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At mend it, we strive to add comfort to add comfort to our customers’ lives by providing all their home maintenance needs at their doorstep on ONE phone call – On time, EVERY time.
We aim to change the way people live and seek convenience, therefore selling lifestyles and not just services. We aspire to be the premiers in home maintenance, interior designing and renovation services. Our motto is.. ONE STOP, MANY SOLUTIONS
Company Summary & Services offered
Mend- It is a service oriented company that aims to revolutionize the way homes are maintained. Mend-It caters to apartment buildings and offers membership to the Mend-It club which gives the members access to wide range of services and benefits. Mend-It provides electricians, plumbers, carpenters, key maker and janitors. This will be a unique company as it provides trained personnel for all home maintenance needs on just a phone call. Mend-It assures that only the highly skilled people who have under gone and cleared all the back ground security checks will be used for the services. This solves a major security threat that is associated with picking p random people from the street to solve these problems. Mend-It caters to customers with a fast paced life style specifically the nuclear families. These clients do not have the time to hunt for the appropriate people and neither can they make a dozen phone calls for the different needs so even basic electricity and plumbing problems becomes a nuisance. Mend-It solves this problem by catering to all the home maintenance needs on just one phone call. The members of the Mend-It club get a loyalty card on which they get reward points which enable them to get discounts on the designated Hardware stores. Mend-It is the first company that enables the apartment management to outsource the maintenance needs to a specialized company.
Mend It Team
Mend –It is owned by two people named Haider Raza and Zahra Inayat. Yawar Bukhari is the Venture Capitalist who is making 65% of the investment and who according to memorandum of understanding will not participate in the decision making. The
management decisions are to be taken by Haider Raza and Zahra Inayat who collectively put 35% of the investment. Mend It has a horizontal hierarchical structure; Head of Marketing, Head of Finance report to both Vice President and President, whereas, Head of Operations reports to the Vice President directly. The three divisional heads are not making any investment initially but in the forthcoming years, they will be given an option to purchase the equity. 1
Unique Selling Proposition
Mend-It is an innovative concept in home maintenance as: Mend-It is the first company that offers complete home maintenance services for apartment complexes. Membership with Mend-It allows members to avail services at affordable rates. 2 Mend-It offers all home maintenance services on one phone call. Mend-It is a safer option as it undertakes background checks of its employees. Mend-It guarantees satisfaction to customers as only the expert personnel will be used.
Refer to Organizational Chart for the organizational chart Refer to “Maintenance Packages at a glance” table given in Appendix
Viability of Business
Mend-It is a business entity with strong chances for survival due to the following reasons: There is a strong need for an entity that provides apartment complexes with multiple skilled workers. Therefore, the demand for our services is there and this has been proved by our primary research. 3 There is an abundant supply of the skilled labor in the market The demand for services provided by Mend-it is relatively inelastic. Mendit caters to a necessity and not a luxury so the demand is not seasonal making the business ‘Resistant to Recession’.
Company location and facilities
Mend-It has one company office and that is at Tauheed Commercial Area. Tauheed commercial has been chosen due to its proximity to the target market and the relatively affordable rents. Since, our business is such that the customers do not need to visit the office, we can establish our office anywhere. The required personnel will be dispatched from the office so our primary concern is to minimize the fuel costs. In that regard, Badr commercial is the best trade off between low rents and low fuel costs. The office rent at other commercial hubs such as on Khyaban Shahbaz is Rs.30,000 plus for one month making it tough for our finances to accommodate. On the other hand, the rent at Kyban-eIttehad is between Rs. 10,000-12,000 which is affordable however would increase our fuel costs as its located comparatively far for Clifton and Sea view (the hubs of apartments)- our extremely potential market. Therefore, we have settled for a 335sq feet shop on the Mezanine floor at Tauheed Commercial and the monthly rent is Rs. 15,000.
Refer to „people contacted‟ in Appendix
Mend-it is using the latest, state-of-the-art, technology to cater to the demands its customers at it. The primary focus of our business is customer building and customer relations. Hence, Mend-it uses a 10-line telephone switch board which will enable our trained, English speaking telephone operators to answer our customers’ phone calls. As Mend-it focuses on delivering quality to its customers, a well developed computer system is put in place to serve the company’s needs. The telephone operators will also have a Customized Complaint Software that will give the operator the knowledge of where Mend-its personnel are currently deployed and be able to deploy the closest and most suitable specialist to the required job. Mend-it is also using a well developed Customer Database that will maintain a detailed record of its customer’s profile and even the number and type of jobs that they have ever had the company service in the past – including the material and costs charged. This not only helps the company to refer back to records instantly, but also helps it to rate its most frequent customers and give them added benefits.
Competitors and Competitive Analysis In the domestic services sector, there is no concept of clubs and membership and Mend-it is introducing this. Mend-It is the only company that specially targets the apartment complexes and provides all the home maintenance needs on one phone call. The range of services provided by Mend-It is broad and there is no direct competition. Currently, there are entities that provide domestic servants and security guards, but there is no established entity that gives the clients the opportunity to become members of the company and receive home maintenance facilitates in lieu of this membership. Mend-It is only competing with the electricians, plumbers and other personnel on the street and this gives the company various advantages over the competitors. These are: The staff is trust worthy and has undergone the necessary security checks. With
Mend-It staff, people can feel safe as the staff is reliable. The current law and order situation is such that random people cannot be allowed to come and fix the problems; therefore the security issues are resolved with Mend-It. Mend-It promises the customers that the required personnel will reach at the
promised time that is within two hours. The problem with the conventional system of getting hold of random people has a major issue that there is no assurance that the desired people will actually come when needed. Therefore, in emergency cases when the customers cannot wait for long, Mend-It is just a call away. Mend-It serves all the home maintenance needs ranging from electricians to
plumbers to carpenters to key makers to maids and Butlers. Currently, people have to
BUSINESS PLAN approach different people to meet diverse needs. With Mend-It becoming a member ensures that all the needs are met within one business. Mend-It serves customers with style- all Mend-It workers will be wearing a company
uniform along with the employee card. *SWOT analysis summary given in the Appendix
The target market for Mend-It is the residents of Apartment complexes in Defense and Clifton. This means Socio Economic class A and B plus will be catered to. This class is a minute portion of the total population but the spending on living and life style is higher. A Pakistani citizen on average spends about 3.7% of their household expenditure on home maintenance needs4. The target market has been as all the buildings in Defense and Clifton need high maintenance due to the proximity to sea. Primary research shows that there two broad categories of buildings in Defense offering similar yet not complete packaged services. Indepth Comparison is provided in appendix.
Mend-It caters to a niche so there be selected marketing and no mass marketing tools will be used. The aim of Mend It in its initial years is to create awareness. There will be no Newspaper advertisements or television commercials as they are very expensive and there is a lot of wastage in the use of such mediums as they there is no assurance will actually view the ads or not.
BUSINESS PLAN Therefore, we will therefore use the following:
Direct Marketing: The aim of Mend It in its initial years is to create awareness about its services and thus to make a mark in the existing market. To do so, several mediums of direct marketing are to be employed. o First two week campaign: Mend-it focuses on delivering quality and customer satisfaction at all levels of the services it provides to its valued clients. Thus to establish a strong standing in the service industry it competes it in, mend-it is setting up a stall at what is considered the heart of all such business activities, Ghizri. The stall will be there to stay for a minimum of two weeks. The reason for selecting this location is that nearly 80% the people from Clifton and Defense come here to with their maintenance problems. Instead of approaching the same usual labor, mend-it’s workers at our stall will offer their services for free (no labor charges) and make sure the customer’s problem is fully resolved to the customer’s satisfaction.
Public relations: one of the most effective ways of marketing is through third party recommendation. Our friend, Amena Jafry5 writes for DAWN News. Her articles discuss the lifestyle and women in our culture. As a favor, a mention of our services once or twice in her article can create awareness about the company. o Word-of-mouth: Social network is one of the strongest forms of communication diffusion. Other than visibly advertising in the public through our advertising and awareness campaign, our employees also build our company’s name by delivering quality services and thus forming a strong
5 http://www.dawn.com/weekly/review/archive/080710/review7.htm -8-
BUSINESS PLAN positive brand image of the company. Our emphasis is on Customer relationship management and our customers will be our biggest advertisers. HOME EXPRESS: Is a well renowned advertizing magazine that is delivered to 10,500 doorsteps in Defence and Clifton, our target market, making it a right-fit for a suitable channel of advertising. In this magazine, Mend-it will advertise its ‘membership’ schemes and its discount and free-trial coupons that will not only benefit our existing customer base, but will also help to attract new customers and create a foundation for further customer relationship building. *Please refer to Appendix for the details of distribution of promotional elements.6
Impact on Pakistan Economy and Society
Mend-It will help the Socio economic class C and D by providing them employment in a time when the unemployment rate is hovering around 5.3% to 6%7. Mend-It provides job security to workers who otherwise live on daily wages; and during political strikes or ethnic tensions in the city they do not find work and live in a near starvation state. Mend-It also provides higher wages to the employees and this will help in alleviating their standard of living. Our target market is Clifton, DHA Apartment complexes. All these buildings reside Socio Economic class A to B. though our primary target remains Socio Economic class A, yet a percentage of Socio Economic Class B will be catered and our services will improve their standard of living and add convenience in their life.
“Breakup of Promotional Campaign” given in the Appendix www.pak.gov.pk
In case of unavoidable circumstances that may force closing down, Mend-It can discontinue operations easily. Mend-It is a services company so there are minimal fixed assets. There is no plant or machinery so winding up will not be an issue. The company office is rented so that can be returned with just a month’s prior notice. The others company assets are the Motor Cycles and the company van. Both these have a high resale value and can be sold off easily. The employees are on a 6 month contract that is renewed on June 30th and December 30th so incase the operations are discontinued, Mend-IT is obligated to pay the salaries for the interval until the contract ends.
Mend-It is a partnership between three members, two of them being team members of this business plan group and the third one is the Venture capitalist. The other three group members will receive a salary till the next two years. However, if any of the partners wish to leave the members, these three employees have the option to buy the equity.
Mend-It is a service oriented business. It is a business which is expected to flourish. Any financial plan cannot be made until certain basic assumptions are made and certain basic agreements worked upon. For Mend-It it is essential that these basic assumptions are kept in mind when analyzing its financial data. Mend-It has no debt. All equity is financed by two partners and a venture capitalist who has agreed to invest about 65% of our initial investment. After an agreed upon time of five years since the business inception, the two partners will be allowed to buy back the equity from the investor at no more than 10% yearly. The investor has agreed to give us a grace period of maximum two years to bare our losses, if any. The whole business would run mainly on cash basis. Therefore there are hardly any liabilities, which justifies the low base effect and hence the abnormal high liquidity ratios. Certain expenses, such as fuel, salaries & Rent have been increased by the current and the forecasted inflation rates respectively.
Ratio Analysis June Current Ratio Acid Test Ratio Net Profit Margin Return On Investment Return On Assets 24 24 -41% -7% -10% July 19 19 -41% -7% -11% August 13 13 -40% -7% -11% September 8 8 -40% -7% -13% October 8 8 -2% 0% -1% November 7 7 -8% -2% -4% December 6 6 -8% -2% -4% January 4 4 -8% -2% -4% February 3 3 -11% -3% -6% March 4 4 4% 1% 2% April 6 6 3% 1% 2% May 7 7 3% 1% 2%
BUSINESS PLAN The table above shows the ratios of a service industry where there are repeat customers. Thus the customers of the last month of the first year would be the included in the first month of the new year.
Current Ratio Acid Test Ratio Net Profit Margin Return On Investment Return On Assets
Ratio Analysis FY 2011 39 39 9% 48% 50%
FY 2012 77 77 10% 71% 42%
FY 2013 111 111 11% 107% 39%
FY 2014 198 198 14% 178% 39%
Payback Period Payback Period is the year 2013, which is the 3rd year since the inception of the business. By that period all the money invested in the business would have been paid back through profits. NPV Net Present Value is Rs 10,023,687. The discount rate is 20% which is considered as the cost of equity. IRR Internal Rate of Return for Mend-It is 82% over a 5 year period. However till the end of the second year, it is negative 6%. This shows that around in the third year, our business would be able to break-even. For IRR purposes, the discount rate is 15% and terminal growth rate of 4%
“Organizational Chart- Mend It”
President (Haider Raza) Vice President (Zahra Inayat)
Head of Marketing (Sultana Haider)
Head of Finance (Ozair Masood)
Head of Operations (Suhaib Jalees)
“Maintenance Packages at a Glance”
Comparison of Maintenance Packages Basic Package Pricing Rs. 1500 Normal Package Rs. 5000
Our Package Rs. 1500 + 2000 Guard + Elevator + Cleaning Services + Building Maintenance + In-house Maintenance (Plumbing, Carpentry, Electricity)
Guard + Elevator
Guard + Elevator + Car Cleaning + Building Maintenance
• Real Estate – Mr. Saad • • Contact Number: 021-5831614
Commodore Real Estate • Contact Number: 5378626
Karachi Chamber of Commerce • Contact Number: 021-9218001
Silver Hawks Security Guard Agency – Mr. Khizer Hayat • Contact Number: 0320-4225374
Caretaker Askari Apartments – Mr. Abdul Malik • Contact Number: 0300-2627881
Sea Breeze Construction – Mr. Talib Ali Chawla • Contact Number: 0300-2007339
Yawar Bukhari • Contact Number: 0300-8505254
S.W.O.T Anaylysis Summary
1. Consistant demand of services 2. Abundant supply of labor available 1. Profits are highly dependant 3. No direct competitor-no one provides on fuel costs that are very volatile services in this manner 2. Security checks is a 4. Low initial capital requirementscumbersome process 5. Recession proof business- home 3. Creating awareness about the maintenance cannot be avoided company will be a challenge. 6. Large volume of customers due to targeting large complexes 7. Target market is not price conscious and appreciates better quality services
OPPORTUNITIES 1. Expand into home renovation and decoration. 2. The relationship built with customers through the basic services will help in introducing value added services. 3. Fresh graduates of Art schools will be hired as interior decorators and innovators. These services will be lower prices than established names like S.Abdullah and Ashary Kitchens.
THREATS 1. Low barriers to entry so competitors can enter easily. 2. Poor services by one employee can jeopardize the reputation of the company. 3. Government departments such Employee Social Security may create problems.
5% 9% 36% 23%
HOME EXPRESS Flyers WorldCall Ticker Stall
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