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Smart Choice Whitewalling - Professional-Business-Plan
Smart Choice Whitewalling - Professional-Business-Plan
Plan
Confidentiality
This document is only to be issued following the receipt of the Non Disclosure
Agreement (NDA). This document may not be disclosed to any third party without
the prior written authorisation by “Smart Choice Whitewalling” Limited. This
document may only be disclosed to your officers and professional advisers on
condition that they too agree to be bound by the terms of the NDA.
Potential acquirers, investors or lenders must conduct their own reviews and
satisfy themselves in terms of the Business and its prospects for the future. The
Directors accept no liability for any loss or damage whatsoever which may occur as
a result of reliance on the information in this document.
Questions and requests for further information regarding the Business should be
made in strictest confidence to:
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“Smart Choice Whitewalling” Limited – Business
Plan
“Smart Choice
Whitewalling”LTD
Business Plan
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“Smart Choice Whitewalling” Limited – Business
Plan
A. EXECUTIVE SUMMARY
“Smart Choice Whitewalling” Limited is a construction of commercial buildings company with a
focus on high levels of projects customer support based in Canning Town, England. It is
managed by its one founding directors and has an annual turnover of just under £200k, a
customer base of around 100 customers and a team of 1 employees. It is growing its revenue
slightly above the industry average and exceeds industry best practice KPIs
The Construction market in the UK is set to grow by 11.5% CAGR over the next 5 years from a
base of £746m in 2008. This growth being driven to by factors that fit well with the economic
climate
– cost reduction, increased efficiency, scalability and flexibility. In addition, the construction
market is populated with a wide range of similar product offerings often only differentiated by
relatively small technical variables. Being competitive in this market relies on adding value by
additional or peripheral services such as high level of consultation, design, maintenance,
installation.
The opportunity for “Smart Choice Whitewalling” lies in providing value-added services
that deliver cost reduction, increased efficiency, scalability and flexibility.
“Smart Choice Whitewalling” has a product range to compete with the best providers with
ready-to-go server systems through to highly complex solutions. It is the leading supplier of
Skanska in the UK and is a Construction Partner. In addition “Smart Choice Whitewalling”
already positions itself in the market as a providing significant added value through its service
levels. It provides a superior level of hand-holding and installation support that differentiates
itself from other construction providers.
“J Smart Choice Whitewalling” is well positioned to convert this opportunity into significant
growth with its existing product range and high service levels but has identified a need to
increase its market visibility. It has therefore created a plan to develop its sales and marketing
structure which will capitalise on this opportunity and double its revenue over the next three
years. Core to this plan is investment in three target growth areas with low cost of sale that
provide low risk and potential high return. This will increase its currently low visibility with its
customers and in the market place, develop new sales channels and increase large customer
sales.
With 75% of revenue currently generated through solid and predictable monthly recurring
business, and cash providing 4x cover of its monthly overheads the company is in a stable
financial position. It is able to support its growth plans with its current borrowing and need to
anticipate further loan.
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“Smart Choice Whitewalling” Limited – Business
Plan
B) BACKGROUND
“Smart Choice Whitewalling” Limited is a middle tier construction company based in
Canning Town, England, UK with an annual turnover around of £150k in the full year to March
2023. It was established 5 year ago to provide consultation, design, maintenance, installation
services.
The Company has a client base of around 100 small, medium and large businesses
operating both internationally and in the UK that include Skanska, Mace Group, Kier
Group PLC, Balfour Beatty PLC.
Clients are served by agency staff who provide a 24/7 managed service environment
and a range of expertise that includes best prices.
The Company is run by Managing Director Mavriche Bogdan Vasile, who has over 20 years of
Construction industry experience, who has guided the growth of the company as Financial and
Administrative Director.
The company is in a stable financial position with good recurring business but has yet to reach
its full market potential. With the experience of the current directors and operations team and
the recruitment of experiences sales and marketing personnel it has developed a growth plan
that will see its revenue over the next three years to around £3 mil.
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“Smart Choice Whitewalling” Limited – Business
Plan
“Smart Choice Whitewalling” positions itself in the market as a providing significant added
value through its service levels. It does not aim to compete on price with its larger
competitors but instead provides a superior level of hand-holding and management support
that differentiates itself from other construction providers. It is from this added value that it
gains a sustainable competitive advantage over other mid-size and large competitors.
“Smart Choice Whitewalling”s customer list numbers over 200 made up of a mix of small,
medium and large businesses operating internationally as well as within the UK. Existing
construction contracts are split between 3 large very profitable customers that will account
for around 25% of sales in 2023/24 and medium and small customers that will account for
the remaining 75% of sales.
85% of Sales revenue is generated predominantly from core installation services and fees
collected by monthly invoicing. Other services design for the remaining 15% of sales are
invoiced upon delivery on standard 30-day terms also.
75% of sales are currently generated through solid and predictable recurring repeat business.
The remaining 25% of sales is generated through new business sales. The “Smart Choice
Whitewalling” web- site, which has recently been re-designed to focus on core business
offerings and ready-to-go solutions, acts as a sales channel and generates around 15% of new
business annually. New business sales from existing customer referrals account for the
remaining 10% of sales. Where new proposals for larger customers are required the Managing
Director is responsible for the sales process and for developing client proposals.
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“Smart Choice Whitewalling” Limited – Business
Plan
At present “Smart Choice Whitewalling” does not have any protectable intellectual
property, trademarks or exclusive agreements in place.
Of the Global market the Banking, Financial Services & Insurance (BFSI) sector was the
biggest spender on construction services with $4,758.9 million or 21.9 percent of the
market in 2007. Manufacturing and services sectors spent $3,960.4 million and $2,261.2
million, accounting for 18.2 percent and 10.4 percent of the total market, respectively.
1
Exchange Rate used : £1 = $1.78607
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“Smart Choice Whitewalling” Limited – Business
Plan
Some basic distinctions can be drawn between companies by a review of their work on web-
sites. Whilst other companies use similar format to deliver the services the market focus
may vary. At a product level one such distinction is between consumer and business
services. Within the business services sector a further one is between non-managed and
managed services.
Despite these distinctions it is often the case that mid-size and large companies compete
across these categories. Mid-size and small companies therefore may often find themselves
competing with larger companies able to secure significant economies of scale. Being
competitive may therefore relies on adding value by additional or peripheral services such
as consultancy and high levels of installation service.
Over the past few years the construction market has seen consolidation and it is anticipated that
this will continue.
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“Smart Choice Whitewalling” Limited – Business
Plan
Market Growth
According to TechNavio, the global market for construction services3 is forecast to grow from
$21,746.0 million in 2017 to $31,294.0 million in 2020, growing at a CAGR of 12.9 percent
over the forecast period.
The EMEA market is estimated to reach $9,357.1 million in 2020, growing at a CAGR of 11.5
percent.4 The UK can realistically expect to grow in line with this and grow to around $1,850m
by 2020
For the largest five vertical markets there are a number of common drivers – cost
reduction, efficiency, scalability and flexibility.
Cost reduction is being sought by migrating customers to low-cost channels like e-services or
CRM, offering pay-as-you-go functionality, reducing up front expenditure/investment and
lower training costs.
The benefits of increasing efficiency through management projects are seen as reducing
the wastage of time, expense and business disruption, improved resilience, availability of
expert staff, fast implementation, and lower maintenance.
Scalability and flexibility benefits are seen as stemming from the choice of different
designs and architectures, instant upgrades, accessibility anywhere any time, reduced
incremental costs of new solutions, and ease of installation.
Technically focused solutions such as Virtual Private construction also provide clear
opportunities for cost reduction, Scalability and Flexibility and have a very good future market
potential.
A detailed breakdown of the vertical sector drivers and potential matching of hosted services
to meet that demand is at Appendix A.
3
Technavio Insights – Hosting Services Technology Report – July 2008
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“Smart Choice Whitewalling” Limited – Business
Plan
“Smart Choice Whitewalling” has assumed a CAGR growth rate of 10% in the UK construction
market over the next 5 years which is below that suggested by the latest industry research
(20085) of 11.5%. It has also written in a cumulative attrition rate into its revenue estimates
through to early 2020 equivalent to about 1.25% (one and one quarter percent) of forecasted
revenue. In addition it has accounted for bad debts at 0.5% (one half of one percent) of total
forecasted sales revenue.
Market opportunities highlighted above coincide substantially with the potential impact on the
market of a downturn – price sensitivity and the seeking for alternative and flexible solutions
that allow customers to scale up and down as required. The downturn therefore go to
emphasise these opportunities and is likely to increase competitiveness in these areas. With
this in mind the provision of additional value to existing and potential customers through low-
cost/no-cost services such as cost management packages, disaster recovery and off-site back
up will help to improve competitive positioning.
5
Technavio Insights – Hosting Services Technology Report – July 2008
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“Smart Choice Whitewalling” Limited – Business
Plan
With its limited sales capacity the company has seen limited growth in 2019/20 as a result of
the focus by the Managing Director on acquisition negotiations. As such the company has a
limited new business pipeline. However, “Smart Choice Whitewalling’s” has significant
potential to increase revenue by actively marketing its services.
The company has taken steps to overcome the previous limitations of its structure by
recruiting extra sales and marketing resource. “Smart Choice Whitewalling” has engaged a
marketing consultant who will provide weekly input into the development and implementation
of “Smart Choice Whitewalling’s new marketing strategy. In addition, is in the process of
appointing an experienced Interim Sales Manager to develop Direct Sales and build a clear
sales pipeline for the business. The sales Manager will be supported by the Managing Director.
This position will be recruited as a full-time permanent position within the next 24 months.
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“Smart Choice Whitewalling” Limited – Business
Plan
To address the wide range of product offerings and companies in the sector a number of
“20” installation rankings are maintained. These try to cut through the complexity and
frequently changing market offerings to provide a hierarchy of providers in various product
areas as well as a simple ranking of top providers. This goes some way to giving the
inexperienced buyer a reference point in this fast changing market.
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“Smart Choice Whitewalling” Limited – Business
Plan
Total
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“Smart Choice Whitewalling” Limited – Business
Plan
G) COMPETITION
The Construction market is populated with a wide range of similar product offerings that are
often only differentiated by relatively small technical variables. In this sense “Smart Choice
Whitewalling’’ competes with a broad range of construction providers for its core services.
“Smart Choice Whitewalling” adds most value to its customers through installation expertise and
support. It is this
– rather than price - on which it bases its service differentiation.
a) Financial Data
An overview of the financial Data for UK Internet Service Providers 6 shows “Smart Choice
Whitewalling” growing its turnover in line with the industry average in 2022 in the begging
and slightly above the industry average at the end of the year.
“Smart Choice Whitewalling” shows a better than industry average gross and operating
profit. However, despite the fact that the industry averages exclude unusually high or low
figures (i.e. plus or minus two standard deviations from the mean) they include
multinational companies with a diverse product set (e.g. BT). Therefore care must be taken
in viewing this as anything other than a general indicator.
Results seem to indicate the ability of construction solution providers to maintain margins
within the market whilst scaling up.
b) Web-based data
On a simple Google search for the “Smart Choice Whitewalling’s” product range it is clear that
large, medium and small companies (including resellers) provide competition fore “Smart
Choice Whitewalling”. It is also clear that from a simple price comparison “Smart Choice
Whitewalling” pricing is comparatively high for similar generic offerings based on its higher
service levels.
Perhaps because of the similar technological structure of construction companies, and the
struggle to differentiate, the definition of a product may vary substantially from one provider
to another. For example, whilst a installation product can be compared at a top level the
number of variables in server specification and service that delivers this type of product allows
companies to differentiate their offer.
6
Best Practice - Calculated using the data for companies that are both financially strong and have been
consistently profitable over previous years. Irregardless of size some companies are quite simply better
managed or better placed to take advantage of industry changes than others so these averages show the
potential for firms within this sector.
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“Smart Choice Whitewalling” Limited – Business
Plan
However, at the supply end of the construction market where “Smart Choice Whitewalling”
has established itself, higher management expertise and investment in a secure construction
infrastructure and customer acquisition would be necessary. With these taken into account a
total investment in the order of £100k-£500k would meet the requirements of a mid-sized
construction company like “Smart Choice Whitewalling”. Speed to market for a new company
in this area would be in the region of 12-16 months. Thus, company wishing to go further by
establishing its own data centre the cost of market entry would be further increased and the
timescale limited by constraint of power availability.
Customer Retention
Whilst there is a relatively low cost of switching for customers in financial terms the “hassle”
factor of switching from one provider to another can be significant in preventing a change of
supplier. Interruption of email, exchange and sales related services resulting in business
interruption at some level can provide a significant deterrent.
Competitive Threat
Whilst there is a constant competitive threat in a market that is fluid and changing the forecast
growth in the market would seem to indicate that “Smart Choice Whitewalling” is well positioned
to defend its position and capitalise on this growth potential. It seems more likely that any
“threat” to the business will come from a competitor within the construction services market which
wishes to gain “Smart Choice Whitewalling”s high value customers or alternatively a company with
an emerging application, product or technology who wishes to secure a launch platform and route
to market.
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“Smart Choice Whitewalling” Limited – Business
Plan
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“Smart Choice Whitewalling” Limited –
I) FINANCIAL INFORMATION
The directors have given personal guarantees by way of deed of priority over their private residence in favour of the company’s bankers in order to
provide loan security.
Shareholding
Shareholding
Shareholder Share ClassShares
%
Bogdan Vasile
Mavriche
By virtue of their owning 100% of the ordinary share capital, Bogdan control the company jointly. No approved or unapproved share option scheme is in
place.
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“Smart Choice Whitewalling” Limited –
Manufacturing Cost reduction, fees based on a specific functionality and Enterprise Resource Planning (ERP)
capacity to use depending on individual requirements
Higher business value benefits, faster and at reduced costs Manufacturing Execution Systems (MES)
than a purchased solution
Reducing the wastage of time, expense and business Supply Chain Management (SCM)
disruption associated with in-house applications
No upfront expenditure on licenses, maintenance contracts
and new staff
Scalability
Availability of industry-specific functionality that best meets
a company’s needs
Availability of expert staff to address issues
Advantage of security and risk-mitigation capabilities
Services Pay only for the functions used (Pay-As-You-Go) Constructions solutions - using the internet as an application platform
Reduced training Costs
Access to the latest technology without installation
Investment
Increase efficiency and cost savings
Access to applications for a fraction of the cost
Quick implementation process and lower maintenance
responsibilities
Instantaneous upgrades based on necessity for software
products
Unprecedented reach and flexibility to access from anywhere,
anytime
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“Smart Choice Whitewalling” Limited –
Government Choice of different design and architectures Reduce the e-governance solutions
incremental cost for implementation of new
solutions as well as the time needed for design and development
Improved cost efficiencies for improved ROI
Provides a lower-cost option that eliminates traditional
investment, setup, and maintenance hurdles
Designed to meet the requirements, budgets and needs of
individual agency or a large organization
Scalability & Flexibility
Availability on a monthly subscription fee basis
Access securely anytime, anywhere, from any computer with
internet access
Lower total cost of ownership
Communications Projects to offer services that drive subscriber growth and Web-based back-office applications such as billing, mediation, rating and
profitability to meet the challenge of creating new revenue subscriber management
opportunities
Tailored, industry-specific solutions to solve business Web-based client-facing applications such as call centre and customer
challenges relationship applications (CRM)
Cost effective solutions, with managed servers and updates
projects platform to offer advanced services
Complexity in upgrading legacy systems
Ease of switching - Facility to switch solutions easily
Efficient back up and security
Anytime, anywhere accessibility
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