Investor Questions
What makes GSH different from any other house building company?
1. The software. The manager of this company (me) is a software developer with 20 years commercial experience, many of which involved writing software for the steel building industry. Our software will give customers the flexibility of creating their own design, providing accurate quotes in real time, without requiring the expensive services of an architect or engineer. The software will greatly streamline the construction process and all of our business processes, automatically sending the correct information to all participants at the right time. The result is a high-quality product that suits the customer, completed quickly and within budget.
2. Fully integrated sustainable design. There are other building designers around calling themselves sustainable, when their only point of uniqueness is following energy efficiency guidelines. Our homes, however, will be as environmentally-friendly as possible from the ground up, incorporating the most sustainable building materials, design methodologies and environmental technologies. These types of dwellings represent one of the fastest-growing segments of the housing market. As climate change and the environmental movement progress, people are become increasingly savvy about sustainable technologies and will demand more from new houses. We will provide it.
3. Strength and toughness. Our homes will be solid steel and extra-strong, built for the next wind code higher than is required by council. This will ensure that they survive the increases in storm intensities and wind force expected as a result of climate change.
4. Smart housing concepts. At present in most Australian homes, internet is an "add-on", requiring the purchase of a modem and possibly also networking equipment. We believe internet should be as transparent as electricity, always on, and available everywhere in the house. Broadband internet and wireless networking is now commonplace, and can be integrated into a house very easily providing wireless internet access anywhere inside, and in some outdoor areas as well. Our homes will also include a "house server", a built-in computer that records information about energy and water consumption, connects with security systems, and can be used to run a range of house management software.
5. Customer service. Everyone says it, but not everyone really does it. Rather than just sell a product, we will seek to enter into a relationship with our customers that will include ongoing maintenance of their home during its lifetime. Our website will provide a range of after-market services to our customers, including consultancy, repair requests, upgrade options, and a wide range of solutions and advice to help people live more sustainably.
6. Marketing. Advertising is a highly effective tool which is often under-utilised, especially by builders who seem to advertise very rarely if at all. We will implement a sustained marketing plan using internet, TV, radio and newspaper. Our goal is mass production of homes, not just a handful a year, but ultimately hundreds or even thousands, and to achieve this we need to be well known. This scale of service is essential for successful sustainable development of the region, and also in order to make the homes more affordable. The cost of extensive marketing will be offset many times over by the large number of sales.
How much money do you need to get started?
There are a few things that need to be done before the company can start selling homes:
- Establish a location for the business.
- Build a website.
- Design a range of homes and determine prices.
- Set up relationships with architect(s), suppliers, and building contractors.
- Begin a marketing campaign.
With a team of 4 programmers, we estimate that it will take about 6 months before version 1 of the house designer software can be built and people can start designing their own homes online. However, while this is an important component of the business strategy, it is not absolutely essential in order to create cash flow. Because the houses themselves are unique, we could be selling preset designs within about 3 months in order to generate income as soon as possible.
Over the next 3 months, the expenses would be approximately as follows. This includes startup costs as well as operating expenses.
First Quarter
| Salaries for team of 5 | $100,000 |
| Office rent (inc. 2 months bond) @ $2,500/month | $12,500 |
| Telephone and internet | $900 |
| Computer hardware | $24,000 |
| Computer software | $21,000 |
| Office consumables | $1,300 |
| Building design | $12,000 |
| TOTAL | $171,700 |
With profit of $50k profit on each house, this amount will be recouped after selling just 4 houses.
Here are the cost projections for the second 3 month period, during which we build the house designer software, and market the business. Note the increase in team size.
Second Quarter
| Salaries for team of 7 | $140,000 |
| Office rent @ $2,500/month | $7,500 |
| Telephone and internet | $1,200 |
| Marketing | $10,000 |
| Office consumables | $1,300 |
| TOTAL | $160,000 |
So, we will cover costs for the first 6 months by selling just 7 houses. Considering our unique and attractive product, and our assertive marketing strategy, this should be a snap.
What kind of investor are you looking for?
As a programmer and salesperson I've been exposed to the steel building industry for about 5-6 years and the real estate industry for about 3 years. However, I still have plenty to learn about the actual mechanics of construction and property development. So, the ideal investor will have experience in the building profession or with property development, and will be able to provide advice and guidance where necessary.
I would like to find an investor that I can have a good personal relationship as well as a business relationship, ideally someone who understands what I'm trying to achieve through the business and is interested in that goal.
Proceed to Current Actions.