Sample Business Plan: The Smart Real Estate Company

Executive Summary

The Smart Real Estate Company (SREC) is a UAE-based company, which will be offering benchmarked rental units for the residents of the different regions of the United Arab Emirates. Its housing units will balance safety, the innovative features, as well as create a positive atmosphere for each of its tenants. The SREC will provide rentals that have unmatched levels of customer attention and service. The company has projected to have substantial sales within a period of one year, which is expected to grow moderately by the third year of operation.

  1. The Opportunity

The company will target two main customer segments in its first three years of operation. The largest segment to be served by this company will be Abu Dhabi city. The booming population in this city has left thousands of residents scrambling in order to get properties to rent. The city is currently bursting with many projects and construction of business premises (Structures Congress, Lyons & American Society of Civil Engineers, 2007). In fact, villas are now being partitioned into smaller rooms to cater to the high demand of the properties. Because of the high demand, the cost of housing has increased. However, the quality of the houses does not match with the costs. The company is therefore seeking to improve the quality of these houses.

The other segment that the company will be serving in Dubai city. Just like in Abu Dhabi, the house shortages within Dubai city have resulted in high rental charges on the few available resources (Quednau, Mülleru & SMAQ, 2012). The company will, therefore, target to utilize the available market by coming up with a housing system that will be more affordable for most residents. In addition, the system will ensure that the quality of the houses matches the rental charges.

  1. The Growth Plan

During the initial years of operation, the company will mainly focus its efforts on buying the existing properties and then developing them. The properties will be purchased and then the safety measures will be implemented in each unit, which will ensure that there is an innovative and safe environment. In addition, the units will be hard-wired with internet access and state-of-art amenities will be installed. The future projects will involve building and installing the entire house.

  • The Management Team

Abdullah Salim and Ramadhan Mohammed will be the leaders of the Smart Real Estate Company. Salim possesses a Bachelor’s degree in Economics and Statistics. He also received his MBA from Oxford University. He has worked with three different property management companies in the United Kingdom. In fact, he served as the vice president of Scot Real Estate Company for six months. It was this time that he gained valuable industry insight as well as experience, which will help the SREC to achieve its goals. Ramadhan will bring different skills to the company since he has sufficient information on the customer service background. He possesses a Bachelor’s degree in Human Relations. He has worked as the Director of Customer Service for the Voice Stream Company for over three years. In addition, he has worked as a marketing executive for the Sigma Company in Dubai. Therefore, the experience of Ramadhan will provide the company with incredible customer attention, which will help the company to meet its target.

  1. The Keys to Success
  • Safe and quality housing system, which will provide state-of-art amenities at the competitive prices
  • Maintaining open communication between the company and its customers will ensure a high level of customer satisfaction. In addition, it will ensure there is a long-lasting company reputation within the UAE.
  • Continue expanding the number of units that are owned and maintained by the company will increase the company’s profits. It will also attract more investors, which will enable the company to expand rapidly to other regions.
  1. The Financials

As a limited liability company, SREC will mainly depend on the capital contributed by the parties to start its operations. Each of the two owners will contribute 40 % of the total required investments while other interested investors will contribute the remaining 20 % of the required capital. The company will use up to a total of $1.34 M as the start-up funding.

The Company Summary

The Smart Real Estate Company is an enterprise, which will be involved in numerous activities in the real estate industry in UAE. The primary experience, as well as expertise, will be in developing high-quality and lower-cost living units for the residents of Abu Dhabi city and Dubai. It is a start-up company, which has a well-planned line of action that intends to benefit the residents. These will be mainly the residents who seek the most updated technologically advanced living environments.

The Smart Real Estate Company has been established as a Limited Liability Corporation. The company will be owned by its principal investors, Abdullah Salim and Ramadhan Muhammad. Salim will be the acting CEO and will own up to 40 % of the company stake. On the other hand, Ramadhan will be the acting CFO and will hold up to 40 % of the company’s stake. A silent investor will own the remaining 20 % of the company’s stake.

The company will be operating in both the Dubai emirate as well as the Abu Dhabi emirate. However, its headquarters will be based in Dubai city. This will be acting as the heart of the company. The company will have satellite locations in different regions within Dubai and the Abu Dhabi emirates. In addition, the company will install in-house internet servers as well as 24-hour answering services, which will enable easy and quick communication between the customers and the company representatives. The first property to be purchased and maintained by the company is based in the Abu Dhabi emirate, on the Saadiyat Island. In fact, the company is now in the final stages of acquiring this property. This property will attract many customers to the company estate. This is because it is the only plot, which can give the residents a sea view opportunity (Abed, 2010). The company will acquire more plots within Abu Dhabi city as well as in the emirate of Dubai.

The Company Products and Services

The Smart Real Estate Company will offer the most modern rental units or houses, which satisfy the tenants’ safety as well as comfort requirements. Apart from providing the accommodation, the company will be offering on-site security guards, which will be patrolling the grounds in the evenings, nights, as well as during early mornings. The company will also be offering on-site repair services to its clients. Moreover, there will be an open line of communication, which will link the management to the tenants through the SREC Web. There is also a 24-hour call-in answering system, which will be installed in the houses.

Vision, Mission, and the Company Objectives

  1. Vision Statement

The Smart Real Estate Company is devoted to ensuring it is the most trusted real estate company within the United Arab Emirates, providing high-quality dental services that derive customer satisfaction.

  1. Mission Statement

The mission of the Smart Real Estate Company is to provide comfortable, high-quality rental units in the United Arab Emirates. The company’s apartment units will be offering its residents a state-of-art living standard, which is reflective of the quick advancements within the technology, as well as the growing need for quality housing in the UAE. The company is devoted to ensuring that there is a hassle free-living environment, where the tenants are able to enjoy the benefits such as attractive, safe, and inviting units.

The major goal of the SREC is maintaining the most possible competent level of customer satisfaction. The safety, happiness, and comfort of the tenants are the main goals of the company. In fact, the company is able to maintain competitive market prices while working hard in order to expand the number of units it owns as well as increase the total profits that it will be earning.

The management of the company will work as a harmonious and cohesive unit, which will focus on exemplifying the mission of the company. The company will also focus on the employees’ satisfaction to achieve its success, just as customer satisfaction. Therefore, both customer, as well as employee satisfaction, will be the key to the longevity of the company.

  • Objectives of the Company
  • To encourage substantial sales within the one year of operation as well as growing steadily through the three years of service
  • To attain a moderate gross margin and improve this margin over the span of the company’s plan of operation.
  • To obtain a positive net profit and net sales by the second year of service
  • To adhere to the environmental rules and regulations in order to ensure that the company has a crime rate of zero
  • To foster the ideals of the significance of the tenant needs along with the healthy as well as understand the relationship and professional commitment to the customer satisfaction.
  • Modifying and remodeling the acquired real estate in order to meet the standards of the SREC and increase the long-term assets as well as income.

Industry and Competition Analysis

The demand for affordable housing in the United Arab Emirates has been increasing steadily (Gorgenländer, 2011). The high demand has mainly been due to the increase in the immigration rates into the country. People have been migrating into the UAE for business, education, and tourism. In addition, the improved living standards, such as better health facilities as well as food availability have led to a drop in the mortality rate in the region while raising the life expectancy. This has resulted in an increase in population. Because of these factors, there has been an increase in the available housing facilities.

On the other hand, the real estate companies have moved in to take advantage of the high demand. This has resulted in the evolution of poor-quality housing facilities, which are too expensive to be afforded by most of the residents in the UAE. The companies are mainly interested in making a profit without considering the demands of the customers (Motaleb & Kishk, July 01, 2013). Therefore, the supply of the housing units has completely failed to meet the demands of the customers, especially the safety and comfort requirements. This has caused an imbalance in the country between housing affordability and customer requirements.

Despite this, there is high competition within the real estate industry (Potts, 2003). This has been increased by the favorable government policies that encourage the real estate companies to invest more in order to reduce the problem of house shortages within the UAE (The Report: Dubai 2007). In fact, The government of UAE passed the mortgage laws, which are meant to impact changes within the housing market. These laws are aiming to address the problems of imbalances between the supply and demand of housing facilities in the country. In fact, the laws are encouraging competition in this industry. Therefore, the Smart Real Estate Company will be entering into an open market, which has a high level of competition.

The housing industry in the country has initially had limited competition (Walker, 2007). There have always been few firms within this industry. This has been mainly because of the high costs involved during the construction activities. However, with the passage of the mortgage laws in the country, there is expected competition in this industry. These laws have enabled various construction companies and individuals to acquire loans. They have invested in real estate, hence increasing competition within the industry. However, these companies pay very little attention to the quality of the facility that they are building. The SREC will therefore utilize this to acquire an advantage over its competitors.

The SWOT Analysis

  1. Strengths
  2. The SREC is a true expert within the real estate and housing industry. The management team of the company has adequate experience within the industry that has been acquired from different companies.
  3. The SREC is a middle-market company. It will be catering to the needs of the local class, the middle class, and the high-class customers within the UAE.
  • The company has a well-organized team that will help it in executing its projects in various new places by employing good networking.
  1. The Smart Real Estate Company is a customer-driven company that will be mainly focusing on achieving the demands of its customers.
  2. The company’s services are in line with the advanced technological developments. This will help in attracting many customers to the company.
  3. Weaknesses
  4. The SREC is a start-up company. Due to this, the company does not have any strong contacts within the UAE real estate and housing industry.
  5. The major part of the company is owned by two individuals. Expanding the company may take time due to limited resources. This is because the owners may not be willing to invite more people into the company.
  6. Opportunities
  7. There is an increased demand for safe housing facilities within most parts of the United Arab Emirates (Gorgenländer, 2011). This is especially among university students as well as among low and medium-income earners.
  8. The government of the United Arab Emirates has passed mortgage laws, which encourage investment in the real estate and housing industry within the country (Gorgenländer, 2011). This will enable the company to access the required resources easily for its expansion.
  9. Threats
  10. There is a lack of barriers that may limit the entry of new firms within this industry in the country; therefore, other competitors may easily gain access into the market (Leita, 2010). this will lead to increased competition and scramble for the available customers

Competitive Comparison

The competitive advantage of the company will be as follows:

  1. i) The company will be offering a high level of quality services in its houses.
  2. ii) Each of the houses will be fully connected to the internet.
  • iii) The company will enjoy the cheap costs of advertising since it will employ simple marketing strategies

The Market Analysis

During the first years of operation, the company will mainly target to provide accommodation to university students within the United Arab Emirates. These students are much concerned with their security while on campus. Therefore, they will be able to benefit from the company’s high-quality facilities, which are in line with modern technology. The company is also targeting other residents who are mainly concerned with the value of their money.

  1. The marketing strategy

The company will have readily available brochures at all its offices. These will contain all the information that may be required by the clients. It will explain all the benefits associated with the use of the company facilities.

  1. The market trends

The real estate industry is evolving constantly (Abed, 2010). The inflexible industries will be left stagnant. In line with this, the SREC will be working hard to ensure that its housing facilities are easily adaptable to technological advancements.

References

Abed, I. (2010). United Arab Emirates a new perspective. London: Trident Press.

Dreiseitl, H., & Grau, D. (2009). Recent waterscapes: Planning, building and designing with water. Basel: Birkhäuser.

Gorgenländer, V. (2011). A strategic analysis of the construction industry in the United Arab Emirates opportunities and threats in the construction business. Hamburg: Diplomica Verlag.

Leita, E. (2010). MATLAB :modelling, programming and simulations. Rijeka: Sciyo.

Motaleb, O., & Kishk, M. (July 01, 2013). An Investigation into the Risk of Construction Projects Delays in the UAE. International Journal of Information Technology Project Management (ijitpm), 4, 3, 50-65.

Potts, D. T. (2003). Archaeology of the United Arab Emirates. London: Trident Press.

Quednau, A., Mülleru, S., & SMAQ. (2012). Charter of Dubai: A Manifesto of Critical Urban Transformation. Berlin: Jovis.

Structures Congress, Lyons, R., & American Society of Civil Engineers. (2007). Structures 2007: New horizons and better practices: proceedings of the 2007 Structures Congress May 16-29, 2007, Long Beach, California, USA. Reston, VA: American Society of Civil Engineers.

The Report: Dubai 2007. (2007). London: Oxford Business Group.

Walker, J. (2007). Oman, UAE & Arabian Peninsula (2nd ed.). Footscray, Vic.: Lonely Planet.