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S t u d e n t I D : 4 1 9 4 2 M 1 E D H E C B u s i n e s s S c h o o l
Table of Contents
Table
of
Contents...1
Executive
Summary2
Brief
outlook
of
the
Company.2
Business
Description..2
Mission
Statement..3
Strategy..3
Industry
Analysis.......4
Environmental
Analysis.....4
Competitor
Analysis..6
Target
Market
Analysis8
Operational
Plan
and
Strategy8
Location10
Process.10
Sales
&
Marketing10
Negotiation12
Labor..13
Financial
Analysis..14
Appendix.24
Bibliography.26
Executive Summary
PDG
Realty
S.A.
is
the
second
largest
real
estate
&
Construction
Company
in
Brazil,
based
in
Rio
de
Janerio.
Since
December
2012,
the
official
website
of
the
firm
has
been
the
most
visited
real
estate
franchise
web
site.
It
boasts
global
operation
throughout
Europe,
Latin
America,
the
Middle
East
and
Asia.
The
company
s
strategy
aims
at
growth
through
investments
in
subsidiaries
and
direct
investments
in
projects.
Its
real
estate
projects
include
residential
projects
for
various
class,
from
the
economy
segment
(focus)
to
high-income,
developing
luxury
condominiums
and
investments
in
ventures
with
focus
on
generating
income
through
leasing,
developing
residential
lots,
investing
in
commercial
real
estate
projects
and
commercializing
residential
and
commercial
properties.
The
company
also
involves
in
real
estate
brokerage
and
consulting
business.
Its
presence
in
Syria
has
been
scarce
and
the
current
financial
situation
of
the
country
poses
an
excellent
opportunity
for
the
firm
to
stake
its
stronghold
in
the
market.
The
main
agenda
is
to
offer
safe
and
modern
touch
to
the
housing
conditions
in
Syria.
We
will
buy
the
properties
that
have
left
aside
and
in
dreadful
situation
at
cheap
and
modernize
it
with
sate
of
art
equipment
and
amenities,
and
we
will
do
it
using
local
labor,
providing
them
with
training
in
construction
and
we
will
use
local
dealers
of
raw
materials
like
cement,
marbles,
steel
to
make
its
people
more
self-sufficient.
Start
up
capital
will
be
low
because
we
will
enter
into
partnerships
with
local
construction
agents
who
will
provide
us
with
the
required
raw
materials
and
workforce.
This
will
enhance
the
image
of
the
company
by
providing
social
services
and
therefore
create
an
entry
barrier
to
other
competitors.
PDG
Realty
S.A.
Empreendimentos
e
Participacoes
engages
in
the
development
of
residential
and
commercial
properties
primarily
in
Brazil.
The
company
develops
residential
projects
for
various
income
classes;
and
residential
lots.
It
primarily
focuses
on
medium
and
lower-income
residential
projects.
The
company
also
invests
in
commercial
properties,
as
well
as
engages
in
real
estate
brokerage
business.
In
addition,
it
involves
in
the
securitization
of
real
estate
receivables.
The
company
was
founded
in
1998
and
is
based
in
Rio
de
Janeiro,
Brazil.
Business Description
The
company
plans
to
have
its
Syrian
operational
headquarters
in
the
city
of
Aleppo.
It
will
be
a
limited
liability
partnership,
leveraged
through
private
investments
including
local
banks
to
carry
out
the
investments
in
construction
of
housing
facilities.
The
services
we
plan
to
offer
Refurbished
housing
with
modern
amenities
(Wi-Fi,
safety
measures)
Provide
safe
environment
by
entering
into
partnerships
with
local
community
leaders
and
police
forces
Establish
a
reputation
in
the
community
for
the
extent
of
local
services
provided
Make
fruitful
long-term
partnerships
with
local
suppliers
and
property
managers
for
future
joint
ventures
and
long
-term
projects.
Provisions
for
rental
service
in
response
to
growing
rental
demands
in
the
capital
and
suburbs.
Provide
home
search
database
through
the
company
website.
Use
its
e-
marketing
strength
to
build
brand
awareness.
Mission Statement
Our
mission
is
to
be
Real
Estate
company
involved
in
construction
of
housing
and
building
rental
units
with
unmatched
levels
of
customer
service
and
attention
to
the
demands
of
Syrian
community.
Strategy
PDG
S.A
will
target
the
opportunity
that
rises
from
decreasing
valuation
of
Syrian
pound
compared
to
dollars.
As
such,
we
will
initially
focus
our
efforts
on
buying
and
developing
existing
properties
at
lower
than
market
price
with
the
strength
of
dollars.
Once
the
properties
are
purchased,
each
unit
will
be
wired
with
internet
access,
state-of-the-art
amenities,
and
safety
measure
will
be
implemented
ensuring
cutting
edge
safe
environment.
Effective
utilization
of
capital
will
be
key
to
the
business
as
we
aim
to
establish
and
maintain
close
contacts
with
residential
real
estate
listing
services,
and
other
service
organization
such
as
mortgage
service
companies,
as
well
as
local
providers
of
construction
raw
materials.
Local
citizens
with
unemployment
and
expatriates
will
be
hired
and
will
be
provided
with
required
training
and
assistance
in
use
of
machinery.
Listing
the
refurbished
property
in
dollars
will
ensure
increase
in
worth
by
more
than
15-20%,
and
it
can
be
made
to
look
affordable
by
further
reductions
to
attract
buyers.
We
will
work
with
local
ad
agencies
and
construction
promoters
for
added
visibility,
and
to
maximize
opportunities
to
sell
their
home
at
the
best
possible
price
within
acceptable
time
frames.
Industry Analysis
Large
areas
of
Aleppo,
in
Tartous
and
Swedia,
even
in
rural
areas
far
away
from
the
cities,
rental
rates
have
grown
as
a
result
of
growing
demand,
and
they
continue
to
rise
amid
a
general
inflation
of
prices
and
a
decline
in
the
value
of
Syrian
pound.
Rental
rates
have
increased
by
between
30%
and
50%
during
the
month
of
January
2015
alone.
The
monthly
rent
for
a
small
one-bedroom
house
with
a
salon
in
Damascus
is
now
20,000-25,000
Syrian
pounds
($89-$100),
which
may
house
two
families
with
children.
Often
in
the
regions
of
Jarmana
and
al-Daweila
in
the
Damascus
countryside,
one
will
find
shells
of
houses
apartments
without
furnishings,
windows
or
doors
which
rent
for
about
20,000-30,000
Syrian
pounds
($89-
$125).
It
has
become
an
familiar
sight
in
Syria
to
see
these
houses
inhabited
by
families,
after
their
seal
open
windows
and
doors
with
nylons
and
cloth
curtains.
Many
of
the
houses
rented
out
are
not
suitable
for
living
some
have
no
windows
or
ventilation,
while
others
are
not
equipped
with
kitchens
or
other
necessities.
Many
are
not
connected
to
the
water
supply,
forcing
residents
to
buy
water
at
a
price
of
1,500-2,00
Syrian
pounds
($6-$8)
per
cubic
meter.
Power
outages
occur
constantly,
and
malfunctions
are
only
repaired
after
a
week
or
more.
Many
of
these
apartments
are
in
areas
lacking
services,
with
dirt
roads
and
no
streetlights.
Real
estate
and
rent
prices
are
dreadful,
and
can
only
be
afforded
by
big
businessmen
and
those
with
a
lot
of
money.
Environment
Analysis
(PEST)
Political
Factors:
Political
Stability
-
Even
though
political
unrest
may
continue,
the
Syrian
Investment
Commission
recently
launched
a
first
Foreign
Direct
Investment
report,
which
covered
241
companies
included
in
foreign
direct
investment
with
54
companies
located
in
industrial
cities
and
free
zones.
In
2010,
total
FDI
flow
to
the
country
was
76.971
billion
Syrian
pounds.
Outside
oil
and
gas
sector,
most
of
investment
turned
towards
manufacturing,
real
estate
and
money.
99.7%
of
FDI
in
this
sector
was
new
investment
while
remaining
0.3%
of
it
took
the
form
of
mergers
and
acquisitions
through
a
bargain
that
was
conducted
between
Rankings
on
Doing
Business
(Scale:
rank
189
center,
Rank
1
outer
edge)
Source:
Doing
Business
database*
Social
Factors:
There
are
no
job
opportunities
in
Syria
with
unemployment
rate
exceeding
70%.
No
other
sources
of
income
exist
aside
from
some
remittances
sent
by
expatriates
to
their
families
inside
the
country.
Syrians
are
forced
to
receive
money
in
Syrian
pounds
with
foreign
currency
priced
at
up
to
15%
less
than
its
actual
value
Due
to
large
number
of
displaced
Syrians,
with
no
homes
provided
by
the
government
in
their
current
capacity,
locals
have
increasingly
looked
to
rent
homes
in
areas
of
its
capital
and
suburbs.
The
largest
concentration
of
Syrian
dispora
outside
the
Arab
world
is
in
Brazil.
Brazil
is
the
first
country
in
the
Americas
to
offer
humanitarian
visas
to
Syrian
refugees.
Hence,
there
is
a
connection
of
trust
and
amity
between
the
two
countries,
which
can
only
be
strengthened
by
the
partnerships
in
construction
sector.
Technological
factors:
Education
-
There
are
plenty
of
universities
that
offer
higher
studies
in
engineering
and
business
management
and
thus
offer
plenty
of
local
talents
that
can
be
hired
for
the
project.
Construction
Permits-
There
are
parameters
involved
in
this
like
construction
licensing,
architects,
civil
engineers,
construction
lawyers,
and
construction
firms.
There
are
utility
service
providers
and
public
officials
who
deal
with
building
regulations.
Electricity
Permits
-
Procedures
for
connection
involve:
Submitting
all
relevant
documents
and
obtaining
all
necessary
clearances
and
permits
Completing
all
required
notifications
and
receiving
all
necessary
inspections
Obtaining
external
installation
works
and
possibly
purchasing
material
for
these
works
Concluding
any
necessary
supply
contract
and
obtaining
final
supply.
Competitor
Analysis
We
have
analyzed
the
competitiveness
of
the
industry
through
use
of
Porters
5
forces.
Through
this
analysis
we
have
determined
that
the
environment
is
relatively
competitive.
There
is
low
threat
of
new
foreign
entrant
due
to
political
instability
and
raids.
Even
if
there
is
one
,
there
is
considerable
risk
due
to
high
investment
and
the
market
success
being
based
on
lowest
cost
tender.
Threat
of
substitution
is
also
low,
since
the
market
environment
isnt
likely
to
change.
Supplier
power
is
high,
as
they
can
choose
not
to
enter
into
partnership
and
reduce
the
prices.
So,
we
have
to
appease
them
by
showing
the
kind
of
humanitarian
efforts
being
put
into
the
project.
Buyer
power
is
low
as
they
wont
get
similar
housing
arrangements
from
other
construction
companies.
Competition
among
Rivalries:
3
competitors
are
big
enough
to
be
named
as
our
main
completion.
They
are
Name
Type
Analysis
Arabtec
Construction
Residential
and
Largest
construction
PJSC (Dubai)
utilizing
early
mover
advantage
to
set
up
a
strong
client
base.
Where
the
others
will
look
to
employ
their
own
supplier
chains,
we
will
introduce
ours
formed
entirely
of
partnerships
with
local
dealers.
Competitive
Advantage:
Our
strategy
will
be
based
on
entering
into
alliance
with
existing
suppliers
and
local
dealers
in
the
region
and
will
be
based
on
six
attributes
of
strategic
alliances
for
application
to
construction
organizations
trust,
commitment,
interdependence,
cooperation,
communication
and
joint
problem
solving.
These
attributes
are
proposed
as
a
tool
for
use
in
tender
evaluation
process
for
public
works,
which
will
the
broader
indicators
of
the
construction
firms
performance
in
the
eyes
of
people
of
Syria.
We
aim
to
provide
modern
housing
amenities
for
common
middle
class
working
people
who
are
always
in
the
run,
being
jostled
from
one
place
to
another.
They
face
the
prospect
of
eviction
each
month
because
of
ever
increasing
demand
from
tenant
and
real
estate
brokers.
Black
market
contracts
are
also
being
exchanged
and
security
forces
have
forced
renters
to
renew
contracts
every
year,
for
obtaining
security
permits.
Such
harassment
of
security
services
forces
people
to
pay
ore
taxes
in
renewing
the
contract
for
social
warrant.
We
aim
to
appease
these
exploited
people
by
providing
a
stable
and
secure
housing
facility
for
permanent
or
on
rental
basis,
with
security
charge
and
taxes
at
a
moderate
level,
without
compromising
safety.
We
can
ensure
this
at
a
time
when
people
are
willing
to
pay
more
for
safety
&
stability
and
entering
into
government
partnership
will
help
us
ensure
that.
Thus
there
is
a
definite
market
for
our
service.
The
nature
of
service
we
provide
is
quite
differentiated.
The
market
is
quite
profitable
if
we
can
capture
it.
The
strength
of
Syrian
pound
has
been
waning
in
comparison
to
other
major
currencies
in
the
world,
and
people
would
be
more
motivated
to
buy
these
housing
facilities
and
rent
it
out
in
the
future
so
as
to
make
money
for
themselves.
Clients
usually
deal
with
real
estate
companies
based
on
their
reputation
of
professionalism
and
quality
of
services
rendered
in
the
past.
This
reputation
is
difficult
to
obtain
by
new
firm
such
as
us
unless
you
build
a
partnership
and
amity
with
local
construction
material
dealers
and
suppliers.
The
hiring
of
local
labor
also
makes
a
positive
impression
in
the
minds
of
people
who
are
happy
to
see
unemployment
rate
go
down.
Strategy:
Our
strategic
focus
is
on
Capital
Acquisition
from
local
banks
like
Bank
of
Syria,
which
allows
investors
and
government
extend
funds
to
real
estate
sector.
It
also
helps
to
control
all
the
foreign
exchange
and
trade
transactions
and
give
priority
to
our
transactions.
Another
key
focus
will
on
Human
resource
and
Labor
Acquisition
as
well
as
on
Management
Excellence.
To
ensure
our
success,
we
need
to
ensure
we
have
capable
talent,
and
that
they
are
managed
effectively
to
produce
optimal
results.
Optimal
training
program
is
key
to
make
sure
we
get
the
most
out
of
the
local
labors.
Wages
will
be
according
to
the
labor
market,
which
according
to
Syrian
Government
statistics
is
less
than
100
USD.
Labor
forces
are
going
over
the
border
to
Lebanon
to
seek
work.
We
should
make
it
possible
for
them
to
stay
in
their
country
and
find
work
and
develop
their
skills
in
construction
works.
We
will
also
be
looking
to
hire
civil
engineers
and
architects
from
local
universities
to
help
ease
the
transmission
of
the
whats
required
out
of
labors
more
seamless
as
they
would
be
well
proficient
of
how
to
get
local
people
more
motivated.
Government
officials
recognize
that
the
economy
is
not
growing
at
apace
sufficient
to
create
new
jobs
and
hence
any
efforts
to
do
the
same
will
be
appreciated
by
government
and
Syrian
businessmen
who
would
then
invest
in
the
project.
Organizational
Structure:
The
structure
will
be
utilizing
a
flat
divisional
structure.
The
to
mos
in
the
hierarchical
ladder
is
Managing
Director.
Under
him
is
the
Project
General
Manager
and
Business
Development
department.
Much
of
the
day-to-day
responsibilities
of
running
the
construction
project
fall
on
the
shoulders
of
the
cadre
of
the
project
manager.
Business
development
department
looks
at
the
sales
and
the
marketing
side
of
things.
The
chiefs
oversee
staff
with
a
range
of
duties
ranging
from
sales,
development,
operations,
engineering
and
construction.
The
chief
financial
officer
directs
the
kind
of
viable
operations
from
a
finance
point
of
view.
The
managers
directly
beneath
the
chiefs
or
project
supervisors
are
responsible
for
a
particular
building
or
redesign
effort
and
look
over
several
line
workers
beneath
them.
Once
the
project
is
completed,
these
managers
will
then
move
on
to
the
next
project
drummed
up
by
the
sales
or
development
departments.
Several
types
of
managers
will
be
unique
to
manufacturing
or
construction
business.
Safety
directors
or
environmental
managers
will
be
there
in
operations
or
development
departments
to
ensure
compliance
with
regulations
and
to
avoid
unnecessary
pollution
or
injuries.
Managers
unique
to
construction
trade
will
be
found
in
departments
such
as
chief
estimator,
lead
architect/designer
and
surveying
chief.
These
managers
will
often
be
involved
with
project
managers
in
the
construction
department,
particularly
in
the
beginning
of
a
new
project.
Our
main
function
will
be
as
follows:
1. Human
Resources:
It
will
be
responsible
for
the
execution
of
our
strategic
focus
of
human
capital.
Our
approach
will
be
based
on
the
fact
that
there
is
no
one
size
fits
all
solution
or
magic
program.
Rather,
we
will
look
at
the
whole
picture
and
understand
that
marketing
s
not
a
single
act
or
a
strategy
in
and
of
itself
but
rather
a
complimentary
force
to
sales
efforts
and
a
key
addition
that
both
builds
upon
and
enhances
the
core
strengths
of
a
sales
team.
10
Negotiations
Investors/Local
suppliers
and
vendors
Negotiations
will
be
conducted
directly
by
our
sales
team
to
solidify
contracts
and
set
a
price.
Arabs
make
up
roughly
74%
of
the
population.
Arabs
will
often
speak
in
vague
terms,
generalities,
stories
and
metaphors
during
negotiations.
We
should
make
it
a
must
not
to
insult
potential
business
partners
through
blunt
demands
or
rejections,
as
that
could
be
fatal
to
a
deal.
Syrian
Arabs
are
charming
to
the
core.
The
idea
of
signing
a
strategic
partnership
or
Memorandum
of
Understanding
(MoU),
which
is
a
regional
favorite,
with
a
foreign
company
is
very
appealing.
Thus,
several
nascent
Syrian
local
companies
will
readily
agree
to
become
your
partner
without
necessarily
thinking
about
our
expectations
of
them
and
drive
to
help
and
support
us
in
our
services.
Whilst
there
are
several
benefits
to
working
with
local
partners
and
it
is
in
fact
compulsory
in
most
places
in
republic,
we
should
not
rely
on
being
flooded
with
leads
and
new
orders.
Local
partners
and
dealers
can
be
difficult
to
track
and
manage
and
may
lead
to
high
maintenance.
The
best
way
to
approach
this
is
to
look
for
commercial
synergy
between
two
companies
and
intellectual
synergy
between
the
people
from
both
parties.
We
should
clearly
define
the
roles
and
responsibilities
that
are
expected
out
of
our
partners
in
the
operation
and
we
should
look
in
our
new
partner
the
means
for
them
to
open
new
markets
or
contacts
for
us.
Business
and
personal
friendship
are
similar
for
Syrians
and
therefore
we
will
take
some
time
to
personally
know
our
potential
investors
and
government
officials
or
dealers
and
suppliers.
Small
talk
is
more
than
just
a
courtesy,
it
is
way
of
finding
out
whether
both
are
compatible
with
each
other.
We
will
engage
with
them
freely
and
enthusiastically
in
conversations
and
have
a
few
stories
in
our
back
pocket
to
break
the
ice.
Much
of
these
can
be
made
easier
by
hiring
a
local
professional
intermediary
who
will
assist
us
in
dealings
with
business
associate
or
influential
friends
in
finding
prospective
customers.
We
can
contact
one
of
our
prospects
existing
12
13
pay)
Premium
for
work
on
weekly
rest
(%
100%
of
hourly
pay)
Major
restrictions
on
night
work
No
Major
restrictions
on
weekly
holiday
Yes
Paid
annual
leave
for
a
worker
with
1
14
year
of
tenure
(in
working
days)
Paid
annual
leave
for
a
worker
with
5
21
years
of
tenure
(in
working
days)
Paid
annual
leave
for
a
worker
with
10
30
years
of
tenure
(in
working
days)
Paid
annual
leave
(average
for
workers
21.7
with
1,
5
and
10
years
of
tenure,
in
working
days)
Social
protection
schemes,
benefits
&
labor
disputes
Social
protection
schemes
and
benefits
Data(Doing
Business
database
2015)*
&
Local
disputes
indicator
Availability
of
unemployment
No
protection
scheme
Health
insurance
existing
for
Yes
permanent
employees
Availability
of
courts
or
court
sections
Yes
specializing
in
labor
disputes
There
will
be
3
type
of
contracts-
a. Hiring
of
temporary
employees
b. Hiring
of
employees
on
fixed
term
contracts
c. Hiring
of
employees
in
permanent
scheme
Syria
recently
eliminated
the
severance
payment
obligation
but
increased
the
notice
period
applicable
in
case
of
redundancy
dismissals.
We
will
therefore
implement
a
100%
pay
premium
for
weekly
holiday
work
and
decrease
the
total
term
of
fixed-term
contracts.
Financial Analysis
Projected
Financial
Plan
The
initial
capital
investment
will
come
form
variety
of
sources.
The
firm
will
contribute
to
the
working
capital.
Depending
on
the
number
of
investors,
the
amount
will
vary.
The
remaining
amount
will
be
funded
through
external
credit
supplied
by
Bank
of
Syria,
in
consultation
with
the
government.
The
credit
will
directly
be
taken
from
the
bank,
and
will
be
repaid
in
full
over
each
profitable
year.
Government
14
grants
received
by
the
Government
will
also
be
repaid
as
each
profitable
year
arises.
Fig.
Showing
distribution
of
Start-up
venture
capital
resources
of
PDG
S.A
We
have
budgeted
enough
investment
to
cover
any
potential
losses
and
have
additional
personal
financial
resources
available
for
equity
investment
if
sales
do
not
match
predictions.
(000
$)
START-UP
REQUIREMENTS
START-UP
EXPENSES
Legal
800
Insurance
1,500
Utilities
200
Rent
3,000
Accounting
fess
2,000
Expensed
equipment
8,000
Advertising
6,500
Other
8,000
30,000
TOTAL
START-UP
EXPENSES
START-UP
ASSETS
Cash
required
44,500
Other
Current
Assets
3,500
Long-term
Assets
5,000
15
53,000
83,000
TOTAL
ASSETS
TOTAL
REQUIREMENTS
START-UP
FUNDING
Start-up
Expenses
to
Fund
Start-up
Assets
to
Fund
TOTAL
ASSETS
Liabilities
and
Capital
Liabilities
Current
Borrowing
Long-term
Liabilities
Accounts
payable
(Outstanding
Bills)
Other
Current
Liabilities
(Interest-free)
TOTAL
LIABILITIES
Capital
Planned
Investment
Additional
Investment
Required
TOTAL
CAPITAL
TOTAL
CAPITAL
LIABILITIES
AND
30,000
53,000
83,000
8,500
44,500
0
44,500
53,000
15,000
45,000
3,000
0
63,000
10,000
10,000
0
20,000
(30,000)
(10,000)
53,000
Total
Funding
83,000
Important
Assumptions
We
are
assuming
approximately
15%
sales
on
credit
and
average
interest
rates
of
10%.
These
are
considered
to
be
conservative
in
case
our
predictions
are
erroneous.
GENERAL
ASSUMPTIONS
Year
1
Year
2
Year
3
Plan
month
1
2
3
Current
Interest
10%
10%
10%
rate
Long-term
10%
10%
10%
Interest
rate
Tax
rate
30%
30%
30%
Other
0
0
0
16
Break-even
Analysis
Gross
margin
is
assumed
to
be
100%
and
we
base
or
break-even
analysis
on
that,
which
means
we
will
have
insignificant
direct
cost
of
sales.
An
average
of
10%
commission
rate
is
expected
on
average
profitability
rate
for
the
first
three
years.
We
expect
one
home
sold
per
month
to
guarantee
a
break-even
point.
BREAK-EVEN
ANALYSIS
Monthly
Revenue
Break-even
8,198
Assumptions
Average
Percent
variable
Cost
0%
Estimated
monthly
Fixed
Cost
8,198
Projected
Profit
and
Loss
The
following
will
list
the
revenues
and
associated
costs.
We
will
have
higher
costs
in
marketing
and
advertising
as
we
attempt
to
build
sales
volume.
We
can
expect
more
or
less
consistent
monthly
profits
to
begin
in
year
3.
17
18
Pro
forma
Profit
and
Loss
PRO
FORMA
(000
$)
PROFIT
&
LOSS
Year
1
(000 $)
(000 $)
Year 2
Year 3
19
Sales
117,800
160,000
195,000
Direct
Cost
of
0
0
0
Sales
Other
Cost
of
0
0
0
Sales
TOTAL
COST
OF
0
0
0
SALES
Gross
Margin
117,800
160,000
195,000
Gross
Margin
%
100%
100%
100%
Expenses
Payroll
46,500
49,000
58,0000
Sales
and
6,000
6,000
8,000
Marketing
and
Other
Expenses
Depreciation
0
2,500
2,500
Rent
18,000
18,000
20,000
Utilities
3,400
3,600
4,000
Insurance
1,100
2,000
2,000
Payroll
taxes
6,975
7,350
8,700
Travel
2,000
3,000
5,000
Other
14,400
16,000
17,000
Total
Operating
98,375
107,450
125,200
Expense
Profit
Before
19,425
52,550
69,800
Interest
and
Taxes
EBITDA
19,425
55,050
72,300
Interest
Expense
5,805
5,090
3,940
Taxes
Incurred
4,086
14,238
19,758
Net
Profit
9.534
33,222
46,102
Net
profit/Sales
8.09%
20.76%
23.64%
Projected
Cash
Flow
The
following
is
our
cash
flow
as
expected.
Short-term
loan
is
expected
in
two
equal
payments
in
year
2-3.
20
PRO
FORMA
CASH
(000
$)
FLOW
Year
1
Cash
Received
Cash
from
Operations
Cash
Sales
100,130
Cash
from
14,899
Receivables
SUBTOTAL
CASH
115,029
FROM
OPERATIONS
Additional
Cash
Received
Sales
Tax,
VAT,
0
HST/GST
Received
New
Current
0
Borrowing
New
Other
0
Liabilities
(interest-free)
New
Long-term
0
Liabilities
Sales
of
Other
0
(000 $)
(000 $)
Year 2
Year
3
136,000
23,007
165,750
28,427
159,007
194,177
2,000
2,000
2,000
2,000
21
Current
Assets
Sales
of
Long-term
0
Assets
New
Investment
3,000
Received
SUBTOTAL
CASH
118,029
RECEIVED
Expenditures
Expenditures
from
Operations
Cash
Spending
46,500
Bill
Payments
60,318
SUBTOTAL
SPENT
106,818
ON
OPERATIONS
Additional
Cash
Spent
Sales
Tax,
VAT,
0
HST/GST
Paid
Out
Principal
0
Repayment
of
Current
Borrowing
Other
Liabilities
0
Principal
Repayment
Long-term
3,600
Liabilities
Principal
Repayment
Purchase
Other
5,000
Current
Assets
Purchase
Long-
7,500
term
assets
Dividends
1,000
SUBTOTAL
CASH
123,918
SPENT
Net
Cash
Flow
(5,889)
Cash
Balance
38,611
Projected
Balance
Sheet
PRO
FORMA
BALNCE
SHEET
Year
1
Assets
Current
Assets
Cash
38,611
163,007
198,177
49,000
73,539
122,539
58,000
87,320
145,320
0
8,000
0
7,000
5,000
7,000
5,000
5,000
2,000
142,539
6,000
170,320
142,539
59,080
170,320
86,937
Year
2
59,080
Year
3
86,937
22
Accounts
Receivable
Other
Current
Assets
TOTAL
CURRENT
ASSETS
Long-term
Assets
Long-term
Assets
Accumulated
Depreciation
TOTAL
LONG_TERM
ASSETS
TOTAL
ASSETS
Liabilities
and
Capital
Current
Liabilities
Accounts
Payable
Current
Borrowing
Other
Current
Liabilities
SUBTOTAL
CURRENT
LIABILITIES
Long-term
Liabilities
TOTAL
LIABILITIES
Paid-in
Capital
Retained
Earnings
Earnings
TOTAL
CAPITAL
TOTAL
LIABILITIES
AND
CAPITAL
Net
Worth
2,771
3,764
4,587
8,500
8,500
8,500
49,882
71,343
100,024
12,500
0
17,500
2,500
22,500
5,000
12,500
15,000
17,500
62,382
86,343
117,524
4,448
15,000
6,187
9,000
7,266
4,000
2,000
4,000
19,448
17,187
15,266
41,400
36,400
29,400
60,848
53,587
44,666
23,000
(31,000)
9,534
1,534
62,382
23,000
(23,466)
33,222
32,756
86,343
23,000
3,756
46,102
72,858
117,524
1,534
32,756
72,858
23
Appendix
1.
SWOT
Analysis
Strengths
S W
Well
diversified
Numerous
partnerships
and
joint
ventures
throughout
the
history
Current
financial
condition
and
future
cash
generation
leaves
company
in
a
favorable
position
Second
largest
real
estate
company
in
Brazil
Complex
corporate
structure
Some
investments
lack
more
visibility
Acts
a
co-developer,
pairing
with
other
companies
in
this
sector.
Presence
limited
to
Brazil
and
Argentina
24
2.
Organizational
Structure
Project
Supervisor/Board/
Sponsor
Business
Development
Department
Project
General
Manager
Sales
Estimating
/Tenderin
g
/QS
Departme
nt
Human
Resources
&
Administratio
n
Department
Human
Resources
Development
Operations
Departme
nt
Constructio
n
Execution
Marketing
Financial
Departme
nt
Costing
Estimators
Administratio
n
Accounts
Safety
Purchasin
g
Quantity
Surveyors
Quality
Transport
Stores
Legal
25
Insurance
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26