OBRTNIKA KOLA POEGA OSJEKA 33 34000 POEGA

SLAVONIA CONSTRUCTION GUILD

Home Improvement Referral & Resource Network Centre

FEASIBILITY STUDY COST-BENEFIT ANALYSIS

Prepared by: mr.sc. DIJANA FERKOVI, dipl.oec. & team

December 2012

ACKNOWLEDGEMENTS
We are grateful to Mrs Iva Snajder, Vocational school Pozega principle which served as the financial sponsor of this feasibility study, and also the informal FORUM of construction crafts in which strong local support for regional SLAVONIA CONSTRUCTION GUILD was identified. We also wish to thank the many professionals and people of Pozega, Slavonski Brod and their counties who generously contributed time, information and enthusiasm to our research process. We appreciate the interest and guidance provided by the Croatian Chamber of Commerce and Crafts as we explored the justification of setting the SLAVONIA CONSTRUCTION GUILD in Pozega's Vocational school premises. Special thanks to architects, designers, maintenance experts and current investors for their encouragement as well as sharing detailed and specific information about the construction projects with us. Our project also benefited greatly from visiting existing Business incubators in the county (Pakrac and Pleternica), as well as Entrepreneurial Centres, working within them. We wish to thank our reviewers for strengthening our report. We very much appreciate the confidence and financial support provided by the Vocational school, and their teachers. This support was essential for moving our project beyond the stage of just another good idea, and allowed us to systematically investigate the viability of a regional construction guild, and its operative headquarters in form of HOME IMPROVEMENT CENTRE in Pozega.

TABLE OF CONTENTS
Executive Summary... 1. Project Overview .. 1.1. Background ... 1.2. Why Construction Guild . 1.3. Community Service Goals .... 1.4. Mission . 1.5. Slavonia Construction Guild: A Snapshot . 2. Home Improvement sector .. 3. Marketing & Sales ... 3.1. Marketing .. 3.2. Initial Target Markets & Primary Clients . 4. Technical an Organisational Requirements .. 4.1. Location .... 4.2. Referral & Resource Network Centre 4.2.1. Premises and layout .. 4.2.2. Equipment and resources .. 4.2.3. Specialised features . 4.2.4. Energy Efficiency Specialization .. 4.3. Home Improvement Referral & Resource Network Centre Business Model 4.4. Key Staff Positions. 5. Services.. 5.1. Delivery of Services to Construction SMEs 5.2. Services to Investors .. 6. Financial Plan 6.1. Estimates of Capital Costs. 6.2. Estimates of Annual Operating Costs 6.2.1. Human Resources. 6.2.2. Utility Costs.. 6.2.3. Transportation and Study Visit Costs.. 6.2.4. Other Services Costs 6.3. Projected Income and Profit/Loss. 7. Feasibility Assessment 8. Possible Sources of Financing. 9. Conclusion & Recommendations. ANNEXES COST-BENEFIT ANALYSIS .. 4 6 7 8 9 9 10 12 14 15 18 20 20 21 22 27 29 30 32 34 35 36 40 41 41 42 42 43 43 43 44 47 49 50 51 58
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EXECUTIVE SUMMARY
The proposed project of setting and operating a functional HOME IMPROVEMENT CENTRE (as Slavonia Construction Guild's operative body and home improvement referral and resource network) is being designed to significantly contribute to raise of competitiveness of regional construction crafts and SMEs by improving access to reliable information, training and education, relevant specialized services and networking and synergy between individual construction crafts and SMEs in the region. As part of Vocational school Pozega and Slavonia Construction Guild, the Home Improvement Centre would provide improved access to services and information (knowledge, skills) important for development of property-related investments in the region. Raising the level of education and training within the workforce (and construction companies) is critical to the region's overall economic development. Upgrading employee skills in construction companies will make them more competitive in the marketplace, while upgrading the skills of the region's workforce pool will make it more attractive for other related industries to move into the area. Offering modern materials and methods in construction, that save energy, time and money for investors, should inspire new investments, and create a new demand for construction works in the region. This study analyse the feasibility of building the Home Improvement Centre. The summary of the major findings: A need for workers with relevant skills in a wide variety of technical areas in regional construction SMEs is recognized. Also, there is a need for existing engineers to have access to education in technology management The current educational attainment level of unemployed residents in the county is low. The greatest number of registered unemployed persons has finished secondary education. However, the unemployed not-registered are mostly without occupations or skills. The fact is that many residents need to upgrade their work related skills and education levels The Centre will provide on-going opportunities for improving existing skills, developing new skills and to attain additional certificates and degrees (in school or other institutions) For the region, the Home Improvement Centre would provide a hub for economic development efforts and raising level of workforce that will
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improve the quality of life for citizens and attract new business and industry The Centre would provide improved work life opportunities for technical staff, joint public-private investment projects For the educational institutions the Centre would provide prestige access to jobs in construction companies for students, collaboration with other entities, and enhanced opportunities for program development and research The Centre will have a regional focus and will be a resource for the wider Slavonia region (not only Pozesko-slavonska county) The Center would be established as a separate department of educational public high-school institution and be managed by the School Board, and Slavonia Construction Guild Board The Center would be approximately 473m2 with ample flexible space. Large hanger door will allow larger pieces of equipment to be moved in and out of the facility. The anticipated capital cost is EUR 646.611 to build and equip the Center while the recommended initial annual operating budget is EUR 5.000. The Center would have broadband wireless access to the Internet throughout the facility and be equipped with state-of-the-art computing and two-way audio / video systems Overall, while not without major challenges, the creation of a Home Improvement Center is a laudable project with great potential and needed benefits for the region.

Ultimately, it can be considered that the Centre could operate sustainably without the need for extensive fundraising or additional budgetary pressure. In conclusion, we believe this project is an exciting way to provide the regional construction sector with relevant business and educational support. Funding support should be sought to ensure the steps for set the up of Centre, so that is is organised in timely manner, so that the project does not lose momentum.

1. PROJECT OVERVIEW
This document assesses the viability of Home Improvement Centre to serve the Slavonian Construction Guild, VET school Construction Department and investors in projects related to construction, building and property improvement. The primary goal of the analysis is to answer: Will the Home Improvement Centre justify its establishment, will it be self-sustainable and should the initiators of the project proceed with it? The feasibility study of the Centre was conducted in period from October 2012 to January 2013. This investigation addresses the above question by 1) identifying how the various components of a Slavonia Construction Guild affect in order to serve the needs of the sector; and 2) developing models to explore the potential pros and cons, and the costs and benefits of our decisions. Conducting this analysis allowed us to gain a more thorough understanding of the opportunities and challenges in locating, designing and building a Home Improvement Centre. It also helped define organisation and functioning models and scenarios of possible directions in which Centre will go. The analysis helped to describe in more details all aspects of the future Home Improvement Centre. The level of specificity of information provided in this study is dependent upon the depth in which we were able to investigate the components, and the degree to which we could reach resolution on particular issues. Consequently, this feasibility study is best viewed as a solid point for developing more refined business and operational plan.

1.1. BACKGROUND
Over the last decade, a construction sector (in Croatia, as well as in Pozeskoslavonska county) has experienced a strong rise and even stronger decline in terms of economic performance. Construction has in the last two years (2011 and 2012) lost more than 40% of total number of employees, while many construction companies, due to chronic insolvency, have bankrupted. VET school with its Construction Department has felt strongly all the market changes, and it reflected on the school's image and enrolment of students. Construction jobs have for long been considered unwanted and less attractive than some other service occupations. This is why the school principal (Snajder) together with the school internship program coordinator (Kovacevic) initiated in 2011 the consultations with the associate construction companies (18 companies) in order to identify the reasons of weak construction SMEs economic performance in the region. The group reviewed several scenarios and configurations for Home Improvement Centre including various purposes and outcomes that might benefit the community and construction business sector. No similar projects or institutions were seen in Croatia. Only segments of Home Improvement Centre's activities can be noticed, but in different form. The project developed in this case would present a transformation of CLUSTERVOCATIONAL SCHOOL-CONSULTANCY-CHAMBER of companies, comprised in a totally different form. Similar projects have been important in shaping the thinking and enthusiasm of project partners. However, none existing examples of business-support institutions could be exactly replicated, nor did any fit exactly the specific regional needs regarding the construction sector. Consequently, in September 2012 the group of project partners developed a new framework to help organise their own investigation of what would work in Pozesko-slavonska county and its construction sector. Home Improvement Centre used all available resources in the locality, and took into consideration the specific requirements of the regional construction sector. During the following months, a sequence of interviews were conducted with construction entrepreneurs, in order to 1) identify potential members of Slavonia Construction Guild; 2) learn about investment preferences in the region; 3) explore how a new business-support could meet the needs of companies and crafts, as well as their clients; 4) gauge SMEs' interest in becoming a member of the Guild (and user of Centre's services).

1.2. WHY CONSTRUCTION GUILD

There are several reasons for developing a specialised regional construction guild. The Guild primarily serves as networking tool in order to develop cooperation between competing small companies and crafts. The Guild is owned by its members and driven by the needs of its clients. Members of the Guild are primarily the smallest family-run construction crafts and companies. Its members belong to wide range of disciplines (brickwork, tunnelling, electricity, paving, tile works, building carpentry, insulation ). Members benefit of access to Guild from a wide variety of expertise and knowledge that assists them to run their business more efficiently. The Guild runs lectures and presentation, but also connects by round-table meetings and business brunch gatherings and discussions. Guild will protect its members via expert assistance for compliance, support and indemnification in their daily businesses. However, being a member of Guild is much more than just access to free relevant educational seminars and trainings. The seminars and educational themes cover a range of topical subjects across sectorial expertise, but also law, tax and policies. High profile speakers will be hosted regularly by the Guild. Guild works closely with labour agency (Croatian Employment Service) in securing that workers are available and that no conflicts come out of the about legal regulations. VET school provides internship of young construction school students. Guild representatives and Home Improvement Centre staff develop close relationship with all Guild members and the type of trust that comes with a long lasting, quality service. In addition to serving its members, Guild also helps them meet the demands of the companies above them in the contractual chain (if member is subcontractor) in order to achieve security in payments and respecting the contractual requirements. Towards the clients, the Guild provides contact to all construction (and property related) services. It helps and connects the client with the contracting companies or individual subcontractors. In doing so, the Guild absorbs segments of legal and tax risks that would otherwise be borne by clients or construction companies.

1.3. COMMUNITY SERVICE GOALS

There are numerous reasons for developing Home Improvement Centre as Slavonia Construction Guild's operative institution. Project partners envision Home Improvement Centre serving and benefiting community of Pozesko-slavonska county (and wider) by Increasing investments in property improvement in the region Improving business performance (profitability, efficiency) of regional construction SMEs Creating small construction companies partnerships for easier applying to public tendering procedures Creating local employment and training opportunities Educating local community and investors about energy efficient solutions in construction (and building maintenance) by holding lectures, workshops to the public Increasing the availability, quality and quantity of local property improvement initiatives and investments (building and construction) Providing services and advice for local population Assisting construction SMEs in attempt to respect all legal requirements about construction business Feeding eventual excess of income over costs back to the community through improvement of VET school construction department and conditions for work in vocational program

1.4. MISSION
to significantly contribute to the growth of regional construction sector and increase of number and value of investments into property improvement or new construction in the region. Access to improved and better services of local companies will stimulate energy efficient initiatives and activities. Home Improvement Centre will achieve this by forming a direct connection between investors (clients) and construction companies built on knowledge exchange and relevant information. Strong relationship between members of the Guild will become a seed of new and stronger joint cooperation and synergy in operative performance.

1.5. SLAVONIA CONSTRUCTION GUILD

The Slavonia Construction Guild is a networking platform that assists in provision and search of high-quality construction services in the region. Its members' have great overall experience in working as contractors and subcontractors and through their connection achieve even higher level of reliability, quality and sustainability. Slavonia Construction Guild will be an economical interest grouping, established by construction companies and institutions in the fields of building design, consulting, engineering, contracting and production of building products. The main goal of the Guild is to improve domestic regional competitiveness of its members through commercial cooperation and networking, education, training and even some policy action. Guild vision is to become a network of construction companies offering complete solutions for the regional (and wider) market. Guild will build its long term competitiveness on technological and organisational innovations, development and quality. Slavonia Construction Guild operates informally through Home Improvement Centre, coordinating and assisting the work of the Centre's work by direct involvement in its organisation and performance. ACTIVITIES: By providing its members with infrastructure, services and coordination of development projects, the Slavonia Construction Guild creates conditions for: Increase of productivity and business efficiency Increase of innovation and transfer of good practices The growth and development of competitiveness through the application of clustering principles Efficient training for personnel Mutual business and other cooperation in the value chain Search for new business opportunities in the region, and wider Protecting interests and cooperating with the government and other public institutions, financial organisation and other.

KEY TECHNOLOGIES that Slavonia Construction Guild members could offer are: structural and architectural design of buildings, roads and highways, bridges, viaducts, underpasses, overpasses, galleries and retaining walls, wastewater treatment plants, hydropower plants, repair works and special technical solutions, consulting, engineering of buildings and civil engineering works, in indoor environment, energy in buildings, in geotechnics, geology,
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technical consulting, quality assurance and supervision, expert opinions, inspection, examinations and testing of concrete, mortar and of products, aggregates and stones, conformity assessment and certification, construction contracting of buildings (apartments, business and industrial buildings), civil engineering works, communal infrastructure, external arrangements (asphalt, stone-pits, horticulture), prefabricated products for construction of apartments, hotels, hospitals, construction materials and products, stonecutting, building shuttering system, building and stone restoration, sustainable construction, environment management systems ISO14000, EMAC, IPPC. Guild defines topic-related teams of experts (tax, accountancy, law, construction, energy, financing) that work jointly on achievement of full legal and tax compliance of work of its members. Guild does not employ staff, but rather works through Home Improvement Centre work, and work of individual Guild members. It can be expected, after the initiation phase, when members of Guild experience the concrete advantage of networking and joining the Guild, there could be suggestions of further formalization of the network, and development of professional service to each of the members. Slavonia Construction Guild staunches commitment to genuine selfemployment.

GUILD BENEFITS
FOR COMPANIES
-Identification of common needs and its improvement -mutual development projects -cost sharing -development of human resources -increase innovation -business climate improvements -access to new markets

FOR EDUCATIONAL INSTITUTIONS

-knowledge of industry needs -tailor-made education -applied research -profit from research and development -technology transfer -access to funds

FOR PUBLIC SPHERE

-targeted support -support of competitive industry -region specializations -FDI attraction -improved competitiveness

Improved communication, common needs identification Realization of mutual projects 11

2. HOME IMPROVEMENT SECTOR

Home Improvement is a concept that joins together several interrelated sectors of economy: building and construction; home maintenance; installation and repair (heating, cooling), energy efficient investments and interior optimisation and redesign. Primarily it focuses on the construction sector, that covers in a wider sense all these mentioned subsectors. The construction sector in Croatia makes a very important part of the economy. It has reached in pre-crisis 2008. 8,2% of GDP, thanks to the growing investments (capital infrastructural projects, mainly road construction), but also apartment building. The construction sector has suffered a great loss in the last 2-3 years, coming to a level of 6,2% of GDP. Greater supply of demand for new apartments was not adequately compensated by other construction or home improvement activities on the market. The trend is not positive. The number of issued building permits is showing even worse immediate future for construction if there will be no readjustments to market change. Significant fall is evident not only in building construction segment, but also i traffic infrastructure. The overall investment capacity of investors and construction industry is lower. Since 2008 the number of persons employed in construction sector Number of building permits, source: DZS has constantly decreased, approximately for 20.000 workers. Around 38% of all employed work in segment of building construction, 33% work in civil engineering and the rest are working in specialised construction sectors. In 2011 there were 14.784 construction companies active in Croatia. 88% of them are smaller companies and crafts employing less than 10 workers. Generally, economic fall, unemployment growth and the decrease of income disposable for investments (due to the growing costs of food and communal costs) create a consumer's pessimism and delay the decisions to invest.

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The average salary in construction sector in Croatia in 2011 was 4.522kn that is 18% lower than Croatian average. The reason lies primarily in the lower educational level of construction workers (mostly without qualifications). The analysts expect in 2013 the continuation of negative trends in construction sector in Croatia. High unemployment, stagnation of income, low crediting, great number of unsold apartments, all influence the decline of construction works. Low-quality property prices are falling, and existing entrepreneurs (builders) should redirect towards the property improvement investments, in order to raise the value while waiting for buyers. Joining the EU (1.7.2013.) will turn the trend towards the greater demand. Available EU funds for investments should also affect positively the construction sector market. However, EU introduces many quality related preconditions regarding the property (legality, energy efficiency, environmentally friendly processes, adequate waste disposal, etc.). Growth of private investments is slowed down by administrative barriers and complicated procedures. The potential for growths can be seen in smaller reconstruction and renovation projects of public building (kindergartens, schools, building certification, etc.), in some cases funded by the EU funds. In the following years, it is expected that ENERGY and energy efficiency will be in focus of investors, as well as environmentally important projects (sewage, water supply and protection, and similar). Due to the great competition from large European construction companies, it is expected that some Croatian companies will not manage and will lose battle against competitors. This is why the segment of domestic HOME IMPROVEMENT projects is very important, since it is not interesting for the EU competition and leaves a vast area of market niches where construction crafts and SMEs can act. The solution is perceived in establishing of flexible and competitive CLUSTERS or other forms of associations based on well familiar knowledge, tradition and competences. Home Improvement Sector, as part of construction sector in general, is not without perspective (on the contrary). However, the existing model of work is spent. Decrease of living standard will influence the level of new construction and put stronger focus on adaptations, sanations, improvements, optimisation, and similar activities related to construction field.

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3. MARKETING AND SALES

Marketing and sales of Home Improvement Centre are derived from the actual situation of marketing and sales (business performance) of regional construction sector, that is Slavonia Construction Guild members and other construction sector actors. Construction companies in the county are going through a challenging period of adaptation, primarily due to previously described situation on national level, but also because of numerous upfront costs. In a competitive environment, operating margins of construction companies are slim, at ca. 5%. During construction booms, margins may reach higher levels, but still not high compared to other sectors. Key success factors for regional construction SMEs are: Efficient project management, especially in terms of planning (projecting, budgeting, forecasting availability of needed materials) Economies of scale and available resources (access to financing, labour force), possibly through networking and cooperation Reliability of contractors and subcontractors And quality of construction work.

The recognized key risks are: Underbids (bidding a contract at a price that turns out to be too low to complete the project) Possible cash flow instability due to early-on costs and relatively late incomes in most projects Rising costs of building materials and labour.

Investors themselves are also face with several risks, and this must be taken into account when observing the regional construction market. They experience the risks of: high administrative barriers, rising costs of services and materials, high level of land prices, high interest rates reducing access to financing (both for investors and construction companies). In this changing and hard to predict market environment for construction and construction related SMEs in the region, HOME IMPROVEMENT CENTRE will seek opportunities to help companies and investors (both parties of the investment) achieve greater satisfaction with the investment in terms of return and profit.

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3.1. MARKETING
Certain aspects of the county's construction sector have been investigated in order to define how Home Improvement Centre should act and operate. The defined characteristics of the regional construction SME sector in Pozeskoslavonska county (and even wider) are: There is a public commitment that small construction companies survive Quality of service and customer relations are not on high level Accumulated experience and practice of construction crafts Population decline, particularly in villages Industrial decline, due to the difficult process of transition to a free economy and closing down of big systems; lack of domestic and foreign direct investments, dependence on imported goods, negative financial results of companies High unemployment in the county, while the number of employed persons in the county shows even worse situation (large number of inactive population, or emigration) Stagnation in investments in property due to economic crisis Poor working conditions and low educational standard Fast changing legal framework.

Considering the above described situational facts, Home Improvement Centre MUST BE A REGIONAL CENTRE serving Pozesko-slavonska county, but equally all neighbouring counties. In its work, it must focus on emphasising the strengths of the situation, and mitigating the weaknesses. Hence, from the above defined facts, arise possible services that can be provided in the Centre:
SITUATION: -There is a public commitment that small construction companies survive -Quality of service and customer relations are not on high level -Accumulated experience and practice of construction crafts -Population decline, particularly in villages -Industrial decline, due to the difficult process of transition to a free economy and closing down of big systems; lack of domestic and foreign direct investments, dependence on imported goods, negative financial results of companies ANSWER: -public-private partnership and networks could trigger the development -training and skills improvement is in focus of educational activities -promotional efforts must be improved in order to attract new clients -investments into renovation, demolish -assisting the growth of SMEs, management and entrepreneurial training, consultancy on foreign supply, accounting basics training, cash-flow control in SME businesses, successful contracting to large companies, quality service management upgrade

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SITUATION: -unemployment in the county, while the number of employed persons in the county shows even worse situation (large number of inactive population, or emigration) -Stagnation in investments in property due to economic crisis -Poor working conditions and low educational standard -Fast changing legal framework

ANSWER: -human resources development, how to recruit the best people, investing into people, reskilling of labour, new markets in other regions -informing about investments in property and home improvement (cost reduction) -working and health conditions on workplace standard implementation -training on legal requirements for SMEs

It is important that the Centre starts small. It will probably take 3-5 years for Centre to fully develop all its envisaged services and to become a reliable and recognisable point in the eyes of construction SMEs, as well as their clients. Stakeholders must be patient during the early developmental stages. It is also important to note that the development and strengthening of Slavonia Construction Guild is what is going to drive the Home Improvement Centre forward. Initially, the focus of the Home Improvement Centre should be on developing programs and activities that would benefit the Slavonia Construction Guild members, their employees and employees of their subcontractors. It should begin by utilizing educational and training programs provided by the project initiator (VET school) and their associates (suppliers of specialized materials and equipment). As the Centre develops, it should expand on these programs (management, tendering, work safety, energy efficiency, informative lectures for public and investors ). Programs should be selected according to the level of its immediate practical application, and based on the real demand for concrete training curricula (or subject of presentation). Enhancement of recruitment of new workers and retaining the current ones should be priority in terms of goals and objectives of these programs (considering the benefits for VET school). A number of technical training (and certification) programs are needed for the region and would be offered at the Centre. Participants will be able to receive training in carpentry, masonry, electrical, HVAC, plumbing, tiling, flooring, and other related construction skills to prove the needed skills sets for area's employers. Centre will develop ad-hoc and tailor-made programs according to particular need of construction companies (specialized skills in application of new materials or methods, computer training, drainage, etc.).
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In the second phase of its development, Home Improvement Centre should develop in sense of providing online and distance learning technologies, in order to expand to the wider area than the regional market, and to achieve the sufficient critical mass to be cost effective in providing educational offerings. Details of market approach (4P: product, price, promotion, placement) will be defined in the Marketing Strategy that must be developed immediately after the launch of the project. Marketing Strategy should build upon and promote business opportunities in the prominent construction and building sector of the region. Marketing Strategy must have these key strategic aims: Expansion of the brand of Home Improvement Centre by communication of its benefits that Under the Slavonia Construction Guild you are in a better position working together than you are individually Developing longer term sectorial partnership in which local companies and educational institutions can collaborate and work together on joint Guild initiatives Promoting construction and building sectors as cornerstone industry of the County's economy and as a strategic knowledge based growth sector, that can attract additional investment, talent and jobs Communicate to citizens the many opportunities for smart solutions in their properties and homes that save energy and money.

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3.2. INITIAL TARGET MARKETS AND PRIMARY CLIENTS

The initial target market of the project make companies and population of Pozesko-slavonska county, primarily construction companies. Recently, Pozesko-slavonska county has experienced a decline in each of the most important industrial areas (textile, furniture, agriculture), and employment futures of many of the residents are threatened. The initial concept of Home Improvement Centre was developed in 2012 as a result of the following identified needs related to providing residents with skills that would ensure their employability: technical education, career education, entrepreneurial skills, lifelong learning. Considering that construction sector is one of the prosperous ones in the region, it was chosen to be supported through this project. Home Improvement Centre will become an umbrella organization, offering different services to construction SMEs, but also their clients, and investors in construction related projects in the region. Since the project represent a unique and pioneer idea in the region, the demand for the services of the Home Improvement Centre will have to be created through well thought marketing campaign. Primary clients of the Centre will belong to two main groups: a) Construction SMEs in the region, at least 10 regular clients, members of Slavonia Construction Guild; at least 20 occasional clients, participants at Guild events and meetings; and at least 20 clients not interested in activities of networking, but joining trainings and lectures. b) Construction SMEs' clients investors into their home improvement, at least 60 participants in the first year of Home Improvement Centre's work, to grow to expected annual number of participants at informative lectures of 180 individual participants. Secondary group of clients belong to (estimate cca 200 persons / year): c) Unemployed persons, looking for quality education and training, or connecting to available employers through network of the Guild d) High-school students, improving their skills and getting relevant and immediately applicable knowledge, connected to employers e) Experts, consultants, developers, contractors, researchers, scientists in search of partners for their projects.

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Developing various communication tactics will be crucial to disseminate information to various target audiences. It is assumed that the brand of Home Improvement Centre will be maintained and incorporated into each of these projects. 1.WEB PORTAL www.unapredenje-doma.hr

The Internet will be the main source of information for potential customers seeking information about the regional construction opportunities, service providers, members of Slavonia Construction Guild, smart construction solutions, energy efficient building, etc. It is imperative that web portal maintain a highly functional, informative and user-friendly website. In order to achieve the full potential, it must be populated with relevant and timely information. For example: industry news, articles, white papers, news clippings, upcoming events in the region regarding new investments in the sector, events, tradeshows, benefits of Slavonia Construction Guild, membership conditions, testimonials from businesses in the sector, links to relevant institutions, etc. Regular maintenance and updating is very important and certain time and resources need to be put in place to ensure this. This website should provide a favourable first impression of the Slavonia Construction Guild and Home improvement Centre for those who visit it. It must be up-to-date, well-populated and easy to use, at all times. 2.PROMO NOTEBOOK and other printed material As a unique way of providing relevant information about the Home Improvement Centre, the staff will contract a distinct product: Promo Notebook. This will be a regular small (A5 format) notebook, with available space for writing. The special feature of this book will be the information about the Home Improvement Centre in the bookends, providing a quick overview of the Guild and the Centre. This way, the information about the Centre will stay longer at disposal to all that receive this promotional product. Other very important element of the Centre's promotion are business cards, created for all Home Improvement Centre staff, but also for the interested Slavonia Construction Guild's members (with Guild LOGO), as a way of creating a brand. 3.REGIONAL CRAFTS TRADESHOWS participation Every year, there are tradeshows in Pozega and other towns (Pakrac, Slavonski Brod) where participation of Slavonia Construction Guild and Home Improvement Centre will be beneficiary for Guild members, as indirect way of their presentation.
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4. TECHNICAL AND ORGANISATIONAL REQUIREMENTS

The project depends on the great support of local stakeholders. This is why the project's technical and organisational elements should remain SIMPLE and CLEAR, understood by all participants in the partnership.

4.1. LOCATION
The location of Home Improvement Centre is in the premises provided by the Vocational school Pozega, above the existing construction workshops and labs (masonry, carpentry, wall-painting). The building, that was used as horse stable, is very old (more that 100 years) and it used to be a part of big manor's property. Conservation experts were involved in the development of the technical drawing in order to preserve all the architectual values of 19th century. External outlook must be fully respected, while indoor lay out will be adapted to the modern and relevant purpose, beneficial to the community.

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VET school construction workshops April 2013

4.2. REFERRAL AND RESOURCE NETWORK CENTRE

Although a more detailed operations analysis and consisting expertise is required prior to the initiation of operations, the following sections outline the expected operational design of the Home Improvement Centre, run under the Slavonia Construction Guild's mentorship. Home Improvement Centre will develop in form of referral and resource network centre for its users. In this sense, REFFERAL means that it provides users (construction SMEs and investors) with efficient and quality service, specialized in field of construction and energy efficiency. RESOURCE means that it offers current and comprehensive information about all related topics, or it directs towards the information source. NETWORK means that it relies on the work and service of all involved project partners and their associates in provision of above described services. Home Improvement Centre specializes in answering questions about regional construction sector, but also about Pozesko-slavonska county economy perspectives. Centre's staff help clients navigate through all the Centre's resources and services, provide expert referrals, and promote and provide ways for clients to get connected with contractors and stay informed about their investment. Home Improvement Centre will succeed only if construction sector in the region shows increase rate in level of income and number of employees.

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In the pioneer phase, in the first years of the Centre's work, it is important to stick to the clear idea of Home Improvement Centre, with its defined goals and strategy. A strong initiator (Vocational school Pozega) will remain for some time an informal leader of the project, offering guidance and motivating other stakeholders to join the project. Decision making must stay simple, without procedures (by consensus). Assignment of duties should be based on individual wishes, more than qualifications (since the level of motivation is a crucial success element of this project). Since Vocational school Pozega sees great interest in development of this project, in order to preserve the construction occupation and to provide more and better jobs to their students, it will secure all the technical, as well as human resources for the initiation of this project.

4.2.1.

PREMISES AND LAYOUT

While the Home Improvement Centre received a strong support by the regional construction companies associates of Vocational school, as expressed in the survey interviews, they also urged caution, recommending that the Centre dedicates necessary edifice in realistic dimensions and connected to the expressed level of local needs. In order to have local ownership of the building, which contributes to the sustainability of the project, the Vocational school Pozega has agreed to consign its premises (that need to be reconstructed) above the existing construction, wall-painting and carpentry workshops and labs for this purpose. The specific location is excellent for such a purpose, since it is the position in the middle of high-school educational complex centre, only 3km from the Town's centre, but in the quiet and easily approachable place (easy for finding and for parking). During the first half of 2011, the architects have proposed a draft of the reconstruction of the old attic above the construction department workshops. It is an edifice of total surface of 472,48 m2, out of which 218,80 m2 are classrooms, 74,56 m2 are cabinet offices, and the rest are staff-room (lounge), toilets, and hall. The first concept of the draft had in mind only the narrow school purposes (classrooms and staff cabinets), without expansion to other fields of community influence. However, previously described problems in the sector have asked for a strategical turn in sense of assisting the construction sector in the region, so that VET construction school could maintain its economic
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justification for its work, and that students could more easily find a way to employment in the sector.
EXISTING GROUND FLOOR 1 2 3 4 5 6 7 8 9 Carpentry workshop Office Hall Entrance hall Toilet Depository Masonry workshop Office Wall-painting workshop TOTAL: NEW: RECONSTRUCTION OF GROUND FLOOR 3 4 5 6 10 11 Hall Entrance hall Portal Depository Toilet Toilet TOTAL: NEW: 1ST FLOOR 1 2 3 4 5 6 7 8 9 Hall and stairway Toilet Classroom1 Cabinet office CONFERENCE ROOM (ex:Classroom2) CLASSROOM (ex:Cabinet office) Classroom3 CABINET OFFICE (ex:Classroom4) ROUND TABLE ROOM (ex:Staff-room lounge) TOTAL: m m m m m m m m m
2 2 2 2 2 2 2 2 2

m m m m m m m m m

2 2 2 2 2 2 2 2 2

193,78 8,01 49,35 5,7 5,54 1,9 139,84 6,11 56,4 466,63

m m m m m m

2 2 2 2 2 2

27,73 10,6 4,98 4,78 8,46 10,27 66,82

129,28 10,69 42,96 32,7 74,25 41,86 44,72 56,87 39,15 472,48

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24

25

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There will be 2 offices (cabinets) for expert services, 3 classrooms for traditional educational programs of the sector (smaller groups), 1 conference room (50 persons), 1 round-table room (18 persons seating) and necessary sanitary or communication space (halls, entrance port, presentation and exhibition area). Since most of the training that will take place in this facility revolves around the construction industry, there is a need for a larger open space that allows for large samples to be moved in and out as needed. Classrooms will be specialized for different areas of construction (1- CONSTRUCTION PHYSICS with presented materials and equipment for saving thermal energy and calculation of heat insulation coefficients; 2- BUILDING CONSTRUCTIONS related to construction structures of buildings, with sectional views; 3- HOME INSTALLATIONS, including electrical, plumbing, heating, ventilation and other) with available LAB EQUIPMENT (chemistry, physics) for easier demonstration.

4.2.2.

EQUIPMENT AND RESOURCES

Office furniture, video conferencing and other capital expenditure, such as new computers and software are required. This will present an additional startup cost of Home Improvement Centre. Detailed list of furniture and equipment items is presented in the Cost-benefit analysis financial presentation. Equipment for energy audit is presented on next page. The entire building must have secure broadband wireless access to Internet. Portability will be the key to maximizing the use of equipment and taking advantage of the flexible space the building offers. Consequently, all or most of the computing should be via notebook computers that may be moved from space on carts. Likewise, most of the desks, chairs, etc. (in classrooms) should be stackable on portable carts to accommodate easy setup. Twoway audio and video for conferencing and instruction can be provided with portable systems. To the extent possible testing equipment, engineering simulation stations, and other lab equipment should be on wheeled workspace so they may be moved from space to space as needed. Centre will have relevant software programs related to construction works, preferably for provision of 3D simulations. Special equipment for energy audit will also be procured. The detailed presentation of this equipment is visible on next page. In order to enable efficient work, it will be necessary for the Home Improvement Centre to purchase a simple vehicle, for the field work of the Centre's staff.
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1.

Blower door. They help evaluations and aid diagnostic work. While the common thermal bypasses are well known, a blower door can starkly show the extent and size of air leakage problems. Infrared camera Helpful for locating air leakage, moisture issue, thermal bridging, or insulation irregularities that can lead to poor thermal performance. Useful in visually demonstrating building problems to homeowners.

2.

3. Digital pressure and flow gauge. It is integral to blower-door testing but is also very useful on
its own. Zone diagnostics (poking air tubes into rooms and framing cavities) is very informative. Pressure gauges can more finely detail the heat loss and air leak pathways. A pressure gauge is also used for flue gas pressure testing and depressurization testing of the combustion air zone.

4. Gas leak detector. For natural gas and propane heating systems. 5. Carbon monoxide detector. Carbon monoxide levels need to be monitored during an
audit. The heating system is checked with the combustion analyzer and this monitor tracks atmospheric CO in the house throughout the audit.

6. Combustion analyzer. The combustion analyzer tests the efficiency of heating and hot water
systems. It can test flue gases for O2, CO2, heating system efficiency and carbon monoxide. It can also double as a CO detector.

7. 8. 9. 10. 11.

LED flashlight. Digital camera. Longer heavy-duty extension cord. Tape measure. Cordless drill. Many times the heating system exhaust pipe doesnt have an access hole drilled yet for the combustion analyzer probe. A drill is also needed for checking inside a wall cavity. full ladder might not fit in an awkward closet. A heavy-duty telescoping ladder will make snaking through a clothes closet to the attic hatch that much easier.

12. Telescoping ladder. Attic access hatches are often tucked away and hard to reach. A

13. Moisture meter. Hygro psychrometer allows to quickly read several moisture measures,
including relative humidity. While no substitute for year round metered data and observation, it is incredibly useful for gaining a sense of the moisture levels in a building.

14. Fiber-optic borescope. Borescope allows looking inside wall cavities, sealed
crawlspaces, duct work. Useful for figuring out whats happening in the building shell.

15. Pin-type wood moisture meter. This device is very useful for testing sill plates or
other structural elements you suspect may have moisture issues.

16. Pinless moisture meter. When testing moisture in finish wood, trim, or other surfaces. 17. Non-contact voltage detector. Testing whether they are live is important as insulating
near or over live knob and tube is a potential fire hazard.

18. Laser tape measure. 19. Distance measuring wheel. 20. Wizard Stick smoke creator. Useful for tracking air flows when the blower
door is running. It creates a pretty arresting visual when the smoke is sucked through a crack no one suspected was a problem.

21. Hat with LED light.

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4.2.3.

SPECIALISED FEATURES

Home Improvement sector covers a wide area of very different segments, but all related to improvement of living and resident conditions. Trends put focus on living in harmonization with the nature, self-sufficiency in terms of energy, simplicity of maintenance, minimalism of refurbishment, and similar all for the purpose of freeing time and money for greater quality of life. This is why Home Improvement Centre will make an effort to become a reliable advisory institution, a starting point for all home improvement related projects, where investors come and ask for free advice and consultancy. Some specific services, that require greater time and engagement of additional resources, will be charged at competitive prices. Home Improvement Centre's staff will be trained and educated to provide relevant information and services in matters of following issues: RENEWABLE ENERGY working together with investors in order to define optimal solutions that help save and earn money, through application of latest tools, technology and analytics. Clients could receive set of deliverables, in form of documents, plans, drawings. After initial in-person consultation, and development of drawings, 3D (4D) walk through presentations can be provided. Contacts with regional contractors. HOME REPAIR AND MAINTENANCE a list of local providers of home repair and maintenance services will be provided. Consultation on solutions. USING NEW MATERIALS AND METHODS IN CONSTRUCTION - having excellent communication with suppliers and producers of available new materials in construction sector, enables regular presentations and trainings of using such novelties. Providers offer these educations without charge for participants. INTERIOR DESIGN & OPTIMAL ORGANIZATION OF SPACE providing samples of colour schemes, or furniture online shopping examples, Home Improvement Centre staff can provide floor plan with furniture layout to help investors to use their homes in the optimal way (functionally). Having catalogues of suppliers, the Centre's staff will suggest accessories, light solutions and other tips for modern interior design and organization. 3D VISUALIZATION OF SPACE using high-tech software solutions (CAD) RENOVATION OF FURNITURE AND EQUIPMENT having carpentry workshop, and experts in furniture production, clients will be provided with relevant advice on how to reuse the existing furniture items, hence be environmentally savvy.
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4.2.4.

ENERGY EFFICIENCY SPECIALIZATION

Energy use in buildings accounts for over a third of total energy requirements and offers the largest single potential for energy efficiency (excluding the industry supply). Since Croatia is joining the European Union, a Directive on the Energy Performance of buildings will have to be respected, meaning that some energy standards will have to be adopted. Furthermore, building owners will have to label the information on the energy consumption of the building (energy quality)1. Also, when selling or renting a building, this label must be available. It is an instrument of price differentiation, since high energetic quality means lower costs for heating or cooling. Investments to energy efficient living are definitely expected in the future period in Croatia, since huge potential lies in this field. Energy audit programs must precede these investments, and these services are targeted to all endusers. HOME IMPROVEMENT CENTRE in the field of energy efficiency will act as nonprofit energy consultant. The expert staff, together with the cooperatives and outsourced associates, will approach individually to every project, and help the investor (owner or other) to determine how to make his home or business premises more efficient and to close the financial construction. VET school teachers will undergo the certification for energy audit and efficiency and will work together with the client. The priority will be to become the investor's advocate throughout the process in order that he gets the best deal at the highest standard of quality. Energy efficiency is a complex issue that concerns few things in isolation. Air leakage in the attic, level of insulation in walls and ceiling, size of heating or cooling appliances, etc. all influence the level of energetic quality. This is why a whole house approach is necessary that views all parts of one home as a connected system. PROCEDURE: STEP1 contacting Home Improvement Centre through website or by phone. Centre's representative will explain how the investor can access subsidies and financing to upgrade his home, and will offer to conduct a low-cost energy consultation to get the process started. They recommend a package of retrofit measures that maximizes savings for the lowest cost, while ensuring there are no health or safety hazards.

So far, only buildings larger than 1000m2 are included in the directive.

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STEP2 connecting the investors with local energy contractor to conduct a complete home performance assessment. They provide him with a clean, understandable plan to improve home's efficiency and calculate the potential energy savings. Full energy assessment should include blower door test (measuring leaking of home, infiltration, exfiltration), building envelope inspection (evaluation of windows and doors, insulation check, thermal infrared imaging), HVAC inspection (HVAC heating, ventilation, air conditioning), appliance and lighting evaluation (cooking appliances, light fixtures, proposal for more efficient lighting), health and safety testing (ventilation, checking for mould, carbon monoxide, asbestos, ). STEP3 Client's home undergoes an energy efficiency retrofit, meaning the life in a healthier, more comfortable and less expensive home. Home Improvement Centre staff follows the investor during his investment procedure, documents it and (with permission) displays the proof of home improvement initiatives online. On the web portal of Home Improvement Centre, the staff will develop a simple online tool for calculation of potential energy savings in homes. Giving some basic information about their home, the investor gets the indicative guidelines about the results of their investments and results that can be achieved.
Illustration:

Illustration:

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4.3. HOME IMPROVEMENT REFFERAL AND RESOURCE NETWORK CENTRE BUSINESS MODEL
WHY? The project here presented was developed to address the most recent challenges in the regional construction sector, through initiative for sectorial guild creation. Focus is shifting from construction of new buildings to maintaining and repairing them. Thus construction companies have to change in a way that they not only offer basic construction services but rather a whole life-cycle package, including maintenance. This also should include data management on property, and being able to react to eventual needs Another issue related to regional construction sector is the fact that the average age of construction workers is high and that the sector does not have a very glamorous image. Recruitment is difficult. Few students study building and construction and dropout rates are high. Furthermore the mismatch between what students learn at VET schools and real life is a problem. Guild of regional contractors was identified as a much-needed collaborative synergy between regional construction SMEs, organized in a less formal way, as a series of projects that develop and implement the tools and methods necessary for sectorial development, is what has been imagined. More specifically, work on support to regional construction SMEs and their clients, through Home Improvement Centre business model. HOME IMPROVEMENT CENTRE, as referral and resource network centre leaned on the work of Slavonia Construction Guild, is dedicated to unlocking of economic potential of Pozesko-slavonska county (and wider) construction sector, through support to entrepreneurs and small business formation. Home Improvement Centre works focus to all entrepreneurs connected to the PROPERTY & HOME related activities, but primarily contractors in construction, helping them navigate the difficulties of running and advancing a small construction business. Centre's staff in their work use innovative approach in counselling and business assistance. Home Improvement Centre raises from the unique partnership composed of educational institutions and economic developers (companies), as well as regional and national agencies (Chambers).

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GOVERNANCE After reviewing several governance structures for similar type of facilities, some potential models were researched in detail. Based on consultations with project partners, and future members of Slavonia Construction Guild that the Centre will likely have several funding sources, the best governance model would be to establish a separate department within the existing vocational school (public institution). Home Improvement Centre, as part of the Vocational school, will not have separate management, and will be supervised by the School Board. Slavonia Construction Guild, on the other hand, will constitute a 3-member Board out of 2 representatives of construction SMEs and one representative of project partners. The Board will have the authority to decide on the work of Slavonia Construction Guild and to recommend the features of activities of its Home Improvement Centre (except the disposition of the building premises of the Centre that remain under the school management)2. All major decisions will have to be confirmed by the Guild's Assembly (brought by the majority of all participating members of the Guild, on monthly meetings). The Board will observe the work of the Centre's employees and give recommendations on how to improve their work. The meetings of the Board must take place at least once in three months. It is essential that construction entrepreneurs remain on the Board to achieve local leadership and ownership. Keeping the management simple and the Board small and functional is important. The Board should meet on quarterly basis (minimum). In its work, the Centre must act individually, in order to be less restricted in its approach to develop partnerships with multiple agencies. By including different agencies, institutes or development centres, Home Improvement Centre will be in position to act in collaborative fashion towards the support to regional construction sector. Home Improvement Centre's staff will have responsibility of reporting twice a year to the School Board and to the Board of Slavonia Construction Guild.

Home Improvement Centre is an institution defined by its activities and recognition in the community, rather than a building or a formal bureaucratic body.
2

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4.4. KEY STAFF POSITIONS

The key position in the Centre will be 2 members of staff, constantly at disposal to Slavonia Construction Guild members and to clients-investors. The special type of institution and distinctive regional circumstances in which this project is developed has imposed a particular organisational scheme that encompasses all the competitive advantages offered by the VET construction school. The first Home Improvement Centre employee will be the BUSINESS CONSULTANT, who will need to provide overall management and guidance for the organisation in addition to construction business development. Estimated salary would be 1100 EUR monthly (approximately 2000 EUR including benefits and travel). Business consultant will specialise in issues of land registry (legality of buildings), work protection, accounting, bookkeeping and tax regime of small construction companies, public procurement elements, preparation of procurement documentation, waste disposal regulations, and other administrative and legal elements important to construction business. This will be a person employed externally over open call for job vacancy. The required professional experience of min 10 years. Education in economy or law. The second Home Improvement Centre employee will be a CONSTRUCTION ENGINEER, a representative of VET school Construction department. This will be a person available at all times to investors and clients, providing them with his/her advice and consultation regarding the choice of optimal solutions in home improvement or building. However, this will be an employee of VET school (teacher) and will be reassigned from the group of 6 construction engineers in school. All of these 6 engineers will occasionally work as consultants in Home Improvement Centre, depending on their schedule in school. In the Centre at all times will be one person present (8h per day), but working in shifts. This way the Centre will be in position to provide the expertise of all employed school construction experts (engineers), and not be burdened by additional staff costs. Within their regular work hours, the school staff has available working hours for additional tasks, and engagement in Home Improvement Centre will be one of them. In the fifth year of work of Home Improvement Centre, this Study envisages the employment of ELECTRICAL ENGINEER with focus on issues of energy efficient buildings, passive houses, energy saving and renewable energy sources for individual small investors.
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5. SERVICES
Home Improvement Centre is established in order to serve regional construction companies in their attempt of improving their businesses, increasing level of income and profit, and developing new demand on the regional market. Always having that in mind, all the services provided in the Centre will serve these objectives. The services should be offered free of charge or at minimal price that enables sustainability of the Centre (covering only operative costs of the Centre). Acting as referential point of all Slavonia Construction Guild members, the Centre will be their representative institution. Its mission is to empower local builders and construction professionals in the region, who have the reputation for good work at a fair price. Home Improvement Centre is also an institution open for public. It should create a new and smart demand for new services related to construction investments. Local population is facing a low living standard and small average wages. This is even the reason more why their properties need investments into energy efficient home improvement, or even into renewable energy home-based projects. Project partners have identified that sometimes investments are not limited only by the available resources and funding, but also with the lack of relevant information (about loans, new efficient methods, materials). Services of the Home Improvement Centre are directed into assisting the entire construction sector in the region.

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5.1. DELIVERY OF SERVICES TO CONSTRUCTION SMEs

Having in mind that most of Slavonia Construction Guild members work by referral only and do not advertise one of the services of the Home Improvement Centre will be to connect, promote and brand each member. Strong referral base is not built over night. It takes a solid track record over a long period of time to earn the trust of customers. Reputation depends upon the quality and cost of the work. This is why the Guild shall offer, through the Centre's platform for promotion, a set of free services for promoting the work and businesses in the Guild. Without having any preferences, all construction SMEs in the Guild will be offered to be promoted the best possible way over the Centre. NETWORKING PROMOTION BRANDING - EXHIBITION HALL Regional construction SMEs, in general, do not invest anything in their own promotion. Using word-of-mouth principle, they wait for clients to come and rely on the fact that previous clients will provide contact information (mobile phone number) to new clients. This is the model of promotion that 90% of regional construction SMEs use. Establishing of Slavonia Construction Guild and its operative body Home Improvement Centre can change this, in a systematic and sustainable way. Centre's staff will create a detailed regional construction SMEs Directory (database) on WEB PORTAL, where all members of Guild (but also other companies) will be presented, with all contact details and description of specialisation. Guild members will further on be presented even with referential works (photo galleries). Graphical presentation will clearly show by location available contractors and their specialization. According to preferences, it will be possible to present with more information the individual contractor (owner, prices, staff expertise, etc.). Home Improvement Centre will provide space for permanent exhibition of quality works of regional construction SMEs, as a form of systematic and attractive tradeshow presentation. Rarely regional construction SMEs have time or money to participate in the crafts tradeshow, or they do not see the immediate interest in this. Centre's available space (wide hall) will attract visitors and show good example of works in home improvement projects. CORPORATE TRAINING EDUCATION LECTURES - PREQUALIFICATIONS Skilled and adaptable labour is needed in order to develop the SME sector. This is achieved only by dedication to life-long learning in all segments of life. It
36

is necessary to support prequalification and training programs in the small economy, since inadequate offer of skills in the labour market prevents new jobs creation and long-term development of the sector. How this can be done3? By supporting the modernisation of business activities through education of entrepreneurs By supporting the improvement of vocational competencies of entrepreneurs and their employees through engagement into different forms of informal education (seminars, courses, etc.) By provision of expert support to key aspects of business management, like innovation, quality management and marketing By developing new models of approach and adoption of bestpractice management and promotion of success stories in order to spread the innovative management in SME sector By supporting the general awareness of the necessity for education and training, and greater adoption of life-long learning principle.

Some sectorial educational topics that could be organised and conducted in forms of several days long seminars (or shorter lectures) are (according to the input made in the planning phase by construction entrepreneurs themselves):
-Advanced Entrepreneurship in Crafts -Brazing Approval -Chemical Safety Awareness -Confined Space Operations and Training -Construction Informatics and Management -Disability Access Application -Emergency Lighting Systems -Entry Level to Refrigeration & Air Conditioning -F-Gas & ODS Refrigerant Handling Theory and Practical Workshops -Fire Detection & Alarm Systems -Forklift Training -Introduction to Legislation & Standards in Maintenance, Servicing & Construction Safety & Activities -Managing Safety & Health in the Workplace -Ladder Safety -Legislation & Standards in Maintenance, Servicing & Construction Safety & Activities - Managing Safely for Construction Managers -Manual Handling Instructor -Mobile Elevated and Access Working Platform Training -Passive House Design

From the national Strategy of Entrepreneurship Development 2020, adopted in May 2013.

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-Project Management Professional -Portable Fire Extinguisher Maintenance & Servicing -Preventative Maintenance -Solid Fuel Awareness & Installation -Wiring Diagrams.

More general topics, but still concerning running and improving the business could include the following topics:
-Advanced Entrepreneurship in Crafts -Entrepreneurial Training Program- Are You Ready to Start a Small Business? -Building the Foundation for Your New Business -Business Basics -Start Smart -Crafting A Business Plan -Strategic Planning and Execution -Choosing A Legal Structure -Buying A Business -Entrepreneurial Training- Business Plan, Legal Issues & Info Resources; Financial Management -Finding Money To Start A Business -Creating Financial Projections -The Entrepreneurial Strategies -Hiring and Managing Employees -Accounting -Money Smart: Record Keeping for a Small Business -Understanding Advertising and Promotions -Creating Buzz: Small Business Marketing -Market Insight and Research -Pricing Strategy and Tactics -Competing with the Big Boys -Windows, Signs, and Visual Displays -YouTube Marketing for Small Business -Online Tools to Help You Work Smarter - Not Harder -DIY Marketing Tips -How to Be A State Contractor.

FOCUS GROUPS BRUNCH MEETINGS CONVENTION CENTRE RENTING PREMISES - Project partners predict solid demand for usage of Home Improvement Centre in the future, not only for Vocational school Pozega's school activities and Slavonia Construction Guild activities (networking and advisory), but also for other activities of the same kind (soft activities of counselling, education and know-how sharing).
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Town of Pozega does not have many places where events of more than 50 participants can take place4. Home Improvement Centre's advantage in this case lies in its location and accessibility (closeness to educational institutions, available even in afternoon hours, etc.). Also, through cooperation with the Students' Dormitory where participants in educational activities could reside, the overall atmosphere of this Centre is the one of campus that stimulates the knowledge apprehension. Hence, Home Improvement Centre could expect the demand for usage of its premises (conference room, in particular), by other cooperating institutions for minimum 4 times a year. One of the most important elements of the project is networking element that connects all interested construction companies in the region, in a way that enables them better exchange of information and joint action in matters of common interest. The model of frequent and regular gathering that will be used within this project is already confirmed in many other sectorial networks in EU brunch meetings. Brunch is concept of morning meetings related to some specific topic with distinguished spokespersons, usually followed with light breakfast. The overall casual atmosphere creates an environment where all attitudes are welcome and where opinions can be expressed without prejudices. BRUNCH MEETINGS could be held each 2nd Friday (or Saturday), in the premises of Home Improvement Centre (round-table room). Slavonia Construction Guild will be established without the obligation of payment of membership fee for the first year. However, it is expected that after the first year the Guild proposes a yearly membership payment that will be symbolic in regard to quality services provided by the Home Improvement Centre staff. The second model of financial contribution to the Guild's activities could be through payment of each individual service provided. However, considering that the price of each service would be in total significantly more expensive than a package price the membership fee would be a smarter and more rational solution.

Besides large sports halls and hotel's restaurant areas, that are completely inadequate for such events, only Croatian Chamber of Commerce and Chamber of Craft dispose with lecturing space for more than 50 participants.
4

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5.2. SERVICES TO INVESTORS

Regional investments in property can be supported by provision of relevant and timely information. Several services of the Centre are described here. ONLINE SERVICE:
Illustration:

- ASK CONSTRUCTION EXPERT Through web portal of Home Improvement Centre clients and contractors are in position to ask direct and specific questions regarding their property or investment. Experts that will regularly answer to questions will be all members of the VET school Construction Department. Depending on the type of the question, Home Improvement Centre will seek for appropriate answers from authority institutions, all with purpose of developing the same-practice principle and exchange of valuable experience among regions. The service of answering to relevant questions will be offered without charge to clients.

- INTERIOR & EXTERIOR DESIGN SOLUTIONS As a promotional tool, on the web site, one client's request each month will be chosen to design a drawing on interior design solutions, without charge. According to availability, service of drafting the interior or exterior design solutions to investors will be provided at competitive price. - COUNCELLING ON FUNDING OPTIONS Investors are not informed enough about the possible financing options, not only about the financial institutions, but also about relevant subsidies or incentives (grants) that exist in the market. Centre's staff must have all related information on one place, or be familiar where such information can be found. - LECTURES Open to public lectures will be regularly provided connected to property related topics, in wide range of segments (i.e. legal status of property, building permit issuing procedure, solar panels in homes, energy saving, etc.)
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6. FINANCIAL PLAN
In order to make a Home Improvement Centre a reality, project partners have developed a timetable, with span of 2 years (related to construction) and up to 5 years (related to its full functionality and sustainability). Stakeholders must have patience, and things must be initiated with a defined schedule and proportioning. The Centre should develop in reasonable phases, as a process. According to the operative action plan of establishing the Home Improvement Centre, and based on the information from the technical design, a detailed financial plan (estimates) was developed. The exact figures and prices can only be defined after the conduct of tendering procedures for procurement of works or equipment.

6.1. ESTIMATES OF CAPITAL COSTS

An estimate of costs to build and equip the building was made during the planning phase of the project. The building cost is based on the Bill of Quantities made by the architectural design company KID d.o.o. that has drafted the building design. Costs of necessary equipment were defined through partnership work, during the planning phase of the project. EUR 399.561 for building, total of 472,48 m2 of facility EUR 47.100 for solar energy panels (30kWh) EUR 199.950 for equipment including: o Hardware for building-wide wireless network o Notebook computers o Portable two-way audio / video equipment o White boards, smart boards o Exhibition furniture and equipment o Energy audit equipment o Portable projection systems o Stackable chairs, desks, tables, etc. o Mobile workbenches o Office & conference room furniture o Lift platform for access of disabled o Soup kitchen equipment o Sanitary equipment.

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6.2. ESTIMATES OF ANNUAL OPERATING COSTS

Operating costs (including maintenance) are those post-construction costs necessary to ensure or verify the continued effectiveness of a remedial action. These costs are estimated on an annual basis. Annual operating costs include all labour, equipment, material and personal service costs that make the Centre's work possible.

6.2.1.

HUMAN RESOURCES

BUSINESS CONSULTANT, a newly employed person: besides provision of advisory services and consultancy to construction companies, the Consultant will conduct management and administration related trainings and seminars, but also supervise and take care of the facility, be a marketer of the facility, be a broker for education, training, services, work with Board to secure funding. During the set up phase of the project, he/she will also act as project manager. Working for 50% of working hours, his/her estimated year wage is 12500 EUR. CONSTRUCTION ENGINEER will be a person (persons) employed in Vocational school Pozega, who are in position to provide specialized service to construction companies within their regular working hours (additional work), and this cost does not add on Home Improvement Centre's operative costs. Will work for total of 12 hours/week, in a way that each VET school teacher dedicates every week 2 hours (within their additional tasks working hours) to working in Home Improvement Centre. ELECTRICAL ENGINEER will be a person employed in Home Improvement Centre, in the fifth year of the Centre's work to provide specialized advisory services to investors and contractors related to energy efficient investments, but also to renewable sources of energy that can replace the existing fossil oil based energy. Focusing on achievement of self-sustainable homes, this expert will work for total of 10 hours/week, being every day at disposal to client at the same working hours.

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6.2.2.

UTILITY COSTS

Concierge service, maintenance and janitorial service, as well as 27000 EUR per year for overhead costs (utilities, wireless & telecommunication access, other administrative costs) are covered by the funding of Ministry of education, since the building remains for the VET school purposes (due to the fact that during the vacant hours, the school will use classrooms and premises for regular school programs). Since the work of Home Improvement Centre mostly includes the intellectual services and counselling, it is not expected that it generates large utility costs. There are no large machines or equipment to be used within this project, so energy spending will be relatively small.

6.2.3.

TRANSPORTATION AND STUDY VISIT COSTS

As important element of the project, in the way of providing service to construction companies and clients, a vehicle must be provided to the Centre's staff and their work at field. Considering that Home Improvement Centre staff will operate on field, and that they must frequently travel to other institutions (Zagreb, Slavonski Brod, Osijek, abroad) in order to develop longlasting relations with other Centres of excellence, and to find adequate lecturers and experts, the project team finds purchase of the Centre's vehicle more efficient and more rational model of transport, than using private cars for the institution's work. The project also envisages organisation and conduct of different construction-related study visits to regions of good examples and best practice. Study visits will be covered by the fees of participants, in accordance to not-for-profit model of work, and organised with taking into consideration the professional purpose of the visit (simple and modest accommodation, staying at the host institutions, etc.).

6.2.4.

OTHER SERVICES COSTS

Construction works are a complex activity, frequently connected to legal and general economic issues. In order to be relevant in their consultancy work, and to cover the complexity of this sector, Home Improvement Centre will have to occasionally consult legal and other experts. These services will be used according to specific requirements, and will be paid based on the actual number of consultancy hours provided.

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6.3. PROJECTED INCOME AND PROFIT/LOSS

Income of Home Improvement Centre is derived from the set of services described in the 5th chapter, offered and provided for the regional construction companies and investors (clients, public). The project anticipates the establishment of Slavonia Construction Guild organisation whose members will be primarily supported by the Centre's service, and that will be interested to participate on regular basis in its financial support. Also, other more specific services will be provided for the general population in Pozesko-slavonska county, in terms of construction and energy efficiency, some to be offered without charge, other at competitive or symbolic price. The Cost-benefit analysis has presented details of income generation, where assumptions are that the Centre will offer trainings, lectures, promotion, counselling, and other services at low price, attractive for the regional companies and investors to use. Also, the Centre will generate income from production of electrical energy (and selling it to the electrical network), that makes an important element for sustainability and potential for improvement of Centre's activities and investing into new services and marketing products. NETWORKING monthly brunch meetings, round table meetings, focus groups, lectures of relevant speakers these activities will be offered to construction SMEs, at affordable prices. Total of 20 such events (minimum) per year will be offered at price of 2000kn (as subscription), or 100kn/event. PROMOTION through participation in Slavonia Construction Guild, all members will be strongly promoted within the promotional activities of the Home Improvement Centre. The staff of the Centre will produce promotional material (leaflets, booklets, brochures, business cards) of the Guild's members, and will work on their continuous advertisement and recommendation. Online promotion on the Centre's homepage will be possible. Home Improvement Centre will inform clients about the available contractors in the region, and provide contact. The price of complete package of promotion for each construction company will be 1000kn/year (simple package in detail defined by the Centre staff). BRANDING Home Improvement Centre will develop its own brand during time, focusing on the clients' trust, quality of service and relevance of its programs. The CENTRE must become recognizable as Construction Extension (Advisory) service. The interested construction
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SMEs will be offered to obtain the Home Improvement Centre's SIGN (logo, mark) as a proof of their engagement in the Centre's activities (showing that the company is investing in its growth and education). Joining the Centre's branded group will be offered to companies at symbolic price of 200kn/year. EXHIBITION Home Improvement Centre's premises will represent a constant exhibition space (tradeshow). The interested construction SMEs will have the option to present their referential work in form of section views (separates of walls, windows, etc.), large photos, ppt presentations, or similar. This option will be offered to companies at the price of 500kn/exhibition (i.e. 10 items of presentation, 30 days long presentation). CORPORATE TRAINING EDUCATION LECTURES PREQUALIFICATIONS specialized trainings, educations, lectures and other forms of transfer the knowledge and skills will be regularly organised and conducted in the Home Improvement Centre. Focus on competency based training (operating with equipment or material, in safe and effective manner) with primary role to ensure that participant has the skill to undertake a specific operation. Trainings are centred on demonstrations and application, while lectures remain theory based. Participation on each individual educational event will be offered at the least possible price (to cover the expense of the event), starting from the FREE courses or lectures, up to several thousands of kunas (for 40h trainings). SPECIALIZED WINTER SCHOOL FOR CONSTRUCTION SMEs in cooperation with the Students' Dormitory, every year a Winter school (course) for specialized training for construction SMEs will be offered. Duration of minimum 40 hours, and possibility of cheap and quality accommodation in the Dormitory could attract dozens of participants, from entire Croatia. Quality of program will depend on the expert lecturers, and program curricula. The package price without accommodation could be around 2500kn, while the package with accommodation and meals included will be 5000kn. CONVENTION CENTRE a small portion of the revenue for the Centre will come from renting its spaces and facilities to outside groups and businesses. Projections are very conservative because the priority will be for Slavonia Construction Guild members and partner institutions to use the Centre as much as possible to provide courses, stimulate regional business development and market local services.
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ASK CONSTRUCTION EXPERT these services will be offered as a promotional tool, primarily. One such service will be offered free of charge each month, online. Other services, if they will ask for more time and resource consuming activities, will be offered at competitive price (80kn/hour of consultancy work). INTERIOR & EXTERIOR DESIGN SOLUTIONS as another promotional tool, attracting the attention of investors on Home Improvement Centre's work and development of clients' trust, it will be offered (one every three months) free of charge design makeover projects. If asked more frequently, clients will be charged 500kn/design solution (3D). ENERGY AUDIT the project includes education and training of VET school teachers in segment of energy efficiency and energy audit servicing. These services will be offered to investors (and contractors) at affordable price of 800-2000kn/audit. Since new legal regulations demand that all properties receive certificate on energy quality, it can be expected that demand for such services will grow exponentially (min10 services in the first year, 20 in the second, with growth trend in the following). The alternative to the income presented in the Cost-benefit analysis is the possibility that members of the Slavonia Construction Guild cover the complete Operative costs of Home Improvement Centre and 1(one) expert (business consultant) 25.000kn/month5. This can be expected only if Guild members recognize the direct benefit for their businesses and staff, and if they can transfer the membership fee to the increase of their profit. Project partners believe that their interest will be gradually built and sufficient only after the 3rd year of the Centre's work, when quality of services and consultancy becomes familiar and strongly branded in the region. The financial viability of Home Improvement Centre must be achieved. The educational and consultancy institution must at least operate at a breakeven level, in order to have long-term perspective.

20 members would have to pay monthly membership fee of 1.250kn.

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7. FEASIBILITY ASSESSMENT
The purpose of Home Improvement Centre is to shake up the status QUO, to broaden access to education and business development opportunities, and to ultimately stimulate the local economy and bring economic benefit to population in Pozesko-slavonska county and wider. The project aims to: stimulate new investments in property improvement and new construction, triggers new business development related to construction and energy efficient investments, and to increase employability of construction experts and workers in the region. The ultimate goal of these activities is to: bring more money into local communities (into region) through increasing the number of people employed, and increase the internal circulation of resources (money) to support a greater variety and scale of local businesses. Having in mind these ambitious goals of this project, it is clear that FEASIBILITY could be hard to estimate. However, by using the CBA method, the figures have shown the sustainability of the project, but with certain conditions. The funding of capital investments must be in form of public support (Ministries, EU funding or similar) without the obligation of return, or interest payments. Other very important condition is to let users (construction SMEs) have a strong influence on the design and management of Home Improvement Centre's work, through optimal models of governance. The pace and scale of the growth for the Home Improvement Centre is very difficult to predict. It will depend on the development and strength of Slavonia Construction Guild, and the general development of regional construction sector. There is also a concern to what is called chicken or the egg situation. Should the educational/advisory institution be established first and then attempt to attract employers and clients? Or there should be first the demand for such an institution? Based on the demographics and character of current population and economy, it is difficult to expect such demand, considering that similar networking and informing institutions in the region do not exist. Future clients will have to be informed and motivated to use the offered services. The research during this feasibility study development has shown several key points that will have significant influence on the success of Home Improvement Centre project:
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Hiring a person familiar with issues of regional construction, but also with secondary education and available funding of education, who has a passion for this type of project, and who is willing to stick with developing the project in early stages, even when things appear to be difficult to carry through Management of Vocational school Pozega, that remains the owner of the building and equipment, must strongly support the initiative, having in mind that success of this project will positively influence the image of school, as well as probability of employment for high-school graduates Support from regional or national institutions should not remain only declarative, but in time grow into financial.

Sustainability of the project can be assured if following reasons are respected: Continuous operation of Vocational school Gradual improvement of the standards of VET school from basic level to advanced one Involved teaching personnel permanently employed by the school Involved teaching personnel implements a long-term vocational teaching programs (and life-long learning concept) Slavonia Construction Guild members are involved in the establishment and monitoring of the program, so it can be adjusted to suit their changing requirements Durability of equipment and furniture will last for minimum of 10 years Renovation and upgrading of new building premises will last for at least 30 years.

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8. POSSIBLE SOURCES OF FINANCING

When possible sources of financing of Home Improvement Centre are observed, the objectives of its operations are crucial. Home Improvement Centre (as operative body of Slavonia Construction Guild) will act as an enterprise-led support body dedicated to the promotion and facilitation of enterprise training and workforce learning, as key elements in sustainable regional competitiveness. The aim of Home Improvement Centre (among other) is to increase participation in enterprise training by firms to improve their competitiveness and provide improved access for workers to skill's development. It should continue to foster and support networked and partnership approach to the provision of relevant training and expand and develop that approach by supporting workforce retention / activationrelated learning. If these objectives and aims of the Centre's work are properly presented, it is clear there are several other sources of financing present in Croatia that could be used for the work of Home Improvement Centre. Ministry of Entrepreneurship supports every year business-support institutions, as well as VET schools that could apply for this funding. Town of Pozega and Pozeskoslavonska county support their business-support institutions, according to the current budgetary limitations and possibilities. VET schools that are project partners, both generate substantial income from commercial activities conducted in their workshops that could be partially used for financing of Home Improvement Centre. Income can also be generated from renting the conference room for occasional public events, presentations, book promotions, etc. However, it is estimated that the interest for this service will not be significant, so it is not mentioned in the Cost-benefit analysis. The presented income from the energy production of SOLAR PANELS is the conservative version estimate of income, considering that the price of kWh in Croatia is guaranteed at 2,7kn/kWh, and that in Pozega's area can be expected that 30kW solar panels could produce around 30.000 kWh annually.6

81.000 kn is the income level according to providers of solar panel energy plants. For the purpose of Cost-benefit analysis, the level of income of 55.200 kn is planned.
6

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9. CONCLUSION & RECOMMENDATIONS

The major underlying question related to the presented project is Is this concept feasible? Our answer to this question is YES. However, all parties must realize this is not an easy project and will require the coordinated effort and support of all. The concept is laudable one and the potential outcomes and benefits from establishing Slavonia Construction Guild only. Home Improvement Centre is certainly needed and would greatly aid the region. All of the stakeholders in the area with whom we spoke or who answered surveys were excited about participating in the project. This is quite a unique project as it involves cooperative efforts among the public institutions, private ventures, not-for-profit organizations and individuals. A great deal of creativity will be needed in how to sustainably develop this project to upgraded phase (next level), since tight budgets at national or regional level may have a definite impact on the ability to carry some elements of the project. The identified recommendations that would improve the implementation and success of this project are: Much of the success of the Centre will depend on the homogeneity of Slavonia Construction Guild and their genuine sense of ownership over this Centre It is important that Centre has some early success stories to provide momentum for future growth of programs and services. It is anticipated that it will take several phases over a period of min 3-5 years for the Centre to reach its full potential The staff of the Center would need to be identified early and brought on board prior to construction to champion its mission and develop the linkages to the region that will be necessary to ensure early successes The most important feature of the physical structure of the Center will be its flexibility to adapt to needs as they are identified and change over time.

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ANNEX 1 Construction SMEs in Pozesko-slavonska county associates of Vocational school Pozega

1. 2. 3. 4. 5. 6. 7. 8. 9. Izvoa graevinskih radova "RAGU ing. KREIMIR", Poega, Zelena 24 ARMIRANJE I BETONIRANJE "ESTRICH", vl. eljko Pranji, Poega, Zrinska 68 Graevinski obrt "FRITZ", vl. Zoran Markovi, Kutjevo, T. Tomia 14 Moderna IVI GRADNJA, vl. Ivo Ivi, Velika, Strossmayerova 32A PRIVATNI PODUZETNIK " VINKO GRADNJA " vl. Vinko Adaga, TRNOVAC 26 A GRAEVINARSTVO MARKOVI, vl. Pero Markovi, Kutjevo, Tomislava Tomia 16 P. D. "GRADNJA", vl. Petar Draeti, Brodski Drenovac 172 GRAEVINSKI OBRT "2M", vl. Marko Majstorovi, Kutjevo, Vinkomir 27 Graevinski obrt LOVRI, vl. Tihomir Lovri, Migalovci 27

10. GRADITELJSTVO STEHLIK, vl. Ivica Stehlik, Resnik 41 11. Soboslikarski i liilaki radovi GATJAL, vl. Tomislav Gatjal, Derviaga, Srpanjska 1 12. GRAEVINSKI OBRT " BEMBO", vl. Ivica Tadijal, POEGA, B. P. UBIA 12 13. Soboslikar i liilac "PERUZOVI", vl. Josip Peruzovi, Poega, Vranduk 83 14. "BOJA" SOBOSLIKARSKI I LIILAKI RADOVI, vl. Damir Jane, Poega, Toak 9 15. SOBOSLIKARSKI I LIILAKI RADOVI "VALA", vl. Branko Vala, TEKI 5 16. Obrt za soboslikarske i liilake radove "PIRANEC", vl. Zlatko piranec, KUNOVCI 1C 17. SOBOSLIKAR I LIILAC "MARIO HORVAT", vl. Mario Horvat, Poega, Dubrovaka 8 18. Soboslikarski i liilaki obrt COLOR KOVAEVI, vl. Ivan Kovaevi, Poega, Ivana Mesnera 24

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ANNEX 2 Construction SMEs in Pozesko-slavonska county to be invited to join Slavonia Construction Guild
1. 2. 3. 4. 5. 6. 7. 8. 9. "Zidarska radnja Branko Sadilek", vl. Branko Sadilek, Kaptol, Vetovaka 17 Zidar "VINKO OSI",vl. Vinko osi ,Golo Brdo 93, , Kaptol Graevinski obrt "PAUK", vl. Ljubomir Markovi, Kutjevo, Vinkomir bb Obrtnika radnja "INTERIJERI-KREI", vl. Nikica Krei, Jaki, S. Radia 38 Samostalna stolarska radnja "AENBRENER", Kutjevo, Bana Josipa Jelaia 24A "PARKETARSKA RADNJA PAVELI",vl. Ivica Paveli, Pleternica, E. Podub skog 14 Zidarsko-fasaderska radnja "PETRANOVI", vl. Dragan Petranovi, Bzenica 17 Samostalni zidarski obrtnik "SAM-PROMET", vl. Josip Buturac, Grabarje, M. Gupca 50 Usluge gra. strojevima "JURAK ZVONIMIR", vl. Zvonimir Jurak, Poega, Industrijska bb

10. Graevinsko obrtniki radovi "ZOKA - Kaptol", vl. Zoran Zeba, Kaptol, Poeka 50/b 11. Obrtnika radnja "LIMARIJA - PAIN", vl. Dalibor Pain, Jaki, S. Radia 47 12. "ROVOKOPAKE USLUGE", vl. Ivan Stipi, Blacko 46 13. "LIMARIJA JANOTA", vl. Stevo i Dejan Janota, Derviaga, Zrinska 3 14. "ZIDARSKO FASADERSKA RADNJA", vl. eljko Tomi, Golo Brdo 72 15. KERAMIKA JAMBREI, vl. Berislav Jambrei, Orljavac 59 16. GRADNJA, vl. Ivica Stjepi, Vikovci 1 e 17. Graevinski obrt "4M", vl. Ivan Mali, Poega, E. Kvaternika 193 18. "AG" GRADNJA, vl. Marina Abramovi, Velika, Dr. F. Tumana 2 H 19. GRAEVINSKI OBRT - ZOVKO, vl. Mato Zovko, Stari Brestovac 93 20. "Z.D.S. OLI" - STROJNO BUKANJE, vl. Stipo, Zdenko i Dragan oli, Stara Lipa 76 21. Strojno bukanje ANTIK, vl. Darko Janji, Vidovci, Svibanjska 8 22. Strojno bukanje BONUS, vl. Ivica Nikoli, Ivandol 17 23. ELEKTRO-GRADNJA, vl. Ivica Banoi, Pleternica, Smrik 9 24. OBRT ISKOP " MARIJANOVI ", vl. Frano Marijanovi, Kaptol, Majstorska 1A 25. GRADNJA TROHA, vl. ANTUN TROHA, POEGA, A. ENOE 16 26. STROJNO BUKANJE ZEBA, vl. Jozo Zeba, Straeman 14 27. DELUX GRADNJA, vl. Dalibor okrli, Bikupci 13 28. OBRT "GRADIS", vl. ELJKO EREIZ, NOVO SELO, HRVATSKIH DRAGOVOLJACA 106 29. OBRT FENIX, vl. Igor orkovi, Poega, Kralja Kreimira 9A 30. BLIC interijeri, vl. Flamenko Senjak, Pleternica, Vinogradska 36 31. GRAEVINSKI OBRT "LUI", vl. Stipo Lui, Bekte 78 32. GRAEVINSKI OBRT "VRELA", vl. Josip Cvitkovi, Ciglenik 10 33. "PARKETI BRABEC", vl. Goran Brabec, Poega, O. Kuere 19 34. GRAEVINSKI OBRT "OP", vl. Ivica op, Grabarje, Stjepana Radia 68 35. KERAMIKA "BILOBRK", vl. Milan Bilobrk, Velika, Hrvatskih branitelja 19 36. OBRT STIPI, vl. Ivica Stipi, Kaptol, Velika 7A 37. KERAMIKA "VIDOVI", vl. Robert Vidovi, POEGA, DR. F. TUMANA 6 38. GRAEVINSKI OBRT SOKOL, vl. Stipo Lovrenovi, Vidovci, Radnika 5

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39. M2 - GRADNJA, vl. Mijo Jozi i Mario Mrvelj, Gradac, S. Radia 132 40. STOLARIJA "SOKOLOVAC", vl. Ivica Valiek, POEGA, SV. JOSIPA 23 41. OBRT "PUKARI", vl. Josip Pukari, BUJE 48 42. LIILAKI OBRT "DUMANI", vl. Vlado Dumani, VIDOVCI, J. MUEVIA 18 43. OBRT STROJNE GLAZURE "OKRLI", vl. Milan okrli, RADOVANCI 47 44. GRAEVINSKI OBRT "ZORAN I STIPO", vl. Stipo Davidovi, DARANOVCI 39 45. OBRT ZA GEO-BUENJE, vl. Goran inko, GRADAC, A. STAREVIA 7 46. TOMAEVI SUHA GRADNJA, vl. Stjepan Tomaevi, POEGA, A. MIHANOVIA 4 47. SAMOSTALNI OBRT "PEI", vl. Mario Pei, GRADAC, P. RADIA 23 48. USLUNI OBRT "OKAC", vl. Tomislav Ruika, GOLOBRDCI 23 49. INTERIJERI - UNJO, vl. Vinko unjo, BRESNICA 11 50. GRAEVINSKI OBRT CRNKOVI, vl. Robert Crnkovi, POEGA, VRANDUK 121 51. Zavrni radovi "FINI", vl. Ante Anui, CEROVAC 47 52. GRADNJA PAVI, vl. Ivica Pavi, Busnovi 32, Brestovac 53. OBRT "HORVAT", vl. Nenad Horvat, Poega, Pavla Radia 133 54. ALU I PVC PERKOVI, vl. Hrvoje Perkovi, Poega, Sv. Roka 14 55. Zavrni graevinski radovi "TAPET", vl. Miodrag Vukeli, ANTUNOVAC 1A 56. TRGOGRADNJA, vl. Damir Gali, BEKTE 20 57. ALU-PVC BISTRICA, vl. Dario Bistrica, Poega, B. Hanekovia 8 58. Fasadni i tukaturski radovi "MARIO FASADE", vl. Marijan Galovi, Pleternica , M. Gupca 94 59. OBRTNIKA RADNJA TONI, vl. Anto Milii, KUTJEVO, S. RADIA 39 60. STOLARSKI OBRT KRALJEVI, vl. Ivan Kraljevi, Draga 46 61. LOVRENOVI GRADNJA, vl. Jakov Lovrenovi, Vidovci, Radnika 5 62. ATLA, obrt za pruanje usluga u graevinarstvu, vl. eljko atlai, Poega, Ive akalia 3 63. ITUM OBRTNIKA RADNJA, vl. Frano itum, Baruna Trenka 2, 34 340 Kutjevo, 64. INTERIJERI JELUI, vl. Stipo Jelui, TRNOVAC 2C 65. Usluge u graevini "PEENI", vl. Anto Zeba, KAPTOL, MAJSTORSKA 6 66. DAJA, obrt za graevinarstvo, vl. Kata Markovi, Kutjevo, Kneza Trpimira 21 67. ANTUN, obrt za soboslikarske radove, vl. Antun akali, eljakovci 66 68. KURAJA, obrt za usluge, vl. Miro Kuraja, Kuzmica 70C 69. GRADEKO, obrt za usluge, vl. Tihomir Rado, Vesela 7 70. LOVRENOVI INTERIJERI, obrt za usluge u gra. vl. Valentina Lovrenovi, Vidovci, Radnika 5 71. SVITOK, obrt za graevinske usluge, vl. Ivan Svitok, Kutjevo, upnika Mirka Messnera 43 72. INTERIJERI FD, obrt za usluge, vl. Dario Frantz, Poega, Orljavska 44 73. HNATYYN, obrt za usluge, vl. Danijel Hnatyyn, Vidovci, Josipa Muevia 3 74. GRADNJA, vl. Antun Nenadovi, Donja Obrije, Donja Obrije 81 75. Limarski obrt, vl. Nenad Stojakovi, Lipik, kolska 12 76. Zidarsko-fasaderska radnja, vl. Petar Kova, Poljana, Varoka 28 77. Soboslikar i liilac Franjo Martinovi, Prekopakra, Frankopanska 17a 78. Staklarski servis "VILGLAS", vl. Vilko Pilat, Pakrac, Hrvatskih velikana 8 79. "KM" Montaa metalnih konstrukcija za stropove, vl. Stjepan Kelemen, Filipovac, Lipika 15 80. Obrt "VISKOVI", vl. Zlatko Viskovi, Pakrac, P. Polaka 25

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81. AJMAN-GRADNJA, vl. Dario Ajman, Prekopakra, Matkovac 9 82. "FRIVANTO", vl. Ivan Frier, Prekopakra, Matkovac 82 83. OBRT "GORAN", vl. Pero Prodanovi, Brezine, Brezine 104 84. SOBOSLIKARSKO-LIILAKI OBRT MAEK, vl. Mario Maek, Pakrac, Kneza Branimira 37 85. NOVALIS SOBOSLIKAR LIILAC Draen Sudeti, Prekopakra, S. Radia 48 86. BAGARI OBRT ARMIRAKI RADOVI, vl. Dragan Bagari, Prekopakra, S. Radia 23 87. SOBOSLIKAR I LIILAC, vl. Sran Potrebi, Pakrac, G. Viteza 18

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ANNEX 3 EXCERPT OF COUNTY'S DEVELOPMENT STRATEGY OF POZESKO-SLAVONSKA COUNTY 2011-2013

3.3.7. SME economy

Even though entrepreneurs are not divided into small or big but only on successful and less successful, SME segment has a special importance since smaller economic actors adapt more easily to market demands and accept faster the structural changes than the big systems. With few business resources engaged they achieve better financial results, and record increase in employment. This is the reasons why small and medium entrepreneurs have greater and greater role in the overall economic development of certain region. It is understandable that small economy cannot operate separately and that it adds on the big companies in activities that are strategic directions of the entire economic development. Hence, one of the goals of SME development is its (inter)connection between the SME system itself, but also with big companies. The most spread and the most important form of SMEs in the area of Pozeskoslavonska county are CRAFTS and small and medium companies. The cooperative economy, as a form of entrepreneurial organising, on the level of the County is not significantly present. Table: Structure of businesses by size in 2009. STRUCTURE Crafts Small companies Medium companies SME sector Big companies TOTAL Businesses Number % 965 66,7 462 31,9 16 1,1 1.443 99,7 5 0,3 1.448 100,0 Employees Number % 3.045 26,6 3.842 33,6 2.406 21,1 9.293 81,3 2.134 18,7 11.427 100,0

Even in the crisis period that is facing with significant decrease of overall number of businesses, the number of employees in SMEs shows the trend of increase. CRAFTS in Pozesko-slavonska county, as a traditional economic activity, cover the greatest number of all economic forms of organising with tendency of growth.

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Table: Number of crafts and employees YEAR Number of crafts Employees (incl.owner) Average no.employees 2004 1.182 3.328 2,82 2005 1.195 3.520 2,95 2006 1.201 3.688 3,07 2007 1.234 3.717 3,01 2008 1.225 3.797 3,10

In 2009, the total financial result for SME sector (only companies) has been positive (18,6 million kunas), while the big companies have resulted negatively (26,5 million kunas). This negative business result in segment of large companies had a negative impact on the entire business sector, through spill-over effect.

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ANNEX 4 SECTOR IMPLICATIONS

Changes in competitive conditions:

Demand for turnkey services is growing, maintenance is becoming part of the construction package Increased use of partnership-based operational model. Sector is including more specialized SMEs. Providing full package requires close collaboration since customers prefer working with one contractor (instead of several) Increased competition in design solutions Prequalification of contractors is becoming more common in competitive bidding for contracts

Changes in operational environment:

The ratio of new construction to renovation decreases. Companies have to have several competencies or be able to collect a consortium with right competencies. Focus on networks and flexible specialization Changes in building regulations promote quality but often increase costs. If prices go up, contractors must be able to work more efficiently Growing competition for skilled labour, greater need for training

Changes in final construction products

IT infrastructure becomes standard accessory in homes. This requires new competencies for contractors and partnerships with IT suppliers Increased emphasis on health and safety in the selection of materials and structural components. Contractors must have access to the right data and the skills to analyse and apply this data

Changes in customers' needs

Owners are interested in the whole package and its profitability, not the details of construction. The contractor must act as an intelligent interface between the customer and consortium of specialized subcontractors. Customers' business needs often require the rapid completion of projects

Changes in demand for construction

Construction SMEs must handle maintenance and repair Quality and equipment continue to increase. The value show positive trend, meaning there will be fewer but bigger projects. Specialized contractors will face extinction unless they operate in a consortium Renovation of real estate and infrastructure will increase in the future 57

COST-BENEFIT ANALYSIS
The Feasibility Study summarises the project plan to set up: a) Home Improvement Centre, as operative body of Slavonia Construction Guild, through the reconstruction of existing building of Vocational school Pozega construction workshops; b) its rationale, a market analysis for this kind of business support institution and c) the institutional setting of the project. This Cost-benefit analysis, as its integral part, summarises the analysis of its financial viability and sustainability. The study will present the short background, justification for the project and the key financial assumptions of the projects recurrent costs and revenues. These estimates have been used to develop a financial model to test the viability and sustainability of the project. It follows the conclusions of the financial model. A distinction is made between: Commercial viability (returns to the project at full investment cost) Financial sustainability (returns to the project at investment cost to the promoter-investor) Economic and social sustainability (returns to the project including indirect and intangible costs and benefits).

BACKGROUND AND JUSTIFICATION OF THE PROJECT

Home Improvement Centre is a regional project intended to contribute to regional economic development through assistance to regional construction entrepreneurs and service providers. The project was widely supported in the locality and the county, that is being confirmed through the partnership of 2 vocational schools (Vocational school Pozega, providing programs in construction and carpentry, and Technical school Pozega) and Chambers of Crafts and Commerce. The cooperation is expected by dozens of relevant institutions out of which the most important ones are: Pozesko-Slavonska County, Town of Pozega, Collega in Pozega and others. This centre is supposed to act as a networking link between the construction SMEs, in their joint attempt to improve their business performance, to apply and commercialize new methods and materials in the field, to promote SME competitiveness, and (not the least important) addressing social inclusion of
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disadvantaged groups (young unemployed VET school students) and helping them engage in entrepreneurial activity. Considering that Pozesko-Slavonska County is a lagging-behind region, the Centre is focusing its activities on construction sector, being considered as prosperous and important for overall development. Construction is here observed in the widest possible sense, including all activities connected to HOME and living (electricity, plumbing, heating, carpentry, interior design, maintenance, energy efficiency). All home improvement activities will be supported, that should lead to the companies' growth, better technological solutions (environmentally friendly), greater value-added in already present services and works. It should also assist in creation of better living conditions and higher standard of local population. The risks of the project are connected to the (potential) weak linkages between businesses, inadequate support structures for high growth firms, an under-developed entrepreneurial culture, or these and other factors combined. There are almost no examples in Europe of full private funding of projects of business-support institutions. The public funding accounts for high proportion of set up costs in any such institution. When it comes to operating costs, depending on the services structure, the operating costs are covered by the public subsidies. Incubators receive around 60%, business-counselling institutions around 70%, while institutions that focus on education and training up to 100% of operating costs cover by the public (or Business-networks) subsidies. The fact is that many of these institutions serve the public interest and therefore the subsidies are justified. Still, there is a strong argument that incubators must be encouraged to maximise income generation from its services, so that the public support can be spread across a larger range of schemes.

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KEY FINANCIAL ASSUMPTIONS Initial investment: The Centre will initially be highly dependent on public financing. This is in line with the expectations (and usual practice), given that one of the functions of business-support institutions is to address market challenges of existing companies (helping them survive and grow) and to facilitate accelerated SME growth to new businesses which, by their very nature, have little in the way of collateral or revenue until they have reached the mature stage of their development. Revenues of the project: Taking into account that the future Home Improvement Centre will operate within the not-for-profit VET school institution, and that it will be founded with the purpose of helping the local construction SMEs, it cannot be expected that it will create significant revenue. The founders (Vocational school Pozega and construction entrepreneurs) are bounded to finance all the difference created from costs and benefits. Pozesko-slavonska county and Town of Pozega have also expressed their support in terms of financing and promoting of Home Improvement Centre. However, because of the limited budget potential of the founder and supporters, it is strongly suggested that the Home Improvement Centre becomes financially sustainable and self-sufficient. This is a challenge that is achievable through the long-term credibility building in the marketplace and developing a comprehensive range of business support services.

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Share of certain types of revenues are calculated on the basis of CSES study:
Types of Business Support Services
(1) Pre-incubation services (2) Business planning and forming a company (3) Training to develop business skills (4) Accounting, legal and other related services (5) Market research, sales and marketing (6) Help with exporting and/or partner search abroad (7) Help with e-business and other aspects of ICT (8) Advice on development of new products and services (9) Help with raising bank finance, grandts, venture capital (10) Incubator venture capital fund, business angel network (11) Advice on recruitment of staff and personnel management (12) Networking, e.g. with other entrepreneurs, customers (13) Mentors, board members and other senior advisers (14) Other services

In house No. % 66 11,74% 62 11,03% 36 6,41% 16 2,85% 31 5,52% 28 4,98% 39 6,94% 43 7,65% 68 12,10% 31 5,52% 32 64 38 8 562 5,69% 11,39% 6,76% 1,42% 100,00%

External No. 15 25 47 57 52 52 42 35 28 32 35 24 27 3 474 % 3,16% 5,27% 9,92% 12,03% 10,97% 10,97% 8,86% 7,38% 5,91% 6,75% 7,38% 5,06% 5,70% 0,63% 100,00%

TOTAL / Percentage

The Centre will focus on provision of necessary educational and advisory services primarily for the members of Slavonia Construction Guild. This organisation is the main target group, and will have the possibility to manage and lead the work of Home Improvement Centre, together with the Vocational school Pozega. They will be offered to establish a membership fee that will be at a competitive monthly price that will subsequently provide some exact services of trainings, lectures, education, networking activities or counselling by construction or energy efficiency experts. However, since the actual interest for regular membership fee cannot be estimated in the initial phase, the Costbenefit analysis is using the principle of payment of each service or training (by the number of services or trainings). The Centre will seek to provide its clients with a comprehensive range of services with a full-service offering a combination of business support services, counselling, more specific services (energy audits) and other assistance. The quality of the service, and not the physical aspects, is the most critical aspect of the Centre's operation. However, it is a fact that the physical proximity to other entrepreneurs can plan a beneficial role, both by catalysing the entrepreneurial process and by facilitating networking, alliances and collaboration between firms. Start-up services is a term that describes support services to would-be entrepreneurs before they launch their business. This includes assistance in creation of a business plans, training and advice of forming a company.
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Business support services include business planning, advice on accessing capital, marketing, identification of suitable partners and others. Some specialist services (e.g. legal, accounting) can be provided by the external providers with whom the staff has established relationship. These services are of interest to SMEs while large private sector does not search for such consultancy in business incubators. Technology-Innovation services assume access to centres of excellence (R&D), or involvement in development of regional technology clusters. After Care, Outreach, Networking and Virtual Support Services are some of the services that might be provided by the Centre.

The principle of pricing the provided services, used in this analysis is next: VET school operates under the national support, being not-for-profit institution that educates for immediately applied jobs in regional economy. Home Improvement Centre will also operate under these rules, but taking care about the financial sustainability of the programs. VET school teachers have up to 10 hours weekly for additional work within which they assist in organisation of different school activities (Graduation exam, competitions of students, promotion of school, etc.). This project assumes their direct engagement every week for minimum of 2hours/each. 6 (six) VET school teachers will be actively engaged in the Centre's work, through holding lectures, training, provision of services, etc. Most of their services will be provided at symbolic charge or free of charge. The situation is different when the services are being outsources to external suppliers (lecturers, consultants, etc.). In those cases, the full price must be paid, although there is a need for public funding to cover part of these costs and make them more attractive to users. The price of the services will be calculated on the basis of needed number of working hours to perform the service. 7 It is expected that suppliers and authorised agents of producers of new construction materials (i.e. Ytong, Knauf ) will hold lectures about their materials free of charge. Another revenue source is expected to come from the financial support provided from the Ministry of Entrepreneurship and Crafts; possibly of Ministry of Regional Development. Certain project can be funded by the Fund for Environmental Protection and Energy Efficiency, Ministry of Tourism (or even
For example, creation of quality business plan usually takes at least 7 working days of experts. Taking into account that, the market price totals (7days x 8h x 15EUR/h = 840 EUR)
7

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Ministry of Culture, in case the specific project promotes tradition or cultural heritage in architecture or construction). Financial support is expected from the Town of Pozega and Pozeskoslavonska county that have a direct interest for this project.

COSTS Recurrent cost implications have been calculated by estimating the resources needed to operate the Centre and associated equipment. Recurrent costs include wage costs, material cost, maintenance services, heating etc. It is estimated that the annual operational costs equal approximately EUR 44.900. See calculation tables for more details. The key position in the Centre will have two members of staff: a) The first Home Improvement Centre employee will be the BUSINESS CONSULTANT, who will need to provide overall management and guidance for the organisation in addition to construction business development. Estimated salary would be 1100 EUR monthly (approximately 2000 EUR including benefits and travel). b) The second Home Improvement Centre employee will be a CONSTRUCTION ENGINEER, a representative of VET school Construction department. This will be a person available at all times to investors and clients, providing them with his/her advice and consultation regarding the choice of optimal solutions in home improvement or building. However, this will be an employee of VET school (teacher) and will be reassigned from the group of 6 construction engineers in school. In the fifth year of work of Home Improvement Centre, this Study envisages the employment of ELECTRICAL ENGINEER. Total estimated operative annual cost of Home Improvement Centre is 44.900 EUR with a full complement of staff and including all expenses. During the start-up phase the Centre will need working capital to pre-finance the first 90 working days in the 1st year. This amount is estimated to 5000 EUR, as sufficient to cover the basic costs. Other important financial assumptions are presented on Sheet: MAIN ASSUMPTIONS in the CBA calculation.

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MARKET ANALYSIS Demand: Due to the lack of elemental information (Labour Force Survey data) it is hard to get a clear picture about the regional labour market, especially a part on educational and training needs of entrepreneurs, small and medium enterprises. Based on the inputs provided by the project partner Chamber of Crafts, in regard to training services, entrepreneurs are aware of importance of technical training, market research training, IT training and management training. The usage, purchase and repetition do not follow the expression of interest, though. Trainings connected with the legal requirements (safety training, accountancy regulations, etc.) are the most attended. Regarding the consulting services, the highest level of awareness was related to technology, product development, IT, financial management investment and legal consulting services. Entrepreneurs KNOW they should ask someone for advice and services, but they usually do it only in emergency case. They still consider themselves as the best advisors for their businesses. Also, they still want to control everything in their businesses. In regard to business development services, the highest level of awareness is related to fairs, lobbying and representing. Using and purchasing is low, though. Linking with business partners is frequently perceived as very demanded service, even considered as some kind of magic solution for many enterprises (as an easier way to start export or start using new technology). The structured interviews conducted by the Vocational school have shown that entrepreneurs are not satisfied by the associations that should provide services of training and consultancy (Chamber of Commerce, Chamber of Crafts). In the Employers' Survey, conducted by the Croatian Employment Service in April 2011, on the question about the need for additional education, only 19,2% of employers has answered positively. They have expressed this need mostly in context of retaining the existing jobs. Only 7 employers have expressed the need for more extensive additional training for their workers in technical skills and expert vocational skills. IT training was recognized by 11 employers. Foreign languages are needed by only 5 employers. 8 employers want to improve relations with clients, while team work needs improvement (as is stated in the Survey) at 6 employers.
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According to the above described facts, the demand will have to be partly developed and redirected towards quality services that will improve the competitiveness of SMEs and performance success of companies. Supply: The only institutions that can be considered as competitors (of any kind) are: Entrepreneurial Centre and Incubator in Pakrac, and Entrepreneurial Centre and Incubator in Pleternica, both offer excellent premises and services for new companies. However, even if it is in the same county, Pakrac and Pleternica are dislocated from Pozega, so it cannot be taken into account for the local businesses. The first Centre targets the market of Lipik, Daruvar and other western towns (as expressed in their Marketing plan). The distance of 50 km and weak traffic connections make it impossible for the local companies to receive appropriate service or advice in Pakrac. On the other hand, the lack of relevant entrepreneurial training, forces Pozega's managers and entrepreneurs to travel to Pakrac and Pleternica, since there are no similar events closer (as testified in Pakrac' Center). Pleternica is focused on development of rural economy, primarily food processing and rural tourism related activities. So, the target group of this project cannot receive the necessary services. Centre for Technological Development Slavonski Brod works as a regional development agency. Because of their limited capacities (staff), they are usually not available for providing assistance to Pozesko-Slavonska County's companies. The interest of their local businesses does not leave much space for assisting the neighbouring County. Business-Innovation-Science Centre Nova Gradika an excellent newly built Incubator space that offers also complex services and assistance in product development. This is also very dislocated premise, and weak traffic connections make it hard for Pozesko-Slavonska County companies to get more involved and engaged into their work. Also, there are no examples of Incubators and Centres that are focused or specialized in construction economy and entrepreneurship. The Home Improvement Centre shall give focus on the property related field, in order to serve the actual need of the locality.

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