Final Business
Plan Assignment
BUQS4041A
ENTREPRENEURSHIP AND INNOVATION
24th MARCH 2025
TITLE: Create a Business Plan - Assignment
GROUP NUMBER: Group 6
SUBMITTED TO: Ms. Anele Somaguda
SUBMISSION DATE: 2025/03/25 @17:00
STUDENT NAME & SURNAME:
STUDENT NUMBER:
Blessing Themba
2306271
Nkoliseko Nyubuse
2579566
Seluleko Dladla
2609677
Simingaye Nxumalo
2374156
Thuli Dlokweni
2200792
Veeddeya Dheda
2462643
1
Business Plan
TO BE PUBLISHED BY
24/03/2024
A Technological Approach To
Real Estate Practices
Introducing:
Take-A-Res
Produced by Top Level Management
A PRODUCT OF GROUP 6 PROPTECH PRACTITIONERS
(PTY) LTD.
2
CONTENTS PAGE:
INTRODUCTION AND BACKGROUND: ................................................................................4
COMPANY OVERVIEW: ...........................................................................................................4
PRODUCT DESCRIPTION: ........................................................................................................6
TARGET MARKET: ....................................................................................................................7
MARKETING STATEGY ...........................................................................................................9
FINANCES AND BUDGETING: ..............................................................................................13
RISK MANAGEMENT: ............................................................................................................18
REFERENCES: ..........................................................................................................................22
3
INTRODUCTION AND BACKGROUND:
'Take-A-Res’ is an innovative online platform designed by Group 6 Proptech Practioners (Pty)
Ltd (G6PP). The app aims to simplify the student accommodation search process. It addresses
the common problem students face when trying to find suitable housing, particularly in unfamiliar
areas. The platform allows RES owners to list properties with detailed descriptions, images,
amenities, proximity to key services, and student reviews. By centralizing accommodation
options and enhancing transparency, 'Take a Res' aims to become a trusted resource for
students seeking quality housing.
The platform functions similarly to e-commerce marketplaces like Takealot, Amazon, or Tinder,
where RES owners advertise their properties, and students can browse, compare, and swipe
left or select accommodation based on their needs.
Key Features on the platform:
•
Comprehensive Listings: RES owners can showcase their properties with photos, room
sizes, and available facilities.
•
Search & Filter Functionality: Students can filter based on budget, location, amenities, and
reviews.
•
Review System: Provides student feedback to improve transparency and accountability.
•
Proximity Information: Shows nearby transport links, stores, and other essential services.
•
Vacancy Rate & Room Availability Data: Displays real-time availability of rooms to help
students make informed decisions.
COMPANY OVERVIEW:
Company Summary: Take-A-Res is a Proptech company under the G-6 Property Practitioners
(PTY) (LTD) portfolio, and our online platform uses market analysis, real-time data, and student
preferences (with the aid of AI) to suggest the best-fit accommodations rather than requiring
students to search manually. It provides students with information about nearby amenities
(stores, libraries, and proximity to transport)
Mission Statement: Take-A-Res believes in transparency and efficiency. We provide simple and
quick access to student accommodation ratings and vacancies. We aim to assist both
accommodation providers and students with an improved communication platform for greater
experience.
Company History: The company was founded in 2025 by G-6 Property Practioners which
comprises of 6 members, namely: Veeddeya Dheda, Blessing Themba, Seluleko Dladla,
4
Simingaye Nxumalo, Nkoliseko Nyubuse and Thuli Dlokweni. The ordeal of looking for student
accommodation has proven rather cumbersome due to reasons beyond the control of students.
We sought to find a solution, and this was the genesis of Take-A-Res.
Markets and Products: Our online platform is a technological solution that significantly reduces
the issues faced by students when looking for an ideal residence. We provide honest, verified
review systems to provide all potential residents with honest exposure to students about the
living conditions and benefits. We help accommodation providers with a marketing platform to
attract potential students who will also be able to book their spots directly from our site.
Management Team: Our Team of 6 has unique roles and our management structure is as
follows:
•
Finance Officer (CFO): Veeddeya Dheda, Graduate in Finance from the University of
Johannesburg. Responsibilities include managing the company budget, monitoring
expenses and financial health.
•
Marketing and Sales Professional: To be outsourced. Responsibilities include promotion of
the platform, finding users and creating long lasting relationships with potential partners in
the real estate industry.
•
Software Developers: To be outsourced. Responsibilities include the development and
testing of the platform to ensure a seamless and flawless user experience.
•
Customer Success Manager: Seluleko Dladla, Property Studies Graduate from the
University of Witwatersrand. Responsibilities include customer service, user feedback and
creating long-lasting customer relationships.
•
Product Manager: Simingaye Nxumalo, Property Studies Graduate from the University of
Witwatersrand. Responsibilities include liaison between the technical and non-technical
teams to consistently improve the platform and our vision.
•
Chief Executive Officer (CEO): Nkoliseko Nyubuse, Property Studies Graduate from the
University of Witwatersrand. Responsibilities include company representation, high-level
decision making and managing overall operations. This requires strong leadership and clear
vision.
•
Legal Structure and Ownership: Take-A-Res is equally owned by all 6 members.
•
Legal Officer: To be Outsourced. Responsibilities include keeping the company in line with
legal policies in the property industry, protecting our IP and the information or all parties
involved.
•
Locations and Facilities: Our business can be run independently online; we can arrange
online meetings to discuss matters and changes in the business.
5
PRODUCT DESCRIPTION:
Opportunity: Student accommodation providers spend a lot of money on marketing and are
dependent on proximity and return customers for occupancy. For big companies this may not
be a groundbreaking opportunity to cut costs on marketing but an opportunity to get great
reviews to back their services. However, for smaller and upcoming accommodation providers,
this could create immense exposure for them in the market. This also gives students realistic
timelines and available vacancies for the residences nearby, finding a res has never been so
easy.
Product Overview: The app/platform to be used would narrow down a student's search items by
enabling a student to type in their preferences for an ideal accommodation, which would include
proximity to university, grocery stores, public transport, room types, and aesthetic preferences.
The app would then filter out their options and list accommodation options that would suit their
preferences.
Key Participants: Our partnerships will include the accommodation providers such as South
Point, Thrive Group, private accommodation providers (The Campus, 100 Jorissen and Civic
Towers), TVET colleges, broadband providers, and software maintenance.
Pricing: For each accommodation provider, there will be a monthly fee which will cover online
and email marketing. There will also be a client commission for every student that signs up and
successfully books using our platform. This will also be discussed in the MARKETING
STATEGY under the Marketing Mix section.
6
TARGET MARKET:
1. Primary Target Market: Tertiary education students
Undergraduate Students (Wits):
•
Age Range: 18–24 years old.
•
Enrollment: Wits has approximately 40,000 students, with a significant portion being
undergraduates.
•
Accommodation Needs: Many first-year students are new to Johannesburg and require
safe, affordable, and convenient housing close to campus. They often prioritize proximity
to public transport, libraries, and other amenities.
•
Budget:
Most
undergraduate
students
are
budget-conscious,
with
monthly
accommodation budgets ranging from R3,000 to R6,000.
Postgraduate Students (Wits):
•
Age Range: 25–30+ years old.
•
Enrollment: Wits has a growing postgraduate population, with many international
students.
•
Accommodation Needs: Postgraduate students often seek quieter, longer-term
accommodation with private facilities. They may also prioritize proximity to research
facilities and libraries.
•
Budget: Postgraduate students typically have slightly higher budgets, ranging from
R5,000 to R10,000 per month.
Students at Vocational Colleges and Training Institutions (Surrounding Wits):
•
Age Range: 18–30 years old.
•
Enrollment: There are several vocational colleges and training institutions near Wits,
such as Boston City Campus and Rosebank College, with thousands of students.
•
Accommodation Needs: These students often have tighter budgets and may prioritize
affordability over proximity to Wits.
•
Budget: Monthly budgets typically range from R2,500 to R5,000.
2. Secondary Target Market
Parents/Guardians of Students:
•
Role: Parents and guardians often assist in the accommodation search, especially for
younger students or those relocating from other provinces or countries.
•
Priorities: Safety, security, and proximity to campus are top concerns.
•
Budget Influence: Parents may be willing to pay a premium for secure and well-located
accommodation.
7
International Students (Wits Enrolled):
•
Enrollment: Wits has a significant international student population, with students from
across Africa and other continents.
•
Challenges: International students face unique challenges, such as unfamiliarity with
Johannesburg, language barriers, and visa-related administrative processes.
•
Accommodation Needs: They often seek fully furnished accommodation with flexible
lease terms.
•
Budget: International students may have higher budgets, ranging from R6,000 to
R12,000 per month.
Educational Institutions (Indirectly):
•
Role: Universities and colleges often struggle to provide sufficient on-campus housing.
Take-A-Res can serve as a recommended off-campus accommodation platform.
•
Partnership Potential: Collaborations with Wits and other institutions can lead to referrals
and increased platform usage.
3. Niche Target Markets
Students with Disabilities:
•
Needs: Accessible accommodation with features such as ramps, elevators, and modified
bathrooms.
•
Market Size: While smaller, this segment is critical for inclusivity and compliance with
accessibility laws.
Students Seeking Short-Term Accommodation:
•
Needs: Students on exchange programs, internships, or short courses often require
flexible lease terms.
•
Market Size: Growing due to increasing international exchange programs and short-term
courses.
Students with Specific Lifestyle Preferences:
•
Needs: Eco-friendly accommodation, pet-friendly options, or student communities with
shared interests.
•
Market Size: A niche but growing segment, particularly among environmentally
conscious students.
4. Geographic Focus
•
Primary Area: Braamfontein, Parktown, and surrounding suburbs near Wits.
•
Secondary Areas: Johannesburg CBD, Melville, and other areas with good transport
links to Wits.
8
•
Expansion Potential: Other universities and colleges in South Africa, such as the
University of Johannesburg and Tshwane University of Technology.
MARKETING STATEGY
With Take-A-Res aiming to grow as a business, it’s imperative that marketing strategy is one
that is of an optimal standard. A fully fledged marketing strategy will consider the following steps:
1). Determining the Need 2). Market Goals Aligned with Company Goals 3). Understanding
Market 4). SWOT Analysis 5). Marketing Mix Consideration 6). Budget Allocation and 7).
Evaluation. Some of these elements are already embedded in the document under different
headings. Therefore, this section will not reiterate all these points in this Business Plan, to avoid
redundancy.
Marketing Methods
To fully maximize our exposure to our intended audience, Take-A-Res is aimed at being
promoted through these various cyber market distribution channels:
•
Advertisements:
o
Billboards
o
Mobile games: where possible G6PP aims to gauge consumers on mobile phones
through the intermission periods on mobile games.
o
We can pay social media platforms to push our advertisements on their apps. These
apps will be Instagram, Tik Tok, YouTube, and LinkedIn.
•
Social Media: Accounts will be opened on Instagram and Tik Tok so that end users can
follow us and see the endeavors of the new Take-A-Res platform. Beyond that, we will also
advertise the new business venture of Take-A-Res on our already existing social media
platform created by our holding company, G6PP.
•
Promoted by our Clients: Where our primary clients, the student accommodations, have
people interact with the student residence before without having engaged with our platform,
we would encourage them to still promote our app. This will be stipulated in the contractual
agreements signed by the residences on our app, stating that this is a requirement as a part
of maintaining a mutually beneficial relationship.
•
On the ground brand promoters: Employees that are hired overtime, will be tasked to be on
the ground to promote the app by dishing out brochures of the app, explaining how it works
and how it. If they have time, the promoters can, as far help the students, open an account
on the app there and then, promoters will stand near areas with high student population
density and street corners. They will also be present on university campuses and colleges
9
in the form of gazebos during certain varsity days where there are events where students
will be highly concentrated in one area. They will also operate in malls or shopping centers
where buses will drop students off there on the weekends. These areas have high student
foot traffic along easements.
•
Excursion to High Schools: Presentations will be made to various high schools. Plans will
be organized to capitalize on days where High Schools will have their career days or varsity
advertisement days.
•
Existing Brand Collaborations: These collaborations can be between brands of similar
offering, or brands with completely different offering.
•
Direct email: To students that already utilize the app, we will have them subscribe to the app
so that they can receive regular communication from us. From students who are not utilizing
the app, we aim to discuss with existing institutions with whom have collaborated with us to
be able to email on our behalf the students of wits
•
Direct Calling
How will all these promotional techniques be funded?
G6PP has members who have all its members who have largely split capital investment into
the company. Beyond that, the business will have acquired funding from private investments
and the banks. Ultimately, the business will set aside a budget for promotional activities in the
amount of R5 million in the first year and it will continue to be adjusted according to how the
in-house marketing team will utilize the budget.
Marketing mix
Group 6 Protech Practitioners Ltd has decided to implement the 7Ps of the marketing mix as
introduced by the founder of it the concept - E. Jerome McCarthy, American marketing
professor. These concepts are well known to be People, Profit, Place, Price, Product,
Process, Physical Evidence. Let’s discuss them practically below:
Product and Place: As emphasized already through this business plan, the product itself is
an app that will host many student accommodations on it. For more information refer to the
“Introduction and Background, Company Overview, and Product Description,” as it has been
explained comprehensively there.
Variation in product appeal will need to be made sporadically, to avoid customers believing
our app is outdated.
In terms of ‘place’ as a part of the marketing P’s, the product is intended to be easily accessible
from a mobile device. However, the app will be available on other devices such as PC’s, and
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tablets too. Although the best features are available via the app version, it can also be opened
via a website.
People: As highlighted already, our two main target markets are the student accommodations
that will be listed on our apps, and the students that will be utilizing the app while searching for
residences. To ensure we maintain a good relationship with these individuals, we will ensure
we have platforms where we could regularly advertise our endeavors, our services and ensure
that we have established platforms for consumer feedback from our target markets. These
include chat boxes, utilization of:
•
Chat boxes: Where our PR team will be able to engage regularly with consumers with their
concerns. This will be supported as well by an AI robot that can respond quickly to generic
questions the user might have.
•
Enquiry emails: Where consumers can digitally type their concerns with the app ratings.
•
Help Icon: Where consumers will be able to seek help from a generic help guide that has
been created by our tech providers
•
Online Surveys: Dished out twice a year where we loyal consumers will answer questions
related to their experience with the app. The feedback they provide will help us to improve
the app where needed.
Beyond those we have other stakeholders to consider, such as investor relations too and our
own employees. We aim to ensure that a healthy corporate culture is created by Group 6
Property Practioners Ltd. This will be done by:
•
Hybrid work environment: Regarding our in-house team, we will ensure that they can have
a minimum of 3 days of work in the office whilst the other two days can work from home.
This will allow them to maintain the creativity and working standard whilst also having a
personal life that can help them to maintain their health
•
Team building activities
•
Respect provided by top-bottom level management
•
Reward employees: Praise them privately and publicly where appropriate. Incentives may
be considered too.
Since these people are the drivers of our app, we need to ensure that they love the work they
are doing, so that they can produce optimal results for the Take-A-Res app.
Physical Evidence: This concept speaks about the appearance of the brand and how this will
appeal to end-users. The product aims to be clean in appearance with the colours of the brand,
that being light and dark shades of blue along with black and white. The app’s appearance was
11
inspired by other existing looks like the likes of Take-a-Res, Amazon, Tinder, Apple App Store
in terms of look and operation. However, we customized these to suit our image with the main
themed colours of our app, black, variations of blue and white. The app aims to be
“clean/minimalistic” and “professional” but still appeal to our target audience of students. This
will be amplified by reduced usage of multiple colours and hard structures.
Price: For the end-user: The app will be free because many digitalized platforms in the forms
of apps or websites, with which our target audience interact, are free to end users. Adopting a
fee, as some investors would propose, is anticipated to be hazardous to our business growth
mainly because Take-A-Res is an unknown app at present. Many might have their suspicions
towards paying a price for an app with an unknown reputation. Moreover, a small fee might drive
clients away simply because a large variety of customer bases are unwilling to pay subscription
fees because they are not of a working class. Although our app aims to provide a unique enduser experience, the nature of substitutes is readily available, since a student can find reses on
the internet as well for free, albeit with more difficulty than what our app provides. The only time
the end-user gets charged is if they upgrade to our advanced services on the app. This is
essentially a basic fee payment and a premium fee payment.
For Student Accommodations (reses): A listing fee will be charged. Reses listed on the platforms
will have to pay a monthly rental fee to stay being advertised on our app. The price determination
will be based on a flat-out listing strategy; that is a strategy that has all its accommodations
paying same listing fees regardless of their reputation and financial capabilities. Greater prices
will be paid by accommodations to be on the front page once the app is open, to be
recommended under suggestions on the app and to have their names appear first once various
letters
are
placed
in
the
search
bar.
Process: This concept speaks of the way the systems operate from product conception to
product delivery. To market the product effectively, the business will need to ensure that its
processes are seamless. This will be done by:
•
Our outsourced technicians will regularly look to improve the apps efficiency.
•
Having high barrier firewall systems to ensure viruses don’t deteriorate our system, or that
hackers don’t infiltrate our systems.
•
Ensure regular updates to apps from system updates to physical appearance innovations.
•
Addressing customer concerns as soon as possible through our mediums of communication.
12
Promotion: This concept speaks to the promotional strategies that are to be primarily utilized
to market the product. These are spoken about comprehensively under the Marketing
Methods.
When a company applies the Marketing Mix to their business approach, their marketing
objectives and endeavors become clearer. In our new Take-A-Res venture, we aim to
consistently apply this framework:
Marketing Methods SWOT Analysis
Strengths
• New idea into the market
• Large Financial Backing
• Low initial pricing strategies to
induce accommodations and
students
• Small management team
enhancing pace in decisions
Weaknesses
• Hefty Initial expenses
• Small Team of employees.
• Biased towards a customer
base that has access to
internet services only
• Purely online
Opportunities
• Patent/copy right idea
• Monopolize e-commerce with this
unique idea
• Expand nationwide in all student
accommodations, should idea
surpass initial stages
• Expand to apartments, beyond
student accommodations
• Increase pricing once we are
established and credible
• Opportunity for offline services:
Once a student has loaded an
accommodation or multiple
accommodations simultaneously,
they can remain with those
unrefreshed data until they refresh
again
Threats
• Threat of idea being
replicated
• Overspending on an
idea that has the
possibility of failing.
• Possibility of a long time
to break even
FINANCES AND BUDGETING:
13
START-UP COSTS
Take-a-Res | Projected Launch Date:
COST ITEMS
01 0ctober 2026
MONTHS
COST/MONTH
ONE-TIME COST
(R)
(R)
Technology Development (Website & App)
1,200,000
Platform Hosting & Cloud Services
6
25,000
Marketing & Branding (Digital Ads, SEO, social media)
6
84,000
Legal & Compliance (POPIA, Contracts, Business Registration)
TOTAL COST (R)
1,200,000
150,000
200,000
704,000
300,000
300,000
50,000
200,000
Office Space & Utilities
6
25,000
Employee Salaries (Developers, Marketing, Support)
6
200,000
1,200,000
Employee Payroll Taxes & Benefits
6
30,000
180,000
Communication (Phones, Internet, Software Subscriptions)
6
5,000
15,000
45,000
Computer Equipment & Software
200,000
200,000
Professional Services (Legal, Accounting, Consulting)
450,000
450,000
Insurance (Business Liability, Cybersecurity, Employee Benefits)
100,000
100,000
Travel & Entertainment (Meetings, Conferences, Investor Pitches)
6
10000
60,000
Bank Service Charges (Merchant Fees, Transaction Fees)
6
5000
30,000
Security & Data Protection
50,000
50,000
Cash-On-Hand (Working Capital Reserve)
500,000
500,000
Miscellaneous & Contingency
250,000
250,000
5,619,000
TOTAL ESTIMATED START-UP COSTS
•
Technology Development: Is the most significant one-time cost at R1,200,000, which is typical for building a platform.
•
Marketing & Branding: Takes up a large portion of ongoing costs, reflecting the need for substantial visibility for the platform’s
launch and growth.
14
•
Employee Salaries & Payroll Taxes: Will consume a considerable part of the monthly budget, with a total of R1,380,000 for the first
6 months.
•
Miscellaneous & Contingency: (R250,000) provides a buffer for unexpected costs, which is crucial for a start-up
Revenue Assumptions: Take-a-Res Financial Projections (Year 1: October 2026 to September 2027)
•
Product Sales: Take-a-Res platform will not generate direct product sales but will earn from service revenue such as listing fees
for RES owners, advertising, and potential partnerships with universities and other businesses.
•
Growth Assumptions: It’s assumed that Take-a-Res will onboard 1 000 RES listings in the first three months, with growth scaling
to 10 00 listings by the end of the first year.
Revenue from
Month
Listings
Listings
(R100/listing)
Advertising &
Other Revenue
Total Revenue
October
1,000
R100,000
R25,000
R125,000
November
3,000
R300,000
R75,000
R375,000
December
6,000
R600,000
R150,000
R750,000
January
8,000
R800,000
R200,000
R1,000,000
February
9,500
R950,000
R250,000
R1,200,000
March
10,000
R1,000,000
R300,000
R1,300,000
April
10,000
R1,000,000
R300,000
R1,300,000
May
10,000
R1,000,000
R300,000
R1,300,000
June
10,000
R1,000,000
R300,000
R1,300,000
July
10,000
R1,000,000
R300,000
R1,300,000
August
10,000
R1,000,000
R300,000
R1,300,000
15
September
10,000
R1,000,000
R300,000
R1,300,000
Total YTD
-
R9,750,000
R2,800,000
R12,550,000
Cost of Goods/Services Sold (COGS) Assumptions: These costs will scale up as the number of listings increases. The major
COGS components remain the same: cloud hosting, platform maintenance, and tech support.
Month
Total Revenue (R)
COGS Rate (%)
COGS (R)
October
R125,000
30%
R37,500
November
R375,000
30%
R112,500
December
R750,000
30%
R225,000
January
R1,000,000
30%
R300,000
February
R1,200,000
30%
R360,000
March
R1,300,000
30%
R390,000
April
R1,300,000
30%
R390,000
May
R1,300,000
30%
R390,000
June
R1,300,000
30%
R390,000
July
R1,300,000
30%
R390,000
August
R1,300,000
30%
R390,000
16
September
R1,300,000
Total YTD
R12,550,000
30%
R390,000
R3,765,000
Operating Expenses Assumptions: Projections for marketing and employee compensation scaling with growth.
Month
Total Revenue (R)
Marketing
Marketing
Expenses (%)
Expenses (R)
Employee
Employee
Total
Compensation (%
Compensation
Operating
of Revenue)
(R)
Expenses (R)
October
R125,000
20%
R25,000
25%
R31,250
R56,250
November
R375,000
20%
R75,000
25%
R93,750
R168,750
December
R750,000
20%
R150,000
25%
R187,500
R337,500
January
R1,000,000
20%
R200,000
25%
R250,000
R450,000
February
R1,200,000
20%
R240,000
25%
R300,000
R540,000
March
R1,300,000
20%
R260,000
25%
R325,000
R585,000
April
R1,300,000
20%
R260,000
25%
R325,000
R585,000
May
R1,300,000
20%
R260,000
25%
R325,000
R585,000
June
R1,300,000
20%
R260,000
25%
R325,000
R585,000
July
R1,300,000
20%
R260,000
25%
R325,000
R585,000
August
R1,300,000
20%
R260,000
25%
R325,000
R585,000
September
R1,300,000
20%
R260,000
25%
R325,000
R585,000
Total YTD
R12,550,000
R3,137,500
R5,647,500
R2,510,000
Net Income Calculation: Net Income = Total Revenue − (COGS + Operating Expenses)
17
Month
Total Revenue (R)
COGS (R)
Operating Expenses (R)
Net Income (R)
October
R125,000
R37,500
R56,250
R31,250
November
R375,000
R112,500
R168,750
R93,750
December
R750,000
R225,000
R337,500
R187,500
January
R1,000,000
R300,000
R450,000
R250,000
February
R1,200,000
R360,000
R540,000
R300,000
March
R1,300,000
R390,000
R585,000
R325,000
April
R1,300,000
R390,000
R585,000
R325,000
May
R1,300,000
R390,000
R585,000
R325,000
June
R1,300,000
R390,000
R585,000
R325,000
July
R1,300,000
R390,000
R585,000
R325,000
August
R1,300,000
R390,000
R585,000
R325,000
September
R1,300,000
R390,000
R585,000
R325,000
Total YTD
R12,550,000
R3,765,000
R5,647,500
R3,137,500
RISK MANAGEMENT:
Any factor that threatens or lowers a business’s ability to obtain its financial goals, profit or leads it to failure, is known as a
business risk. These risks can be caused by external factors (things out of the business’ control) and caused by internal factors
(decisions made within the business’ structure or its management). There are usually 4 types of business risks: strategic risk,
compliance risk, operational risk, and reputational risk. Consider the table below for their analysis:
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Type of Risk
Description of Risk
Arises when a business fails to follow its business model or market shifts can make its
Strategic
Risk
strategy less effective. E.g. if another well-funded competitor introduces a platform or
app with integrated virtual reality tours and better or more enhanced real-time booking
capabilities, our unique value proposition could be undermined.
When a business fails to comply with government specific distribution laws and may
face fines/legal actions because of doing so. E.g. Our platform processes personal data
Compliance/
regulatory
Risk
from students and RES owners. Non-compliance with data protection regulations
(regulatory bodies such as POPIA) could result in significant legal penalties. Regular
audits and updated compliance measures are necessary to mitigate this risk. Noncompliance with the Consumer Protection Act (CPA) could also lead to fines or legal
disputes. If our advertising or listing practices do not meet the standards set by ASA or
conflict with local rental advertising regulations, we could face fines or legal actions.
This risk occurs when day-to-day operations fail to perform. E.g. Technical issues such
Operational
as app downtime, server outages/loadshedding, or software bugs could hinder students
Risk:
from accessing listings and booking accommodations. Furthermore, inaccuracies in
real-time availability can negatively impact user experience and financial performance.
A business runs the risk of losing customers and its brand loyalty suffering when the
business’s reputation is ruined. This can happen because of an event, previous
Reputational
Risk:
business risk or any other occurrence. E.g. If fraudulent listings appear on the app, or if
there’s a data breach compromising sensitive user information, Take-A-Res’s credibility
could be severely damaged. If students frequently encounter fraudulent listings,
misleading descriptions, or unresponsive landlords, they may blame the platform.
Likewise, RES owners may complain if they get fake bookings or payment disputes.
Internal risks affecting a business often stem from management or executive decisions in
pursuit of growth. These choices can lead to physical or tangible risks that impact operations.
These risks can include on-site risks like fires, equipment failures, or hazardous materials that
can disrupt production and put employees at risk which result in legal or financial consequences
(Kenton, 2024).
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Contingency Plans to Mitigate These Risks
Effective risk management is essential for the sustainability and growth of Take-A-Res. By
identifying and preparing for potential risks, we can minimize negative impacts and ensure
continuity of service.
1. Reducing the business risk: Business risks are unpredictable and thus, aren’t entirely
avoidable. So, it’s important to identify the sources of risk that lie within your business
plan and external to the business. Most businesses should adopt a risk management
strategy, either before the business begins operations or after it experiences a setback, to
mitigate these risks. By documenting the initial causes of risk and the strategies used to
mitigate it, the business can more easily apply those solutions again in the future. This will
help the company better prepare to deal with risks as it presents themselves during the
business cycle. By documenting the causes of risk and the mitigation strategies used, a
business can more efficiently apply those solutions if the risk arises again. This minimizes
the time the risk remains unaddressed and reduces the overall cost of risk management
(Kenton, 2024). To mitigate the strategic risk, Take-a-Res can continuously innovate,
conduct market research – student surveys and ratings, and practise user feedback
implementation, to ensure that the business is forever evolving and keeping up to date
with market trends.
•
To mitigate compliance/regulatory risk, Take-a-Res can conduct regular audits and
updated compliance measures necessary to mitigate this risk.
•
To mitigate operational risk building/ensuring a robust IT support team and regular
system updates, are essential.
•
To mitigate reputational risk, establishing strict verification processes to maintain
transparent communication, and swiftly addressing any issues are key to
safeguarding our brand. Writing a Terms and Conditions may also assist with this
– fraudulent listings, misleading descriptions, or unresponsive landlords – since we
are just a booking system. We may also implement a strict verification process for
all RES owners – asking for proof of ownership prior to being listed.
2. Capital Structure: If a business has a high amount of business risk, may opt to adopt a
capital structure that has a lower debt ratio to ensure it can consistently meet its financial
obligations. If, by some means, any of the listed business risks affect the revenue and it
drops, the business may not be able to service its debt, which can lead to bankruptcy. A
lower debt ratio reduces the burden of servicing the debt, lowering the risk of bankruptcy if
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revenues decline. Additionally, when revenues rise, a company with less debt enjoys
higher profits and can comfortably meet its obligations. This can aid as a contingency plan
to migrate the effects of business risks (Kenton, 2024).
3. Safe working environment: Having clear policies that guarantee a safe working
environment would be an effective strategy for managing internal risks (Kenton, 2024).
Such as cybersecurity measures, and protocols for handling sensitive data to ensure
minimizing operational disruptions and maintaining compliance with labour laws,
protecting the owners/founders of the app.
4. Legal Compliance Issues Risks: Listings violating advertising standards (e.g., false claims
about property features, discriminatory listings, false representation of vacancies). To
mitigate this, we can:
•
Establish automated verification processes to review listings before they go live.
•
Ensure we are strict about data protection policies to ensure compliance with POPIA.
•
Regular/bi-yearly legal audits and staff training on laws and regulations. As well as
partner with legal consultants to stay updated on regulatory change. Get/hire a lawyer.
5. Fluctuating Business Costs: As app developers, advertising, lawyers, training will be
outsourced, fluctuating costs in these areas could affect profitability. To mitigate this, we
can:
•
Implement long-term contracts with service providers to secure stable pricing
(introducing a swap or options contract).
•
Diversify revenue streams, introduce both a free and premium version (for listings and
better allocation to accommodation providers).
•
Use data analytics to monitor marketing efficiency and optimize ad spending.
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REFERENCES:
1. Ridge, B.V. (2023) ‘Understanding the Origins of the 4Ps of Marketing: Unveiling the
Mastermind Behind the Concept’, Medium Multimedia, 24 November.
2. Lee, C.F. and Lee, J., 2009. Financial Analysis, Planning, and Forecasting: Theory and
Application. 3rd ed. Singapore: World Scientific.
3. Nugus, S., 2009. Financial Planning Using Excel: Forecasting, Planning, and Budgeting
Techniques. London: Cengage Learning.
4. Kenton, W. (2024) Business risk: Definition, factors, and examples. Investopedia. Available
at: https://www.investopedia.com/terms/b/businessrisk.asp [Accessed: 23 March 2025].
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