1. Business plan
Trust Construction Solutions
Submitted by
JOB THOMAS
#8, SEM-5, MBA (PT)
SHOOL OF MANAGEMENT STUDIES
Cochin University of Science and Technology
Cochin, Kerala, India, PIN 682 022
October 2012

2. 1. Executive Summary
Trust Construction Solutions is a residential home inspection service including Vasthu serving
Kalamassery and the surrounding community. Trust Construction Inspection Solutions offers
complete home inspections, as well as additional services including testing of building materials
and vetting structural design of buildings. This service will be offered to home buyers as well as
sellers. The majority of sales will come from real estate agents who can be contacted easily
through lead channels.
The company has a wide variety of inspection services. These include: foundation analysis for
cracks and, settlement, plumbing inspections that look for deterioration, leaks, and check for
appropriate water pressure. The company's electrical inspection looks for loose wires, shorts,
shock/fire hazards, and proper functioning of Ground Fault Interrupt (GFI) receptacles. The cost
of the full service is INR 100 per square feet to be inspected.
Trust Construction Solutions objectives for the first three years of operation include:
To create a service-based company with goal of exceeding customer's expectations.
To increase the number of clients by 20% per year through superior performance.
To develop a sustainable home business.
Trust Construction Solutions will maintain the good relationship with sellers, buyers and other
brokers by providing incentives. Trust Construction Solutions will be providing optional services
like structural safety checking of the building. Trust Construction Solutions will be installed as a
sole proprietorship owned by Job Thomas. The details of sale and profit growth are given in
Figure 1.
180%
160%
140%
120% 1 year
100%
2 year
80%
60% 3 year
40%
20%
0%
Sale Profit
Figure 1 Sale and profit growth of Construction Solutions
Business plan for Trust Construction Solutions by Job Thomas 2

3. 2. Business Description
Trust Construction Solutions offers residential home construction monitoring and inspections for
owners, buyers and sellers. The majority of service calls will have been derived from strategic
partnerships with realtors. The services of Trust Construction Solutions include:
Inspection:
Site inspection to comment about the compliance with Vasthu
Inspection of cracked or damaged structures for giving recommendation on repair
Plumbing inspection and pressure checking
Electrical inspection and checking for earth connection
Light intensity checking
Leak and damage inspection and recommendation
Ventilation checking
Assistance for testing the material quality
Recommendations for optimum resource utilization
Suggestion for green construction practices
A comprehensive written report will accompany the service. Trust Construction Solutions
suggests all clients be present during the inspection to increase comprehension of the written
report by the client. The cost of the full service is INR.100/- per square feet.
3. Marketing
Trust Construction Solutions will be focusing on two general groups of customers. The first
group is real estate agents. The strategic relationships with the agents will include an economic
incentive for them to give Trust Construction Solutions referrals. The agents will provide Trust
Construction Solutions with a steady flow of customers as it is in the agent's best interests for
the houses that they are trying to sell to have a complete inspection, ensuring satisfied
customers.
Trust Construction Solutions will also target individual buyers and sellers. For different reasons,
both of these groups have something to gain by having an inspection done on the home they
are trying to sell/buy Trust Construction Solutions will target these groups through focused
advertisements providing visibility of Trust Construction Solutions.
Trust Construction Solutions target can be broken down into three (not mutually exclusive)
segments. The segmentation of the market based on the survey is given in Figure 2.
Business plan for Trust Construction Solutions by Job Thomas 3

4. Individual buyers
Individual seller
10%
Real estate agents
30%
60%
Figure 2 Market segmentation
Real estate agents: This group of customers is professional realtors in the area. They are
targeted because they will recommend, or require, a home inspection before purchase.
Requiring the inspection makes great business sense. It forces latent problems to become
apparent, significantly reducing the chance of the customer being dissatisfied. By aligning
Trust Construction Solutions with many different realtors, Trust Construction
Solutions would in essence be spoon fed a constant stream of business. Not only would
there be a flow of customers, but they would all be referrals so there would already be the
beginning of a trust bond formed as their agent has personally vouched for Trust
Construction Solutions. After the initial relationships are set up, the agents would be a
relatively easy group to service or maintain.
Individual buyers: This group purchase inspections to ensure the quality of products. The
house buyer is motivated to determine any problems with the house before they purchase
it. The knowledge of what is wrong with it is useful because it will provide insight as to
whether the asking price is fair and the information could be used as leverage to adjust the
price if it wasn't fair.
Individual sellers or builders: this group is a smaller segment relative to the other two,
but they still will be a consumer of Trust Construction Solutions. Having an inspection done
on the house that they are trying to sell is useful in offering assurances to the buyer
regarding the condition of the house.
4. Operations
Trust Construction Solutions will open a office at Kalamassery. The office will be functioning at
the premises of the property of proprietor. Mr. Job Thomas. The office with an office manager
will be opened to facilitate the clients to contact and register the work. The manager has to
Business plan for Trust Construction Solutions by Job Thomas 4

5. collect the order and inform to Job Thomas. The proprietor Mr. Job Thomas will visit the
worksite for delivering the services. Job Thomas will mark the details of visit in the checklist and
recommendation sheet. The visit report will be issued to the client after 2 days of inspection.
The inspection report contains the details of the quality of the component parts of the building
and suggestions regarding the remedial steps. The clients will be entertained to clarify their
doubts or suggestion in the execution stage.
5. Management
Job Thomas, the proprietor will manage the firm’s activities. The projected salary of the office
manager is given in Table 1. Job Thomas will also act as full-time consultant in the firm. The
part-time consultants will be paid based on the piece rate system.
Table 1. Personnel Planning
Personnel Year 1 year 2 Year 3
Job Thomas INR 120,000 INR 144,000 INR 180,000
Office Manager INR 60,000 INR 66,000 INR 72,000
Total number s 2 2 2
TOTAL INR 180,000 INR 210,000 INR 252,000
Trust Construction Solutions will fully leverage its competitive edges (experience and
professionalism) to turn prospective leads into customers. The customers will be so satisfied
with the services that they will go on to tell their acquaintances about Trust Construction
Solutions. In addition to competitive advantages of Trust Construction Solutions, the owner has
10 year experience in the real estate agent industry as a paid consultant.
The competitive edge of Trust Construction Solutions is based on experience and
professionalism.
Experience: Job Thomas has 12 years of experience as a general contractor. Through
these years in the industry, Job Thomas has done almost everything in regards to home
building and remodels. Having this firsthand experience gives Job Thomas a very
discriminating eye when it comes to inspections. This makes his inspections that much
more accurate because he has the knowledge and experience to make informed
inspections. While others in the home inspection industry have a reasonable amount of
experience, they are generally not as well trained as Job Thomas. One reason for this is
that there is the possibility for higher margins by actually doing the work instead of offering
inspections. For Job Thomas however, an injury a year ago has precluded him to continue
as a general contractor, which in effect has allowed him to pursue this opportunity.
Professionalism: loosely defined as exhibiting a courteous, conscientious, and generally
businesslike manner; characterized by or conforming to the technical or ethical standards
of a profession. Professionalism is an overriding goal and behavior for Job Thomas. This
comes across even in a simple conversation with Job Thomas. People are utterly
Business plan for Trust Construction Solutions by Job Thomas 5

6. impressed when dealing with Job Thomas and this is purposeful because they will tell
people about him. Most people will agree contractors and home inspectors could use a
dose of professionalism, allowing Job Thomas to stand out even more from his colleagues.
6. Financial
The profit and loss account is projected for upcoming three years. The sale, cost operating
expenses and profit of the projected period is given in Figure 3. It is expected that the proposed
business yield profit in the first year itself.
INR 700,000 1 year
INR 600,000 2 year
INR 500,000 3 year
INR 400,000
INR 300,000
INR 200,000
INR 100,000
INR 0
Sale Cost Operating Profit
expenses
Figure 3. Projected sale, cost, expenses and profit of Trust Construction Solutions
The balance sheet is projected for upcoming three years. The assets, liabilities and capital of
the projected period are shown in Figure 4. The increase in the asset and capital over the period
is significant over the projected period. The increase in the liability in the projected period is
meager. As the net worth of the company is increasing, it may be concluded there is every
chance of growing the business in the positive direction.
Business plan for Trust Construction Solutions by Job Thomas 6

7. 1 year
INR 400,000 2 year
3 year
INR 300,000
INR 200,000
INR 100,000
INR 0
Assets Liabilities Capital
Figure 4. Projected asset, liability and capital of Trust Construction Solutions
7. Critical Risks
There are many different competitors in the home inspection market. At first glance, the service
appears to be commodity like. Most people offer the same service offering, the same type of
inspections, the same price, etc. However, the level of experience and professionalism of the
service provider does indeed differentiate the companies.
The buying patterns regarding the home buyers seem to be based on referrals and
advertisements. The home buyer will often ask someone in the industry if they can
recommend a home inspector provider. If they do not know anyone to ask they will typically look
in the number of local magazines for homes and find an advertisement in there. Lastly, they
would also check the Yellow Pages.
Home sellers will either ask their realtor or they will look for some sort of advertisement.
The buying pattern for the realtors is that they typically will know of an inspector that they send
their clients to. Because they are in the industry, they typically know people so they will
generally not be looking at advertisements to make a decision as to who to recommend.
8. Harvest Strategy
The business is a sole partnership firm. The firm will acquire more staff if required in the future.
The leadership change in the firm will be accompanied by ownership change.
Business plan for Trust Construction Solutions by Job Thomas 7

8. 9. Milestone Schedule
Trust Construction Solutions has identified several milestones for the organization to achieve.
The achievement of the milestones will be instrumental in the success of the venture. By
enumerating the milestones it provides the organization with clear goals that everyone can
focus their energy on.
Milestone
Q1 Q2 Q3 Q4
Delivery beyond customer expectation XXXXXX
Develop sustainable home business XXXXXX
Increase clients by 20% XXXXXX XXXXXX
Profitability
Meet sale target XXXXXX
Business plan for Trust Construction Solutions by Job Thomas 8

9. 10. Appendix
A1. Start-up Requirements
Start-up Expenses
Legal INR 10,000
Stationery etc. INR 20,000
Brochures INR 5,000
Consultants INR 10,000
Insurance INR 0
Rent INR 20,000
Research and Development INR 0
Expensed Equipment INR 0
Other INR 0
Total Start-up Expenses INR 65,000
Start-up Assets
Cash Required INR 50,000
Other Current Assets INR 0
Long-term Assets INR 60,000
INR
Total Assets 110,000
INR
TOTAL REQUIREMENTS 175,000
Business plan for Trust Construction Solutions by Job Thomas 9

10. A2. Start-up Funding
Start-up Expenses to Fund INR 65,000
Start-up Assets to Fund INR 110,000
Total Funding Required INR 175,000
Assets
Non-cash Assets from Start-up INR 60,000
Cash Requirements from Start-up INR 50,000
Additional Cash Raised INR 65,000
Cash Balance on Starting Date INR 115,000
Total Assets INR 175,000
Liabilities and Capital
Liabilities
Current Borrowing INR 65,000
Long-term Liabilities INR 0
Accounts Payable (Outstanding Bills) INR 0
Other Current Liabilities (interest-
free) INR 0
Total Liabilities INR 65,000
Capital
Planned Investment
Investor 1 (JOB THOMAS) INR 110,000
Investor 2 INR 0
Other INR 0
Additional Investment Requirement INR 0
Total Planned Investment INR 110,000
Loss at Start-up (Start-up Expenses) (INR 65,000)
Total Capital INR 45,000
Total Capital and Liabilities INR 110,000
Total Funding INR 175,000
Business plan for Trust Construction Solutions by Job Thomas 10

11. A3. Profit and Loss account (Projected )
Year 1 Year 2 Year 3
Sales/Consulting fee INR 400,000 INR 500,000 INR 700,000
Direct Cost of Sales (0.2) INR 80,000 INR 100,000 INR 140,000
Other Production Expenses INR 0 INR 0 INR 0
Total Cost of Sales INR 80,000 INR 100,000 INR 140,000
Gross Margin INR 320,000 INR 400,000 INR 560,000
Gross Margin % 80% 80% 80%
Expenses
Payroll INR 180,000 INR 210,000 INR 252,000
Sales and Marketing and Other Expenses INR 20,000 INR 30,000 INR 45,000
Depreciation(0.3) INR 18,000 INR 18,000 INR 18,000
Leased Equipment INR 0 INR 0 INR 0
Utilities INR 0 INR 0 INR 0
Insurance INR 10,000 INR 10,000 INR 10,000
License fees and association dues INR 5,000 INR 5,000 INR 5,000
Payroll Taxes INR 0 INR 0 INR 0
Other INR 0 INR 0 INR 0
Total Operating Expenses INR 233,000 INR 273,000 INR 330,000
Profit Before Interest and Taxes INR 87,000 INR 127,000 INR 230,000
EBITDA INR 105,000 INR 145,000 INR 248,000
Interest Expense INR 13,000 INR 13,000 INR 13,000
Taxes Incurred INR 22,200 INR 34,200 INR 65,100
Net Profit INR 51,800 INR 79,800 INR 151,900
Net Profit/Sales 13% 16% 22%
Business plan for Trust Construction Solutions by Job Thomas 11

12. A4. Balance Sheet (Projected )
Year 1 Year 2 Year 3
Assets
Current Assets
Cash INR 149,800 INR 235,900 INR 304,950
Other Current Assets INR 60,000 INR 90,000 INR 120,000
Total Current Assets INR 209,800 INR 325,900 INR 424,950
Long-term Assets
Long-term Assets INR 60,000 INR 60,000 INR 60,000
Accumulated Depreciation INR 18,000 INR 36,000 INR 54,000
Total Long-term Assets INR 42,000 INR 24,000 INR 6,000
Total Assets INR 191,800 INR 259,900 INR 310,950
Liabilities and Capital
Current Liabilities
Accounts Payable INR 30,000 INR 45,000 INR 60,000
Current Borrowing INR 65,000 INR 65,000 INR 65,000
Other Current Liabilities INR 0 INR 0 INR 0
Subtotal Current Liabilities INR 95,000 INR 110,000 INR 125,000
Long-term Liabilities INR 0 INR 0 INR 0
Total Liabilities INR 95,000 INR 110,000 INR 125,000
Paid-in Capital INR 110,000 INR 110,000 INR 110,000
Retained Earnings (INR 65,000) (INR 39,900) (INR 75,950)
Earnings INR 51,800 INR 79,800 INR 151,900
Total Capital / Net worth INR 96,800 INR 149,900 INR 185,950
Total Liabilities and Capital INR 191,800 INR 259,900 INR 310,950
Business plan for Trust Construction Solutions by Job Thomas 12

13. A5. Ratio analysis
Financial ratios Year 1 Year 2 Year 3
Current ratio 2.21 2.96 3.40
Debt/Net worth 0.98 0.73 0.67
Return on tangible net worth 0.67 0.62 0.89
Return on assets 0.34 0.36 0.53
Financial ratios
3.50
3.00
2.50
2.00 Year 1
1.50 Year 2
1.00 Year 3
0.50
0.00
Current ratio Debt/Net Return on Return on
worth tangible net assets
worth
Business plan for Trust Construction Solutions by Job Thomas 13