TGI Properties Business Plan

Executive Summary

Introduction

TGI Properties is a start-up company operating in the real estate market in Atlanta, Georgia. The firm specializes in developing rental facilities, not only in the state but also across the country (TGI Properties, n.d.). It is driven by a strong desire to provide safe, quality, and affordable housing solutions to its clients. TGI Properties is a complete service real estate and mortgage firm, serving the needs of a diverse clientele. The management strives to be a leader in the industry. Although many businesses are in the real estate, TGI Properties’ marketing strategy is unique and should capture a wider market to have a competitive edge and operate profitably.

The Company

TGI Properties is a limited liability company registered to formally operate in the state of Georgia. The founder has adequate experience in the industry and is committed to excellent services to clients. The management team plans to leverage private investment and loan facilities to provide housing to the target clientele. The firm aims at providing homes for the working class who can access private financing, especially in the middle-income blanket. The founder and the management team understand the needs of this segment because they have served them in the past. The firm will operate in a way that serves the interests of the market, its employees, and the management team.

Company Summary and Ownership

TGI Properties will be owned by the shareholders who will invest in the business. The founder will be the primary investor due to the highest amount contributed to financing its activities. Other shareholders will have stakes depending on the amount of capital they inject into the business. TGI Properties will not be open to many investors to avoid complications during its early days of operation. Any loan provided for its activities will not guarantee ownership since it will be payable within an agreed period.  The founder is opening up the business to meet the demand for homes among the middle-income earners in the country. The company will have various facilities from where to operate. The investments will be used to fund all projects related to its operations.

The Market

TGI Properties will operate in the United States’ real estate, a sector that has been growing steadily since the 2008 economic crisis. The government implemented an effective recovery plan in 2009 that has made a positive contribution to the industry (Paris, 2018). The 2017 expansionary monetary policy has also benefited the real estate business by providing financial incentives to home buyers. Other factors influencing the market include economic growth, housing affordability, and interest rate policies. The middle-income individuals in the U.S.  have the motivation to own houses due to the available financing options.

Financial Considerations

TGI Properties will require modest start-funding, including expenses and the costs necessary to support the operations until it reaches its breakeven point. The company will obtain most of the finances from management investment and private financiers. However, it has the option of borrowing from the bank to cater for any deficits. The firm hopes to reach its breakeven within the second year of operations and does not expect major cash flow issues. The management anticipates that the first three years will be characterized by adequate sales and profits. Therefore, the available funds will meet the firm’s current needs.

Mission and Overall Strategies

The TGI Properties’ Mission is to define strategic ways to attract customers and provide them with safe, quality, and affordable housing. The management desires to leverage the experience to establish homes with security and comfort (TGI Properties, n.d.). The mission will be achieved through a simple rental application or purchase procedures. The strategy will play a role in its expansion efforts throughout the country. Many companies have complex processes which is one of the reasons they lose clients. Therefore, easing the process is a source of competitive advantage for TGI Properties. The firm will work in compliance with the law and support the customers to retain long-term loyalty and attract new clients. The mission will guide the operations by the managers and employees.

Keys to Success/ Statement of Distinction

TGI Properties focuses on various key areas that differentiate it from competitors. The following strategies are its unique aspects as well as its key to success.

1. The management will maintain close contacts with the real estate listing services and other service providers to ensure that all the information required by the clients is available. The customers will come to the company as a one-stop-shop for all services in the industry.
2. The business will put the customers at the center of all their services to maintain long-term relationships. Client-centered operations are the most effective approach for the firm to gain continuous profitability and remain at the top in the industry.
3. The firm will continue to increase the number of units offered to the customers to meet the demand. The decisions will be made following market research to provide reliable information on what the consumers want.

Objectives

The management will strive to accomplish three primary goals:

1. Achieve break even by the end of the second year of operation.
2. Attain a minimum of 95% customer satisfaction rate by the end of two years to build the long-term relationship with the clients.
3. Expand the housing units by 20% every year to meet the increasing demand for homes among the middle-income earners in the U.S.

Start-up Summary

TGI Properties is a startup company in its initial days of operation. The management expects various categories of expenses to ensure that all activities run smoothly. The owner will contribute the largest part of the finances while the remaining funds will come from other investors and loans. The management will design the budget to ensure that the available funds are efficiently used for the success of the business. Figure 1 shows the required expenses in implementing the marketing plan.

Figure 1. Budget.

Service Business Analysis

The real estate business has been growing steadily in the last few decades. Additionally, the economic status of the middle-income earners in the country has improved. Therefore, a business model that targets this group is most likely to make sufficient profits as well as maintain its operations and earn returns on investment (Fernandez, 2016). The market has a high power of customers, suggesting that the business will have a wide range of clients. Thus, the management anticipates sufficient profits beginning from the initial days of operation.

Marketing Mix

The management will take advantage of the “Purple Cow Concept” in its marketing mix. The team seeks to distinguish itself from others by ensuring that the services are incredible and targeting the right people within the industry (Godin, 2003).  It will be different from what others are doing as real estate firms appear to be concentrating their effort on promotion. Therefore, the initial marketing approach will entail designing appealing services to the right clients.

Product or Service

TGI Properties focuses on developing services that differentiate it from competitors by providing comprehensive real estate services to a wide client base. The company will supply mortgage and title services on newly built houses to the middle-income earners. It will also offer condos and retirement apartments to the older and retiring customers (TGI Properties, n.d.). The firm will provide other services to facilitate the buying and selling of real estate buildings, including the following areas.

• Moving consulting.
• Home search database.
• Mortgage and loan consulting.
• Title transfer.
• Community information.
• Property preparation.

Place

TGI Properties will be located at Atlanta, Georgia but will provide the services throughout the state and the country. The management strives to reach as many real and potential customers as possible to continue expanding its market. The firm will not be limited by geographical area like its rivals, which will be another source of competitive advantage. Traditionally, real-estate companies focus on a highly localized market, targeting customers in their region. The firm will target the people in the whole country wishing to own homes in Georgia. According to the “Purple Cow Concept,” satisfying the customers’ needs will build a reputation for the business and the clients will refer other potential buyers (Godin, 2003).  The management desires to create a strong brand image such that clients can market it through word of mouth.

Promotion

While TGI Properties will still use the traditional promotion strategies, the firm will also depend on the “Purple Cow Concept” that departs from the conventional channels of marketing. The team will create awareness about the business through the media. It will advertise to the customers in different parts of the country. The most effective way to send the message to most real and potential clients is using the social media. The marketers will develop a website and other apps to market the business. They will also use the conventional media, including radio and TV (Rubinson, 2009). The traditional modes are also effective in communicating to a larger audience.

Pricing Strategies

TGI Properties will use competitive prices for their properties since the market is highly saturated. Therefore, the company has to ensure that prices match the quality required by the customers. The marketing team will research the cost of property in the region and the entire country before developing the pricing strategy. The firm will use intermediaries to market and sell the property, a factor that might affect the prices. While these individuals or organizations might increase the cost, they generate more revenue, making them cost-effective. Therefore, the management will use a pricing approach that will guarantee high returns.

Market Analysis

TGI Properties will focus on providing middle-income earners in the United States with affordable housing through private financing and mortgage services. The management will also provide professional advice to the clients to encourage then make informed decisions. The company will operate through in-house to reach the customers. Importantly, it will use social media to send the message to a large audience. The United States government made efforts to improve the industry after the 2008 economic crisis (Paris, 2018). Home-buyers are looking for properties in different parts of the country, and the company can take advantage to target the potential clients. The management is capitalizing on the positive developments to build a strong brand name in the real estate sector. The business has selected Georgia as the most lucrative area due to the economic potential of the region as well as its suitability for building safe and comfortable homes.

Potential Market Share

The market is characterized by an increasing number of real estate businesses. Therefore, the company does not expect to have a huge market share. However, its unique business model will earn it a considerable portion. From the analysis by RE/MAX (2018), TGI Properties should expect to have a market share of 4% in 2018 financial year. However, the figure is expected to continue increasing as it gains ground in the industry. It is possible for the company to lead the market in the future if it implements more effective strategies.

Market Segmentation

The company may not meet the housing needs of all clients within the target market. Therefore, the management team will sub-divide the market into manageable segments to meet the demands effectively. Figure 2 shows the company’s market segments.

Figure 2. Market Segmentation

1. Homeseller is the most important market segment for the company. The division will take up to 40% of the business. The sellers will act as the intermediaries and call the company for important insights regarding the real estate market. It will have an effective strategy to meet the needs of this segment due to its role in marketing the services.
2. Homebuyers, taking 30%, are another vital segment for the company. These clients are expected to go to TGI Properties to “match” their criteria selections. The marketing team will play a critical role in assessing the requirements to ensure that customers get properties that meet their needs. Importantly, the company will not target all homebuyers in the country but will focus on middle-income However, it will sell to members of other income groups if they meet its criteria, private financing or loan (mortgage).
3. The firm will target customers wishing to lease property at 20% share. These clients will also receive services depending on their individual needs.
4. The management will accommodate clients outside its services, but refer them to other businesses that can meet their needs. Referrals and consultant services at 10% share are a critical part of the firm.

Competition Analysis

The real estate market is highly competitive due to the ease of entry. Therefore, the management should understand the nature of the rivalry to create effective strategies to counter it. The high competition affects the prices of lands on which the real estate companies establish their properties (Beck, Scott, & Yelowitz, 2010). As a result, the businesses are forced to increase the cost of the houses. One of the main competitors of TGI Properties is RE/MAX, a firm that has been in the market for years. The company uses a competitive model to target small families seeking to own homes (RE/MAX, 2018). The business will use a similar strategy by targeting middle-income earners. The segment is usually ignored in the market due to financing challenges. However, TGI Properties will meet their needs by providing alternative sources of funding, including loans (mortgage). The approach will ensure that the business remains a market leader since the other prominent firms target customers with high income.

References

Beck, J., Scott, F., & Yelowitz, A. (2010). Competition in market structure in local real estate markets. Retrieved from https://www.brokersinsider.com/pdf/competitionstudy0311.pdf

Fernandez, R. (2016). Financialization and housing: Between globalization and varieties of capitalism. In M. B. Aalbers (Ed.), The Financialization of housing:  A political economy approach  (pp. 81-100). New York: Routledge.

Godin, S. (2003). Purple Cow: Transform your business by being remarkable (1^st ed.). New York: Penguin Group.

Paris, E. (2018, April 23). Real estate market for spring 2018 is a good news/bad news story. Forbes. Retrieved from https://www.forbes.com/sites/ellenparis/2018/04/23/springs-2018-real-estate-market-is-a-good-news-bad-news-story/#60b081e32c35

RE/MAX (2018). Rising prices, fewer sales driven by record-breaking low inventory. Retrieved from https://www.remax.com/newsroom/press-releases/april-2018-national-housing-report.tekdownload

Rubinson, J. (2009). Empirical evidence of TV advertising effectiveness. Journal of Advertising Research, 49 (2), 220–226. doi:10.2501/s0021849909090321

TGI Properties. (n.d.). Welcome to TGJ Properties. Retrieved from http://tgjproperties.com/

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