Feasibility Study Assignment

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Revenue model

The company’s general business model includes providing affordable housing to college students in Rhode Island. Because this place has both State and private universities, it means that there are millions of students. Many of these students cannot access rooms where they can sleep or stay. The business will, therefore, make money by building more rooms that are affordable to these students. Because the houses are affordable, many students will flock in, thus making a profit. The service offered here includes affordable rooms, while the target market/audience includes college/university students.

The revenue model for the company will be based on the affordable housing services provided to students. Prior to providing this service, the company will earn money. The revenue stream here includes parents providing money to their kids (students). The kids then cannot pay for on-campus houses and so will be left with the option of purchasing affordable housing. Because the company’s services are affordable, the students will purchase them, thus earning profit. Grants from the government can also be a revenue stream.

Since this service is based on built houses, the cost modeling will determine how much money is used in constructing them. Cost modeling will include labor productivity, number of suppliers, equipment, building expertise, materials such as cement, sand, water, and granite. Overheads will be used in measuring, quantifying, and estimating the effort and time used (Metcalf, 2018). Some key drivers that result in the construction of these houses include the increased number of students at campuses and colleges, the increased cost of rooms that make it hard for students to access the rooms, and the fact that on-campus housing is very expensive (Kim & Kim, 2016).

Income statement

Income statement

Year	2020
Revenue	$150,000
Rent ($350X15 RoomX12)	$63,000
Government Grants(500X15X12)	$90,000
Operating Expenses	$30,500
Building Repairs  (paint, outdoor updates, air conditioner filters, plumbing and electrical updates)	$2,000
Utilities ($150x15x12)	$27,000
Insurance	$1,500
Administrative Expense	$60,000
Payroll($11.50X4X12) estimated	$50,000
Furniture	$10,000
Cost of Goods Sold($30,500+$60,000)	$90,500
Net Income (150,000-90,500)	$59,500

Startup requirements

First, places for constructing these affordable rooms will be needed. Capital needed for buying a piece of land near campus zones is estimated to be $100,000 for each piece. Some equipment will be needed for constructing these houses. To get the construction in place, workforce or labor will be needed approximately a hundred people on each site, and materials such as cement, sand, cranes, generators, concrete mixer, cabins, and building expertise. Other than financial resources such as funding, human resources such as caretakers and security guards will be needed.

Several things need consideration before any service is sold. Competition is one of them. In the affordable housing industry, competition can stiff given that students rent the houses and families who want to start businesses. Market share is a factor of consideration given that this industry is big (Metcalf, 2018). Now that the houses are ready and set up, many people may not know where they are located, and so a marketing strategy should be put in place. This will ensure the prospective customer (college/university students) is reached.

Team

A number of employees will be needed to make sure tenants are satisfied with the services offered. Caretakers will be required in the maintenance of the property. Their qualifications include industry-related experience and a high school diploma. The caretakers will also be required to speak fluently, given that many tenants will be students. There will also be security guards whose main work will be keeping the property secure. Their requirements include outstanding acquaintance with security conventions, excellent relational skills, and progressive communication abilities. 

References

Kim, M. K., & Kim, M. J. (2016). Affordable modular housing for college students emphasizing habitability. Journal of Asian Architecture and Building Engineering, 15(1), 49-56. Retrieved from https://www.tandfonline.com/doi/abs/10.3130/jaabe.15.49

Metcalf, G. (2018). Sand castles before the tide? Affordable housing in expensive cities. Journal of Economic Perspectives, 32(1), 59-80. Retrieved from https://www.aeaweb.org/articles?id=10.1257/jep.32.1.59