Opportunity
Problem
People are living longer thanks to modern medicine. They are able to enjoy their spouse after having children or retiring from work. This is their second chance to be a happy, carefree young person. They must find a suitable place within their budget to help them achieve this.
Solution
GVRE will provide real-estate services in the newly created Golden Valley Retirement community, which is located northwest of Tucson, Arizona. GVRE is a full-service real estate, mortgage, and title company.
Market
The retirement industry has been steadily growing over the past twenty years. The U.S. 55+ population is at an all-time high of 21%. This is growing at an average rate in excess of 3% every year. There are areas in the United States with high concentrations of retirement communities like the American Southwest where the growth rate is around 8%. As the first generation of “baby boomers” reaches retirement age in the next ten years, this percentage is expected to increase. The U.S. Census Bureau estimates that the annual retirement industry (which includes homes, special equipment, and retirement entertainment services) is worth 4.8 billion dollars.
Concurrence
The realty industry is highly fragmented. There are many potential competitors. Bowditch Realty (RE/MAX) are our two biggest competitors. Bowditch Realty is a well-established company with a strong track record of providing quality service. It has been in business for ten years. It currently employees twelve agents and has long-term contracts with various home building companies. The company is slightly larger in size and market capitalization than GVRE.
RE/MAX may be the biggest and most well-known of all the real estate firms in America. It employs hundreds of agents with deep pockets, which can be used to offset any type of competition.
Why Us?
GVRE believes that the greatest threat at the moment is in new entrants to the market who will want to capitalize on this high growth industry. The most likely entrants are small, new realty companies with fewer that ten workers. The one advantage GVRE does have is the exclusive right to act as an agent for Golden Valley Retirement Community. However, due to the high number of competitors and the overall low profitability of each firm, competition is quite intense.
This industry has a lot to offer potential clients because clients tend to be concentrated in our area. Clients tend to “shop around,” in order to get the best service and price.
Expectations
Forecast
The company anticipates being profitable in the first 12 months and doesn’t expect to have any cash flow problems. We conservatively believe that during the first three years, average profitability per month per segment will be adequate. Our expectation is that there will be about one monthly sale to guarantee a breakeven point.
Financial Highlights by Year
Finance is required
We will get $20,000
Susan Egan $10,000
Mr. Daniel Egan $10,000