business plan: total repair system

7/27/2019 Business Plan: Total Repair System

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BUSINESS PLAN

TOTAL REPAIRING SOLUTIONS

(TRS)

Mr. Aashik a. ambawat

MR.VISHESH R. MODI

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Table of Contents:

2

Topic Page NO:

Introduction 3

General Company Description 4-5

Products and Services 6

Marketing plan 7-10

Operation plan 11-12

Start-up expenses and capitalisation 13

Financial Plan 14-18

BREAK-EVEN analysis 19

Reasons for pursuing this business model 20

conclusion 21

appendices 22


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INTRODUCTION:

What do you exactly need to build a perfect structure?

Right Material, Right People, Right Place, Right Costs, Right Time. And probably one place

where the best of all these come under one roof. TOTAL REPAIRING SOLUTIONS (TRS)

is just the place to head. Come over to check out this dream world for your Dream House.

Happy Building..!!

In todays fast moving world, people dont have time to go and search forMasons,

Plumbers, Electricians and other emergency repairing service providers when they need to

renovate or repair their house/office. Most of the times these service providers are hired

through personal contact or from nakas and small building material shops as there is no such

specialised outlet available under one roof where you get all these services. Usually the

labourers hired are unskilled, who generally roam from one place to another in search of

work. They dont have any fixed rates for any kind of work and charge you exorbitantly for

the service they provide. In addition to that, the quality provided by them is of a major

concern and an individual from the family has to constantly look after them while they are

working in the house to see that the work is done in an effective manner or not. This creates

unnecessary panic among the members of the house usually as they have to divert their mind

from their day to day work and assist the labourers in getting all the required material for the

renovation and look after them while they are working in the house.

There are architects who provide all the services but their charges are exorbitantly high and

they avoid doing small day to day repairing work, so ordinary people cant afford to hire theservices of an architect.

Therefore our basic idea is to provide complete home/office based repairing and renovation

solutions all under one roof. Because we know the tough decisions you have to make while

hiring someone to work for you. Generally, we observe that the service provided by the

contractors are not up to the mark and most important not completing the required work on

time and the work done is of inferior quality standards. Our idea is to provide quality

customer service with excellent workmanship standards, which customers pay for and

rightfully deserve. This concept can work in both urban and rural areas because repair and

renovation is an integral part of the house.

In short our main motto is TO CONVERT AN UNORGANISED SECTOR INTO AN

ORGANISED ONE which can be beneficial to the society at large.

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GENERAL COMPANY DESCRIPTION:

Our Business :

We will be engaged primarily in the business of providing the complete solution for

activities such as masonry, plumbing, and all works related to electricity and other

services related to repairing and renovation.

Mission Statement :

We believe in fulfilling your needs at your doorstep and in the process providing our

employees with the opportunity to grow and excel.

Vision Statement :

To become an economical and social service provider Business group.

Company Goals and objectives :

To be a leader in the area of customer service

To be able to provide complete solutions to our customer

To provide the best of services at a reasonable cost

To provide an opportunity to our employees for continuous growth and

development

To make our customers life simpler and more convenient

Business Philosophy :

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Our philosophy in business is to maintain a healthy relationship with all our

customers. We understand that keeping our customers happy is our best foot forward.

We will focus on providing the best quality services at reasonable prices. Moreover,

our aim is to make the lives of our customers much simpler and convenient by

fulfilling their needs at their doorstep. We also do believe that an organization cannot

grow without the support of its employees. Hence, we would motivate our employees

for their all-round development by providing them, necessary training programmes at

regular intervals.

Our Industry:

Our company would broadly fall under the construction service industry related to

repairing and renovation. It is a growth industry as services such as masonry;

plumbing and electric have a constant demand. We would also be looking to take the

first mover advantage and grow as an organization.

The nature of this industry is highly unorganized. Therefore, we foresee other

branded players entering the market due to the huge potential this industry offers.

Although the entrance of new players will affect our market share but we plan to

cash in on the first mover advantage and create a good brand image for ourselves and

hence avoiding any encroachment into our market share.

Company Strengths and Core Competencies :

Providing service at customers doorstep

Skilled and well trained employees

Quality service at reasonable prices

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Providing annual contracts for hassle free maintenance

Proper follow up and after sales services

Legal Firm of ownership :

We will be starting out as a Partnership firm in the beginning and later look onto

form a private limited company after 5 years based on business.

Partners:

Mr. Aashik Ambawat

Mr. Vishesh Modi

PRODUCTS AND SERVICES:

Our Service boasts of the following major facilities:

A) Masonry

Kitchen Renovation

Bathroom Renovation

Flooring

Tiling

Plasters

Any other work as per customers requirement

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B) Plumbing Work

C) Electric Work

D) Painting Work

E) Water Proofing

In addition to the above facilities, we are also providing following services on demand:

Vastu-Consultancy

Pest Control

Architect

POP Work

Carpentry

Interior Decorator

Legal Tips

Technical Knowledge

We will also be dealing for the products required for all the above services which are as

follows:

Cement

Steel

Sand

White Cement

Water Proofing Materials

Bricks

Tiles

Paints

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Electrical Products

Plumbing Products

*E-payment Facility

*Basic Vastu -Consultancy and Cost estimation is free.

MARKETING PLAN:

Market Information:

Size of the Markets:

Repairs and Renovation segment contributes to approx. 45 % of the construction industry

potentially.

E.g.: South Mumbai is the best example for this segment as there is no new land

available and renovation is carried on throughout the year as structures available are

all old and due to environmental conditions repairs and renovation is a need of hour.

Barriers to Entry: Competition from Non-organised sectors.

Major Customers:

Co-operative Housing Societies

Individual House Builders(IHB)

Petty Contractors

Small Builders

Institutions

Commercial Premises

MARKETING STRATEGY:

Direct mailers :

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We would be sending direct mails to our target customers informing them about the

services we provide. We would include our brochures and pamphlets in the mails

that would be sent to the potential customers. This will create knowledge about the

services that we provide amongst the customers.

E- marketing :

We would also be using internet as a medium to promote our services with the help

of our own website. We would also post links to our website on various search

engines as well as popular networking sites.

Word of mouth:

As we are not investing a lot of money in direct advertising, it will be very important

for us to promote our services through word of mouth. For this purpose, it will be

very crucial to develop good relations with the housing societies in the city and the

customers that we make. As it is usually said and now proven by market research A

satisfied customer talks good about the product or service to 10 other customers.

Therefore we would be looking to satisfy our customers by providing excellent

quality of service at reasonable prices.

Other Promotion Techniques:

Mass Publicity

Hand Outs in Newspaper

Key Customers Meetings which includes:

-Petty Contractors and Small Builders Meetings

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-Housing Society Decision Maker Meetings

PORTERS FIVE FORCES MODEL:

Bargaining power of supplier:

High - We would have greater bargaining power with supplier because the materials would

be purchased in bulk and on advance payment basis which will be beneficial to us up to a

large extent.

Bargaining power of buyer:

Low - The buyers will have little or very low bargaining power with respect to our services

because we will have fixed prices which will already be very reasonable keeping the in mind

the people from all stratas and sections of the society

Threat from substitutes:

Low - The threat of substitutes is low in our industry due to the fact that all the other players

in the market are highly unorganized and charge exorbitant prices without any cost analysis

behind their pricing policy. It is here that our firm would look to build an advantage over

them by proving best quality at very reasonable prices supported by adequate cost analysis

and logic.

Threat from new entrants:

High- The threat of new entrants is very large in this industry as there are no real barriers to

entry. Moreover, this is a niche market which has not been tapped by the organized sector as

yet. Therefore there are high chances of big players entering the market.

Competitive rivalry within the industry:

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Low to Medium - As we have already mentioned this industry has lot of competition in the

unorganized sector. There are thousands of freelance workers and small shops and

establishments which perform these services individually. On the contrary, there is not a

single organized player in the market who provides all these services under one roof.

Therefore we would face low to medium competitive rivalry from these unorganized playersin the market. To counter this competition we would look to score over them through

superior quality and competitive pricing policy.

POSITIONING:

Competition and Market:

In terms of the competition and market we would position our firm as a leader in the market.

As we are the first player to introduce the entire gamut of services under one roof ,we wouldenjoy the position of market leaders in the market along with getting the First Mover

Advantage.

Customer :

In the eye of the customer we would like to position ourselves as leaders in terms of

providing the best service at reasonable prices.

We would like our customers to associate us with excellent service quality and a firm whichmakes their lives simpler and more convenient.

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OPERATIONAL PLAN:

For the Business to be set up, we will primarily hire an office space on of apprx.500 sq. feet

and godown cum training centre of 1000 sq.ft.In the outlet, we will provide the customer

with an computerised estimate of the work they require as soon as they give their

requirement and we will show them the quality of the work done by us. Our marketing

manager will be very courteous in explaining them the minute details of the work to be

done.

We will be opening our first outlet in Mira-Bhayandar Area as we have a strong base over

here in Building Material supply and its fastest growing town of Mumbai region with a

population of more than 10 lakhs people. The approximate number of residential houses in

this region sums up to 1, 25,000 with more than 20% of the houses requiring constant needfor renovation and repairing plus in addition to the above, commercial premises and

godowns will also be our clientele. In future, we would also be aiming to provide skilled

trained labourers in the real estate sector to builders and contractors.

We would be hiring 10 pairs (1 Main worker + 1 Helper) of skilled and unskilled labourers

as a full time employee to work with us which includes 6 pairs of Masons, 2 pairs each of

Plumbers and Electricians. In our godown, we would be storing all the materials and

inventory required to carry out the work and simultaneously train our unskilled labourers for

the task they need to perform in the most effective manner with the help of our skilled

labourers.

Our Outlet would be equipped with modern facilities such as computerised display of our

work, various designs and concepts of renovation and repairing, computerised design of the

work needed by the customer which would enable them to visualise the exact nature of our

skilled work. Once a customer specifies their requirement, we would provide them with the

exact quotation for the work to be done for them and the duration of the work. We would

also be providing them with online quotation facility also.

The work done by our labourers would be personally monitored by our team of experts and

there would be a guarantee period which would depend on the nature of work. We will bealso providing them with an Annual Maintenance Contract (AMC) which would include free

service of basic repairing required for electric, plumbing and small masonry work.

Our Inventory basically includes all the necessary modern tools and kits required for

masonry, plumbing and electric work. The materials for our work would be supplied by

various top branded manufacturers and distributors including us.

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Our name TOTAL REPAIRING SOLUTION (TRS) would be a registered Brand

Name.

As far as ourcredit policy is concerned:

50% of the advance at the time of booking.

25% after completion of 50% of work.

25% after completion of the work.

*Discount Schemes would be there for the customer paying entire amount in

advance.

License Required For Start-Up:

PAN Card No.

VAT TIN No

Profession Tax No.

Employees Profession Tax No.

Service Tax No.

Shops and Establishment License

Owners (Partners): Mr. Aashik Ambawat

Mr. Vishesh R.Modi

After the completion of the work at the customers premises, we would be collecting

feedbacks from them regarding the work done by our team, whether they were satisfied with

the work done by our team or not and what improvements they would like us to make for the

betterment of everyone.

If we receive a positive response from them, it would result in greater customer satisfaction

and at the same time it would result in extra added incentives for the employees depending

upon the work performed.

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If a negative feedback is received regarding any work performed by the labourer, it would

result in penalty, so that the same is not repeated again in future.

Depending upon the response we receive of our outlet within 6 months, we will enhance the

penetration of these concepts by opening new outlets area wise.

Start Up Expenses & Capitalization Amount ( Rs.)

Computers & Laptops1,25,000

Display & Projectors75,000

Interiors - Contractor's Charges2,00,000

Legal & Professional Expenses30,000

To Security Deposit1,50,000

To Rent - Office25,000

To Rent - Godown25,000

Material, Stores, Tools & Kits2,00,000

8,30,000

Note:

Our initial Investment for opening our first outlet will beapproximately ` 8,30,000

The above Capital will be brought in the following manner:

Savings of Partners since childhood- ` 2, 00,000 each.

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Bank Loan- ` 10, 00,000 @ 12 % against guarantee provided byeach partners Father equally.

FINANCIAL PLAN:

Finance is considered to be the most crucial part of any business. At the end, Businessirrespective of the nature of its work should be able to generate money. So following are the

projections for our Business Model:

PROJECTED PROFIT & LOSS A/C:

The sales of the First year would be ` 12,450,000 as per the following details:

- 10 pairs of Labour which includes 6 pairs of masons,2 pairs each of electrician and

plumbers

- The daily expected collection of 1 pair of labour without materials is ` 2000-3000.

E.g.: 1 pair can do minimum work of 100sq.ft to 150 sq. of flooring tiles in 8 hours

of duty. The minimum rates are ` 35 to ` 40/sq.ft

i.e. =100 sq. * 35 = ` 3500/- day.

* /sq.ft- Per Square Feet

Approximate Rates of Repairing and Renovation are as follows:

Services Rates(INR)

- Tiles/Flooring/Wall - ` 35/sq.ft- Bricks - ` 20/sq.ft- Plaster(New)-Wall - ` 20/sq.ft- Plaster(New)-Ceiling - ` 40/sq.ft- Breaking of Old Plaster - ` 10/sq.ft

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- Door Framing - ` 40/Running Ft.- Windows Framing - ` 40/Running Ft.- Kitchen Platform - ` 700/Running Ft.- Toilet Fittings - ` 4000 & Above- Storage - ` 25/sq.ft

BREAKUP OF SALES :

Masons (6 pairs *` 6,50,000 = ` 39,00,000/- )

Plumbers (2 pairs *` 4,50,000 = ` 9,75,000/-)

Electricians (2 pairs *` 4,50,000 = ` 9,75,000/- )

(Total Service Income: ` 58, 50,000/-

+

Sale of Materials- ` 66, 00,000/- which is approx. 53% of the Total Sales.

Total: ` 12,450,000/-

PLAN & POLICIES:

Projected Year Additions of Outlets Total No. of Outlets

Year 1 - 1

Year 2 1 2

Year 3 2 4

Year 4 2 6

SALES:

As per our Calculation above, in the 1st Projected Year our Service Income will be

` 58, 50, 000/- and Sale of Materials will be ` 66, 00,000.

In 2nd, 3rd and 4th Projected Year, as the number of outlets is increasing, so we do expect

our Service Income increases by 5%, 6.25%, and 16.67% per outlet from Projected Year

1.

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In 2nd, 3rd and 4th Projected Year, as the number of outlets is increasing, so we do expect

our Sale of Materials to increase by 25% per year. Also, we are earning a 10% profit on

Raw Materials purchased.

RAW MATERIALS:

We expect Raw Materials to be consumed in the 1 st Projected year will be around

Rs.60,00,000/-

In the 2nd, 3rd & 4th Projected Years, we expect inflation rate to be around 8%, 6.5% and

5 % respectively.

CLOSING STOCK :

Every Month we are maintaining Closing Stock of Rs.2, 00,000 per outlet which

includes Raw Materials & Tools and Kits.

DIRECT EXPENSES:

In projected Year 1, we will be employing 10 pairs of workers per outlet and approx.

will pay them a salary of Rs.26,40,000/-

At the end of Projected Year 4,our total strength of employees will be 120(60 pairs i.e.

10 pair/Outlet)

The salary will be increased by 10% p.a. at the end of the first projected year for every

year.

GROSS PROFIT:

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Our Gross Profit will be in the following manner:

Project Year Gross Profit

1 32.21 %

2 36.27 %

3 38.02 %

4 39.78 %

The following are the details of the number of staff which will be employed by us foradministrative purposes :

Projected Year Peon Receptionist Marketing

Manager

1 2 1 1

2 3 2 2

3 5 4 4

4 7 6 6

Our Chief Accountant will be the same for all Outlets opened by us.

Salaries of all employees would be increased by 10 % p.a.

PARTNERS SALARY:

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Salary to both the partners for the Projected Year 1 st and 2nd will be ` 30000 per month

and for the Projected Year 3rd and 4th will be ` 40000 per month.

RENT (OFFICE AND GODOWN):

Rent of Office and Godown will be ` 25000 per month for Projected Year 1 which will

be subject to an increase of 10% per annum w.r.t to the number of outlets.

DEPRECIATION:

Depreciation will be charged @ 60% on fixed assets as per Written Down Value

Method.

TAXATION:

As the current Tax rate is 30.9 %, so we will expect it to be same for all the four

projected years.

NET OPERATING PROFIT AFTER TAX (NOPAT):

As the total revenue will be increasing but at the same time the Fixed Cost will be

increasing but with a decreasing effect, so out NOPAT will be increasing every as

follows:

Project Year Net Profit

1 8.66 %

2 13.58 %

3 14.36 %

4 16.92 %

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PROJECTED BALANCE SHEET:

We expect Creditors to be 10% of total Purchases with a time lag in payment of 1 month.

We also expect Debtors to be 10% of total Sales with a time lag in payment of 1 month.

Salary and Direct Expenses will be on accrual basis for a period of 1 month.

Labourers for the new outlet will be hired at current market price.

Interest on Bank O/D @ 12 % will be paid in Projected Year 1 and the entire amount

Bank O/D of` 10, 00, 00 will be repaid on the 1st day of Projected Year 2.

Security Deposit will be ` 1, 50,000 per outlet.

Prepaid Expenses includes Rent for a period of 1 month.

We have invested excess Profits in Long Term Fixed Deposits @ 8% per annum

because for further expansion from a partnership firm into a private limited company, we

require money which would help us in getting bigger contract from corporates and

strengthening our clientele.

It has been invested in the following manner:

Projected Year Amount(INR)

2 ` 10,00,000

3 ` 30,00,000

4 ` 90,00,000

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BREAK-EVEN ANALYSIS:

Profit/Volume Ratio = Contribution

Sales

= ` 40, 10, 000

` 1, 24, 50, 000

= 32.21 %

Break Even Sales = Fixed Expenses

P/V Ratio

= ` 23, 30,000

32.21 %

= ` 72, 337, 78 /-

So that means our break even sales would achieve when we achieve the target sales figure of

` 72, 337, 78 /- i.e. after approx. 7 months of start-up of our business, we would be able to

breakthrough which would be a very positive sign for the success of this Business Model.

CONCLUSION:

The total accumulated Profit for all the four projected years of all outlets comes upto

` 1, 87, 94,632/-

We expect our Net Operating Profit after Tax around ` 10, 00,000/- per outlet in

Projected Year 1 which in the Projected Year 4 goes on an average to ` 15, 00,000 /-

per outlet which shows that the Business is continuously making rapid progress.With

the help of above Financial Report, we can finally come to say that the above business

model would result in viable and profitable business venture if implemented and

executed as per the plan.

REASONS FOR PURSUING THIS BUSINESS MODEL:

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Everyone House needs some repairing and renovation in some or the other form in every

year whether it is a small masonry work or leakages during rainy reasons. As per our

calculation, in a year, a household does minimum repairing and renovation of around `

6000/-.And even after doing this, many of them are not satisfied with the service provided

and the quality of work. So, we thought it would be good to provide all the major servicesrequired under one roof under a proper brand name, which would be beneficial to the society

at large and at the same can be a sustainable business model as repairing and renovation is

an on-going activity.

The main advantage of having this Business Model is that it is applicable to all the people

living under the sky and is not applicable to a particular s market because repairing and

renovation would be required by everyone in some or the form.

ADVANTAGES:

Under one roof, consumer will be able to get all the facilities and services pertaining to

repairing and renovation work

Easy Availability of Labour because of fixed income offered by us.

Safety of Consumer as trusted company labourer in uniform would do the work

Guaranteed and Quality work

Bills of every work done

Online Quotation & E-payment facility

Government will get Revenue because of the legalisation of the work

Employment Opportunities

DISADVANTAGES:

Competition with unorganised sector.

Migration After training.

New Player can enter the market after our start.

WAYS TO OVERCOME DISADVANTAGES:

People want quality work at a reasonable price in a fixed duration which unorganised

sector cant provide. Also, a business like this is more is more trustworthy than an

unorganised sector.

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As the sector is unorganised, there would be never any shortage of labour who wants to

do the work at fixed income.

We would be always having the first mover advantage over any other player who tries to

enter the market at a later stage.

Goodwill of the outlet will help us to compete with unorganised sector and new players

who enter the market.

CONCLUSION:

If we manage to start this concept, we will be contributing towards the society primarily in

the followings ways:

Economically: We would be converting an unorganised sector to an organised sector

and at the same time we would be able to generate revenue and also able to achieve

Customer Satisfaction.

Ethically: Government would be able to generate revenue for which they were deprived

till now in this repairing and renovation sector as it was completely an unorganised one.

Socially: It would also lead to the upliftmen of the status of labour class as it would

provide them with a fixed job in a friendly environment with complete peace of mind.

Also, the employment opportunities increases for people belonging to this class as they

mostly use to work on an individual basis with no fixed source of income.

The above Business Model also helps us to curb the menace of Labour Exploitation done by

contractors and Builders as it would give them a fixed secured job with a fixed source of

income. It also helps labourers in the following manner:

Job Security

Job Satisfaction

Family Security

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Higher Status

Insurance, Medical Facilities

Incentives

If a worker performs a similar kind of work individually, he would be deprived of all the

above facilities and in addition to no fixed source of income as they are generally not able to

get work on all 30 days of a month and here we would be providing them with fixed salary +

incentives based upon their work.

We can expand this Business model as much as we are able to because at the end everyone

wants an effective service at a reasonable price and enhance the penetration of this concept.

We can also work out a similar concept for other Industries also as it would be of great help

to the society at large.

At the end, we would like to conclude by saying

We have one thing in common between all of us, i.e. 24 hours a day; it is that how we

use it which makes a difference in our life.

APPENDICES:

All Financial Reports which are as follows:

Start-up Expenses and Capitalisation.

Projected Balance Sheet for 4 years.

Profit and Loss Statement for 1 year.

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Cash Flow Statement (Though as perAccounting Standard 3, it is not prepared for

Partnership Firm but just for our reference it has been prepared).

Sales Breakup

Costing Sheet

Investing Finance

business plan: total repair system

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