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5.7 Sales Projection Year 1

In this section of the business plan we discuss the sales projections for the first year that we have included in this business plan. In order to truly be realistic about the future, we believe that we need to factor in different market conditions into our sales forecasting. As when looking forward at Home At Last Realty, we have projected our sales based on either a slow market condition characterized by a sluggish economy, a good market condition which we understand to be a economy operating under normal economic conditions of demand and supply and finally a great market characterized by an booming economy like 2005 when you could barely keep up with the sales volumes coming in through the door.

Another item that we have factored into our sales projections is sales seasonality - it is a fairly well known fact in the real estate business that busiest time of the year tends to be the spring and the summer. Once the summer home buying season is over, school starts up and most folks tend to put aside their plans to buy another home for the rest of the year. Indeed many homes are also taken out of the listing service by realtors and home financing solutions related to home buying tend to slow down. We are projecting that Jose and Dianna will have to deal with about 11% of their business coming in during Q1, 77% of the annual business in both Q2 and Q3 and another 11% of the annual business in Q4.

Thus we are projecting that for the first year in a good market condition we will probably be able to get to $360,000 in selling 12 homes with each generating about $30,000 in both total revenues. In the event the market for real estate were to slow down, we are projecting that we will be able to sell 9 homes for the first year that will bring in a total of $270,000. Also in the event we have a boom in home sales and actually wind up with a great market condition, we project that Home At Last Realty will be able to take in approximately $450k having sold up to 15 homes in its first year of operations.

The $30,00 profit that we are projecting per home assumes that the market value of our typical home will be approximately $500k and a sales commission of 6%. Since there will be 4 junior realtors besides the two partners, we feel that this gives us plenty of room for these very realistic projections given the vast experience of Jose and Dianna. The junior real estate agents are not expected to contribute too much to the bottom line in year one but will continue to grow steadily as time progresses.

Quick Links:

  1. Go to the Corresponding Template section for this industry.
  2. Go to the Corresponding Questionnaire section for this industry.

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