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 Confidentiality Agreement

The undersigned reader acknowledges that the information provided by

_________________________ in this marketing plan is confidential; therefore, reader agrees not
to disclose it without the express written permission of _________________________.

It is acknowledged by reader that information to be furnished in this marketing plan is in all

respects confidential in nature, other than information which is in the public domain through other
means and that any disclosure or use of same by reader, may cause serious harm or damage to
________________________.

Upon request, this document is to be immediately returned to _________________________.

___________________
Signature

___________________
Name (typed or printed)

___________________
Date

This is a marketing plan. It does not imply an offering of securities.

 Table Of Contents

1.0 Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

2.0 Situation Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2

2.1 Market Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
2.1.1 Market Demographics . . . . . . . . . . . . . . . . . . . . .3
2.1.2 Market Needs . . . . . . . . . . . . . . . . . . . . . . . . .3
2.1.3 Market Trends . . . . . . . . . . . . . . . . . . . . . . . .4
2.1.4 Market Growth . . . . . . . . . . . . . . . . . . . . . . . .5
2.2 SWOT Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
2.2.1 Strengths . . . . . . . . . . . . . . . . . . . . . . . . . .5
2.2.2 Weaknesses . . . . . . . . . . . . . . . . . . . . . . . . .6
2.2.3 Opportunities . . . . . . . . . . . . . . . . . . . . . . . . .6
2.2.4 Threats . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
2.3 Competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
2.4 Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
2.5 Keys to Success . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
2.6 Critical Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8

3.0 Marketing Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

3.1 Mission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.2 Marketing Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.3 Financial Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.4 Target Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.5 Positioning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.6 Strategy Pyramids . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.7 Marketing Mix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.8 Marketing Research . . . . . . . . . . . . . . . . . . . . . . . . . . 10

4.0 Financials, Budgets, and Forecasts . . . . . . . . . . . . . . . . . . . . . . 11

4.1 Break-even Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.2 Sales Forecast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.3 Expense Forecast . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

5.0 Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.1 Implementation Milestones . . . . . . . . . . . . . . . . . . . . . . . 14
5.2 Marketing Organization . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.3 Contingency Planning . . . . . . . . . . . . . . . . . . . . . . . . . 15
 Inspect A-bode

1.0 Executive Summary

Inspect A-bode is a residential home inspection service serving Washington, PA and the
surrounding community. Inspect A-bode offers complete home inspections, as well as additional
services including electromagnetic field testing, radon testing, and asbestos testing. This service
will be offered to home buyers as well as sellers. For buyers it will provide them with crucial
information regarding the condition of their house. For sellers it will offer documentation indicating
the condition of the house, eliminating the buyer's uncertainty.

Inspect A-bode will be deriving the majority of sales from real estate agents who will have entered
into strategic relationships with Inspect A-bode. Once these strategic relationships are established,
there will be a constant, easy source of jobs since the agents are in the business of selling homes,
all of which should have an inspection done prior to closing.

Inspect A-bode is backed up by 12 years of industry experience. These years of experience will be
leveraged to develop a competitive advantage, along with an impeccable level of professionalism.
While there are several other inspection companies serving the market, only one approaches
Inspect A-bode in terms of professionalism or industry experience. Inspect A-bode will reach
profitability by month six and will generate revenue close to $50,000 by the end of year one.

Annual Sales Forecast

$120,000

$100,000

$80,000
Real Estate Agents
$60,000 Individual Buyers
Individual Sellers
$40,000

$20,000

$0
2002 2003 2004

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 Inspect A-bode

2.0 Situation Analysis

Inspect A-bode is entering its first year of operation and owner Chek Domisile recognizes the
imperative nature of a well designed marketing plan that is not just lip service, but actually
implemented. The basic market need is for a professional, experienced, home inspection service
that provides valuable insight regarding the condition of an existing residential home prior to its
sale/purchase.

2.1 Market Summary

Inspect A-bode possesses good information regarding the market and knows a great deal about
the common attributes of the most prized customers. This information will be leveraged to better
understand who is served, their specific needs, and how Inspect A-bode can best communicate
with them. Inspect A-bode recognizes that the collection of information about the market and its
customers is an ongoing process that must be continually attended to in order to provide the
highest quality level of market analysis.

Target Markets

Real Estate Agents

Individual Buyers
Individual Sellers

Table 2.1: Target Market Forecast

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 Inspect A-bode

2.1.1 Market Demographics

The profile for Inspect A-bode's customers consists of the following geographic, demographic, and
behavior factors:

Geographics

• The immediate geographic target is the city of Washington, PA with a population of

176,000.
• A 50-mile radius area is in need of inspection services.
• The total targeted population is 26,000.

Demographics

• Male and female.

• Ages 30 - 65. This segment makes up 57% of Washington according to the Chamber of
Commerce.
• 80% of the clients are estimated to be at least second-time home buyers. This means that
only 20% of the home buyers are first-time buyers. Over time it is likely that this
percentage will increase as the younger buyers who have grown-up with the Internet and
the bountiful amount of information it provides move into the home-owning marketplace.
Using this reasoning, there will be an increasing percentage of people who, although they
have never purchased a house, will desire an inspection to fulfill their need for information
regarding this large purchase.
• 76% have attended college.
• The average median household income ranges from $70,000- $175,000.

Behavior Factors

• Customers tend to do a fair amount of research before any purchase, and tend to use the
Internet to do this research when possible.
• Do not often make impulse purchases.

Table 2.1.1: Target Market Analysis

Target Market Analysis

Market Segments Characteristic Characteristic Characteristic Characteristic Characteristic
Real Estate Agents Don't like surprises Cost conscious Increases value Smooths negotiations Want consistent quality
Individual Buyers Don't like surprises Cost conscious Supports price Improves sale potential Want supportive results
Individual Sellers Don't like surprises Cost conscious Decreases risk Provides peace of mind Want accurate results

2.1.2 Market Needs

Inspect A-bode is providing its customers with a professional, complete, inspection service for
residential homes. These inspections provide the prospective buyer with ample information to
make an educated decision regarding the purchase of the house, its current condition, as well as
the cost for needed repairs. Inspect A-bode seeks to fulfill the following benefits that are important
to customers.

• Thoroughness- A compete inspection will be made of the residence, informing the

prospective buyer of any latent defects.

• Convenience- The inspections can be made to any house within a 50-mile radius of
Washington.

• Professionalism- The home building industry (from which many inspectors come) is not

Page 3
 Inspect A-bode

known for its professionalism or integrity. Inspect A-bode sees their ability to provide the
uppermost professionalism as a competitive advantage.

• Competitive price- Due to many years in the industry, Inspect A-bode is able to offer
competitive pricing by gaining efficiencies in the inspection process, reducing the time
required to deliver a comprehensive inspection.

2.1.3 Market Trends

The market trend for home inspections evidences an industry growth rate that is greater than that
seen in similar industries. This can be explained by the fact that home inspections are a relatively
new service and a valuable source of information to all involved in a house sale. Over time prior
inspections will become a standard requirement when purchasing a home. Trends that have been
observed within the industry are:

• An increasingly larger base of service providers.

• More home buyers are requesting inspections.
• More real estate agents that suggest or require inspections.
• Many of the service providers are splitting their professional time between home
construction/repair and inspections as opposed to being full time inspectors.

Market Forecast

40,000

35,000

30,000

25,000
Real Estate Agents
20,000 Individual Buyers
15,000 Individual Sellers

10,000

5,000

0
2002 2003 2004 2005 2006

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 Inspect A-bode

2.1.4 Market Growth

In 2000, the home inspection market in the U.S. reached $123 million in revenue. The growth rate
of the industry is projected to maintain 12% for the next several years. As more and more buyers
become accustomed to researching their large purchases first, demand for inspections will be
fueled by their need to do due diligence.

Target Market Growth

10.00%

8.00%

6.00%

4.00%

2.00%

0.00%
Real Estate Agents Individual Buyers Individual Sellers

2.2 SWOT Analysis

The following SWOT analysis captures the key strengths and weaknesses within the company and
describes the opportunities and threats facing Inspect A-bode.

2.2.1 Strengths

• Strong relationships with real estate agents.

• Extensive industry knowledge and experience.
• Efficient work-flow designs allowing competitive pricing and above-market margins.

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 Inspect A-bode

2.2.2 Weaknesses

• The lack of initial brand equity, a function of being a start-up company.

• Balancing the allocation of labor between inspections and business development.
• A limited amount of start-up capital.

2.2.3 Opportunities

• The participation within a growing industry.

• A decrease in interest rates that will spur home purchases.
• The industry is poised to grow, and Inspect A-bode is an early entrant in the field.

2.2.4 Threats

• Increasing competition as the industry becomes validated.

• The general economy can have significant negative effects on homes sales, therefore home
inspections as well.

2.3 Competition

There are many different competitors in the home inspection market. At first glance, the service
appears to be commodity like. Most people have 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 seems to be based on referrals and
advertisements. The home buyer will often ask someone in the industry if they can recommend a
home inspectoion 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 check the
Yellow Pages.

The 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 one or a few inspectors that
they send their clients to. Because they are in the industry, networking will take precedence over
advertisements.

Table 2.3: Growth and Share Analysis

Growth and Share

Competitor Price Growth Rate Market Share
Blind Eye Builder's Buddies $400 6% 16%
Faint Heart Advocates (FHA) $299 7% 5%
Honest Henry's Inspections $350 10% 14%
Inspect A-bode $300 12% 1%
Ken Offenboughten, LLC $450 9% 3%
3Porcus & Wolfe Structural Engineers $500 15% 11%
Winkin, Blinkin, Nodd Appraisers $425 8% 8%

Average $389.14 9.57% 8.29%

Total $2,724.00 67.00% 58.00%

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 Inspect A-bode

2.4 Services

Inspect A-bode offers residential home inspections for both buyers and sellers. Initially the majority
of service calls will likely be referrals from strategic partnerships with realtors. Inspect A-bode's
standard inspection includes addressing:

• Site: Land contour, drainage, driveways, walkways, porches, decks, retaining walls,
parking structures, and evidence of abandoned oil tanks.

• Foundation: Cracks, settlement, deterioration, moisture influx, and piers.

• Exterior: Siding, trim, entry doors, garage doors, windows, and chimneys.

• Structure: Framing of sub-floors, stairs, walls, ceilings, and roofs.

• Roofing: Roof coverings, flashings, skylights, gutters, downspouts, eaves, and soffits.

• Plumbing: Water pressure, piping, fixtures, faucets, drains, vents, and water heaters.

• Electrical: Service conductors, main and sub-panels, breakers and fuses, grounding,
switches, receptacles, fixtures, fans, smoke detectors, GFI function, etc.

• Heating: Furnace or boiler, ducts, baseboard heaters, radiators, registers, woodstoves,

and central air conditioning.

• Insulation: Attic, ceiling, wall and floor insulation, and vapor barriers.

• Ventilation: Attic, crawlspace, kitchen, bath and laundry ventilation.

• Interior: Walls, floors, ceilings, doors, woodwork, cabinets, bathroom finish, fireplaces,
etc.

• Built-In Appliances: Ranges, ovens, microwaves, disposals, dishwashers, and trash

compactors.

• Pest & Dry Rot: Inspection for termites, carpenter ants, beetles, wood rot, and rodent
infestation.

• Carbon Monoxide: Measurement of furnace, water heater, and range output.

Optional services will include electromagnetic field testing ($45), radon testing ($200), and
asbestos testing ($120).

A comprehensive written report (typically around 12 pages) will accompany the service. Inspect A-
bode suggests all clients be present during the inspection to increase their comprehension of the
written report. The cost of the full service is $200-$400, depending on size of home, layout, and
any areas such as a swimming pool requiring special attention.

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 Inspect A-bode

2.5 Keys to Success

The following variables are the keys to success for Inspect A-bode:

• Professionalism.
• Customer service.
• Providing valuable information.

2.6 Critical Issues

Inspect A-bode is still in the speculative stages as a service provider. It must take a fiscally
conservative approach, recognizing that it takes time to build reputation and goodwill within the
community. If this is done effectively, over time, the business will flourish.

3.0 Marketing Strategy

Inspect A-bode's marketing plan will be based on a communication campaign and strategic
alliances that will raise awareness of the value Inspect A-bode offers. To reach individual sellers
and buyers, an advertising campaign will be undertaken in the Yellow Pages as well as the local
newspaper, The Washington Observer. In addition to these sources, Inspect A-bode will advertise
in the Washington Home Buyer's Guide that 70% of home buyers consult before their purchase.

The advertising campaign will be supported with a strong strategic alliance effort to develop
relationships with real estate agents. These relationships will be instrumental in generating a
steady flow of business from the agents' pool of clients. The relationships will be formed through
general networking, creating a working relationship between Inspect A-bode and the agents. Once
a relationship is formed, Inspect A-bode will develop financial incentives for the agents to use
Inspect A-bode with their clients. While this will be labor intensive initially, once a solid relationship
is developed, it will amply pay for it self in the future business that it develops.

3.1 Mission

Inspect A-bode's mission is to provide customers with the highest quality home residential home
inspections. When we adhere to this maxim, everything else will fall into place. Our services will
exceed the expectations of our customers.

3.2 Marketing Objectives

• Increase repeat customers by 7% per quarter.

• Decrease customer acquisition costs by 8% per year.
• Increase the number of referring real estate agents every quarter.

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 Inspect A-bode

3.3 Financial Objectives

• Profitability reached by the end of year one.

• Positive yearly growth in revenue as well as profiits.
• Large enough gains in revenue to justify hiring additional people.

3.4 Target Marketing

Inspect A-bode intends to specifically target all three segments.

• Real Estate Agents- This group will be targeted through the development of strategic
alliances with many different realtors. One angle at accomplishing this will be through
networking relationships that Selle Domisile, Chek's wife has established through her ten
years as a realtor. Selle is currently a realtor and will naturally suggest her clients use
Inspect A-bode. Beyond referring just her clients, Selle will be working with her colleagues
to facilitate their usage of Inspect A-bode.

• Individual Buyers- This group will be targeted through an advertising campaign in

publications that home buyers are typically reading as well as in the Yellow Pages. As will
emphasize that the buyers should be practicing due diligence regarding checking the
condition of a home before they buy.

• Individual Sellers- This group would also be targeted through an advertising campaign
reinforcing the idea that they will have an easier time selling their home if they have an
objective report that details everything important about the condition of the house.

3.5 Positioning

Inspect A-bode will position itself as a professional, experienced, residential home inspection
service provider. Inspect A-bode will leverage its competitive advantages to achieve the desired
positioning:

• Experience- Chek has 12 years of experience as a general contractor. Through these

years in the home building industry, Chek has done almost everything in regards to home
new construction and remodels. Having this first-hand experience gives Chek 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 Chek. One reason for this is that there
is the possibility for higher margins by actually doing the work instead of offering
inspections. For Chek however, an injury a year ago has precluded his continuing to work
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 Chek. This comes
across even in a simple conversation with Chek. People are utterly impressed when dealing
with Chek and this is purposeful because they will tell people about him. Most people will
agree that contractors, and by analogy home inspectors, could use a dose of
professionalism, allowing Chek to stand out even more from his colleagues.

In addition to Inspect A-bode's competitive advantages, the company will have a 10-year veteran
from the real estate agent industry as a paid consultant. The consultant, Selle Domisile, Chek's
wife, will develop a referral system for her colleagues in the real estate market, providing Inspect A-

Page 9
 Inspect A-bode

bode with a steady flow of customers.

3.6 Strategy Pyramids

The single objective is to position Inspect A-bode as the premier residential home inspection
service in the Washington area. Inspect A-bode is forecasted to steadily gain market share over
the first five years. The marketing strategy will seek to first create customer awareness regarding
the services offered and develop the customer base.

The message that Inspect A-bode will seek to communicate is that they offer professional and
valuable home inspections for house purchasers. This message will be communicated through a
variety of methods. The first method will be through local advertisements. The ads will be placed in
a variety of venues including the Yellow Pages, The Washington Observer, and the Washington
Home Buyer's Guide. These ads will be effective in the communication campaign for buyers and
sellers.

The real estate agents will be reached through a strategic alliance campaign that will develop
referral incentive relationships. The value of these relationships will be referrals by the agents to
their customers for a home inspection prior to purchase.

3.7 Marketing Mix

Inspect A-bode's marketing mix is comprised of the following approaches to pricing, distribution,
advertising and promotion, and customer service.

• Pricing- The pricing scheme will be based on the size of the real estate as well as the level
of comprehensiveness that is desired.

• Distribution- All services will be provide on-site within a 50-mile radius of the city.

• Advertising and Promotion- The most successful advertising will be in local sources that
prospective home purchasers consult for information regarding homes. Additionally, the
services will be promoted by local real estate agents.

• Customer Service- Inspect A-bode recognizes superior customer service is required for
success and this will be constantly emphasized.

3.8 Marketing Research

During the initial phases of the marketing plan development, several focus groups were held. Some
of the focus groups were held with prospective buyers, others were held with real estate agents.
The goals of the focus groups were to explore the perceived value that inspections offer home
purchasers.

The real estate agent focus groups were held to determine the feasibility, attractiveness, and
willingness of the agents to enter into alliances with Inspect A-bode. The effectiveness of the
financial incentives were also explored The results of the groups provided Inspect A-bode with a
wealth of information that would be hard to collect anywhere else. Additionally, the results
validated all of Inspect A-bode's assumptions.

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 Inspect A-bode

4.0 Financials, Budgets, and Forecasts

This section will offer a financial overview of Inspect A-bode as it relates to its marketing activities.
Inspect A-bode will address break-even analysis, sales forecasts, expense forecasts, and how they
relate to the marketing strategy.

4.1 Break-even Analysis

The Break-even analysis indicates that $4,000 will be needed in monthly revenue to reach the
break-even point.

Break-even Analysis

$4,000
$3,000
$2,000
$1,000
$0
($1,000)
($2,000)
($3,000)
($4,000)
$0 $1,400 $2,800 $4,200 $5,600 $7,000

Monthly break-even point

Break-even point = where line intersects with 0

Table 4.1: Break-even Analysis

Break-even Analysis:
Monthly Units Break-even 11
Monthly Sales Break-even $4,000

Assumptions:
Average Per-Unit Revenue $350.00
Average Per-Unit Variable Cost $17.50
Estimated Monthly Fixed Cost $3,800

Page 11
 Inspect A-bode

4.2 Sales Forecast

The first month will have no sales activity. Early in the month the home office will be set up,
stationary produced, and in general everything organized. During the second half of the month
Chek will be familiarizing himself with the new software and developing a template for the
inspection report. The inspection report will be a template where Check will fill in areas of
information from the inspection. The purpose of the template is so:
1. The report is uniform and consistent, and
2. The time required to fill in the information from the report is reduced, saving time and
allowing the report to be forwarded to the client quicker.

Also during the first month Selle will be setting up partnerships with other realtors to funnel
business to Inspect A-bode. Having set up these relationships, the business will begin to build up
during the second month. Business will grow steadily month to month. It is not expected to need a
second employee until year two. By then business will have picked up and the employee will be
used for back end administrative details.

Monthly Sales Forecast

$6,000

$5,000

$4,000

Real Estate Agents

$3,000
Individual Buyers
Individual Sellers
$2,000

$1,000

$0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Table 4.2: Sales Forecast

Sales Forecast
Sales 2002 2003 2004
Real Estate Agents $36,905 $65,478 $72,514
Individual Buyers $10,854 $19,854 $27,458
Individual Sellers $3,532 $6,547 $9,858
Total Sales $51,291 $91,879 $109,830

Direct Cost of Sales 2002 2003 2004

Real Estate Agents $1,845 $3,274 $3,626
Individual Buyers $543 $993 $1,373
Individual Sellers $177 $327 $493
Subtotal Cost of Sales $2,565 $4,594 $5,492

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 Inspect A-bode

4.3 Expense Forecast

The marketing expenses will be budgeted so that they ramp up during the first quarter of business,
generating awareness about the start-up. The expenses will increase again during the summer and
fall, seasons that typically experience increases in home sales.

Monthly Expense Budget

$900
$800
$700
$600
Yellow Pages Ads
$500
Washington Observer Ads
$400
Washington Home Buyer's Guide Ads
$300
Strategic Relationships
$200
$100
$0

Table 4.3: Marketing Expense Budget

Marketing Expense Budget 2002 2003 2004

Yellow Pages Ads $600 $600 $600
Washington Observer Ads $2,400 $2,600 $2,800
Washington Home Buyer's Guide Ads $2,400 $2,600 $2,800
Strategic Relationships $1,650 $1,800 $1,800
------------ ------------ ------------
Total Sales and Marketing Expenses $7,050 $7,600 $8,000
Percent of Sales 13.75% 8.27% 7.28%
Contribution Margin $41,676 $79,685 $96,339
Contribution Margin / Sales 81.25% 86.73% 87.72%

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5.0 Controls

The purpose of Inspect A-bode's marketing plan is to serve as a guide for the organization. The
following areas will be monitored to gauge performance:

• Revenue- monthly and annual.

• Customer satisfaction.
• Referral rate of the individual real estate agents.
• Revenue breakdown by target group.

5.1 Implementation Milestones

The following milestones identify the key marketing programs. It is important to accomplish each
one on time and on budget.

Milestones

Marketing plan completion

Yellow Pages ads

Observer campaign #1

Observer campaign #2

Home buyers guide #1

Home buyers guide #2

Strategic relationships

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Table 5.1: Milestones

Milestones Plan
Milestone Start Date End Date Budget Manager Department
Marketing plan completion 1/1/02 2/2/02 $0
Yellow Pages ads 1/1/02 12/31/02 $600
Observer campaign #1 1/1/02 6/30/02 $1,350
Observer campaign #2 7/1/02 12/31/02 $1,050
Home buyers guide #1 1/1/02 6/30/02 $1,350
Home buyers guide #2 7/1/02 12/31/02 $1,050
Strategic relationships 1/1/02 12/31/02 $1,650
Totals $7,050

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5.2 Marketing Organization

Chek Domisile will be primarily responsible for the marketing efforts of the organization. Chek will
receive outside assistance for the production and placement of the advertisements.

5.3 Contingency Planning

Difficulties and risks:

• Problems generating awareness and visibility for the organization.

• Entry into the Washington market of a chain or franchised competitor.
• If business really takes off, Chek will encounter the problem of securing sufficiently qualified
employees to assist in the inspections.

Worst case senarios may include:

• Determining that the business plan was overly optimistic in its sales forecasts and unable to
support Chek on an ongoing basis.
• The possibility that equipment will need to be liquidated and the company dissolved.

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Table 4.2 Sales Forecast

Sales Forecast Plan

Sales Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Real Estate Agents $1,254 $1,547 $2,145 $2,254 $2,645 $3,124 $3,254 $3,547 $3,745 $4,125 $4,578 $4,687
Individual Buyers $625 $845 $902 $945 $994 $954 $854 $921 $982 $854 $954 $1,024
Individual Sellers $250 $300 $321 $345 $354 $254 $265 $301 $321 $298 $258 $265
Total Sales $2,129 $2,692 $3,368 $3,544 $3,993 $4,332 $4,373 $4,769 $5,048 $5,277 $5,790 $5,976

Direct Cost of Sales Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Real Estate Agents $63 $77 $107 $113 $132 $156 $163 $177 $187 $206 $229 $234
Individual Buyers $31 $42 $45 $47 $50 $48 $43 $46 $49 $43 $48 $51
Individual Sellers $13 $15 $16 $17 $18 $13 $13 $15 $16 $15 $13 $13
Subtotal Cost of Sales $106 $135 $168 $177 $200 $217 $219 $238 $252 $264 $290 $299

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Table 4.3 Marketing Expense Budget

Marketing Expense Budget Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Yellow Pages Ads $50 $50 $50 $50 $50 $50 $50 $50 $50 $50 $50 $50
Washington Observer Ads $200 $200 $200 $200 $250 $300 $300 $350 $100 $100 $100 $100
Washington Home Buyer's Guide Ads $200 $200 $200 $200 $250 $300 $300 $350 $100 $100 $100 $100
Strategic Relationships $150 $150 $150 $150 $150 $150 $150 $150 $150 $100 $100 $100
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Total Sales and Marketing Expenses $600 $600 $600 $600 $700 $800 $800 $900 $400 $350 $350 $350
Percent of Sales 28.18% 22.29% 17.81% 16.93% 17.53% 18.47% 18.29% 18.87% 7.92% 6.63% 6.04% 5.86%
Contribution Margin $1,423 $1,957 $2,600 $2,767 $3,093 $3,315 $3,354 $3,631 $4,396 $4,663 $5,151 $5,327
Contribution Margin / Sales 66.82% 72.71% 77.19% 78.07% 77.47% 76.53% 76.71% 76.13% 87.08% 88.37% 88.96% 89.14%

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