"We'll See About That"--Results of The Miami Herald's 2000 Business Plan Contest




A number of you have asked to see what Wind & Rain actually submitted to The Miami Herald's Business Plan 2000 Contest, since our entry, which came in 5th out of 325 entries, was given just a one line summary by The Herald. After careful consideration of all the effort put into the Wind & Rain Business Plan, and after weighing our proprietary interest in it, I have decided to put the Overview--which is the brief summary of the full business plan that we submitted to the Contest--onto our website so that others can share the ideas contained therein. It just seems like the time to start rebuilding our inner cities is now, and there is plenty of room for all who are interested in helping. I'd love to hear any comments or suggestions.aparrish@windandrain.com

Andy Parrish, President



Wind & Rain Business Plan 2000


OVERVIEW

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Fundamentals

This business plan is unusual in that it will ask you to consider political and social issues as well as economic ones. It will ask you to revisit the basics of Economics 101: risk and reward, supply and demand, and foundation building as the key to structure. It will ask you to put yourself in the shoes of Henry Ford, as he pondered the novel idea of transportation for Everyman; and fifty years later, of William J. Levitt, who created the concept of single family homeownership for that same Everyman. Fifty years later still, it will ask you to consider whether the principles that guided Ford and Levitt have been suspended, or merely forgotten, as applied to a huge segment of the American population: productive, "low end" wage earners striving to provide for their families through their own efforts. And over all, it will ask you to reconsider the building of personal human relationships as the fundamental basis of economic relations in a sustainable free market society.

Mission Statement

The Company's objective is to create, direct and participate in the rapid real estate appreciation, both residential and commercial, that occurs when new homes for ownership are developed in selected urban infill communities which are stagnating due to social dysfunction and long-term government neglect.

The Opportunity

A political shift is occurring nationwide. The recognition that subsidized rental projects have often contributed to the failure of lower income neighborhoods, together with a renewed focus on creating home ownership, has created a large new market of potential home buyers: working low-to-moderate income families.

New "Soft 2nd" Mortgage Programs offer compelling new opportunities for working renters to become home owners with fixed monthly payments that are close to their current rent. Miami's HOME (up to $35,000 at 1% to 3%, fixed, for 30 years), SHIP (up to $40,000 at 0%, with principal forgiven over 10 years), and the Miami-Dade Housing Finance Authority's "Deep Subsidy" (up to $145,000 at 4.43%) are examples of new civic thinking providing the necessary stimulus for financing development in lower income neighborhoods.

These innovative programs have provided the opportunity for the Company to expand upon its successful track record as the sole for-profit homebuilder in the historic Bahamian community of Florida's West Coconut Grove. Beginning in 1995, the Company has profitably developed and sold twelve new "spec" houses. These are the first to be built in this community in almost forty years. They have created both jobs and new home owners. A revitalizing West Grove has produced commercial as well as additional residential real estate opportunities for the Company.

What We Do

We create and direct "the rising tide that lifts all boats" in selected low income communities. The Company's primary business is the development and sale of new 3BR/2BA detached houses, on "scattered site" lots, for up to the current maximum allowed "SHIP" sales price of $119,439. We coordinate their purchase by first-time, low-to-moderate income home buyers by utilizing "soft 2nd" mortgage financing. The Company's secondary business is capitalizing on the rapid increase in value of the commercial real estate that directly results from the Company's leveraged infusion of new capital--and much higher "comparables"--into the residential market. The Company is not aware of any other "for-profit" company in Miami-Dade County that is pursuing this market at this time. The Company's only "competitors" are the various Community Development Corporations ("CDC's") and Habitat for Humanity.

The Company's experience has led to a strategy for profitability having a parallel focus: (i) tight control of every component of the renter-to-homeowner process on the residential side; and (ii) selective purchasing of undervalued properties on the commercial side.

Key Strategic Components

1. The selected target community must be "on the edge" of the depressed area with some of its social fabric--schools, churches, etc.--still intact.

2. The prospective purchasers who are allowed to participate are carefully pre-screened and evaluated by the Company as viable candidates for home ownership.

3. Residential lots purchased for development must ALL meet the Company's pricing criteria: Each house is its own profit center. Since the Company will be the sole buyer of commercial properties, they will be in key locations and will be negotiated at highly advantageous prices or they will be passed over.

4. Development costs will be strictly controlled through replication of Company proprietary "model" designs.

5. The Company will build into all sales contracts mechanisms it has developed and tested to protect the Company's profit margin on each house.

6. The creation of a Company directed "mutual association and fund" will give the Company the ability to control the prospective purchaser's finances--including expedited "credit repair," often at a discount--during the critical months leading to closing.

Marketing

The Company is a licensed Florida Real Estate Broker and will "cooperate" with other residential brokers both in the buying of lots for development and in the selling of Company houses. However, the Company's experience is that "word of mouth" and signs on lots that ask "Why Rent When You Can Own?" are the most effective forms of marketing, along with close cooperation with local not-for-profit agencies and civic groups. They can be informed of housing prices, floor plans, etc., via the Web and the Company's existing website at "http://www.windandrain.com".

Management

Anthony R. Parrish, Jr., Founder, President and CEO, was a tax lawyer before becoming in 1984 a founding partner of a commercial real estate brokerage company and later of his own real estate consulting practice. In 1995, he started Wind & Rain, Inc. in order to initiate the revitalization of the historic Bahamian community of West Coconut Grove.

David J. Alexander, VP and C00, with a degree in marketing and business administration, was the Executive Director and CEO of the Coconut Grove Local Development Corporation from 1983 to 1998 where he directed the development of over 40 new houses, and the rehab of 76 others. In 1999, he joined Wind & Rain, Inc.

Ysmael M. Benitez, VP for Construction and Development, is a Florida licensed general contractor who has built all of Wind & Rain's houses as well as its office headquarters. He has performed as general contractor or subcontractor on contracts in excess of $25 Million for all types of residential, industrial and commercial construction.

Dr. Richard Shepard, VP for Design, is currently the Director of the Center for Urban & Community Design at the University of Miami School of Architecture. A practicing architect since 1982, he is also a principal of Shepard Quareshi Associates, a multi-disciplinary consulting firm dedicated to improving the way people live through design.

Capital Requirements Wind & Rain has been capitalized to date by a $750,000 investment from its Founder. (Pro forma financial data has been purposely omitted here).



Copyright 2000 Miami Herald


BUSINESS Published Monday, September 18, 2000, in the Miami Herald




Business plan judges comment on the finalists

JUDGES
This year's contest was judged by: Betsy Atkins, Angel investor and Lucent board member; Andy Badolato, Investment Management of America; John Copeland McKinsey & Co.; Jesus Diaz, Ernst & Young; Helen Gomez, Adjoined; Bill Greene, Cenetec; Daniel Heimlich, Citrix Systems; Kevin Watson, C/max Capital; and Frank Young, Virtual Inc. Of your 325 entries, The Herald business staff selected the following 15 finalists to be judged by our panel of nine experts in the technology and investment world.

As we noted last year, the judges often had widely differing views on the plans, and we've included some of their comments below. Would-be entrepreneurs should learn from negative reactions, but should not be deterred. All they need is one big investor to get going.

FlowerGarage.com by Alex and Tony Muñoz-Suárez -- A classic business-to-business model, led by two brothers with broad experience, that wants to bring growers together with retailers.

Plus: ``Very professional business plan, good concept, strong management team.'' - Heimlich

Minus: ``How is this not just a flower wholesaler with a website? (Low barrier to entry.)'' - Badolato PDF Law by Richard O'Brien -- Getting mounds of legal documents into digital form.

Plus: ``Big market with no clear leader established.'' -- Copeland

Minus: ``Low barrier to entry. Needs proprietary relationships to overcome.'' -- Heimlich

Play Safe Pool/Spa by Paul McKain -- Device to stop drains from drowning children.

Plus: ``Terrific idea, good competitive analysis, strong need for the product, solid marketing idea. . . . Go for it!'' -- Greene

Minus: ``Not fully convinced the management team has a complete grasp on commercialization requirements.'' -- Copeland

3DCom by Eric Rayboy -- A novel 3D process for computer imaging.

Plus: ``If the product delivers as stated, could be very interesting.'' -- Badolato

Minus: ``No information regarding management, poor description of product, no quantitative description of market.'' -- Young

BusinessCardCD.com by Barbara B. Thomas -- A digital card that could contain ``a full-color catalog or show a tour of your plant.''
Plus: ``Could expand . . . to product demos such as video game teasers.'' -- Diaz

Minus: ``Seems more like a novelty item'' at high cost. -- Watson

Wind&Rain by Anthony R. Parrish Jr. -- constructing housing and commercial buildings in urban communities that suffer from ``social dysfunction and long-term government neglect.''

Plus: ``Very well written and organized plan. I like focused approach.'' -- Heimlich

Minus:
``A good return in terms of doing the right thing for humanity and for your soul, but what is the monetary return for the investment?'' -- Atkins

World Music Web by Jerry Sehi -- Providing B2B services to the musical instrument industry.

Plus: ``Interesting concept.'' -- Heimlich

Minus: ``Portal will compete with Mars Music and other established equipment sellers.'' -- Greene

National Healthcare Recoveries -- Discovering medical and prescription billing errors.

Plus: ``Hot field right now.'' -- Greene

Minus: ``Extremely competitive space with no barriers to entry.'' -- Watson

Enhanced Buoyancy Swimsuit by David D. Miller -- Aimed at children under 2 so they can learn to swim without danger of drowning.

Plus: ``If my daughter's swimming instructor told me this device would help her learn how to swim, I'd buy it.''

Minus: ``Poorly written.'' -- Watson and others

Vending Refreshment Commission Auditing Service by Jeff Stubins -- Software program to download information from vending machines to clients' personal computers.

Plus: ``Could very well be a successful cottage industry.'' -- Greene Minus: ``It will take two years to build the software. By that time, the hardware changes.'' -- Gomez

At the End of the Day Productions -- ``interactive multimedia company formed to provide mental health access.''

Plus: ``I don't personally like the business but it has a fairly high likelihood of success'' -- Young

Minus: ``After reading it twice, I still don't know exactly what they plan to do.'' -- Copeland and several others.

Los Rapidos by Martin Munarriz and Zeny Ulloa -- ``first online prepared meal delivery service that caters primarily to the Hispanic American market.''

Plus: ``May have found a good niche, but I would recommend starting small and building positive results with customers and restaurants.'' -- Atkins

Minus: ``I just don't see many people -- at least today -- ordering high-end food over the Internet.'' -- Heimlich

Durapack by Mary Der Ovanesian -- a technology that ``transforms regular medical hot/cold packs into high performance packs.''

Plus: ``With some professional marketing help, this could be a real winner.'' -- Heimlich

Minus: ``Very poorly written. . . Plan implies a hard-to-produce and expensive product.'' -- Watson

Caribbean/Bahamas Values Report by Paul Straher -- a monthly publication mailed free to those who have vacationed in the area in the past three years.

Plus: ``Excellent. . . It sounds like there is well defined market, no clear competition.'' -- Atkins

Minus: ``Never show a VC [venture capitalist] a business plan that if the concept worked the VC would be annoyed by the product. . . . Is this junk mail?'' -- Watson

HobbyFish by Martin R. Hanan -- Keeping or transporting tropical freshwater fish in small plastic boxes.

Plus: ``Probably OK small business.'' -- Greene

Minus: ``Putting fish in a taped box for many weeks does not sound humane to me.'' -- Diaz



Copyright 2000 Miami Herald


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