,000	800	1,100	1,400
Supplies	900	1,300	1,700	2,100
Repairs & Maintenance	1,000	850	1200	1550
Advertising	2,300	900	1,200	1,500
Car, Delivery & Travel	-	400	800	1,200
Accounting & Legal	500	850	1200	1550
Rent	1,500	1,300	1,600	1,900
Telephone	100	500	900	1,300
Utilities	100	450	800	1150
Insurance	500	800	1,100	1,400
Taxes (Real Estate, etc.)	-	400	800	1,200
Interest	300	650	1000	1350
Other Expenses	-	300	600	900
SUBTOTAL	5,500	10,750	16,000	21,250
Loan Principal Payment	1,050	1,050	1,050	1,050
Capital Purchase	-	1,350	1,800
Other Startup Costs	500	-	-	-
Reserve and Escrow	-	1,540	1,990	2,440
Others Withdrawal	-	600	1,050	1,500
TOTAL CASH PAID OUT	7,050	15,290	21,890	26,240
CASH POSITION	450	131,960	279,470	429,330

Balance Sheet 

Assets	Start Date: January 2017		End Date: December 2017
CURRENT ASSETS ($‘000)
Cash in Bank			85,550
Accounts Receivable			4,700
Inventory			1,500
Prepaid Expenses			250
Other Current Assets			3,600
TOTAL CURRENT ASSETS			95,600
FIXED ASSETS
Machinery & Equipment	9,000
Furniture & Fixtures	5,400
Leaseholder Improvements	3,500
Land & Buildings	4,200
Other Fixed Assets	1,000
TOTAL FIXED ASSETS  (net of depreciation)			23,100
OTHER ASSETS
Intangibles			1,400
Deposits			2,100
Other			-
TOTAL OTHER ASSETS			3,500
TOTAL ASSETS			122,200
Liabilities & Equity
CURRENT LIABILITIES
Accounts Payable				1,600
Interest Payable				1,050
Taxes Payable				3,000
Notes, Short Term (due in 12 months)				5,000
Current Part, Long-Term Debt				4,400
TOTAL CURRENT LIABILITIES				15,050
LONG-TERM DEBT
Bank Loans Payable				5,200
Notes Payable to Stockholders				5,000
LESS: Short-Term Portion				3,600
Other Long-Term Debt				1,400
TOTAL LONG-TERM DEBT				15,200
TOTAL LIABILITIES				30,250
OWNER'S EQUITY
Invested Capital		50,000
Retained Earnings		41,950
TOTAL OWNERS EQUITY				91,950
TOTAL LIABILITIES & EQUITY				122,200

Break-Even Analysis 

DIRECT COSTS	Fixed Costs ($’000)	Variable Costs (%)
Cost of Goods Sold	175,200	30
Inventory	122,200	28
Raw Materials	56,000	20
Direct Labor	13,600	100
INDIRECT COSTS
Salaries	9,300
Supplies	6,000
Repairs & Maintenance	4,600
Advertising	5,900
Car, Delivery & Travel	2,400
Rent	6,300
Telephone	2,800
Utilities	2,500
Insurance	3,800
Taxes	2,400
Interest	3,300
Depreciation	1,800
Other Costs	3,500
Total Fixed Costs	421,600
Total Variable Costs		1.7
BREAK-EVEN SALES LEVEL:	428767.2

Financial Assumptions 

Assumptions for Profit and Loss Projections 

From the table on profit and loss, the assumption that can be made is that the company is expected to make notable profit margins within the first three years of operations. The ability of the company to make profits during the first three years would mean that indeed the company is worth investing attributed to its ability to match set out investment expectations. 

Assumptions for Cash Flow Analysis 

The assumption that can be made concerning the cash flow is that the company will experience a significant increase in expenses within the first three years. However, it is essential to take note of the fact that this will not have any significant impact on the profit margins attributed to the projected increase in sales margins. 

Assumptions for Balance Sheet 

The balance sheet for the company suggests that the company would be in a position to balance its assets when compared to its liabilities. That is important towards ensuring that the company can break even while realizing a return on investment (ROI). From the analysis, it is clear that the company will be in a better position to achieve ROI within three years of its operations. 

Assumptions for Break-Even Analysis 

The break-even analysis suggests that the company will be in a position to break even on the investments within a margin of 1.7%. The fact that the company seeks to build its strategic location effectively means that indeed it is a viable platform for attracting more investment in a bid to defining growth. 

References 

Allen, M. T. (2010). Discounts in real estate auction prices: Evidence from South Florida.  The Appraisal Journal ,  69 (1), 38. 

Beł ej, M., Cellmer, R., Źr ó bek, S., & Kovac, M. S. (2016). Factor Analysis in Determining the Similarity of Local Real Estate Markets' Conditions.  Acta Scientiarum Polonorum. Oeconomia ,  15 (4). 

Connolly, N. D. (2014).  A world more concrete: Real estate and the Remaking of Jim Crow South Florida . University of Chicago Press. 

Figurska, M., & Wisniewski, R. (2016). Fundamental Analysis–Possibility of Application on the Real Estate Market.  Real Estate Management and Valuation ,  24 (4), 35-46. 

Hoesli, M., & Lekander, J. (2008). Real estate portfolio strategy and product innovation in Europe.  Journal of Property Investment & Finance ,  26 (2), 162-176. 

Kazak, J., van Hoof, J., Świąder, M., & Szewrański, S. (2017). Real estate for the aging society–the perspective of a new market.  Real Estate Management and Valuation ,  25 (4), 13-24. 

Kobylińska, K., & Cellmer, R. (2016). The Use of Indicator Kriging for Analyzing Prices in the Real Estate Market.  Real Estate Management and Valuation ,  24 (4), 5-15. 

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Shiller, R. J. (2008). Historical turning points in real estate.  Eastern Economic Journal ,  34 (1), 1-13. 

Siemińska, E., & Krajewska, M. (2017). Conditions and Directions of Investing on the World Real Estate Market.  Real Estate Management and Valuation ,  25 (4), 99-112. 

Temelová, J., Novák, J., Ouředníček, M., & Puldová, P. (2011). Housing estates in the Czech Republic after socialism: various trajectories and inner differentiation.  Urban Studies ,  48 (9), 1811-1834. 

U.S. Small Business Administration. (2017). Business Guide . Retrieved from https://www.sba.gov/business-guide 

United States Department of Labor. (2017). Industries at a Glance . Retrieved from https://www.bls.gov/iag/tgs/iag51.htm