Matt's Entrepreneurship Blog

Two Areas for Self Improvement

2009-12-06T19:16:00.000-08:00

Cash Flow Management-I need to become a pro at working off of the budget that I earn. Being a college student and trying to maintain a quality living at 26 years old while also trying to have a life is a lot to keep up with. I believe that when I graduate on May 8, 2010, I will have much more time to apply myself towards creating my own perfect business strategy that will hopefully one day pay big dividends. Sometimes its a little hard to say no to the fast food for breakfast and lunch everyday because its quick and easy but it sures does add up when looking at the expenses at the end of the month. And cutting back a little on gas will help also seeing as that I currently live in Collierville and drive to Memphis daily. Cutting these expenses alone with increasing my income affter May of 2010, I will definately be off to a better start at having enough capital to startup a new business in the future.

I also need to work on the amount of time that I spend on a daily, weekly, or monthly basis on researching material that will add value to me and my career or my future. I need to spend more time sitting alone at a computer studying different aspects of the industry I am currently involved in at Sherwin Willimas, and also look into any industry that I might be interested in for the future. I have learned that it is a very good tool and starting point in anything that you want to do in life, to read as much material as you can about the kind of business that one wants to advance in. Knowledge creates wisdom which creates power. I will be using many of the tools I learned of in this class, to help me have a better understanding of where my focus needs to be directed, in order to create change that will postiively effect anything that I apply my mind to.

Internet Session 21:What I'll be doing

2009-12-04T21:25:00.000-08:00

From this point forward, I will be making a better effort to manage my cash flow more effectively with a concentration on saving as much money as I possibly can for the chance of being able to make a good investment with my earnings in the near future. I make a good salary working for Sherwin Williams at the current time, enjoy health benefits, and a very appealling 401k retirment fund. I am the next shoe in for a managers position in the Memphis area. In the next 6 months I plan to be running my own store almost immediately after graduation. With an increased earnings in 2010 and better cash management through a more structured, organized, and long term focus in spending, I will be making much better investments with my wages. I will also be trying to start a small business next summer to generate some increased revenue, probably a lawn mowing business. I already have the truck, and I'll have the time once I graduate in May 2010. I also have made plans to work with another assistant manager of Sherwin Williams that is of Hispanic background to help teach me spanish during the summer of 2010, immediately fter graduation. I want to use my knowledge from this class to help me create my own spin on Sherwin Williams when I am given the opportunity to manage my own store. I will do this by using creativity, inductive and deductive reasoning, analyzing trends, competitors, and profit and loss reports to understand my stores foundation. I will increase sales by more than 20% in 1 year of being a manager.
I would also like to go to graduate school to get my masters degree starting in the fall of 2010 so hopefully I have the ablility to absorb as much information as I can so that I can contribute more and advance change in everyithing i put my mind to.
Someone that is a mentor and a head figure in the company that I work for, seems to be willing to work with me and teach me his experienced knowledge of how to acquire many homes quickly. He is going to help me get started on the first house once that I buy, renovate, and rent or sell but i just need to get the capital. The only way that I can get the capital is if I do my research on the exact figures that it will take to invest in this new venture and what will the return on investment be and in what time frame.
I could begin networking a little better although I here that I would make a good sales person because I know how to talk to people. I'm very good at talking to people in a business type setting or if I'm trying to sell something. This is why I feel real estate, property management or some other sales field like Sherwin Williams will be my best bet unless I can devise a very successful strategic plan that begins making me so much that it makes it a waste of time to work for someone else.
To create better financial standing I will not eat fast food everyday, and will not be buying cigarettes because I quit, and I will be making more money within 6 mnths.
I will invest more time showing my face around the people that pull the major strings wherever I am.
I will also work on public speaking and negotating skills over the next 12 months.

Chapter 10 Pricing

2009-12-04T18:48:00.000-08:00

The pricing structure for Stevens Property Management will be based on what level of environmentally friendly home they are wanting, meaning how many green home features they are wanting built into their home. The optional product pricing helps me appeal to a larger segment of the market and is based the size of the green home or the amount of renovations needed to renovate an older home. I hope that I can average buying a home for $40,000, invest $20-$25,000 for renovations and new appliances, and would like to sell the home at around $80-$90,000. The renovations would also include rebuiling any damaged or infected areas of a home, fix any leaks, install economically friendly appliances throughout, install better air purifications systems, increase the amount of natural lighting, and improve the landscaping. If I cannot sell this home, I will begin renting this home at a premium to make up for the added cost of providing a healthier environment, not to mention a little cheaper on the utilities. One day I would like to build an entire community with a concentration o0n energy consumption and better living environment. I will use multiple unit pricing to lower the cost of any green home built. I will not be offering any in house financing, the customer will need to arrange this.

Marketing

2009-10-29T20:32:00.000-07:00

Target Market
Stevens Property Management will be targeting all ages but mainly women, with a co-focus on adults between the ages of 30 and 45. Stevens Property Management will be focusing on women because they are the fastest growing section of the population purchasing all homes. Also, 71% of the green homebuyers are women, with two-thirds having an income of above $50,000 annually, they tend to be married and highly educated. Unmarried women accounted for 30% of overall homeowner growth between 1994 and 2002 and has increased since. To do this we will create a house and buying atmosphere that woman feel comfortable in sharing their feelings and ideas toward their green needs. The first green home that we will build will be aimed at showing the beauty of living in a green home created by Stevens Property Mgmt. From the curb, to the driveway, and into the front door will be created with a woman's touch in mind to make her want to see what's inside. We want women to be able to say "Wow, I could and would live in a house like this." The company will be aimed at providing the customer with the knowledge they need to make educated decisions about their investments in home efficiency and the cost savings that are associated with green living. Women are drawn by three key areas in a home, kitchens, flex spaces, and stress-dissolving master retreats. Throughout the home we will be using many different tools to provide the wow factor including increased lighting, energy efficient appliances throughout, advanced insulation, air purification systems, 0 VOC paints and sealants, and many other green home upgrades. Along with these home upgrades we will be offering green landscape improvements, for example shade trees which provide shade in the summer and protection during the winter months, along with some other features that can provide a healthier and attractive environment.
Statistics show that 89% of people say that energy efficiency was the most important feature they considered when purchasing a home. Other reasons that rated high were water conservation, improved indoor air quality, improved ventilation, and efficient use of resources. Another study showed that first-time home buyers and people under 35 years of age were interested in green homes for three reasons, operational cost savings, health related considerations, and a growing feeling of responsibility for environmental sustainability.
The area that I will be targeting is the East Memphis area mainly because of the higher growth of home sales in this area in comparison to other areas. This seems to be an area of growth and improvement in the area of Memphis with many different college graduates and young business class moving to this area for convenience. We will use the world wide web to contact real estate agents so that they can offer extra services to their clients by upgrading their currently owned properties that seem to not be selling, or just the pure service of showing their customers what they can do to help the environment and improve certain areas of the home after their purchase. Our website will also feature an option that lets potential customers view the products that they can choose from in their transition from traditional living toward green living. Special packages will be offered that will be aimed at the different types of green improvements that customers can achieve through our green improvements. We will also be targeting business in the local community, mainly construction and building material centered businesses to get the word of mouth out to the surrounding population. To market to the women we will offer our wonderful customer service, beautiful model home, creative listening techniques to provide a feeling of involvement, and our expert knowledge to provide them with a feeling of security throughout the buying or renovating process. We will also be going to all decorating and architecture firms in the area to establish relationships so that word of mouth and our reputation for quality might spread.

Reasons To Go Buy Now!
Good news for young homebuyers right now is that they can still receive the FHA loan granting them $8,000 on their homes. Also loan rates are on average right above 5%. Existing home sales in the south have risen 9.0% and the average home sales has decreased 7.6% from a year ago down to $153,500.The cost of building a green home is only 2% more than a regular home on average with an increase of 15% in home worth. All of this said it seems very profitable for someone to invest in building a green home or in remodeling an older home to make it more energy and air efficient and environmentally conservative.

Competition and Suppliers
My competition is far and few between in that most other competitors are not green certified and this is something Stevens Property Management will be doing before they launch. The only main competition that is green certified is Mr. Handyman and this is not a locally based company. Mr. Handyman is a franchise and they have 3 locations in Tennessee but none are located in Memphis. The competitive edge that we have over business like Mr. Handyman is that were locally based and have a much better chance at being able to concentrate on marketing to our target market on a personal level. We have a number of online suppliers and a few local suppliers of green products that we will be ordering from. These include Rheem tankless water heaters, Green Building Supply, Green Kitchen and Bath Showroom and EcoHaus, Sherwin Williams, Lowes, and Home Depot.

24 Hour Fitness For Sale

2009-10-04T13:49:00.000-07:00

Description Copied from Craiglist.com
http://memphis.craigslist.org/bfs/1398169716.html

24 hour fitness center for sale. possible finance. call for equipment list. membership base started. opened in may 09.

over head is only 1200 per month excluding labor. 30 memberships paying $40 per month will pay the bills. 200 memberships paying $40 per month is $8000.00 per month.

8000.00-1200.00=$6800.00 profit per month. thats 82000.00 per year profit. great business for husband and wife. you have to build the business. we have businesses in another city and can't put our effort here. you can also sale nutritional products and make a killing.

What I can bring to this business?
     I feel like I could bring a competitive edge to this business by going out and marketing to businesses that stay open 24 hours a day and to the population of people that work 2nd and 3rd shifts. There has got to be a market for these types of people. There is one other fitness center that stays open 24 hours in Tupelo, but I believe with my business planning skills I will be able to obtain profits quickly. I will immediately go to these businesses and ask for permission to speak with their employees about joining a fitness gym that is aimed to catering to their schedules. I will also give out the first 50, 6 month memberships free in hopes that each person will bring at least one other person to work out with. If this marketing technique is successful it would generate enough money to cover expected overhead exluding labor. During these first six months I will be making improvements to the gym and updating any equipment that I feel needs to be replaced. Any equipment that needs to be replaced because of new technology will be sold online through craigslist, ebay, or another type of online selling website. I will also be using my connections in the construction industry to set up new walls to create a room for ufc style training classes.  I have several friends who are trained in MMA fighting that would be interested in renting this space from me in order to create a name for themselves and make a profit from charging for lessons. This person will be in charge of all cost incurred from any marketing that he may need and any upkeep that is required to keep appearances up, which will free me of any extra expenses immediately.

The Main Obstacle?
     The main obstacle for me in buying this business would be that I am not currently located in Tupelo, Mississippi, still have one semester left at University of Memphis, and do not know anyone there. Currently I am still in school and have 7 years in service with Sherwin Williams which could be a very promising career to walk away from unless there is some way that I could transfer to Tupelo and keep my current or higher position. I do not have the capital to be able to quit my job and do this full time, so at first I am going to need to hire someone young, fresh out of school, driven to help jumpstart this business, and one that will work the first year at a low salary. My salary from Sherwin Williams will help me be able to pay my current bills and use any gross profits to reinvest in my business.

How might financing issues be overcome?
     Financing issues can be overcome by using the money I currently have to buy this business outright. The money up front will not be an issue. I need to do some investigating with the local businesses and community to see what kind of market I am getting into and the numbers that they suggested in annual earnings is actually achievable. If financing is an issue for someone else looking into this business, the current owners do have this business listed as with possible financing.

Chapter 4: The Beginnings of a Feasability Analysis

2009-09-23T21:52:00.000-07:00

According to the 2002 census there are 842 residential remodeling contractors in the state of Tennessee that produce $594,487,000 in generated business. The annual pay roll produced by this industry in Tennessee in $103,773,000 paid to a total of 3,530 employees. Spending on residential renovations was expected to be $294.5 billion in 2007. The spending on residential renovations was predicted to go up $3 billion over 2006 spending of $291.5 billion.
The trends show that remodeling is increasing because homeowners are staying in their homes longer and adding on different projects to increase the value of their home because the selling market for homes has fallen and interest rates have risen. The trend of "going green" is catching on in the public eye now and people want the most energy efficient homes that keep costs low and savings high. Many people that are still able to get loans are buying homes at a low cost because of the poor market and are hiring remodeling contractors to make changes that create the kind of environment they desire. Surveys showed that most people with a home valued over $419,000 are leaning towards remodeling their homes rather than selling and moving. Adults between the ages of 31 and 42 are starting to reach the point in their lives where they are starting to make higher salaries, increasing home ownership rates, and higher remodeling budgests that the previous generation. The minority's are going to buy homes that need to be fixed up because of their lower incomes which will also create growth for residential remodeling contractors. People are getting older and need devices installed in their homes to assist them in their daily activities. Homes are on average 32 yeas old or more which means that they need to be updated. The top remodelilng opportunities for contractors is kitchen remodeling, bathroom remodeling, room additions, whole house remodeling, and bathroom additions.
Competition is very high in the home remodeling industry because of the large home improvement retail chains like Home Depot are now supplying contractor services through installing floors, drywall, siding, roofing, fencing, and plumbing. Some of the top franchise operations that independent contractors are competing with are Kitchen Tune-up, Kitchen Solvers, Inc., Mr. Handyman, Handyman, Connection, House Doctors, and Dreammaker Bath/Kitchen alongh with the 2 big retail chains Home Depot and Lowes.
The larger Chains are actually helping the home remodeling market becaue they are informing the public sector of the need to improve the efficiency of their homes.
In 2006, foreclosure rates for Tennessee were tenth in the country and Memphis had the eight highest foreclosure rate in the country. The foreclosure rate saw an increase from 2005 to 2006 of 33%. This equals out to be 1 of every 67 households in the state of Tennessee filing for foreclosure in 2006. In Memphis, 1 out of every 31 homes filed for foreclosure. In 2007 foreclosures continued to climb but at a lower rate of 17.5%. The areas of Memphis where foreclosures are highest are 38127, 38128,36106, 38109, 38116, 38115, 38141, 38125.
The threat in the Memphis market is that the overall population is decreasing which means less people that occupy homes. With less people occupying homes that meals less residential remodeling jobs. That is unless the contractor buys foreclosure properties which is precisely where we come in. Another threat is the high level of competition, the low level of uncomfort in switching from one contractor to another, and the increased power of the buyer that is produced out of these threats. With this increase in the power of the buyer of home remodeling services, along comes the increase in competition which seems to create price wars continuosly driving prices down. Another threat is the age of the homes in Memphis and their being so much technology being built in new houses which sometimes makes new home purchases seem more attractive. Again remodeling contractors now have the opportunity to buy homes at foreclosure rates which allows them spend extra capital to appy new, "green", technological advancements to their remodels.

Rivalry among Compainies Competing-High
Bargaining Power of Suppliers to Industry-Low
Bargaining Power of Buyers to Industry-Low
Threat of New Entrants-Moderate
Threat of Substitute Products or Services-High

The Strategic Plan

2009-09-15T19:40:00.000-07:00

There are 9 steps in the process of Strategic Management Planning!

Mission Statement: We here at Stevens Properties wish to ad to the city of memphis and re-beautify the streets by taking the old and producing the new. Stevens Properties is a home renewal business concentrating on investing in foreclosures and other very competitive offers to produce rental homes and also homes that we will be putting on the market for sale. Stevens Properties is based on providing quality homes backed by the Stevens name for a variety of different people in the Memphis area aimed at low to middle income families. We want to invest our capital now so that the environment can be improved for the better of tomorrow.

Strengths: The ability to buy homes at a much lower cost than what they are worth because of government foreclosure caused by our economic downturn. I have 7 years in the related industry and will be able to quickly and effectively use the right methods of restoring a home back to a property that is valued by others.

Weaknesses: Small amount of Capital to begin investing, never bought a home before.

Opportunities: Many homes are on the market for purchase because of the current foreclosure rate. This makes it a great time to get ahold of as many pieces of property as possible. The market is wide open and ranging anywhere from $10,000 and up.

Threats: One threat is the unstable market(who actually knows when it will return). The trade war with China could hurt our economy even more soon. Another threat is that other investment companies may have more capital and be able to invest more quickly consuming all the properties before I can raise the capital needed.

KSF's (Key Success Factors):
-Very tight cost control
-Honest Employees
-Using quality products and proper applications
-Homesite location
-Effective Marketing Practices
-Capital

Competition Analysis: In my analysis of my competitors I see that everyone is using the poorest quality products to rehab homes in many homes in the Memphis area. They are not insulating walls properly, not sealing cracks or breaks in many different surfaces, and they are using unskilled workers. My competition is worried about all profit now, and not the junk that they are leaving there customers with. My competition also has much more money to invest to increase there chances of high revenues, companies like Belz, Midtown property management, and Uptown Properties. Customers are very pleased with the prices that many other companies offer but sometimes not so happy with the layout or quality of the walls, floors, ceilings, and doors. Their weaknesses are their inability to concentrate their focus on the customer. They are still acting like self-centered businesses. Not gonna work in this economy! Everyday more and more people are entering this market of purchasing real estate, improving it, and either renting the property or selling it for a profit.

Goals: To buy one home for a low price, fix it up and sell it for a greater amount than I have invested. After the first home I want to continue and later on we will progress into rental housing. Once this happens I would like to gain as many rental homes as possible after initial gains are made to raise capital for future investments.

Objectives: Too not waste time and money by moving quickly and using quality people to make things happen smoothly. Buy 2 foreclosures and completely rehab them and put them on the market for sale or rent.

Strategy: Stevens Property's uses the differentiation strategies to help gain a competitive advantage over our competitors and to better serve customers by offering quality services and quality goods. All of the homes that I purchase will be painted, caulked and sealed with all sherwin williams pro-green products which are healthy for the environment and quality products that last. All homes will come with a 5 year warranty to the home buyer. Any renters will only be responsible for finance charges if any harm is done to the home. Stevens Property's will be going to auctions to find the right houses for purchase at the courthouse downtown. We have the most up to date ways to search for homes in foreclosure going to auction. When we find a property that we find appealing we will pitch this idea to our small group of investors.

All aspects of the company will be focused towards this first home at this point. We will continue to search for the perfect home to buy, rehab, and sell for a higher revenue. I will be hiring a crew of an experienced carpenter who can also paint, a drywall repair man, and one person to be our agent. The resources required at this point are nothing until we find the proper house for rehab. Once we find this house we will focus all efforts on this home and try to learn as much as possible to do it even better the next time.

At this point I will be using my credit account with Sherwin Williams to buy all of my paint, and my personal credit card for any purchases of wood or drywall materials. All tools will be purchased by the employees. Contractors hired will be payed on a job basis, so your the employees success is dependent on our success. All of my finances will be studied daily on Bank of America Online Banking. There is no warning policy on my jobs, you either sink or swim when it comes to expecting skilled and experienced trade workers.

Hey Everyone

2009-09-02T08:31:00.001-07:00

Hey everybody! Im really excited to be in this class and I hope we all learn everthing we need to know to become self made millionares$$$