A typical section of a business plan are the markets we are going after with this business. For example, if you are doing a consumer product, you would say “the market we’re going after is the… (shaving, health care, etc…) market”
In our case, what are the “markets” we’re going after?
potentials (may be multiple):
Real Estate
High Tech Innovation
Resort
Retirement
Thoughts? (and feel free to debate)
@markstephan, Mark how would you define a real estate market value in Cay Sal is it the real estate prices of Cuba or of Miami that apply or are we creating our own market ?
Great question. Where would the people come from who would live in Marinea? Probably around the world. Perhaps we go for real estate value in the Bahamas? It really is a new market, but we could base it off of other values. Average value for a yacht? A year round slot on a cruise ship?
I don’t have the answer yet
Most of our initial business will come from the US. Most of us are from Canada/US, we know how to market here, we know how to get into the news. Beside what ever happens in the US, will get picked up on channels outside the US anyway.
All of the various business are important in themselves but I think that it is important for reasons of future ambitions, that we keep the umbrella of research over the whole project. I will be happy to explain the reason personally (well on skype) if anyone is wondering how a research company is expected to make a profit.
A major first market will be, and Mark I have no idea how to put this, people who are afraid of their governments. Many of those type already live in boats. Where to go when the dollar goes belly up? Small L libertarians. We already got their heart, we just need to get their ear.
we can definitly cover a extreme wide range of the market going from cheap housing to the extreme luxury segment covered by yachting.
I would suggest that we place the offer somewhere in the middle range - a budget of USD 50.000 should be enough for a nice spacious floating home/apartment.
Lets say $50,000 and up. There should be a few up sales. Like would you like a built in pool for only $5,000 more? But also bigger homes. Most Americans won’t blink to buying a $150,000 home so long as its worth $150K… Of course, there will be boats that can be lived on for less than $50K.
Here is how we can sell a bunch of these sea-homes. We offer a rent to own option. Lets say we can build a building that we can sell for $50 grand. We have a small profit built in to the cost of construction. One percent of $50,000 is $500. This is an average of monthly rent expectations. (We want to avoid rentals as no one takes care of a rental).
Here is what they get, A fixed rent that never goes up. The rent is 1% of the sales price. Then we take the total sales price and divide it by 240 months (20 years) at the end of which, if they have made every payment on time, the title to their sea-home is delivered to them. They have a fixed rent $500 per month plus one 240th of the sales price $208.35 for a total of $708.35 per month. They are shown that we are charging no interest, they are paying rent and they are shown the portion of the total rent payment that goes to paying off the house.
{ Always ask for 3 months initial down-payment. We explain that after they take possession, although the home is like new, it is not new so a loss value fee would apply. However it also protects them later on, as if something happened and you were going to be late, you have bought a little grace period. If you are late more than one month, you are evicted and lose the down payment.}
Whats in it for us? $500 a month is $6000 an year. $6000/$50,000 = 12% annually. Not a bad return. But that is only at first. If we still charged 12% after half of the sales price is paid, our payment would be only $250 a month. But we are still making $500 per month on a dwindling asset value. In addition, if the tenant decides he doesn’t want to stay, he can go and we start the sale all over again to a new buyer.
Since they will eventually own the house they are more likely to take care of it and they would still have to pay their docking rights. Probably around $600 per year.
I would diferentiate about half a dozend key markets we are going after…
real estate developers who run out of landspace to develop and start understanding that this is the real estate deal of the century…
When writing a business plan, the section on markets is interesting. Typically the scenario goes “I’m making a new widget. That widget will compete with products x, y, and z. My target market for the widget is… (home health care, consumer entertainment, the real estate market in southern California, parents with kids in college, etc.). You can really identify the market and its size. For example, the home health care market is $20B/year for example. You can say competitor x has 2% of that market, and we would complete directly with them. We estimate we’ll take 10% of their market share (or 0.2% of the total) after 2 years with our revolutionary product. And as such, we expect to make $20M in sales after year 2. (if I did my math correct)”
In our case, it’s more nebulous. We could reference the high end yacht market size, the ocean front property market in the Bahamas…
It’s a little more difficult to pin down, but I still think we’ll be able to say “we think the size of this untapped market is $xB…”
clarification “$xB worldwide”, though if we refer to oceanfront real estate in the Bahamas, the calculation and the angle would be a little different…