Özyeğin University Alp Alkas Retail Real Estate Center / Lecture - "How to Make An Effective Business Plan for Shopping Center"

1. Tufan Karaca
www.tkaraca.com
karaca@tkaraca.com
"How to Make An Effective Business Plan for a Shopping Center"

2. Failing to plan is
planing to fail

3. Failing to plan is
planing to fail

4. Still the not-so-great mall of
China: 99% of units in world's
biggest shopping centre remain
empty SEVEN YEARS after it
opened

5. BUSINESS PLAN
FEASIBILITY
BUSINESS MODEL

6. FEASIBILITY
BUSINESS MODEL
BUSINESS PLAN

7. FEASIBILITY STUDY
May the project be done ????
Technically
Financially

8. FEASIBILITY STUDY
Technically ????

9. LOCATION
LOCATION
LOCATION
LOCATION

12. Distance to other shopping centers,
Nearby locations for other future shopping malls,
Accessibility,
Population density,
Infrastructure,

13. Zoning

14. Terrain infrastructure
swamp
rocky

15. FEASIBILITY STUDY
Financially ????

16. 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

18. What do you need to calculate
ROI
interest rate
risk

19. Interest rate is given
Lets assume it is 10%
Then what is ROI ?

20. 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 21
10 236 24

21. 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 21
10 236 24

22. Risk Analysis
PEST

23. Environmental analysis
Political Economical
Social Technological

24. Interest Rate PEST Analysis
Decision for ROI
ROI ≤ 4 years (25%)

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

26. 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%

27. 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 land
so we will have a 2 story shopping center.
112,500 x $ 1,000 = $ 112,500,000

28. Total Cost :
Cost of land 45,000,000
Cost of construction 112,500,000
Soft costs (8% of const.) 9,000,000
Leasing & Marketing costs 15,000,000
Unexpected (5% of.const.) 5,625,000
TOTAL COST 187,125,000

29. 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

30. Cost per sq.mt. GLA = $ 2,218
How do we proceed from here on ?????

31. $ 2,218 / 4 years (ROI) = $ 555
Is this achievable ????

32. 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

33. With this feasibility study we found out that this project will be OK
NOW WE HAVE TO PREPARE A BUSINESS MODEL

34. Other factors to consider :
Construction period,
Terms of financing

35. 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

37. 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 ?

38. 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
Entertainment
Neighborhood
Outlet
Community CenterLifestyle

39. and what should be our shop mix, with which brands ?
accordingly what kind of a building ?

40. All of these will shape our marketing plan.

41. BUSINESS PLAN
FEASIBILITY
BUSINESS MODEL
NOW WE HAVE ALMOST ALL THE DATA
TO START OUR BUSİNESS PLAN

42. NO PLAN IS BETTER THAN IT’S ASSUMPTIONS.

43. 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 ?

44. HOW TO REACH TO YOUR VISION OF YOUR BUSINESS

45. A good plan, violently executed now, is better than a perfect
plan next week.
George S. Patton
Your plan is wrong from the start

46. For whom do we write the Business Plan
o Ourselves
o Our empleyees
o Our business partners
o Our suppliers
o Our lenders

47. Outline :
1. Executive summary
2. Your company
3. Vision
4. Mission
5. Target market
6. Competition
7. Marketing and sales plans
8. Operations
9. Management team
10.Milestones
11.Financial analysis

48. Finacial analysis :
o Cash – Flow Anaylsis
o Proforma Income Satement
o Proforma Balance sheet

49. Finacial analysis :
o Cash – Flow Anaylsis
o Proforma Income Satement
o Proforma Balance sheet

50. Cash flow analysis, compares the
timing and amount of cash inflows
with the timing and amount of
cash outflows
Cash Flow Analysis

51. Cash Flow Example

52. 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
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 5,524,7
Kredi
Diğer nakit 2013 66,294 100,154 98,287
Diğer nakit 2014 219,278 218,840 225,492 217,706 225,608 263,617 257,674 239,595 326,5
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 5,851,3
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 3,082,8
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 2,224,6
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 53,0
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 5,360,6
FARK -402,575 -1,381,868 108,226 535,786 392,899 186,118 410,211 709,819 541,102 620,104 759,131 490,7
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 2,969,6

53. 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-1
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 5,524,77
Kredi 450,000 1,400,000
Diğer nakit 2013 66,294 100,154 98,287
Diğer nakit 2014 219,278 218,840 225,492 217,706 225,608 263,617 257,674 239,595 326,58
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 5,851,35
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 3,082,89
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 2,224,66
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 53,07
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 5,360,63
FARK
47,425 18,132 108,226 535,786 392,899 186,118 410,211 709,819 541,102 620,104 759,131 490,72
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 4,819,67

54. Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-1
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 5,524,77
Kredi 450,000 1,400,000
Diğer nakit 2013 66,294 100,154 98,287
Diğer nakit 2014 219,278 218,840 225,492 217,706 225,608 263,617 257,674 239,595 326,58
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 5,851,35
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 3,082,89
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 2,224,66
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 53,07
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 5,360,63
FARK 38,425 -18,868 -16,974 10,586 -24,301 21,918 -44,989 444,619 541,102 620,104 759,131 490,72
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 2,821,47

55. -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
Nov-13 Jan-14 Mar-14 Apr-14 Jun-14 Jul-14 Sep-14 Nov-14 Dec-14
Net Satışlar
Satılan Malın Maliyeti
Faaliyet Kârı / (Zararı)
Net Dönem Kârı / (Zararı)
KÜMÜLATİF FARK

56. TIME LINE
LEVEL

57. Before opening After opening
Investment level
Operations level
TIME LINE
LEVEL
Land cost
Construction cost
Interest (if any)
Other
Cash out
Cash in
Interest payments
Dept repayment
Taxes
Other
Rent
Management salaries
Utilities
Cleaning & security
Marketing
Other
Common area charge
Marketing

58. Before opening After opening
Investment level
Operations level
TIME LINE
LEVEL
Land cost
Construction cost
Interest (if any)
Other
Cash out
Cash in
Interest payments
Dept repayment
Taxes
Other
Rent
Management salaries
Utilities
Cleaning & security
Marketing
Other
Common area charge
Marketing
Depreciation
?

59. Depreciation
?

60. New ideas….

62. Tufan Karaca
www.tkaraca.com
karaca@tkaraca.com