RENTAL BUSINESS FOR

HOME AND CONSTRUCTION SUPPLY DEPOT

__________________________________
TOPHOME BUILDERS INC.
Sogod, Southern Leyte
June 2017
 DETAILS

Registered Owner : Nikki Rose D. Chongco

Lot location : Zone V, Sogod Southern Leyte

Tax Declaration Number : 07-17-0005-00862

07-17-0005-00863

Lot Area : 120.87 x 37 M

Building Area : 99 x 37 M
 TABLE OF CONTENTS

Title Page

Executive Summary 1

Description of Project and Services 1

Long- range Objectives 3

Nature of the Industry 4

Technology Considerations 4

Market and Sales Strategy 5

Management and Personnel Requirements 5

SWOT analysis 7

Financial Projection 9

Findings and Conclusions 13

Executive Summary

Tophome Builders Inc. is one of the prime and leading hardware stores in
Sogod Bay area. Since 2004 it operates and serves the clientele with superior
customer service and attention, great product selection, reasonable prices and
upright philosophy. It is also proven that the management team has the financial and
technical experiences that ensure the great investment and overall success of the
business venture. Tophome Builders Inc. growth rate is steady and has potential to
grow exponentially. Thus at random technique, the management surveyed residents
in Sogod bay area and found out that hardware stores are one of the top ten things
needed to make downtown a great place to live and also a great place to work.
The demographics of home ownership and the rising of the construction
industry presented a radical change of demands nowadays. Hence, hardware stores
dominate a substantial value. Tophome builders Inc. is uniquely positioned to take
advantage of this new fact of life. It is conveniently located at the heart of the
province of Southern Leyte in order to offer parts, materials and advice to tackle any
project to either a complete novice customer or a contractor. Thus, its main aim is to
bring to the customer the ultimate and the latest solutions in home improvement and
construction development.
The business exhibited good performance among its few competitors,
competitors that are seen by the management as partners in providing the needs of
the market specially that demands for hardware products are really high. And in
order to fully bring all the necessities up to the last altitude, the company is in the
position of providing the market with a new and huge hardware store with a target
business partner.

Description of Project and Services

The project is a provision and construction of a fully furnished building for a

huge one-stop shop home and construction supply depot. This building is suited for a
business tenant like Savers Home Depot that has extraordinary service, high quality
products and competitive prices as aimed by the management of Tophome Builders
Inc. Through that, the target market is rest assured by the owners of the business
that they adhere to what the customer needs for their full satisfaction.
 Tophome Builders Inc. will acquire the accessible property, specifically
located at Zone V, Sogod Southern Leyte with more or less 4,607 sq.m.. This is
where the building be constructed. The building is expected to occupy 3,663 sq.
which is situated along the main road, hence the location is good enough for the
productivity of the business because it is easily seen by the target audience. The
location is near Gaisano Capital, one of the crowded areas in the locality so it is
accessible for all types of customers. The management also give a considerable
space for parking lot which competitors don’t have.
The location is one of the main roads where passenger vehicles are also
passing by. There are no existing obstructions since the area is clear from other
buildings which presents an inviting views for the customers.

Figure 1.0 The location of the proposed project

Mainly, the project is intended for Tophome Builders Inc. and not in line with
any other government advocacies. Yet, this may support the local government to
elucidate unemployment problem in the locality since it requires considerable
number of human resources. It does not also support any political aspects or the
government or other organizations in the community but it will give convenience to
the consumer in purchasing complete package of materials needed, in lessening up
their effort and time and most specially in saving cost of transportation.

The project also adheres to the responsibility of having a good impact on the
environment. Therefore, the identified project location has no possible intrusions to
the safeguard of life, health, property and public welfare.

Profitability is not just the major aim of the project but also to be a socially
responsible business by promoting a healthy environment in a simple way of
providing home and construction materials.

Long- range Objectives

The construction of a fully furnished home and construction depot building

intends to expand the scope of Tophome Builders Inc. to provide the needs of the
market by inviting business to occupy and invest by selling the same line of products
in the market. Specifically, the project aims to:
1. Countenance Savers Home Depot to occupy and rent the entire building in
order to dominate the market in the community and define the edge from its
competitor in the target market;
2. Provide convenience of the construction industry and other customers by
bringing affordable products into their doorstep;
3. Help decipher unemployment problem in the locality by hiring 70% of the local
individuals to work with Savers Home Depot.
4. Increase income and profit by 80% in the next five years of occupancy.

Nature of the Industry

Home and construction needs depot is a strong and energetic business. Also,
what makes it appealing to the market is the fact that this steadfast service continues
to grow and succeed. As population grows, construction industry as well as home
materials will definitely forecast to flourish. Hence, an equipped building for this kind
of business is viable. For the leasing of the building there is no significant
competition since there is no other structure around Sogod bay area that can
accommodate the standard of Savers Home depot.
 The biggest threat is spotting on the products that the tenant, Savers Home
depot will sell because there are already existing businesses in the near areas that
although relatively small they have developed strong standing in the same kind of
products. This yields a smaller target market for the business.

Relationship and networking to other agencies, organization, government, etc.

are seen as fundamental aspect in this kind of industry.

Technology Considerations

Specific to the building rental, there is no high demand of technologies except

that the building must conform to the standard and requirements set by the
approving authorities as well as by the Savers Home Depot. However, upgraded
technological capability might be required by Savers Home Depot to move toward
offering an online marketplace from which customers may purchase their products,
hence, Tophome Builders Inc. considers, Information Technology room with cables
and internet connections are available and installed in the entire building.

Savers Home Depot is a whopping business and therefore will surely needs
sales and inventory system, warehouse system, management system, accounting
system, etc. These are aspects that Tophome builders will be considered in
designing the building including specifically the electrical plan since these systems
may demands hardware and other interfaces.

Market and Sales Strategy

Tophome Builders Inc. and Savers Home Depot will work in partnership so
the venture will become successful. If products of the latter are not sold, the latter
might vacate the space rented that will weaken the viability for Tophome to get
income from its rental.

In order to be successful, the business must differentiate itself from competitor

s in order to appeal customers in the marketplace. To do this, Savers Home Depot

will utilize its practice of personalizing its product packaging which it currently offers
in-store customers
 The business will implement a customer e-mailing list in order to send product
promotions, sales advertisements, and other special offerings to customers who
register. Additionally, offer referral incentives to customers who refer the products to
friends and family in order to provide additional incentives. Also, maintain a customer
database in order to determine its target customer groups and geographical regions.

The business will research marketing intelligence providers to determine the

benefits and costs of purchasing customer information for bulk email campaigns as
well. Another important consideration online marketing strategy is cost. Electronic
marketing communication costs are very small in comparison to direct mail
marketing which Tophome Builders Inc. currently utilizes. It is important to note that
current marketing and sales staff will require training in online marketing and sales
practices. This training will need to be contracted to a training provider as part of the
startup costs and schedule.

On the other hand having a memorandum of agreement with the associations,

universities, schools, government and other sectors will help the marketing.

Management and Personnel Requirements

The new venture is not anticipated to significantly affect the organization

structure of Tophome Builders Inc. It has recent people who will maneuver the
monitoring and evaluation of the rented space and will also establish good
relationship with the people and management of Savers Home Depot for concerns
and relevant matters. Collection of payment or rental will be assigned to the reliable
staff of Tophome that is recently in-charge in the collection department of the
existing business.
To specify, Tophome Builders Inc. will need staffs for the rental of the building
as follows:
Supervisor – one that is assign by the manager to supervise and attend to the needs
of the occupants. Supervisor also is the one responsible of checking
reparations in the building and all matters related to it.
Accounting/Admin assistant – the one that handles all financial related tasks that
includes invoicing, recording of financial data, issue receipts, file taxes,
and other task in relation to the business
 There are, however, several staffing additions required to successfully
implement the selling of products for the side of Savers Home Depot. All of these
positions will work within existing departments and report to department managers.

Position #1 Managers – this full time position will lead sales staff in identifying
sales opportunities and converting these opportunities to actual sales. Managers will
also lead marketing staff in identifying target customer groups/markets and
conducting online advertising/marketing efforts. This person will report to the Director
of Sales and will work in admin office.

Position #2: Supervisor - This person will lead and supervise the work and
process followed by the workers and will make sure that it undergoes correct and
exact procedure in order to meet the standard demands in the market. This is a full
time position in which has the responsibility to coordinate with the Manager.

Position #3: Selling and Admin Staffs - These three full time admin staffs of
will be assigned to all the administrative tasks in the office that are directly and
indirectly related to marketing, bookkeeping, purchasing, product checking and office
managing. These persons will be looked over by the Manager yet has the avenue to
directly be monitored by the President/Proprietor.

Position #4: Direct Labors – These full time labors are the people who directly
work on the selling process. They are responsible of handling and assisting the
customers as front liners as well as to check the items in the shelves, familiarize
them and make the best PR so the items will be sold. They will report and will be
supervised by the Supervisor.

Position #5: Indirect Labor – Accountant, Graphic designer, website developer

and security guards are the people considered as indirect workers. Except for the
security guards, the rest will only be contracted per assignment. Security guards are
hired full time but still considered as indirect labor. These people are subject for
monitoring of the manager.
SWOT analysis

Strengths
This kind of business deal has numerous strengths within its resources.
Resources are tangible or intangible. Tangible resources are those that can be
quantified, such as store inventories or a company’s employees.
Intangible resources are those that cannot be quantified, such as brand
names or the intellectual information from an excellent manager (Hitt, Ireland, &
Hoskisson, 2009). Savers Home Depot has strengths with its marketing, human
resources, management, research and development, and finance.
Savers Home Depot’s strength in marketing is with its product brand, which is
an intangible resource. Its brand name gives the company leverage with its
bargaining power because it is one of the largest home improvement retailers in the
region.
The partnership agreement entered by Tophome Builders Inc. and Savers
Home Depot creates a good strength in pursuing the market. Existing technologies
and type of marketing including online and social media are among the strength of
the business. Savers Home Depot’s and Tophome Builders Inc. strength in human
resources is its valuable employees. Over several years, both have acquired
knowledgeable personnel from the dozens of suppliers and warehouses it has
purchased. Both also have strength in its management through its efficient managing
of merchandise. Savers Home Depot continues to invest in its management by
utilizing management software to control inventories and new tools for managers to
sustaining a competitive advantage. The two companies have strength in its
upgrading system, its supply chain, improved customer service, and hi-end inventory
management system.
Additionally, both have disciplined capital allocation, controlling expenses, and
increased returns. They are also financially healthy with revenues and costs
improving from last year.

Weaknesses
A company cannot be strong in everything though, thus this business venture
has some weaknesses within its resources. This has a marketing weakness
because home improvement is generally a seasonal project for homeowners. It has
a management weakness because it relies on third-party suppliers and
subcontractors, and failing to develop relationships could adversely affect customer
service. Also, it has a weakness in its finance because of today’s sluggish economy.
New home construction is stagnant and consumers do not have the spending money
for updating current homes.

Opportunities
The business venture is a huge project that can be considered as the first in
Southern Leyte. Probably the land area is not as big as perhaps other competitors in
the industry but the number of stocks and the availability of it are incomparable.
Therefore it is of great opportunity for the Tophome Builders Inc. and Savers Home
Depot to grasp the market.
Tophome Builders Inc. has been operating for long in the area thus, it already
established a wide range of connections, customers, and linkages which is such a
good opportunity for the building occupant.
There are lot of open logistic business around that might be convinced to
have a close partnership for logistics.

Threats
The company will be using technologies for the entire business process yet
technologies are flexible for some glitches that sometimes could not be deciphered
at once. Therefore it is seen as one of the threats for this venture. Moreover, the
increasing cost that also includes taxes and licenses, high competition and increase
in labor costs are among the irrepressible risks that the business will actually be
facing.

Financial Projections
The financial projections stated herein are focused on the rental services
offered by Tophome Builders Inc. See attached the following:
- Projected Income Statement
- Projected Balance Sheet
- Projected Cash Flow