BUSINESS PLAN “Starting up a new company”
This Business Plan is a final product of the Leonardo Multilateral Partnership (2011-2013) whose name is “Giving breath to Buildings” (GIBB). This was approved by the Final Conference in Adyiman on July 2013. Partners of this Leonardo Multilateral Partnership are: Istituto d’Istruzione Superiore “O.Notarangelo-G.Rosati” Foggia, (Italy) ; Faculty of Technology, University of Adyiaman,
Adyiaman, (Turkey); Säästvad Ehituslahendused LLC, Tallin (Estonia)
1) General ideas for a business
Evaluating the “building market” all around Europe we observed some evident charateristics. In the european market for buildings there is a strong taxation imposed by the States on houses and a very low demand, especially in this historical period for buying houses. We also found a general interest of owners in preserving and recovering existing buildings, expecially in rural areas. However we also experimented empirically, examining data and statistics that in the cities there is also a positive attitude of people in restructuring and refurbishing their houses as well using new materials and, if possible, ecological materials. Not to mention of artistic buildings that need specific ways of restructuring. We definetely think that on the european areas there is a demand for this restructuring and specific demand for the restructuring and refurbishing using ecological materials. So the business planned here would be about using ecological materials in buildings. The core of this business will be the recovering and the restructuring of a) civil buildings in the cities b) rural buidings c) all other manufacts related to houses The idea is to estabilish a new company firstly in Italy and then implementing the company itself by gathering new partners and developing the business. This mean that this new italian company will naturally extend the range of action to the whole european market by associating some european companies and institution to the research activities and to the business (namely the partners of the Project
Leonardo-GIBB). This business of the company has to take care of the environment, of the economic rules, of the efficiency, of the specific climate and of the charateristics of each building as it is located in its context. Innovative ecological materials as clay, straw, natural plaster and so on are planned to be used in this business among other materials in a very high percentage (of about 90% of the raw material used). We consider that the business ideas will be successful for these reasons: 1. 2. 3. 4.
Very low number of competitors for this new very large market Use of nnovative materials coming from the rural tradition too Very low costs for the production Environmental advantages, especially using renewable energies for the buildings 5. Owners can also benefit from the norms about the taxes (if there are some in each european countriy involved) 6. Touristic buildings in the countryside can deeply benefit from a “special” natural restructuring.
2) Legal framework and registered office Initially the company will be estabilished in Foggia (Italy) as the founders of it are students of the evening course for adults of the “Istituto D’Istruzione Superiore Notarangelo-Rosati”. The choosen legal framework is that of a limited liability company. This is an “open company” however that will implement its operative activities to enter the european market in the considered segment. That is to say that in the following years (after the three years of “start-up”) the company will be opened to the participation of other institutions (namely the partners of the Leonardo-GIBB Multilateral Project) that will enter the shared capital of the company. In this sense the chosen path is to implement the partnership carefully, paying attention to the problems that a partnership can have (and
obviously looking at the benefits). For this purposes we set up a framework about the Management that is referred to the local activities and business, but is only temporary, according to the general view of this company that would like to expand the market to the european one and to implement the management as the european market for ecological buildings will become progressively part of the business market.
3) Strategies in Italy and Europe The local market will be the initial referring market. This is why in the urban area of the province of Foggia and in the rural suburbs is concentrated the demand for restructuring houses and buildings. Then, once consolidated the business, the company can carefully try to: 1. increase the “know how” by associating the estonian partner and the turkish partner 2. set up a “marketing plan” oriented also to the european market for building using the ecological materials 3. start new investments according to the needs of the new jobs provided in an european dimension Opening the company to the estonian and turkish partners would be a “plus” in terms of know how and business largely considered. This european partnership will aim to have a scientific cooperation with companies related to the turkish partner (for this purpose founded) and try to keep advantages from the cooperation with the estonian partner, which has shown remarkable skills and possess of the proper “know how” in the field of using ecological material for building. Marketing Plan will involve the following marketing channels: television, press adverts, press adverts in specialized magazines, internet. This is planned to cost 1%-2 % of the total revenue accounting.
4) Production Planning Production will consist of:
1. preserving the structures of a buildings or a manufact. 2. improving the general conditions of exixting buildings or a manufacts. 3. finding new advantaging solutions for existing elements using new ecological techniques and materials. We plan to have extimated costs for about 250 Euro per square metres at the beginning (italian market) We plan to have in the first year four employees as described below: ● A production manager (engineer or architect) ● two skilled workers ● one unskilled workers As annual average salary for all employees we estimate 36.000 Euro in all (taxes, social security costs and all minor costs included) First year of activities: to develop a volume of about 1.000 square metres, at an average cost of € 550 for the square metre, with a revenue accounting of about €550.000. Starting from the second semester of the second year we expect an increase in revenue accounting of 8% of the previous year and of about 10% in the third year of the activities
5) Management and Organization Three member will share the responsabilities inside the society in order to let the society produce and make business . These three members came ou from the italian school, in particular from the adult school for accountancy. They have got the diploma and try to start the business. Antonio Carretta, is the first one. He has the right skills for business and wants to be the founder and the main chief of the company. He has got the 30% per cent of the shares of the company. Luca Bevilacqua,is a son of a builder and restorer. He’s found of these kind
of activities since he was child. He’s member of the company with the 40% of the shares. Maria Croce, has a strong knowledge of the english and has a good sense of relationship. She will join the company buying the 30% of the share
We can now have a look to the organization of the company visually:
6) Investment Planning The activity of this company will involve since the beginning some implant
costs. These costs are 15.000 Euros at the beginning (with a general amortization of 20% per year) Means of transports: €50.000, (with an amortization of 20% per year) Tools and machinery: € 120.000 (with an amortization of 20% per year) Tools for the production € 80.000 (with an amortization of 15% per year)
Amortization plan
INTANGIBLE ASSETS
VALUE
%AMORTIZATION
FOR SHARES n1
iMPLANT COSTS
15.000
20%
3.000
FOR SHARES n2 3.000
FOR SHARES n3 3.000
TANGIBLE ASSETS 1 truck Machineries (n°1 excavator, n° 1 goods lift, n° 1 scaffolding) Specific tools for mantaining, repairing and restoring
50.000
20%
10.000
10.000
10.000
120.000
12%
14.400
14.400
14.400
80.000
15%
12.000
12.000
12.000
Total amount
265.000
39.400
39.400
39.400
7) Financial Planning The share capital of the company will be of € 100.000 entirely deposited on the bank account. This financial support from the members is clearly not enough for the
needs of the company. So that the company itself will ask for a loan to the bank. The amount of the loan will consist of € 175.000. The financial loan is then of € 175.000 to be refunded in 6 years at the rate of 12% per year
7.1. Patrimonial Planning ACTIVITIES FIXED ASSETS INTANGIBLE ASSETS IMPLANT COSTS
FIXED ASSETS MACHINERY SPECIFIC TOOLS CARS AND MEANS OF TRANSPORTS
n1
n2
12000
n3
9000
LIABILITIES Equity Share Capital
40000 105600
30000 91200
6000 Budget Reserve Profit of the year Total amount of liabilities 20000 76800
68000
56000
44000
n1
n2
100000
n3
100000
100000
2500
5200
49800
54300
71800
149800
156800
177000
150000
125000
100000
44000 13000
55100 14500
56050 15800
5000
5200
5350
8800
17100
26100
220800
216900
203300
370600
373700
380300
Debts TOTAL AMOUNT OF ASSETS
225600
186200
CURRENT ASSETS
146800 Debts vs. Banks Debts vs. suppliers Debts for taxes Debts for social 90000 security Debts for indemnities to 122000 workers 15500 6000 TOTAL DEBTS
INVENTORIES
50000
75000
COMMERCIAL CREDITS BANK ACCOUNT CASH
80000 10000 5000
95000 12000 5500
145000
187500
233500
373700
TOTAL 380300 LIABILITIES
ASSETS
TOTAL ASSETS
370600
7.2 Economic Planning
VALUE OF PRODUCTION
n1
n2
n3
REVENUES FROM THE SELLING
550000
594000
653000
TOTAL AMOUNT OF PRODUCTION
550000
594000
653000
Costs of row materials
250000
260000
274500
Costs for services
55000
58000
60500
Costs for the workers
144000
148000
151000
Amortments
39400
39400
39400
Variations in stocks
-50000
-25000
-15000
TOTALE COSTS (for the production)
438400
480400
510400
Operating Profit
111600
113600
142600
FINANCIAL CHARGES
-21000
-15000
-12000
PROFITS BEFORE THE TAX
90600
98600
130600
TAX
-40800
-44300
-58800
NET PROFIT
49800
54300
71800
COSTS OF THE PRODUCTION
8) Implementing the business : an estonian private company The Estonian company mainly provides the business with knowledge and skills about the natural building and with natural materials. Säästvad Ehituslahendused LLC (SE) has experiences about natural building more than 6 years, we have several skilled workers that could share their knowledge in the new company. The workers of SE can help on different working sites by instructing the other workers. It is also possible to arrange some practice for the workers in Estonia. SE can give consultations to the new company and to the clients to find the best solution for each renovation/building work. SE also produces and sells many different natural materials (different plasters, paints, adhesives, insulating materials, old wooden materials) that can be used in the work of the new company. SE can help with recipes of mixing the correct amount of materials to get the best mixtures.
9) Implementing the business: a turkish private company Turkish Partner is a business company linked to the Adiyaman Ăœniversity Faculty of Technology as a partner. This University is very experienced about clean and renewable energy, especially solar energy. They have designed, manufactured and tested number of solar water heater, particulary for ecological buildings located in rural areas. In addition they are experienced about heating, cooling and ligthing of buildings by using clean and renewable energies such as solar and wind. As a result, Turkish Partner can determine and calculate total energy needed during the year of ecological building and can project supplying electricity for lighting, cooling and for some low power electrical devices such as refrigerator, comminication, tv. etc and also supplying hot water for cleaning and cooking.