Opportunity
Problem
People are living longer thanks to modern medicine. After they have children, they can enjoy their spouse and be free from all other responsibilities. This is their second chance to be a happy, carefree young person. They need to find a place within their budget that helps them with that.
Solution
GVRE will offer real estate services at the newly-established Golden Valley Retirement Community. It is located in northwest Tucson, Arizona. GVRE can provide real estate services, including mortgages and title.
Market
The industry of retirement has experienced steady growth over the last twenty years. The U.S. population is now at 21%, an unprecedented high. It is also growing at an average rate 3% per year. In certain parts of the country like the American Southwest, which has a high concentration of retirement communities, the growth rate is about 8%. This number is expected to rise as the first baby boomer generation reaches retirement age over the next decade. The U.S. Census Bureau estimates that the annual retirement industry (which includes homes, special equipment, and retirement entertainment services) is worth 4.8 billion dollars.
Concurrence
Real estate is fragmented and has many potential competitors. Bowditch Realty (RE/MAX) are our two biggest competitors. Bowditch is an established company that has been in operation for the past ten years, with a fine track record of quality service. It currently employs 12 agents and has long-term contract with several home building companies. This company is slightly larger than GVRE in size and market capitalization.
RE/MAX, one of the most well-known real estate companies in the country, is the largest. It employs hundreds of agents with deep pockets, which can be used to offset any type of competition.
Why Us
GVRE believes there is a major threat in the new entrants to market, who will seek to capitalize on this industry’s high growth. The most likely entrants are small, new realty companies with fewer that ten workers. The main advantage GVRE holds is the exclusive rights to be the agent for Golden Valley Retirement Community. Competition is intense due to the number of firms competing and their low profitability, however.
This industry is highly dependent on clients who are based in our local area. Potential clients can be very powerful. Clients tend to “shop around,” in order to get the best service and price.
Expectations
Forecast
The company anticipates reaching profitability within the first year. It does not expect any cash flow problems. We conservatively believe that during the first three years, average profitability per month per segment will be adequate. We expect that about one sale per month will guarantee a break-even point.
Financial Highlights by Year
Financing Required
We will receive $20,000
Susan Egan $10,000
Mr. Daniel Egan $10,000
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