Opportunity
Problem
The advances in modern medicine have allowed people to live longer. Once they raise children and retire from work they have a new stage of their life where they find themselves enjoying their spouse and free from other responsibilities. They have another chance at being carefree as a young adult. They have to find a location within their budget that will allow them to do that.
Solution
GVRE provides real estate services for the Golden Valley retirement community, located northwest of Tucson. GVRE offers full-service title, real estate and mortgage services.
Market
The industry of retirement has experienced steady growth over the last twenty years. The U.S. has a record 21% over-55 population, and this number is increasing at an average of 3% annually. 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 has estimated that the industry of retirement, which includes home, medical, specialty equipment and retirement entertainment, generates 4.8 billion dollars per year.
Competition
The realty industry is highly fragmented. There are many potential competitors. Bowditch Realty, RE/MAX are our most serious competitors. Bowditch Realty is a well-established company with a strong track record of providing quality service. It has been in business for ten years. It currently has twelve agents, and long-term contracts with many home building companies. This company is somewhat larger than GVRE in both market capitalization, and size.
RE/MAX has a reputation for being one of America’s most prominent real estate firms. It is home to hundreds of agents, and has deep pockets that can be used against any kind of competitor move.
Why Us?
GVRE believes new entrants are the greatest threat to the market right now, as they want to capitalize on this high growth sector. Smaller real estate firms with less than ten employees will be the most likely new entrants. The one advantage GVRE does have is the exclusive right to act as an agent for Golden Valley Retirement Community. However, due to the high number of competitors and the overall low profitability of each firm, competition is quite intense.
Because most clients live in the same area, there is a lot of potential customers in this industry. Furthermore, clients tend to “shop around” for the best package of services and cost.
Expectations
Forecast
The company expects to reach profitability in the first year and does not anticipate any serious cash flow problems. The average margin per month for each segment should be sufficient, according to our estimates. We anticipate that around one sale per monthly will result in a break even point.
Financial Highlights per Year
Finance is required
We will be getting $20,000:
Mrs Susan Egan $10,000
Mr. Daniel Egan $10,000
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