“I knew that my business plan would be the most important document in my immigration application through the BC PNP Program (in Regional Business Category) and that it must be realistic. Fortunately, I choose the best company to do this which was Business Plans Canada. Although I was in Iran, I just called them then they arranged everything. Now I’m in Canada and have my business running.”
Hossein Shokouhi
ABOUT HIGH KOOL LTD.
Business Description
High-Kool Ltd. is an exciting new business that has the potential to revolutionize the commercial and residential construction industry in BC, and throughout Canada.
Mr. Shokouhi currently owns and operates a very successful pre-insulated air duct company in Iran. It is his intention to immigrate to Canada and to bring this innovative industry to British Columbia which is recognized around the world for its green building construction in both the residential and the commercial building sector. An electrical/technical engineer by training and a businessman who has proven his skills by building a start-up business into a million-dollar-plus industry, Mr. Shokouhi has established processes and agreements with Kingspan for importing container loads of the panels and the tools and accessories required to fabricate the air ducts. A specialized machine for designing and cutting the air ducts will be imported from Ohio in the United States; the company selling this product also provides on-site training for operators of this machine.
Mr. Shokouhi’s company High-Kool Ltd. will expand the green building opportunities in British Columbia, and create significant savings for both contractors and building owners with this exciting new product. The company will create four new jobs in the first year of business and will provide a total of 13 new jobs by its third year of operation.
High-Kool will import pre-insulated panels to build (fabricate) air ducts. Since the early 1900′s air ducts, which are used to circulate air throughout buildings, have been made of sheet metal. The sheet metal ducts are heavy, cumbersome and require insulation after they have been installed. High-Kool will be using KoolDuct© Systems, produced by Kingspan Insulation in the United Kingdom. This product meets all the Canadian and US regulations for insulation, safety, smoke and flame code requirements. The most significant aspect of this product is that it is ideal for green building construction. It has an energy efficiency rating that is 20 percent higher than metal duct works; it vastly improves Indoor Air Quality as it uses antimicrobial silicone which limits mold and mildew and eliminates the risk of insulation fibres circulating in the air. The KoolDuct panels are CFC/HCFC-free with zero Ozone Depletion Potential (ODP) and they can reduce annual costs of fans circulating air by up to 30 percent. The High-Kool system is 85 percent lighter than metal air ducts so it causes less physical stress on workers and requires less labourers to install; air ducts can be flush-mounted to ceilings – significantly reducing the amount of space required for Heating, Ventilating and Air Conditioning (HVAC) systems. The ease of installation and space saving components reduce capital costs of construction by 21 percent.
This business plan is simply that, a planning document. The need for adaptive and flexible planning is a key component of a successful business, and the most successful business plans act as a GPS guide that allows course correction, rather than as a static road map that doesn’t show how a detour can provide a better outcome. If Mr. Shokouhi needs to adapt any aspects of this plan to meet his business goals, he will do so knowing that flexibility and adaptive strategies are the key to success during the first three years of starting a new business.
Ownership and Management
High-Kool will be an incorporated business, jointly owned by Mr. Hossein Shokouhi and his wife Foroogh Pourandi. Mr. Shokouhi will be the General Manager and Ms. Pourandi will provide administrative services. Initially, a sales manager will complete the management team, he/she will report to Mr. Shokouhi; once the business is fully operational a project manager will be hired. Mr. Shokouhi will be responsible for all the organizational, administrative, and financial aspects of the company; the sales manager will meet with potential clients and develop leads in both the wholesale and the fabrication aspects of the business. The project manager will manage the operations of the company, including the technical and general labour staff.
Key Initiatives and Objectives
The key initiatives for High-Kool are to establish the business by opening a warehouse, hiring a sales person, and building knowledge of the availability and benefits of the pre-insulated duct works in the HVAC and construction industry.
While waiting for the immigration process Mr. Shokouhi will start building his contacts and advertising lists. Once immigration is guaranteed Mr. Shokouhi will implement the process of registering the business name and incorporating the company through the online services of Small Business BC. After arriving in British Columbia, he will lease a warehouse location, hire a sales manager and begin the process of setting up his business. As marketing this product will be as important as importing the panels, there will be a concentrated effort to make contact with customers. Once the business is established, the sales manager position will turn into a project manager position.
In order to meet his objectives of becoming the largest provider of pre-insulated air duct panels in British Columbia, Mr Shokouhi will:
- Meet with a minimum of five potential customers a week during January and February
- Hire a sales manager by the third week of January
- Ensure that the sales manager is meeting with ten potential customers a week over the next eight weeks
- Launch a web site and have information materials and samples available by the end of January
- Hire and train staff by the end of the first week in February In order to meet growth objectives High-Kool will increase its stock and sales by: (a) Importing one container per month from July 2011 to April 2013 and by increasing revenues by approximately 10 percent per month over the first year of operation; (b) Increasing imports to two containers per month from May 2013 to October 2013; (c) Requiring imports of three containers per month from November 2013 to May 2014; and (d) Establishing imports of four containers per month by the end of Year 3.
Market Opportunities
The commercial and residential construction industry in Canada is in a period of growth and there is a large market for High-Kool’s products within this industry.
The Construction Sector Council of BC, the group involved in the commercial, industrial and institutional/government building sector, (the term commercial is used throughout this plan to refer to all three of these sectors) projects steady growth in the industry between 2011 and 2018. The February 8, 2010 edition of the Journal of Commerce reports that “Construction GDP is predicted to increase by seven per cent in 2010 and 4.4 per cent in 2011….Construction output will accelerate in the next three years, growing by 9.5 per cent in 2012, 11.6 per cent in 2013 and 8.9 per cent in 2014.”
The BC Stats report on the value of building permits issued between January and July 2009, and the same period in 2010, also shows significant growth in the construction sector. In Victoria there was an 84.4 percent growth in residential building permit values. Growth in commercial construction permit values in Greater Vancouver was 22 2 percent during this period, and it was 11.5 percent in the Lower Mainland. The institutional sector grew by 29.9 percent in Greater Vancouver and 32.2 percent in the Lower Mainland. Industrial construction permit values were down in both areas during this period. The commercial, industrial and institutional sector growth in Victoria was not favourable however; there was a 60.5 percent decline in commercial permit values and a 76.6 percent decline in government/institutional construction permit values. This decline in the Victoria commercial market is marginally offset by the significant growth in residential construction. If needed, the issue of lower commercial sales in the Victoria area could be addressed through locating a High-Kool warehouse and project manager in the Lower Mainland area. (Since this plan was written, the business has been established in Chilliwack, BC.).
Overall, the extensive growth in residential construction in Victoria, an area renowned for its green buildings, and the growth in commercial construction in Greater Vancouver and the Lower Mainland, and the steadily increasing demands for green building construction, is good news for High-Kool.
* For the purposes of measuring growth, the Provincial Government has designated development areas. The Greater Vancouver Development Area is composed of Anmore, Belcarra, Bowen Island, Burnaby, Coquitlam, Delta, Langley, Langley DM, Lions Bay, Maple Ridge, North Vancouver, New Westminster, Pitt Meadows, Port Coquitlam, Port Moody, Richmond, Surrey, University Endowment Lands, Vancouver, West Vancouver, and White Rock. The area known as the Southern Lower Mainland Development Area includes the following communities: Fraser-Valley Regional District, Abbotsford, Chilliwack, Harrison Hot Springs, VL, Hope DM, Kent DM, and Mission. Throughout this plan the term Greater Vancouver refers to the development area described above and the term Lower Mainland refers to the Southern Lower Mainland communities described above.
Competitive Advantages
The most significant advantage for High-Kool is the energy savings aspects of the pre-insulated ducts. Energy costs will only increase over time, and the need to increase green building components in construction will call for more products such as the pre-insulated ducts. These cost-savings advantages are reinforced by the labour and space reductions that are a key part of this system; the ability to reduce costs, accelerate installation times and save money on operational costs gives the High-Kool system a clear advantage in the market place.
There is one other company in BC providing these products, Green Duct Ductworks in Vancouver; they appear to be a small company, their undeveloped website information is a verbatim copy of Mr. Shokouhi’s Iranian website. Requests for information made through the company’s website email have not been answered.
Mr. Shokouhi’s success with building this same business in Iran is also an advantage in that he knows how the product performs for both fabricating and installation and he can speak directly to its benefits.
Marketing Strategy
Marketing will be the key to the success of this company as it is a relatively unknown product in BC. Mr. Shokouhi’s focus, once he has become a landed immigrant, will be on working with the sales manager to make contact with the mechanical contractors, the fabricators and the commercial and residential contractors who will be his customers for both the wholesale and the fabricated products. Other strategies that will support the face-to-face meetings include development of a full-information website, brochures, and product samples that demonstrate the quality of the jointing process and the ease of installation and advertising within the industry. A list of publications and organizations that will be used for advertising and outreach is included in the business plan. Mr. Shokouhi will also join several professional associations involved in the construction industry.
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