Home inventory business plan for starting your own company

Do you want to start your business with the least possible investment? This business plan for home inventory business can make that possible for you. In the following text we’ll tell you how to run a home inventory business. All you have to do is to keep record of what people have at home. Simple as that!

This business is a very simple one. You do not need a lot of cash to get started with it as you would need for real estate business plans. It makes this the best business plan for investors who are short on cash. We’ll follow the example of Cobol Home Inventory Reporting.

Executive Summary

2.1 The Business

Cobol Home Inventory Reporting will be a licensed, ensured, and bonded home inventory services provider situated in Fort Lauderdale and operate in all of Florida. This home inventory business start up will be owned by Dickard Cobol.

Let’s see how to start a home inventory business.

2.2 Management of Home Inventory Company

If you want to know how to create an inventory system for small home business, keep reading. For the business to be successful it must have multiple locations across Florida. This calls for creating a franchise business plan.

The management of this business will be divided into two parts. One will be responsible for operations and the other will look after the external relations and PR.

2.3 Customers of Home Inventory Company

The customers of the Home inventory business will be of three main categories:

  • People who want to keep track of their personal belongings.
  • Insurance companies who need reporting on the home inventory of the insured people.
  • The government can also be a customer if they want to get the inventory details of a crime scene.

2.4 Business Target

The target of the business is to ultimately become the only nationwide home inventory service. This is just like that of a a. The objective targets are:

  • Expanding to at least 3 states by the end of year 1.
  • Obtaining at least 10 large clients within 6 months.
  • Increasing the annual revenue to $311,000 by the end of year 3.

Home Inventory Business Plan - 3 Years Profit Forecast

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Company Summary

3.1 Company Owner

The owner of the Cobol Home Inventory Reporting will be Dickard Cobol. Cobol will also act as the CEO of the company. An experience of 30 years in the insurance adjustment industry has earned Cobol a lot of contacts. Those people can make this inventory business plan sample successful.

3.2 Why the Home Inventory Business being started

Cobol is starting a home inventory business mainly because he has a lot of experience. Another reason behind him starting this business is the recent increase in the need for this field. When people get their homes insured, the stuff inside is also insured. To make sure that they claim what they actually had, the need for home inventory reporting has skyrocketed following the recent storms in America.

3.3 How the Home Inventory Business will be started

Step1: Planning

The first step in starting this business is making the business plan inventory example. This is the stage where it will be planned what services we will provide and to what extent. The market segments to be focused in the business will also be determined in this step. Before you go ahead for home inventory business plan download, you need to read it.

Step2: Define the Brand

This is not a resort business plan where you can spend a lot of money to make more. You need to establish a brand. This can only be done by portraying an image of fair practices and exalted service. You will need to come up with a great name, logo, and tagline for the brand.

Step3: Establish Your Office

The next step will be to establish an office. This is must to get the trust of the clients.

Step4: Online Presence

Unlike a real estate agency business plan, this business needs an online presence. You need to make a website for your clients to connect with you.

Step5: Marketing

You need to market your services via print, electronic and social media.

Home Inventory Business Plan - Startup Cost

Start-up Expenses  
Legal $247,000
Consultants $0
Insurance $31,000
Rent $19,000
Research and Development $26,000
Expensed Equipment $52,000
Signs $4,200
TOTAL START-UP EXPENSES $379,200
Start-up Assets $338,000
Cash Required $345,000
Start-up Inventory $50,000
Other Current Assets $217,000
Long-term Assets $238,000
TOTAL ASSETS $1,188,000
Total Requirements $1,567,200
START-UP FUNDING
Start-up Expenses to Fund $379,200
Start-up Assets to Fund $1,188,000
TOTAL FUNDING REQUIRED $1,567,200
Assets
Non-cash Assets from Start-up $1,576,000
Cash Requirements from Start-up $360,000
Additional Cash Raised $53,000
Cash Balance on Starting Date $32,000
TOTAL ASSETS $2,021,000
Liabilities and Capital
Liabilities $30,000
Current Borrowing $0
Long-term Liabilities $0
Accounts Payable (Outstanding Bills) $41,000
Other Current Liabilities (interest-free) $0
TOTAL LIABILITIES $71,000
Capital
Planned Investment $1,567,200
Investor 1 $0
Investor 2 $0
Other $0
Additional Investment Requirement $0
TOTAL PLANNED INVESTMENT $1,567,200
Loss at Start-up (Start-up Expenses) $382,800
TOTAL CAPITAL $1,950,000
TOTAL CAPITAL AND LIABILITIES $2,021,000
Total Funding $1,567,200

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Services

Before you can start a home inventory service business, you need to have a solid home inventory business plan. As this is not as simple as making a property management business plan, you need to define the services that you will be giving to the clients. Our services for this company will be divided into three categories:

  • Domestic Home Inventory Service

This segment will make up for the largest number of clients but with small revenue per client. The services provided to these clients will include:

    • Maintaining a list of home inventory for their personal reference.
    • Preparing home inventory lists for insurance purposes.
    • Reporting the inventory in case of damage to the property.
  • Assets Inventory Service for Insurance

For this segment of the customers, we will have lesser customers but each of them will give us substantial revenue. The services for these customers will include:

    • Home inventory reporting for the insured homes.
    • Inventory reporting for non-residential insured properties.
    • Presenting inventory reports to the concerned authorities when needed.
  • Retail Inventory Service

These clients will also be in lower numbers but will be high-paying. We will provide them these services:

    • Inventory record management for offices.
    • Inventory reporting for insurance purposes.
  • DIY Inventory Tracking App

For people who would want to keep record of their belongings themselves, we’ll be offering a user-friendly mobile app. Through app that will come up with a subscription fee, our customers will be able to keep record of their kitchen inventories and more.

Marketing Analysis of Home Inventory Company

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For successfully running a home inventory company, you need to know how to do a home inventory for insurance. But even before that, you need to know the market. Even before you start a home inventory business. A recent report has determined that in the USA more than half of the homeowners do not have a home inventory. Keeping in mind that the market has such a huge gap, a property inventory business plan is all you need to start a profitable business. All you need to do is to have a staff that knows how to make a home inventory.

The next thing you need to do is to have a look on the current market trends of the industry to see how you can enter. As a new entrant, you will have to present something that your competitors lack. Only then you can have a reasonable chance of being successful at this business.

5.1 Market Trends

After it was made necessary by the law to maintain a home inventory with a licensed provider, following the Hurricane Katrina, the home inventory business has grown very much. Previously it was something reserved for the ultra-rich. A middle-class man does not have too much stuff to have something note it down for them.

However, now Uncle Sam wants your MacBook and washing machine on the list. If they are not, your chances of getting insurance compensation diminish greatly. This automatically means that the home inventory service providers are in luck. Now is the time to capture this market before it saturates like many others.

Let’s now see the marketing segmentation to better know how to plan this business.

5.2 Marketing Segmentation

The potential customers of our home inventory reporting business will be the following:

Home Inventory Business Plan - Marketing Segmentation

5.2.1 Homeowners

This is the segment of the market that will account for the largest number of customers. We will give them the services of keeping a record of their home possessions. In case their property is lost, we can present the inventory to the insurance company or law enforcing agencies handling the case.

5.2.2 Insurance Providers

Insurance companies need the services of home inventory reporting companies to report on the possessions of the insured homeowners. This segment will be the source of the bulk of our cashflow.

5.2.3 Corporate Clients

These clients need someone to keep track of all the stuff in their offices. These clients will be a few but their projects are large.

5.2.4 Law Enforcing Agencies and Courts

These bodies can sometimes ask home inventory reporting companies to report on the possessions of homeowners. These clients are not regular ones but offer better payout.

Market Analysis
Potential Customers Growth Year 1 Year 2 Year 3 Year 4 Year 5 CAGR
Homeowners 41% 43,000 45,000 48,000 50,000 53,000 10.00%
Insurance Providers 37% 40,000 42,000 45,000 47,000 50,000 10.00%
Corporate Clients 12% 12,000 13,000 14,000 15,000 16,000 10.00%
Law Enforcing Agencies and Courts 10% 6,500 7,000 8,000 9,000 10,000 11.00%
Total 100% 101,500 107,000 115,000 121,000 129,000 10%
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5.3 Business Target

  • To sign contracts with the 10 major insurance providers in Florida.
  • To achieve and maintain an average rating above 4.5 throughout our service years.
  • To make at least $311,000 in profits per annum by the end of year 3.
  • To obtain and retain a CSAT score of 95%.

5.4 Product Pricing

The prices for our services will be higher than the competitors. This is because of the experience of the founder and the dedication of our team. However, we’ll offer discounts at the start. This is not a business plan for painting company. We need to charge for what we are doing.

Marketing Strategy of Home Inventory Company

Of all the things that make it successful, marketing a home inventory business is the most important factor. Before you open a home inventory business franchise, you need to have a solid marketing strategy.

For making an effective marketing strategy, it is important to perform an extensive competitive analysis and base your marketing and sales strategy on it.

6.1 Competitive Analysis

  1. After competitive analysis we have discovered that no home inventory business in Florida has a better experienced team.
  2. Another competitive advantage that Cobol Home Inventory Reporting has is the relations with the insurance industry leaders that Dickard Cobol has developed.
  3. Lastly, and the most importantly, Cobol Home Inventory Reporting will provide services to independent homeowners too, unlike any competitor.

6.2 Sales Strategy

  • The business will be promoted by online ads and TV commercials and the marketing effort will be augmented by emailing insurance agencies.
  • We will offer a flat 30% discount for the first 100 customers and 10 insurance agencies.
  • We will establish an impeccable honesty and integrity reputation.

6.3 Sales Monthly

Home Inventory Business Plan - Sales Monthly

6.4 Sales Yearly

Home Inventory Business Plan - Sales Yearly

6.5 Sales Forecast

Home Inventory Business Plan - Unit Sales

Sales Forecast      
Unit Sales Year 1 Year 2 Year 3
Domestic Home Inventory Service 48,000 50,880 53,933
Assets Inventory Service for Insurance 45,000 47,700 50,562
Retail Inventory Service 27,000 28,620 30,337
DIY Inventory Tracking App 24,000 25,440 26,966
TOTAL UNIT SALES 144,000 152,640 161,798
Unit Prices Year 1 Year 2 Year 3
Domestic Home Inventory Service $43.00 $49.88 $57.86
Assets Inventory Service for Insurance $43.00 $49.88 $57.86
Retail Inventory Service $41.00 $47.56 $55.17
DIY Inventory Tracking App $33.00 $38.28 $44.40
Sales
Domestic Home Inventory Service $2,064,000.00 $2,537,894.40 $3,120,594.95
Assets Inventory Service for Insurance $1,935,000.00 $2,379,276.00 $2,925,557.77
Retail Inventory Service $1,107,000.00 $1,361,167.20 $1,673,691.19
DIY Inventory Tracking App $792,000.00 $973,843.20 $1,197,437.60
TOTAL SALES $5,898,000.00 $7,252,180.80 $8,917,281.51
Direct Unit Costs Year 1 Year 2 Year 3
Domestic Home Inventory Service $41.00 $46.00 $53.00
Assets Inventory Service for Insurance $41.00 $46.00 $53.00
Retail Inventory Service $39.00 $44.00 $51.00
DIY Inventory Tracking App $31.00 $35.00 $41.00
Direct Cost of Sales
Domestic Home Inventory Service $1,968,000.00 $2,340,480.00 $2,858,438.40
Assets Inventory Service for Insurance $1,845,000.00 $2,194,200.00 $2,679,786.00
Retail Inventory Service $1,053,000.00 $1,259,280.00 $1,547,197.20
DIY Inventory Tracking App $744,000.00 $890,400.00 $1,105,622.40
Subtotal Direct Cost of Sales $5,610,000.00 $6,684,360.00 $8,191,044.00

Personnel plan

Business Plan for Investors

For the home inventory business to run smoothly, we need trained professional staff. The staff will have to have two types of skills. If you want to make the most out of home inventory business opportunities, the staff is one of the most important factors determining your success.

7.1 Company Staff

  • 1 Chief Operational Officer.
  • 1 Liaison and PR Manager.
  • 5 Surveyors to conduct field work.
  • 1 IT Expert for managing the website, apps, and social media presence.
  • 4 Drivers.
  • 1 Peon for office work.
  • 1 Office Boy to take care of office errands.

7.2 Average Salary of Employees

 Personnel Plan      
Year 1 Year 2 Year 3
Chief Operational Officer $14,000 $15,400 $16,940
Liaison and PR Manager $13,000 $14,300 $15,730
Surveyors $50,000 $55,000 $60,500
Accountant $9,000 $9,900 $10,890
IT Expert $8,000 $8,800 $9,680
Peon $7,000 $7,700 $8,470
Office Boy $7,000 $7,700 $8,470
Drivers $35,000 $38,500 $42,350
Total Salaries $143,000 $157,300 $173,030

Financial Plan

For running successful home inventory business, it is important to calculate the home inventory service cost. For that it is paramount to make a financial plan for the company. For the starting of the business, we will be focusing on the costs that we will incur to start the business. These will include:

  • The cost for getting the office space.
  • Cost for buying 4 pickup trucks for moving the crew.
  • The salaries of the staff.
  • The cost of advertisement and social media presence.
  • The cost of overheads before the company starts making profit.

8.1 Important Assumptions

 General Assumptions      
Year 1 Year 2 Year 3
Plan Month 1 2 3
Current Interest Rate 8.22% 8.23% 8.28%
Long-term Interest Rate 8.39% 8.44% 8.47%
Tax Rate 23.10% 24.10% 25.50%
Other 0 0 0

8.2 Break-even Analysis

Home Inventory Business Plan - Break-even Analysis

 Break-Even Analysis  
Monthly Units Break-even 5344
Monthly Revenue Break-even $131,890
Assumptions:
Average Per-Unit Revenue $236.00
Average Per-Unit Variable Cost $0.64
Estimated Monthly Fixed Cost $163,160

8.3 Projected Profit and Loss

 Pro Forma Profit And Loss      
Year 1 Year 2 Year 3
Sales $5,898,000 $7,252,181 $8,917,282
Direct Cost of Sales $5,610,000 $6,684,360 $8,191,044
Other $0 $0 $0
TOTAL COST OF SALES $5,610,000 $6,684,360 $8,191,044
Gross Margin $288,000 $567,821 $726,238
Gross Margin % 4.88% 7.83% 8.14%
Expenses
Payroll $143,000 $157,300 $173,030
Sales and Marketing and Other Expenses $122,000 $123,000 $124,000
Depreciation $2,220 $2,300 $2,420
Leased Equipment $0 $0 $0
Utilities $2,980 $3,000 $3,100
Insurance $2,000 $2,100 $2,200
Rent $2,800 $2,900 $3,000
Payroll Taxes $27,000 $28,000 $29,000
Other $0 $0 $0
Total Operating Expenses $302,000 $318,600 $336,750
Profit Before Interest and Taxes ($14,000) $249,221 $389,488
EBITDA ($14,000) $249,221 $389,488
Interest Expense $0 $0 $0
Taxes Incurred ($2,800) $49,844 $77,898
Net Profit ($11,200) $199,377 $311,590
Net Profit/Sales -0.19% 2.75% 3.49%

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8.3.1 Profit Monthly

Home Inventory Business Plan - Profit Monthly

8.3.2 Profit Yearly

Home Inventory Business Plan - Profit Yearly

8.3.3 Gross Margin Monthly

Home Inventory Business Plan - Gross Margin Monthly

8.3.4 Gross Margin Yearly

Home Inventory Business Plan - Gross Margin Yearly

8.4 Projected Cash Flow

Home Inventory Business Plan - Projected Cash Flow

 Pro Forma Cash Flow      
Cash Received Year 1 Year 2 Year 3
Cash from Operations
Cash Sales $52,500 $56,700 $61,236
Cash from Receivables $18,700 $20,196 $21,812
SUBTOTAL CASH FROM OPERATIONS $71,200 $77,608 $83,817
Additional Cash Received
Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0
New Long-term Liabilities $0 $0 $0
Sales of Other Current Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0
New Investment Received $0 $0 $0
SUBTOTAL CASH RECEIVED $72,000 $78,000 $84,000
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $33,000 $34,000 $35,000
Bill Payments $18,500 $19,800 $21,000
SUBTOTAL SPENT ON OPERATIONS $51,500 $53,800 $56,000
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $0 $0 $0
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
SUBTOTAL CASH SPENT $52,000 $56,160 $60,653
Net Cash Flow $16,000 $17,000 $18,000
Cash Balance $23,000 $24,000 $25,000

8.5 Projected Balance Sheet

 Pro Forma Balance Sheet      
Assets Year 1 Year 2 Year 3
Current Assets
Cash $268,000 $300,160 $330,176
Accounts Receivable $22,000 $24,640 $27,695
Inventory $4,000 $4,480 $4,900
Other Current Assets $1,000 $1,000 $1,000
TOTAL CURRENT ASSETS $286,780 $321,194 $361,022
Long-term Assets
Long-term Assets $10,000 $10,000 $10,000
Accumulated Depreciation $17,400 $19,488 $21,924
TOTAL LONG-TERM ASSETS $25,000 $28,000 $31,500
TOTAL ASSETS $296,000 $331,520 $372,960
Liabilities and Capital Year 4 Year 5 Year 6
Current Liabilities
Accounts Payable $18,720 $20,966 $23,566
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
SUBTOTAL CURRENT LIABILITIES $15,500 $17,360 $19,513
Long-term Liabilities $0 $0 $0
TOTAL LIABILITIES $15,000 $16,800 $18,883
Paid-in Capital $29,000 $30,000 $31,000
Retained Earnings $53,000 $57,770 $63,547
Earnings $190,000 $207,100 $227,810
TOTAL CAPITAL $281,200 $306,508 $337,159
TOTAL LIABILITIES AND CAPITAL $296,200 $331,520 $372,960
Net Worth $275,000 $299,750 $329,725

8.6 Business Ratios

 Ratio Analysis        
Year 1 Year 2 Year 3 INDUSTRY PROFILE
Sales Growth 7.23% 8.01% 8.88% 3.00%
Percent of Total Assets
Accounts Receivable 9.24% 10.24% 11.34% 9.80%
Inventory 5.44% 6.03% 6.68% 9.90%
Other Current Assets 2.14% 2.37% 2.63% 2.40%
Total Current Assets 149.00% 151.00% 152.00% 158.00%
Long-term Assets 11.32% 11.37% 11.44% 12.00%
TOTAL ASSETS 100.00% 100.00% 100.00% 100.00%
Current Liabilities 4.87% 4.91% 4.95% 4.34%
Long-term Liabilities 0.00% 0.00% 0.00% 0.00%
Total Liabilities 7.52% 7.58% 7.65% 7.38%
NET WORTH 100.23% 101.03% 101.96% 110.00%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 94.06% 96.60% 99.30% 99.00%
Selling, General & Administrative Expenses 94.00% 96.54% 99.24% 97.80%
Advertising Expenses 1.50% 1.54% 1.58% 1.40%
Profit Before Interest and Taxes 41.00% 42.11% 43.29% 33.90%
Main Ratios
Current 33 34 35 32
Quick 34 34.4 35.26 33
Total Debt to Total Assets 0.17% 0.17% 0.16% 0.40%
Pre-tax Return on Net Worth 72.00% 73.20% 74.00% 75.00%
Pre-tax Return on Assets 94.60% 99.33% 104.30% 111.30%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin 33.00% 34.02% 35.08% N.A.
Return on Equity 55.00% 56.71% 58.46% N.A.
Activity Ratios
Accounts Receivable Turnover 7.7 7.8 7.8 N.A.
Collection Days 100 100 100 N.A.
Inventory Turnover 31.1 32.655 33 N.A.
Accounts Payable Turnover 15.4 15.7 16.2 N.A.
Payment Days 27 27 27 N.A.
Total Asset Turnover 2.5 2.5 2.6 N.A.
Debt Ratios
Debt to Net Worth -0.04 -0.03 -0.04 N.A.
Current Liab. to Liab. 1 1 1 N.A.
Liquidity Ratios
Net Working Capital $232,450 $245,467 $259,213 N.A.
Interest Coverage 0 0 0 N.A.
Additional Ratios
Assets to Sales 0.86 0.87 0.87 N.A.
Current Debt/Total Assets 1% 0% 0% N.A.
Acid Test 28 28.5 29 N.A.
Sales/Net Worth 2.1 2.2 2.3 N.A.
Dividend Payout 0 0 0 N.A.

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