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BUSINESS PLAN

Mission

At mend it, we strive to add comfort to add comfort to our customers’ lives by providing all

their home maintenance needs at their doorstep on ONE phone call – On time, EVERY

time.

Vision

We aim to change the way people live and seek convenience, therefore selling lifestyles and

not just services. We aspire to be the premiers in home maintenance, interior designing and

renovation services.

Our motto is..

ONE STOP, MANY SOLUTIONS

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BUSINESS PLAN

Company Summary & Services offered

Mend- It is a service oriented company that aims to revolutionize the way

homes are maintained. Mend-It caters to apartment buildings and offers

membership to the Mend-It club which gives the members access to wide range of services

and benefits. Mend-It provides electricians, plumbers, carpenters, key maker and janitors.

This will be a unique company as it provides trained personnel for all home maintenance

needs on just a phone call. Mend-It assures that only the highly skilled people who have

under gone and cleared all the back ground security checks will be used for the services. This

solves a major security threat that is associated with picking p random people from the street

to solve these problems. Mend-It caters to customers with a fast paced life style specifically

the nuclear families. These clients do not have the time to hunt for the appropriate people

and neither can they make a dozen phone calls for the different needs so even basic

electricity and plumbing problems becomes a nuisance. Mend-It solves this problem by

catering to all the home maintenance needs on just one phone call. The members of the

Mend-It club get a loyalty card on which they get reward points which enable them to get

discounts on the designated Hardware stores. Mend-It is the first company that enables the

apartment management to outsource the maintenance needs to a specialized company.

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Mend It Team

Mend –It is owned by two people named Haider Raza and Zahra Inayat. Yawar Bukhari is

the Venture Capitalist who is making 65% of the investment and who according to

memorandum of understanding will not participate in the decision making. The

management decisions are to be taken by Haider Raza and Zahra Inayat who collectively put

35% of the investment. Mend It has a horizontal hierarchical structure; Head of Marketing,

Head of Finance report to both Vice President and President, whereas, Head of Operations

reports to the Vice President directly. The three divisional heads are not making any

investment initially but in the forthcoming years, they will be given an option to purchase the

equity. 1

Unique Selling Proposition

Mend-It is an innovative concept in home maintenance as:

Mend-It is the first company that offers complete home maintenance services for

apartment complexes.

Membership with Mend-It allows members to avail services at affordable rates. 2

Mend-It offers all home maintenance services on one phone call.

Mend-It is a safer option as it undertakes background checks of its employees.

Mend-It guarantees satisfaction to customers as only the expert personnel will be used.

1 Refer to Organizational Chart for the organizational chart 2 Refer to “Maintenance Packages at a glance” table given in Appendix

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Viability of Business

Mend-It is a business entity with strong chances for survival due to the following reasons:

There is a strong need for an entity that provides apartment complexes with multiple

skilled workers. Therefore, the demand for our services is there and this has been

proved by our primary research. 3

There is an abundant supply of the skilled labor in the market

The demand for services provided by Mend-it is relatively inelastic. Mend-

it caters to a necessity and not a luxury so the demand is not seasonal making the

business ‘Resistant to Recession’.

Company location and facilities

Mend-It has one company office and that is at Tauheed Commercial Area. Tauheed

commercial has been chosen due to its proximity to the target market and the relatively

affordable rents. Since, our business is such that the customers do not need to visit the

office, we can establish our office anywhere. The required personnel will be dispatched from

the office so our primary concern is to minimize the fuel costs. In that regard, Badr

commercial is the best trade off between low rents and low fuel costs. The office rent at

other commercial hubs such as on Khyaban Shahbaz is Rs.30,000 plus for one month

making it tough for our finances to accommodate. On the other hand, the rent at Kyban-e-

Ittehad is between Rs. 10,000-12,000 which is affordable however would increase our fuel

costs as its located comparatively far for Clifton and Sea view (the hubs of apartments)- our

extremely potential market. Therefore, we have settled for a 335sq feet shop on the

Mezanine floor at Tauheed Commercial and the monthly rent is Rs. 15,000.

3 Refer to „people contacted‟ in Appendix

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Technology

Mend-it is using the latest, state-of-the-art, technology to cater to the demands its customers

at it. The primary focus of our business is customer building and customer relations. Hence,

Mend-it uses a 10-line telephone switch board which will enable our trained, English

speaking telephone operators to answer our customers’ phone calls. As Mend-it focuses on

delivering quality to its customers, a well developed computer system is put in place to serve

the company’s needs. The telephone operators will also have a Customized Complaint

Software that will give the operator the knowledge of where Mend-its personnel are

currently deployed and be able to deploy the closest and most suitable specialist to the

required job. Mend-it is also using a well developed Customer Database that will maintain

a detailed record of its customer’s profile and even the number and type of jobs that they

have ever had the company service in the past – including the material and costs charged.

This not only helps the company to refer back to records instantly, but also helps it to rate

its most frequent customers and give them added benefits.

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Marketing

Competitors and Competitive Analysis

In the domestic services sector, there is no concept of clubs and membership and Mend-it is

introducing this. Mend-It is the only company that specially targets the apartment complexes

and provides all the home maintenance needs on one phone call. The range of services

provided by Mend-It is broad and there is no direct competition. Currently, there are entities

that provide domestic servants and security guards, but there is no established entity that

gives the clients the opportunity to become members of the company and receive home

maintenance facilitates in lieu of this membership. Mend-It is only competing with the

electricians, plumbers and other personnel on the street and this gives the company various

advantages over the competitors. These are:

The staff is trust worthy and has undergone the necessary security checks. With

Mend-It staff, people can feel safe as the staff is reliable. The current law and order

situation is such that random people cannot be allowed to come and fix the problems;

therefore the security issues are resolved with Mend-It.

Mend-It promises the customers that the required personnel will reach at the

promised time that is within two hours. The problem with the conventional system of

getting hold of random people has a major issue that there is no assurance that the

desired people will actually come when needed. Therefore, in emergency cases when the

customers cannot wait for long, Mend-It is just a call away.

Mend-It serves all the home maintenance needs ranging from electricians to

plumbers to carpenters to key makers to maids and Butlers. Currently, people have to

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approach different people to meet diverse needs. With Mend-It becoming a member

ensures that all the needs are met within one business.

Mend-It serves customers with style- all Mend-It workers will be wearing a company

uniform along with the employee card.

*SWOT analysis summary given in the Appendix

Target Market

The target market for Mend-It is the residents of Apartment complexes in Defense and

Clifton. This means Socio Economic class A and B plus will be catered to. This class is a

minute portion of the total population but the spending on living and life style is higher.

A Pakistani citizen on average spends about 3.7% of their household expenditure on

home maintenance needs4. The target market has been as all the buildings in Defense

and Clifton need high maintenance due to the proximity to sea. Primary research shows

that there two broad categories of buildings in Defense offering similar yet not complete

packaged services. Indepth Comparison is provided in appendix.

Promotion

Mend-It caters to a niche so there be selected marketing and no mass marketing tools will be

used. The aim of Mend It in its initial years is to create awareness. There will be no

Newspaper advertisements or television commercials as they are very expensive and there is

a lot of wastage in the use of such mediums as they there is no assurance will actually view

the ads or not.

4 http://www.statpak.gov.pk/depts/fbs/statistics/hies0102/hies0102t20.pdf

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Therefore, we will therefore use the following:

Direct Marketing: The aim of Mend It in its initial years is to create awareness about

its services and thus to make a mark in the existing market. To do so, several

mediums of direct marketing are to be employed.

o First two week campaign: Mend-it focuses on delivering quality and customer

satisfaction at all levels of the services it provides to its valued clients. Thus

to establish a strong standing in the service industry it competes it in, mend-it

is setting up a stall at what is considered the heart of all such business

activities, Ghizri. The stall will be there to stay for a minimum of two weeks.

The reason for selecting this location is that nearly 80% the people from

Clifton and Defense come here to with their maintenance problems. Instead

of approaching the same usual labor, mend-it’s workers at our stall will offer

their services for free (no labor charges) and make sure the customer’s

problem is fully resolved to the customer’s satisfaction.

Public relations: one of the most effective ways of marketing is through third party

recommendation. Our friend, Amena Jafry5 writes for DAWN News. Her articles

discuss the lifestyle and women in our culture. As a favor, a mention of our services

once or twice in her article can create awareness about the company.

o Word-of-mouth: Social network is one of the strongest forms of

communication diffusion. Other than visibly advertising in the public

through our advertising and awareness campaign, our employees also build

our company’s name by delivering quality services and thus forming a strong

5 http://www.dawn.com/weekly/review/archive/080710/review7.htm

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positive brand image of the company. Our emphasis is on Customer

relationship management and our customers will be our biggest advertisers.

HOME EXPRESS: Is a well renowned advertizing magazine that is delivered to

10,500 doorsteps in Defence and Clifton, our target market, making it a right-fit for

a suitable channel of advertising. In this magazine, Mend-it will advertise its

‘membership’ schemes and its discount and free-trial coupons that will not only benefit

our existing customer base, but will also help to attract new customers and create a

foundation for further customer relationship building. *Please refer to Appendix for

the details of distribution of promotional elements.6

Impact on Pakistan Economy and Society

Mend-It will help the Socio economic class C and D by providing them employment in a

time when the unemployment rate is hovering around 5.3% to 6%7. Mend-It provides job

security to workers who otherwise live on daily wages; and during political strikes or ethnic

tensions in the city they do not find work and live in a near starvation state. Mend-It also

provides higher wages to the employees and this will help in alleviating their standard of

living. Our target market is Clifton, DHA Apartment complexes. All these buildings reside

Socio Economic class A to B. though our primary target remains Socio Economic class A,

yet a percentage of Socio Economic Class B will be catered and our services will improve

their standard of living and add convenience in their life.

6 “Breakup of Promotional Campaign” given in the Appendix

7 www.pak.gov.pk

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BUSINESS PLAN

Exit Strategy

In case of unavoidable circumstances that may force closing down, Mend-It can

discontinue operations easily. Mend-It is a services company so there are minimal

fixed assets. There is no plant or machinery so winding up will not be an issue.

The company office is rented so that can be returned with just a month’s prior notice. The

others company assets are the Motor Cycles and the company van. Both these have a high

resale value and can be sold off easily. The employees are on a 6 month contract that is

renewed on June 30th and December 30th so incase the operations are discontinued, Mend-IT

is obligated to pay the salaries for the interval until the contract ends.

Succession Planning

Mend-It is a partnership between three members, two of them being team members of this

business plan group and the third one is the Venture capitalist. The other three group

members will receive a salary till the next two years. However, if any of the partners wish to

leave the members, these three employees have the option to buy the equity.

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BUSINESS PLAN

Financial Plan

Mend-It is a service oriented business. It is a business which is expected to flourish. Any

financial plan cannot be made until certain basic assumptions are made and certain basic

agreements worked upon. For Mend-It it is essential that these basic assumptions are kept in

mind when analyzing its financial data.

Mend-It has no debt. All equity is financed by two partners and a venture capitalist

who has agreed to invest about 65% of our initial investment.

After an agreed upon time of five years since the business inception, the two

partners will be allowed to buy back the equity from the investor at no more than

10% yearly.

The investor has agreed to give us a grace period of maximum two years to bare our

losses, if any.

The whole business would run mainly on cash basis. Therefore there are hardly any

liabilities, which justifies the low base effect and hence the abnormal high liquidity

ratios.

Certain expenses, such as fuel, salaries & Rent have been increased by

the current and the forecasted inflation rates respectively.

Ratio Analysis

June July August September October November December January February March April May

Current Ratio 24 19 13 8 8 7 6 4 3 4 6 7

Acid Test Ratio 24 19 13 8 8 7 6 4 3 4 6 7

Net Profit Margin -41% -41% -40% -40% -2% -8% -8% -8% -11% 4% 3% 3%

Return On Investment -7% -7% -7% -7% 0% -2% -2% -2% -3% 1% 1% 1%

Return On Assets -10% -11% -11% -13% -1% -4% -4% -4% -6% 2% 2% 2%

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The table above shows the ratios of a service industry where there are repeat customers.

Thus the customers of the last month of the first year would be the included in the first

month of the new year.

Ratio Analysis

FY 2011

FY 2012

FY 2013

FY 2014

Current Ratio 39 77 111 198

Acid Test Ratio 39 77 111 198

Net Profit Margin 9% 10% 11% 14%

Return On Investment 48% 71% 107% 178%

Return On Assets 50% 42% 39% 39%

Payback Period

Payback Period is the year 2013, which is the 3rd year since the inception of the business. By

that period all the money invested in the business would have been paid back through

profits.

NPV

Net Present Value is Rs 10,023,687. The discount rate is 20% which is considered as the cost

of equity.

IRR

Internal Rate of Return for Mend-It is 82% over a 5 year period. However till the end of the

second year, it is negative 6%. This shows that around in the third year, our business would

be able to break-even.

For IRR purposes, the discount rate is 15% and terminal growth rate of 4%

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Appendix

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“Organizational Chart- Mend It”

President (Haider Raza)

Vice President (Zahra Inayat)

Head of Operations

(Suhaib Jalees)

Head of Finance (Ozair Masood)

Head of Marketing (Sultana Haider)

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“Maintenance Packages at a Glance”

Comparison of Maintenance Packages

Basic Package Normal Package Our Package

Pricing Rs. 1500 Rs. 5000 Rs. 1500 + 2000

Description Guard + Elevator

Guard + Elevator + Car Cleaning +

Building Maintenance

Guard + Elevator + Cleaning Services

+ Building Maintenance + In-house Maintenance

(Plumbing, Carpentry, Electricity)

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BUSINESS PLAN

“People Contacted”

• Real Estate

– Mr. Saad

• Contact Number: 021-5831614

• Commodore Real Estate

• Contact Number: 5378626

• Karachi Chamber of Commerce

• Contact Number: 021-9218001

• Silver Hawks Security Guard Agency

– Mr. Khizer Hayat

• Contact Number: 0320-4225374

• Caretaker Askari Apartments

– Mr. Abdul Malik

• Contact Number: 0300-2627881

• Sea Breeze Construction

– Mr. Talib Ali Chawla

• Contact Number: 0300-2007339

• Yawar Bukhari

• Contact Number: 0300-8505254

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S.W.O.T Anaylysis Summary

STRENGTHS WEAKNESSES

1. Consistant demand of services 2. Abundant supply of labor available 3. No direct competitor-no one provides

services in this manner 4. Low initial capital requirements- 5. Recession proof business- home

maintenance cannot be avoided 6. Large volume of customers due to

targeting large complexes 7. Target market is not price conscious and

appreciates better quality services

1. Profits are highly dependant on fuel costs that are very volatile

2. Security checks is a cumbersome process

3. Creating awareness about the company will be a challenge.

OPPORTUNITIES THREATS

1. Expand into home renovation and

decoration. 2. The relationship built with customers

through the basic services will help in introducing value added services.

3. Fresh graduates of Art schools will be hired as interior decorators and innovators. These services will be lower prices than established names like S.Abdullah and Ashary Kitchens.

1. Low barriers to entry so

competitors can enter easily.

2. Poor services by one employee can jeopardize the reputation of the company.

3. Government departments such Employee Social Security may create problems.

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36%

27%

23%

9%

5% HOMEEXPRESS

Flyers

WorldCall

Ticker

Stall

Public

Relations