Landscaping Studio Business Plan

* The calculations use the average data for the World

1. SUMMARY OF THE PROJECT

In this business plan, a project to open a landscape design studio in the city of Krasnodar is considered. The aim of the project is to create a highly profitable enterprise, profit and meet the demand of the population for design services. The studio will specialize in providing services in landscape design, 3D-modeling, landscaping. Clients of the company will be the owners of private city courtyards, country cottages, summer cottages, corporate customers.

The region under consideration is favorable for the chosen direction due to the concentration of a large number of solvent population and the high pace of cottage construction, which guarantees an increased demand for landscape design services.

The volume of investment in the project is 1, 670, 000 rubles. To implement the project, own funds will be raised. Key performance indicators of the project are given in Table. one.

Table 1. Integrated performance indicators

Discount rate (r-year), %

ten

Discount rate (r-month), %

0.8

Payback period (PP), months

7

Discount payback period (DPP), months

7

Net present value (NPV), rub.

4836669

Return on Investment (ARR), %

11.96

Internal rate of return (IRR), %

10.8

Profitability Index (PI)

2.9

2. DESCRIPTION OF THE INDUSTRY AND COMPANY

In 2014, the volume of the domestic landscape design market excluding city parks and lawns was estimated by experts at $ 600 million. The greatest competition in this area exists in the largest cities of the country. For example, in St. Petersburg, according to experts from the Forum for the Landscape Industry, Park Industry and Industrial Floriculture, the market volume is about $ 200 million, increasing by 15-20% annually. The landscape design market in Russia, despite the abundance of new players, is considered not saturated - it does not yet reach fierce competition.

The landscape design studio will be opened in the city of Krasnodar - one of the largest cities in the South of Russia: today more than 854 thousand people live in the city. The selected region is promising for creating a landscape design studio. According to data for the 1st quarter of 2016, the region ranks third in terms of construction volumes in Russia, second only to St. Petersburg and the Leningrad Region. The peak of housing commissioning in the region was in 2014, then for the year this figure jumped to 20%. In 2015, there was a predicted recession related to the crisis in the Russian economy. However, despite the current situation, in the Krasnodar Territory, many developers did not freeze the projects, and the construction of facilities continued at the same pace. In 2015, 3.5 million “squares” of living space were commissioned in the Kuban, which became the second indicator among the subjects of the Russian Federation after the Moscow region. A favorable factor is that the development of the city consists mainly of low-rise buildings with adjoining plots. Also in Krasnodar there are a large number of cottages. In the city today there are 23 cottage villages.

The upcoming landscape design studio will specialize in providing a wide range of landscape design services. It will include landscape design, landscaping, 3D-modeling, design of decorative reservoirs, etc. The target audience of the project will be the owners of private urban farmsteads, owners of suburban areas, corporate customers.

The investment project involves the creation of an enterprise from scratch: the company does not have any financial results and achievements. At the time of writing the business plan, an individual entrepreneur was registered, negotiations were held, and business relations were established with specialists from certain related fields of activity (construction companies, a nursery), and selection work began. To open a studio, an office space will be leased, furniture and equipment will be purchased. The founder of the company is an entrepreneur with extensive experience as a landscape designer. He will also act as the immediate project manager.

The project is not capital intensive - the total investment is 1, 670, 000 rubles. The main investment will require the purchase of a truck. Items of investment costs are given in Table. 2 of this business plan.

Table 2. Investment costs of the project

No.

NAME

AMOUNT, rub.

Equipment

one

Office equipment

150, 000

2

Purchase of garden equipment and tools

250000

3

Buying a truck

600, 000

Intangible assets

2

Website creation

70, 000

3

Software Acquisition

30000

four

Advertising campaign

50, 000

five

Other

20000

Current assets

6

Current assets

500, 000

Total:

1670000

3. DESCRIPTION OF SERVICES

The landscape design studio will operate in the medium segment, offering customers high quality services at affordable prices. The list of services provided by the studio is given in Table. 3.

Table 3. List of services provided

No.

Service

Description

Cost, rub.

LANDSCAPE DESIGN

one

Design project (Standard)

Preliminary sketch, general plan of gardening and improvement, dendrological plan, center plan, planting plan, assortment list, recommendations for garden care

4000/100 sqm m

2

Design project (Premium)

Standard package + autowatering plan, estimates for autowatering and work, installation plan for outdoor lighting, visualization

7000/100 sqm m

3

Arbor design project

Development of individual design, creation of a 3D model, preparation of drawings

8500

four

BBQ Design Project

Design and barbecue design

9000

five

Departure around the city

Departure of a specialist in Krasnodar for the initial inspection, measurements, consultations

is free

6

Departure for the region

Departure of a specialist in the Krasnodar Territory for an initial examination, measurements, consultations

25 rub / km

IMPROVEMENT AND GREENING OF TERRITORIES

Landscaping

7

Paving tracks

Laying pavers or paving slabs

from 800 / sq.m.

eight

Soft Coatings

Laying geotextiles, installing a border tape, filling with gravel, gravel, pebbles or marble chips

from 1500 / sq.m.

Landscaping

9

Sowing lawn

Crop grass lawn

from 220 / sq.m.

ten

Lawn roll

The device of a grass lawn from grass + delivery and laying

430-580 / sq.m.

eleven

Flower bed of annual flowers

Arrangement of flower beds from annual flowers (without the cost of planting materials)

from 600 / sq.m.

12

Hedge

Creating a hedge (without the cost of planting materials)

from 600 / m. epaulette.

13

Planting deciduous shrubs

Planting deciduous shrubs (without the cost of planting materials)

from 150 / sq.m.

14

Planting coniferous shrubs

Planting coniferous shrubs (without the cost of planting materials)

from 350 / sq.m.

15

Deciduous tree planting (up to 2 m)

Planting deciduous trees up to 2 m (without the cost of planting materials)

from 500 / sq.m.

sixteen

Deciduous tree planting (over 2 m)

Planting deciduous trees over 2 m (without the cost of planting materials)

from 2000 / sq.m.

17

Planting conifers (up to 2 m)

Planting conifers up to 2 m (without the cost of planting materials)

from 1200 / sq.m.

18

Planting conifers (over 2 m)

Planting conifers over 2 m (without the cost of planting materials)

from 2500 / sq.m.

nineteen

Planting conifers (over 4 m)

Planting conifers over 4 m (without the cost of planting materials)

from 5000 / sq.m.

20

Deciduous tree planting (over 4 m)

Planting deciduous trees over 4 m (without the cost of planting materials)

from 4000 / sq.m.

RELIEF CHANGE

21

Creating a decorative pond

The device of decorative reservoirs (fountains, waterfalls)

from 3500 / sq.m. 4900-7900

22

Creating Alpine Slides

Alpine slide device

negotiable

23

Creating a Dry Creek

Dry Stream Device

from 1200 / sq.m.

RELATED AND AUXILIARY WORKS

24

Creating an automatic watering system

A range of services to create an automatic watering system on the site

negotiable

25

Selection and purchase of seedlings

Selection and purchase of seedlings in nurseries

negotiable

26

Soil preparation for lawn

Soil preparation for laying a rolled lawn

50-100 / sq.m.

27

Delivery of planting material

Delivery of plants to the site

from 1000

28

Soil delivery

Delivery of fertile soil

from 600 / cbm

29th

Site cleaning

Building debris removal

negotiable

thirty

Garbage removal

Construction waste removal

from 600 / cbm

31

Weed grass

Weed plants

from 20 / sq.m.

4. SALES AND MARKETING

The main clients of landscape design studios are people aged 35 to 60 years. As a rule, these are citizens with an income level “above average” and “high”, who own private country cottages, land plots and summer residences. Potential customers include corporate clients - large and small organizations that have a need for the design of sites. Customer segmentation is shown in Figure 1.

Picture 1.

One of the features of the provision of services in Russia is the mentality: Russian consumers tend to take an active part in the process of creating a site design. Often, several family members participate in the discussion of the future image of the garden plot, each of which has his own idea of ​​“how it should be.” In this regard, the staff of the landscape studio must be able to take into account various wishes and present their position with respect to the technical and financial aspects of the activity.

The main consumer preferences presented today to landscape design studios are:

- an integrated approach to the provision of services: according to industry experts, about 95% of Russian customers prefer to contact organizations providing comprehensive services;

- high quality of order execution, professionalism of employees;

- short deadlines for the design and implementation of the order;

- clear budget;

- taking into account all the needs and wishes of customers;

- careful monitoring of the implementation of the project.

In total, there are over 100 organizations in Krasnodar that specialize in landscape design and design. The market is quite motley. Most of it is made up by multidisciplinary construction companies, the direction of landscape design in which is not a priority. About 10 companies can be classified as specialized: landscape design and landscaping is their profile, and many of these companies complement the services of landscape gardening, have their own nurseries and online stores, etc. Such companies have many years of experience, a long portfolio of completed projects, established relationships with suppliers and manufacturers of building materials and contractors. The staff of such companies can reach 150 people. Another part consists of small studios with a staff of up to 5-6 people, in which the designer is the key person. Often, designers and do not have the practice of completed projects, despite the presence of information about landscape design on their own sites. Their work is focused on creating interior design, and landscape design is presented in the form of visualization and creative projects. As a result of this, a high variation in prices for services can be noted. Price per 100 square meters. meters of the project can vary from 2000 to 7500 rubles. and higher, while the quality of the project will be dramatically different.

Sales are planned to be carried out in the city of Krasnodar and beyond. Various methods will be used to attract customers, including cold calls, distribution of booklets and announcements in the places of residence of potential customers, advertising in glossy magazines, conducting groups on popular social networks (Facebook, Instagram, etc.). An important point at the start of the studio will be the formation of a positive image of yourself with potential customers. First of all, clients of landscape design studios need proof of the professionalism of employees. Therefore, it will be necessary to create a high-quality website where they can get acquainted with the designer’s portfolio, see the projects created by him earlier, and verify the experience and competence of the staff. It is also planned to post useful articles on the site for people interested in this topic. The company’s concept will include a customer-oriented approach, taking into account all the needs of customers, and an affordable pricing policy. Forming a circle of satisfied customers, the company will collect material from positive reviews that can affect the decision-making of potential customers.

5. PRODUCTION PLAN

The process of providing services is divided into several stages: ascertaining the needs of the client and his financial capabilities, visiting a specialist and advising on the details of the project, directly preparing the design project, project implementation, construction support, subsequent maintenance (if necessary).

For the implementation of the project will require the presence of an area of ​​20 sq. meters, which will house the office of the designer and sales specialist. An office is also necessary for working with clients, conducting presentations and negotiations. Since the location is not a factor of primary importance, the office will be located in one of the sleeping areas of the city. This location, firstly, will help reduce rental costs, and secondly, gravitates to potential customers - there are several cottage villages with a large number of Central Asian representatives in the area. The room will not require repairs, but the purchase of technical equipment and office furniture will be required. The studio office will work from Monday to Friday from 9:00 to 18:00.

On average, one order is completed in 1 month, at least 7-10 days are spent on the creation of the project. Taking the average cost of services for the design of 1 hundredths (4000 rubles) in the calculations, the cost of the design project for the 10-hundredths site will be 40 thousand rubles. Together with the implementation, the cost of one well-equipped hundredths, as a rule, increases to 70-120 thousand. rubles. Thus, the revenue from one completed project reaches 1.2 million rubles. Net profit will be 270 thousand rubles. Upon reaching these indicators, the studio will be able to recoup itself by the 7th month of work. An important point in the field of landscape design is the seasonality factor, therefore, maximum profitability indicators can be expected in the summer. During this period, a budget should be laid for the offseason.

6. ORGANIZATIONAL PLAN

As an organizational and legal form of activity of the studio of landscape design, SP will be chosen. As a form of taxation - a simplified tax system "income minus expenses" (USN15%). The implementation of the project will require the following main stages: selection and rental of an office, purchase of equipment, hiring employees, establishing contacts with companies from related fields of activity, marketing campaign to attract customers. The start of operations is scheduled to begin in April, before the start of seasonal sales growth.

Management functions will be carried out by a leader with experience in the field of landscape design for more than 5 years. The head has knowledge in the field of dendrology, practical experience in the construction and design aspect of the activity. He will be entrusted with the duties of creating design projects, staffing issues, the definition of marketing policy. Also, the company's staff will need a surveyor, agronomist, dendrologist, sales and purchase manager and accountant. Other responsibilities, in particular, the implementation of projects and construction, will be assigned to representatives of third-party companies. Since the landscape business has a pronounced seasonal character, it is possible to attract seasonal workers. Off-season staff salary will be maintained. In Tab. 4 presents the staffing and payroll.

Table 4. Staffing and payroll

No.

Position

Salary, RUB

Number of people

PHOT, RUB

Administrative staff

one

Accountant

15, 000

one

15, 000

Sales staff

2

Sales Manager

25, 000

one

25, 000

Production personnel

3

Surveyor

32000

one

30000

four

Agronomist

32000

one

30000

five

Land surveyor

32000

one

30000

five

Dendrologist

32000

one

30000

Total:

160, 000

Social Security contributions:

48000

Total deductions:

208000

7. FINANCIAL PLAN

The total investment in the project will amount to 1, 670, 000 rubles. Among the key costs are expenses for the purchase of a truck (600 thousand rubles). Details of investment costs are given in Table. 3 of this business plan.

The financial plan of the project has been developed for a three-year perspective. All types of studio expenses were taken into account, including tax and social contributions, the seasonality factor of demand. Appendix 1 provides a detailed statement of cash flows, information on planned revenues and net income. In Tab. 5 shows the fixed costs of the studio.

Table 5. Fixed costs of the enterprise

No.

NAME

AMOUNT PER MONTH., Rub.

one

Office rental

7000

2

Advertising

20000

3

Communal payments

1000

four

Telephony and Internet

1500

five

Selling expenses

15, 000

7

Management expenses

8000

eight

Fuel and lubricants expenses

5000

Total:

57 500 ₽

8. EVALUATION OF EFFICIENCY

To assess the effectiveness of the project, generally accepted integrated performance indicators are used, including net present value, profitability ratio, payback period and discounted payback period. To account for the value of money over time, a discount rate of 10% is used.

Analysis of indicators that are given in Table. 1., allows us to talk about the investment attractiveness of the project and its high prospects in the next 5-10 years. In particular, the net present value (NPV) indicator significantly exceeds the amount of starting investments - 4, 836, 669 rubles. against 1, 670, 000 rubles. respectively. The internal rate of return (IRR) is higher than the discount rate, and the profitability index exceeds 1.

9. RISKS AND WARRANTIES

The rich experience of foreign and domestic studios does not allow us to call this area a business with a high level of risk. The sector is well developed, and the high level of demand for design services in the region under consideration affects risk reduction.

Nevertheless, it is necessary to foresee the possible risks associated with the implementation of the project, assessing the severity of their consequences and the likelihood of occurrence. Detailed information on possible risks is given in Table. 6.

Table 6. Possible risks and ways to prevent them or their consequences

Risk factor

Probability of occurrence

Severity of consequences

activity

Failure to achieve planned sales

low

average

Hiring a sales representative with experience, thoughtful marketing policy at the preparation stage, thorough market processing, setting an effective pricing policy

A sharp drop in the solvency of the population

low

high

Revision of the range of services provided, preparation of an “anti-crisis” proposal, cost minimization

Increased competition

average

average

Creation of strong positions at the first stage of work, image advertising, establishment of strong relations with customers in a certain area of ​​activity

Off-season financial difficulties

average

average

Early planning of the budget taking into account the decline in sales, personnel policy with separation of full-time and seasonal employees

Затяжка реализации проектов по вине строительных компаний

average

average

Тщательный подбор ключевого подрядчика

Повышение стоимости строительных материалов

average

average

Мониторинг рынка, поддержание связей с альтернативными поставщиками материалов

Выход из строя компьютерного оборудования, потеря важной информации

low

average

Создание бэкапа, использование лицензионного ПО и антивирусных программ

Формирование отрицательного образа компании

low

high

Клиентоориентированный подход в работе, учет менталитета заказчиков, найм квалифицированных специалистов

10. Applications

ANNEX 1

Three-year production plan and key financial indicators

(c) www.clogicsecure.com - a portal to small business business plans and guides

08/18/2019

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