"how to make an effective business plan for shopping center"
DESCRIPTION
Özyeğin University Alp Alkas Retail Real Estate Center / Lecture - "How to Make An Effective Business Plan for Shopping Center"TRANSCRIPT
Tufan Karaca
"How to Make An Effective Business Plan for a Shopping Center"
Failing to plan is planing to fail
Failing to plan is planing to fail
Still the not-so-great mall of China: 99% of units in world's
biggest shopping centre remain empty SEVEN YEARS after it
opened
BUSINESS PLAN
FEASIBILITY
BUSINESS MODEL
FEASIBILITY
BUSINESS MODEL
BUSINESS PLAN
FEASIBILITY STUDY
May the project be done ????
Technically
Financially
FEASIBILITY STUDY
Technically ????
LOCATION
LOCATION
LOCATION
LOCATION
Distance to other shopping centers,
Nearby locations for other future shopping malls,Accessibility,
Population density,
Infrastructure,
Zoning
Terrain infrastructure
swamp
rocky
FEASIBILITY STUDY
Financially ????
What is the ONLY number that you have know to make a decision on
starting up a SHOPPING MALL?
or any real estate project
as a matter of fact any INVESTMENT
ROI
What do you need to calculate
ROIinterest rate
risk
Interest rate is given
Lets assume it is 10%
Then what is ROI ?
Year Investment Interest 1 100 10 2 110 11 3 121 12 4 133 13 5 146 15 6 161 16 7 177 18 8 195 19 9 214 2110 236 24
Year Investment Interest 1 100 10 2 110 11 3 121 12 4 133 13 5 146 15 6 161 16 7 177 18 8 195 19 9 214 2110 236 24
Risk Analysis
PEST
Environmental analysis
Political Economical
Social Technological
Interest Rate PEST Analysis
Decision for ROI
ROI ≤ 4 years (25%)
Other information you need to know :
- Size and price of the land,- Zoning info regarding how much you can build,- Cost of construction,- Achievable average rent
Assumptions for an example
- Size and price of the land,150,000 sq.mt. @ $ 300 = $ 45,000,000
- Zoning info regarding how much you can build,Max 40% - covered area .75
- Cost of construction,$ 1,000 / sq.mt. – GLA = 75%
Calculations :Cost of construction :
150,000 x .75 = 112,500 sq.mt.We also know that we can not build more then 60,000 sq.mt. on the landso we will have a 2 story shopping center.
112,500 x $ 1,000 = $ 112,500,000
Total Cost :
Cost of land 45,000,000Cost of construction 112,500,000Soft costs (8% of const.) 9,000,000Leasing & Marketing costs 15,000,000Unexpected (5% of.const.) 5,625,000TOTAL COST 187,125,000
Cost per GLA :
GLA / Built Area = 75 %112,500 x .75 = 84,375 sq.mt.
Cost per GLA = Cost of const. / GLA = 187,125,000 / 84,375 = $ 2,218
Cost per sq.mt. GLA = $ 2,218
How do we proceed from here on ?????
$ 2,218 / 4 years (ROI) = $ 555
Is this achievable ????
Don’t forget this is the yearly rent you try to reach per sq.mt. GLA
You need to divide that number by 12 to see the monthly rent :
555 / 12 = $ 46 / sq.mt. / month
With this feasibility study we found out that this project will be OK
NOW WE HAVE TO PREPARE A BUSINESS MODEL
Other factors to consider :
Construction period,Terms of financing
WHAT IS A BUSINESS MODEL ?
A business model is nothing else than a representation of how an organization makes (or intends to make) money. This can be nicely described through the 9 building blocks illustrated in the graphic below, which we call "business model canvas".
Alexander Osterwalder
Who is our customer ?Where is he coming from ?How is he coming ?How far is he coming from ?What is his income level ?What are his needs ?What can we offer him that he is not aware that he needs ?Who is around us ?
Answers of these and these kind of questions will lead us to decide on :
What kind of shopping center we should build.
High end
Low end
Medium
EntertainmentNeighborhood
Outlet
Community Center Lifestyle
and what should be our shop mix, with which brands ?
accordingly what kind of a building ?
All of these will shape our marketing plan.
BUSINESS PLAN
FEASIBILITY
BUSINESS MODEL
NOW WE HAVE ALMOST ALL THE DATA TO START OUR BUSİNESS PLAN
NO PLAN IS BETTER THAN IT’S ASSUMPTIONS.
In its simplest form, a business plan is a guide—a roadmap for your business that outlines goals and details how you plan to achieve those goals.
WHAT IS A BUSINESS PLAN ?
HOW TO REACH TO YOUR VISION OF YOUR BUSINESS
A good plan, violently executed now, is better than a perfect plan next week.
George S. Patton
Your plan is wrong from the start
For whom do we write the Business Plan
o Ourselveso Our empleyeeso Our business partnerso Our supplierso Our lenders
Outline :
1. Executive summary2. Your company3. Vision 4. Mission5. Target market6. Competition7. Marketing and sales plans8. Operations9. Management team10.Milestones11.Financial analysis
Finacial analysis :
o Cash – Flow Anaylsiso Proforma Income Satemento Proforma Balance sheet
Finacial analysis :
o Cash – Flow Anaylsiso Proforma Income Satemento Proforma Balance sheet
Cash flow analysis, compares the timing and amount of cash inflows with the timing and amount of cash outflows
Cash Flow Analysis
Cash Flow Example
NAKİT GİRİŞLERi
Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14
Kasa 6,061
Tahsilat - 2013 satışlarından 1,542,415 780,353
Tahsilat - 2014 satışlarınan 440,527 1,475,117 3,329,090 3,703,121 3,587,256 3,679,437 4,171,895 4,590,179 4,436,854 5,321,687 5,205,955 5,524,776
Kredi
Diğer nakit 2013 66,294 100,154 98,287
Diğer nakit 2014 219,278 218,840 225,492 217,706 225,608 263,617 257,674 239,595 326,581
TOPLAM NAKİT GİRİŞLERi 2,055,297 2,355,624 3,427,377 3,922,399 3,806,096 3,904,929 4,389,601 4,815,787 4,700,471 5,579,361 5,445,550 5,851,357
NAKİT ÇIKIŞLARI
Hammadde 1,039,222 504,763
Hammadde 1,726,230 1,730,875 1,879,821 1,835,787 1,993,016 2,252,371 2,317,874 2,205,651 2,903,026 2,448,174 3,082,892
İşçilik 1,317,207 1,344,810 1,448,562 1,448,247 1,543,616 1,688,975 1,687,619 1,747,441 1,912,536 2,007,129 2,191,845 2,224,666
Sabit giderler
Demirbaş alımı 124,684 106,851 25,014
Beklenmeyen Giderler 23,564 37,005 32,863 33,531 33,794 36,820 39,400 40,653 41,182 49,102 46,400 53,076
Kredi geri ödeme
Fazi ödeme
Geçen yıldan sarkan vergi 77,879
Gelir vergisi
Diğer
TOPLAM NAKİT ÇIKIŞLARI 2,457,872 3,737,492 3,319,151 3,386,613 3,413,197 3,718,811 3,979,390 4,105,968 4,159,369 4,959,257 4,686,419 5,360,634
FARK -402,575 -1,381,868 108,226 535,786 392,899 186,118 410,211 709,819 541,102 620,104 759,131 490,723
KÜMÜLATİF FARK -402,575 -1,784,444 -1,676,217 -1,140,431 -747,532 -561,414 -151,203 558,617 1,099,719 1,719,823 2,478,954 2,969,677
NAKİT GİRİŞLERi
Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14
Kasa 6,061
Tahsilat - 2013 satışlarından 1,542,415 780,353
Tahsilat - 2014 satışlarınan 440,527 1,475,117 3,329,090 3,703,121 3,587,256 3,679,437 4,171,895 4,590,179 4,436,854 5,321,687 5,205,955 5,524,776
Kredi 450,000 1,400,000
Diğer nakit 2013 66,294 100,154 98,287
Diğer nakit 2014 219,278 218,840 225,492 217,706 225,608 263,617 257,674 239,595 326,581
TOPLAM NAKİT GİRİŞLERi 2,505,297 3,755,624 3,427,377 3,922,399 3,806,096 3,904,929 4,389,601 4,815,787 4,700,471 5,579,361 5,445,550 5,851,357
NAKİT ÇIKIŞLARI
Hammadde 1,039,222 504,763
Hammadde 1,726,230 1,730,875 1,879,821 1,835,787 1,993,016 2,252,371 2,317,874 2,205,651 2,903,026 2,448,174 3,082,892
İşçilik 1,317,207 1,344,810 1,448,562 1,448,247 1,543,616 1,688,975 1,687,619 1,747,441 1,912,536 2,007,129 2,191,845 2,224,666
Sabir giderler
Demirbaş alımı 124,684 106,851 25,014
Beklenmeyen Giderler 23,564 37,005 32,863 33,531 33,794 36,820 39,400 40,653 41,182 49,102 46,400 53,076
Kredi geri ödeme
Fazi ödeme
Geçen yıldan sarkan vergi 77,879
Gelir vergisi
Diğer
TOPLAM NAKİT ÇIKIŞLARI 2,457,872 3,737,492 3,319,151 3,386,613 3,413,197 3,718,811 3,979,390 4,105,968 4,159,369 4,959,257 4,686,419 5,360,634
FARK
47,425 18,132 108,226 535,786 392,899 186,118 410,211 709,819 541,102 620,104 759,131 490,723
KÜMÜLATİF FARK 47,425 65,556 173,783 709,569 1,102,468 1,288,586 1,698,797 2,408,617 2,949,719 3,569,823 4,328,954 4,819,677
Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14
Kasa 6,061
Tahsilat - 2013 satışlarından 1,542,415 780,353
Tahsilat - 2014 satışlarınan 440,527 1,475,117 3,329,090 3,703,121 3,587,256 3,679,437 4,171,895 4,590,179 4,436,854 5,321,687 5,205,955 5,524,776
Kredi 450,000 1,400,000
Diğer nakit 2013 66,294 100,154 98,287
Diğer nakit 2014 219,278 218,840 225,492 217,706 225,608 263,617 257,674 239,595 326,581
TOPLAM NAKİT GİRİŞLERi 2,505,297 3,755,624 3,427,377 3,922,399 3,806,096 3,904,929 4,389,601 4,815,787 4,700,471 5,579,361 5,445,550 5,851,357
NAKİT ÇIKIŞLARI
Hammadde 1,039,222 504,763
Hammadde 1,726,230 1,730,875 1,879,821 1,835,787 1,993,016 2,252,371 2,317,874 2,205,651 2,903,026 2,448,174 3,082,892
İşçilik 1,317,207 1,344,810 1,448,562 1,448,247 1,543,616 1,688,975 1,687,619 1,747,441 1,912,536 2,007,129 2,191,845 2,224,666
Sabir giderler
Demirbaş alımı 124,684 106,851 25,014
Beklenmeyen Giderler 23,564 37,005 32,863 33,531 33,794 36,820 39,400 40,653 41,182 49,102 46,400 53,076
Kredi geri ödeme 90,000 500,000 400,000 150,000 450,000 260,000
Fazi ödeme 9,000 37,000 35,200 25,200 17,200 14,200 5,200 5,200
Geçen yıldan sarkan vergi 77,879
Gelir vergisi
Diğer
TOPLAM NAKİT ÇIKIŞLARI 2,466,872 3,774,492 3,444,351 3,911,813 3,830,397 3,883,011 4,434,590 4,371,168 4,159,369 4,959,257 4,686,419 5,360,634
FARK 38,425 -18,868 -16,974 10,586 -24,301 21,918 -44,989 444,619 541,102 620,104 759,131 490,723
KÜMÜLATİF FARK 38,425 19,556 2,583 13,169 -11,132 10,786 -34,203 410,417 951,519 1,571,623 2,330,754 2,821,477
Nov-13 Jan-14 Mar-14 Apr-14 Jun-14 Jul-14 Sep-14 Nov-14 Dec-14
-3,000,000
-2,000,000
-1,000,000
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
Net SatışlarSatılan Malın MaliyetiFaaliyet Kârı / (Zararı)Net Dönem Kârı / (Zararı)KÜMÜLATİF FARK
TIME LINE
LEVEL
Before opening After opening
Investment level
Operations level
TIME LINE
LEVEL
Land costConstruction costInterest (if any)Other
Cash out
Cash in
Interest paymentsDept repaymentTaxesOther
Rent
Management salariesUtilitiesCleaning & securityMarketingOther
Common area chargeMarketing
Before opening After opening
Investment level
Operations level
TIME LINE
LEVEL
Land costConstruction costInterest (if any)Other
Cash out
Cash in
Interest paymentsDept repaymentTaxesOther
Rent
Management salariesUtilitiesCleaning & securityMarketingOther
Common area chargeMarketing
Depreciation?
Depreciation?
New ideas….
