Small Business Management Plan

PBL

Duquesne University

Group Members:

Cara Berrigan

Alex Lisowski

1

Table of Contents Executive Summary ................................................................................................. 3

Company Description .......................................................................................... 4-5

The Opportunity ............................................................................................... 4

The Description ............................................................................................... 4

Objectives: Our Mission and Vision ............................................................... 4

Services Provided ........................................................................................ 4-5

Industry Analysis ................................................................................................. 6-7

Market Analysis ................................................................................................... 8-9

Target Market .................................................................................................. 8

Market Assessment .......................................................................................... 8

Segmentation Strategy ................................................................................. 8-9

Competition ...................................................................................................... 10-11

Competitors .................................................................................................... 10

Competitive Advantage ................................................................................. 10

Competitive Edge and Marketing Position .............................................. 10-11

Marketing Plan and Sales Strategy ...................................................................... 12

Promotion ...................................................................................................... 12

Strategic Alliances ......................................................................................... 12

Operations ......................................................................................................... 13-14

Operations After Year 5................................................................................. 13

Value Proposition .......................................................................................... 14

Strategy .......................................................................................................... 14

Management and Organization Structure .................................................... 15-16

History ........................................................................................................... 15

Management Structure ............................................................................. 15-16

Long-term Development .................................................................................. 17-18

2

Scalability ................................................................................................ 17-18

Financials .......................................................................................................... 19-21

Risks and Challenges ............................................................................................. 22

Appendices ........................................................................................................ 23-26

3

Executive Summary

As the market stands today, there are no lodging options for travelers that combine affordability with

comfort. On one side of the spectrum lies expensive, luxurious hotels and resorts that are in highly

commercialized districts. The other end features cheap and unreliable accommodations such as hostels

and motels that do not offer the privacy and coziness of a home. Utilizing the tiny-home ideology and

design, Peregrinator’s Paradise is able to offer low-cost lodging with the comfort and convenience of a

home in the country’s best travel destinations. We allow vacationers the ability to save money on

lodging accommodations, providing them the opportunity to invest in experiences.

At any of our locations, vacationers can expect the option between two units that accommodate either

two or four people. The site is operated and overseen by a property manager who lives in a third unit on

site and assists travelers with questions, concerns, advice, and our Trip Planning Perk service.

Peregrinator’s Paradise seeks to bring out the heart of exploration in all who stay with us. When looking

at vacationers and travelers we want to segment the market into three categories: college students and

young adults, small families, and retirees. Currently, over 132 million Americans fit into one of these

categories, which gives us a larger customer base than many hotels and resorts can claim to attract.

Two driven Duquesne University students lead Peregrinator’s Paradise. Their passions are centered

around adventure, travel, resourcefulness, and simplicity. By making these traits more attractive to the

greater public through our business, we will change the way people vacation and how they prioritize

their time and money. The founder, Cara Berrigan will be the property manager at our inaugural location

in Key West, Florida. Pending the success of this location, we look to scale to different types of

landscapes and locations throughout the country, seeing as the business is scalable and easily replicable.

In the first year of operations, Peregrinator’s Paradise will generate $169,870 in revenue. This will come

from the combination of our rental units and our Trip Planning Perk service. After cost of goods sold

(property manager salary), supply costs (construction and furnishing costs), and other various expenses

we will be left with roughly $50,000 in profit for our first year. As the business scales, we anticipate

larger revenue streams with costs that are relative to each location, yielding bigger profit margins.

Our minimalistic tiny homes will encourage travelers to explore the landscape they are in while

providing them with the ability to come back to a comfortable and cozy accommodation in the heart of

where they are visiting. Overall, Peregrinator’s Paradise will provide vacationers with low-cost lodging,

while simultaneously allowing individuals to spend their time on experiences and making memories. We

plan on spearheading a movement within the vacation industry through our three tiny home business

model that will pioneer the path toward investing in experiences and vacationing tiny.

4

Company Description

The Opportunity

Over the past decade, two trends have come to the forefront in U.S. culture: a demand for low-cost

vacation accommodations and travel arrangements, as well as the tiny-home minimalist movement.

Although companies such as Airbnb and others have successfully addressed consumer needs in one of

these market trends, there is yet to be a company that satisfies both trends in one package.

Peregrinator’s Paradise will fill this void by providing vacationers with an inexpensive and unique way to

lodge, allowing vacationers to focus on what is most important - making memories.

The Description

Peregrinator’s Paradise is a tiny home hospitality accommodation offering vacationers and travelers a

low-cost alternative to expensive hotels and resorts. There will be three tiny-home units located on a

small plot of land. Two of the units will be rented to vacationers via our website, or e-booking sites and

applications. The last unit will be rented to a property manager, who will live on site and is responsible

for managing and monitoring that location, the guests, and its grounds.

Peregrinator’s Paradise will also provide customers with essential information, advice, and planning to

vacationers unfamiliar with where they are visiting. Whether it be helping a traveler: book the cheapest

flight possible, recommending the best places to explore, or offering suggestions about the best bars

and restaurants in town, Peregrinator’s Paradise will emphasize customer and employee interaction.

Ultimately, we want vacationers to spend their time, money, and effort exploring the beautiful

environment they are in. By offering low-cost, minimalistic accommodations exploration and memory

making will become the central focus of the trip, not the lodging.

Objectives: Our Mission and Vision

Peregrinator’s Paradise is an affordable and minimalistic lodging destination that focuses on giving

travelers the opportunity to invest in experiences, while providing them with the comfort, convenience,

and intimacy of a home in the heart of their adventure. Peregrinator’s Paradise plans to be at the

forefront of the movement towards resourcefulness and simplicity. We will pioneer the cultural shift

from materialistic and frivolous vacation experiences to spirited explorations that will leave a lasting

impression on the soul.

Services Provided

Tiny homes have introduced people around the globe to a lifestyle built around resourcefulness and

sustainability. Generally, tiny homes are less than 400 square feet and encourage simplicity and frugality

in an increasingly materialistic world. Tiny homes combine the de-cluttering of personal possessions

with a positive environmental impact due to decreased consumption and waste. Any individual, couple,

or small family looking to enjoy and preserve the natural world will find enhanced well-being and solace

in their tiny home. With this being said, not only can tiny homes improve one’s life through

minimization, but they are a smart financial decision as well. Tiny homes are small and resourceful, thus

cheap in nature. Almost all tiny homes are less than $80,000. Small mortgages and low utility bills give

individuals the choice to work less and increase the amount of leisure time they have. Overall, tiny

5

homes are great tool for encouraging individuals to live a simpler lifestyle, are environmentally friendly,

and increase physical and mental well-being as individuals can work less and relax or adventure more.

Peregrinator’s Paradise tiny homes will follow a similar template to many other tiny homes across the

country. The main floor will consist of a kitchen, bathroom, and small living room. Bulky cabinets and big

desks are replaced by hanging personal items (pots, pans, glasses etc.) on walls. Large windows and

smart insolation allowing natural light and temperate living conditions replace the need for big lamps

and air conditioning units. Additionally, the “A” shaped frame of the ceiling (see Appendix A) provides

ample space for a small loft with a bed. The loft can be accessed through a ladder or staircase. In either

case, both can be engineered to act as a shelving unit. Finally, Peregrinator tiny homes will feature small

hobbit stoves doubling as a heating and stovetop cooking device (see Appendix A). Conclusively,

travelers utilizing Peregrinator’s Paradise will live and sleep comfortably as this design maximizes space

while the layout feels natural and easily navigable.

The Peregrinator’s Paradise business model is as innovative and creative as it is simple and resourceful.

The first location will be in Key West, Florida at 1705 Laird Street (Refer to Appendix A). If our first

location is successful, we plan to scale the business. Homes will be built in sets of 3. Unit A will be 150

square feet will have one bed and the ability to sleep one or two individuals. Because of its size, no

matter the location Unit A will always be the cheapest for travelers. Unit B will be slightly larger than

Unit A at 180 square feet. Unit B will have two beds and the ability to sleep up to four travelers. Finally,

Unit C will be rented out at a very low cost to the site’s property manager. This individual will be

employed by Peregrinator’s Paradise and will be responsible for attracting customers and managing the

location. This includes ensuring that customer questions and concerns are answered, offering and

completing the trip planning perk service, cleaning the house after each guest(s) leaves, ensuring that all

in home amenities are functioning properly, and that outsourced tasks (landscaping, maintenance etc.)

are being completed appropriately by our partners.

Travelers staying at Peregrinator’s Paradise will also have the opportunity to take advantage of our trip

planning perk service. Explorers who book our homes will be offered a service where we as a company

handle all the nuts and bolts of scheduling a trip: flights, rental cars, dinner reservations, excursion

planning etc. Property managers will have the responsibility of conducting this service for our

customers. This service will cost travelers a fee of 15% of their total travel expenses, but guarantees that

we will find our customers the best deals at the lowest prices. No longer do our travelers have to stress

about planning the perfect trip. Although this service will be optional to guests, we believe that buying

convenience and reducing stress is worth its weight in gold.

With Peregrinator’s help, property managers will consult with customers and the overall business of

Peregrinator’s Paradise will partner with other companies to ensure that our travelers can do what they

want at the price they want. We will enter into agreements with airlines and rental agencies to obtain

discounts that would not be available to the average citizen.

6

Industry Analysis

Threat of New Entrants- Low/Growing

There are high startup costs involved with establishing a location in Key West. Plots of land are usually

upwards of $200,000 and supplies/materials are relatively limited. We are bypassing one of these

hurdles by building our tiny homes in Pittsburgh, where we can find relatively cheap wood and

materials, and will then transport the units to Key West. However, the purchasing of land is not

something we can get around. But at least it’s the same issue for any new entrants in this market.

Although the tiny house movement is growing, it has not hit the Key West market, let alone Florida in

general. We would be leading the movement to this area.

Bargaining Power of Suppliers

Moderate Building and supply costs are relatively stable. We plan to be exceedingly thrifty in finding

the materials to build our houses. There are plenty of opportunities to use recycled products and find

wood at lumber yards at minimal costs. Our biggest expense will be the tools needed to complete the

construction process. However, these capital expenditures will only need to be purchased once and

should last for multiple builds.

Bargain Power of Buyers – Low

Since the average price per night for lodging in Key West is close to $300, there are not many low cost

lodging providers to give bargaining power to the buyer. Of all our research on Airbnb and the small

house hospitality sector, the cheapest price we have seen is over $200 (keep in mind, this is not

counting the Airbnb hosts that rent 1 bedroom out of their house for guests). Our smaller unit would be

$150/night and our large unit is $200/night, so we are easily coming in at one of the most, if not the

most affordable option that yields a comfortable and cozy house. When looking at price, customers will

always choose use over the competition.

Threat of Substitutes – High

There are many high-end hotels in Key West for the vacationers that want the lavish thrills. We realize

not everyone is on board with living minimally and some people want to be treated like royalty on

vacation. There is absolutely nothing wrong with that, however, that will be our biggest substitute.

Many people want to go all out for their vacation and stay in the nicest hotel with a pool, restaurant and

bar located conveniently downstairs. But within our target market we are looking for individuals,

couples, and families that like to adventure and enjoy nature. They are not looking to spend a lot of time

in their lodging destination, other than to sleep and cook an occasional meal.

Rivalry Among Competitors

Looking at the hospitality industry, we will be up against hotels, bed-n-breakfasts, and other Airbnb

hosts. Within Key West, our main competitors in the small hospitality Airbnb sector are Key West Old

Town Cottage, Duval Balcony, Zeke’s Retreat, and the Garden Cottage. These are all lodging options

available through Airbnb. Key West Old Town Cottage and Duval Balcony are the closest to our price

spots, although still significantly higher. In order to show how expensive it is to stay in Key West, we

added some of our competitors around the country and what their prices are comparatively. The

7

spreadsheet below clearly shows the need for inexpensive lodging in Key West. Key West Old Town

Cottage is a small home that accommodates four guests with 2 bedrooms. Although they claim it is $265

per night (which is $65 higher than our larger unit that sleeps 4 people), they also require a $150

cleaning fee and a $1,000 security deposit. If you read further into the fine print, they only allow 7 night

minimum stays from April-November and 2 week minimum stays between December-March. Duval

Balcony would be our next closest competitor at $275 per night accommodating 2 guests. It’s a street

suite located in the heart of the city with no minimum night stay. However, the layout of their space is

very tight and cluttered. There is no clear distinction between the bedroom and living room area.

Additionally, there is so much furniture spread across the room that it looks very difficult to navigate.

The difference between Peregrinator’s Paradise and a suite like this is not only the price, but the

efficient use of space, making a substantial difference. With several windows, placing a bed in the loft

and futon in the living room, sunlight fills our home and opens up the space beautifully. It is a creative

challenge to take a small area like the Duval Balcony Suite and make it feel spacious and breathable, but

with the research we’ve done we have comprised the perfect blueprint. Lastly, Zeke’s Retreat and

Garden Cottage would be the next tier of competitors in Key West. Both lovely places, but in an entirely

new ozone for prices.

8

Market Analysis

Target Market

Our target market primarily consists of travelers and vacationers, or “Peregrinates” as we call them. No

matter the age, our target market is active, adventurous, and has a knack for exploration. These

individuals would rather make memories as opposed to spend their savings on three nights at a five-star

hotel. Peregrinator’s Paradise feels that our target market can be segmented into four large groups:

college students / young professionals and couples, small families, retired couples, and tiny home

enthusiasts. With two different unit sizes at our location, Peregrinator’s Paradise has the housing to

accommodate any individual, couple, or family in these segments.

Market Assessment

Peregrinator’s Paradise is opening up the possibility of vacation to a large segment of college students

and young couples because we are affordable. The population is aging and an increasing amount of

older couples will have the desire to travel. The tiny home movement is only becoming bigger as

education and awareness spread throughout the country. As a result, not only do we have a large target

market, but one that is growing in size.

The 2010 U.S. Census Bureau estimates that there are over 82 million 20 to 39 year olds currently living

in the United States. Likewise, there are 50 million people over the age of 62. In total, we have an

addressable market of 132 million people, roughly 42% of the total population of the United States of

America. As stated, this number will only continue to grow.

For our first location in Key West, we discovered that the location receives 1.5 million visitors each year.

Among these visitors, 81% are domestic travelers, leaving 19% to be foreign vacationers. This means

there are approximately 1,215,000 people just within the United States who vacation in Key West.

Within the domestic section, the top five states (not including Florida) that travelers come from are as

follows: New York, New Jersey, Ohio, Pennsylvania, and Illinois. This is significant as Peregrinator’s

Paradise is based out of Pittsburgh, PA, providing close proximity to all of these surrounding states. The

proximity will make marketing Peregrinator’s Paradise easier. We also found that summer is the high

season in Key West and yields vacationers with a higher household income, an average age of 34 (so

pretty young), and a larger party size, which most likely means families with children. In the winter

season, when vacationer’s average age is around 49 years old, there is a higher proportion of retired

couples, and the party sizes are smaller. This research will help us with targeting a particular segment of

our target market at the appropriate time for their needs.

Segmentation Strategy

Peregrinator’s Paradise plans on segmenting our target market based on the needs, demands, and

trends of vacationers and travelers alike. Our current target market features demographic groups that

are likely to be open-minded regarding a minimalistic lifestyle and are focused on saving money and

maximizing memories.

As Peregrinator’s Paradise scales and continues to produce this replicable model within a variety of

market and states, we must be able to continue to attract our segmented target market, and perhaps

9

along the way appeal to new segments depending on the area and the type of vacationer certain regions

produce (preferences on with who, how, where, and when to travel etc.).

10

Competition

Peregrinator’s Paradise is bridging the gap between the necessity for low-cost vacation lodging and the

growing tiny home movement within the U.S. Due to our unique competitive advantage, we not only

have to compete with both large chain hotels, as well as Airbnb, small cottages and bed and breakfasts.

Refer to Appendix B for spreadsheet with information and list of competitors.

Competitive Advantage

Our key advantage is our ability to provide affordability, intimacy and comfort all at once. Travelers are

forced between picking cost or comfort due to limited options: hotels, hostels, Airbnb homes, bed-n-

breakfasts, or couchsurfing. Hotels and bed-n-breakfasts will be very expensive for a comfortable and

cozy space. Hostels and Airbnb rooms are cheaper but usually require travelers to share spaces with

random individuals. Peregrinator’s Paradise aims to bridge the gap between reasonable prices and a

clean, comfortable, and private home for guests to enjoy.

When looking at the Airbnb options for entire homes or cottages in Key West, the prices range from

$265-$745/night. Most of these locations also have cleaning fees of $50-$150 and require renters to be

at least 25 years of age. Peregrinator units will not exceed $200 nightly. Unlike the places mentioned

above, travelers have a temporary home to call their own, complete with a full kitchen, private

bathroom, warm bed, and property manager that can attend to their any need, desire, or concern. On

top of that, Peregrinator’s Paradise also offers our trip planning perk service, a testament to how much

we care about our guests. Our travelers deserve the highest quality at the lowest possible price.

Finally, we encourage our travelers to go out, explore, and make memories. Peregrinator’s Paradise

keeps it simple and affordable because we want our vacationers using their hard earned money to learn

the location they are visiting and make memories. Whereas hotels and resorts will offer luxurious bars,

restaurants, huge swimming pools, massive gyms, karaoke nights, happy hour specials, room service,

and movie theaters, Peregrinator’s Paradise provides an intimate home allowing our customers to do

what they please. Travelers lodging with Peregrinator’s Paradise will always know that no one and

nothing will try to deviously persuade them to spend as much time and money at their lodging while

doing as little as possible like hotels and resorts do.

Competitive Edge & Market Positioning

Peregrinator’s Paradise is a much more flexible business than hotel chains and resorts. We will exploit

this in every facet of our business. Most importantly, our tiny homes will all be on trailers. As a result,

they can be transported and moved anywhere in the nation. While we do expect that many of the three

home plots will generate enough revenue to remain in locations year round (especially those placed in

established vacation spots), we do have the ability to both minimize risk and capitalize on seasonality.

Peregrinator’s Paradise will designate certain tiny home plots across the country as “flexible”. These

three home plots will move based on the season. For example, the potential location in White

Mountains, New Hampshire could be designated as such. In winter, the three homes would be located

11

there for skiing season, but in the spring we can transport them to Virginia for hiking season, in the

summer to New Jersey for beach season, and in the fall to Pennsylvania for hunting season. Whereas

hotel chains look at seasonality as a threat and must manage their cash accordingly during their off-

season, Peregrinator’s Paradise has the power to set up lodging in “x” location’s peak season, earning

high velocity revenues in four locations instead of modest revenues in one location for the entire year.

Likewise, because our business is modular, easily replicable and transportable, it appeals to a large array

of consumers. Peregrinator’s Paradise could have locations appealing to vacationers looking to relax, but

it also could have locations appealing to thrill seekers and explorers. Peregrinator’s Paradise could have

locations appealing to sportsmen and hunters, but it also could have locations appealing to college

spring breakers and young couples going on their annual vacation. Peregrinator’s Paradise could have

locations near national and geographic landmarks and tourist attractions appealing to small families, but

it also could have locations appealing to the lone wolf looking to find brief solitude. For hotel chains to

appeal to this wide of a range of consumers, it would take millions of dollars and years to construct

buildings in this variety of locations.

12

Marketing Plan and Sales Strategy

Promotion

Peregrinator’s Paradise will retreat back to the graphic design styles of the 1960s to draw inspiration for

marketing tactics, outreach, graphics, and advertisements through a variety of channels. During this

period, company products were still handmade, crafted with precision, and established a close

relationship with the consumer because such products were trusted. Peregrinator’s Paradise wants this

image and desires to operate in the same way. Social media platforms such as Facebook, Instagram,

Twitter, and Periscope will appeal to the vast majority of our target market. However, other channels

(print media – newspaper, postcards, brochures, local magazines) will be used to reach out to the older

segments of our market. Furthermore, word of mouth within the tiny home community will be crucial if

we want to appeal to people already in the niche tiny home movement. Finally, we plan on promoting

through our strategic alliances, listing Peregrinator’s Paradise on Airbnb, and the implementation and

utilization of our website. We expect our marketing materials to resonate and attract customers

immediately, as Peregrinator’s Paradise is offering convenience, intimacy, and affordability in one of the

most expensive vacation spots in the United States.

Strategic Alliances & Partnerships Needed for Growth

Tumbleweed Tiny Homes

Regional Contractors

Franchisees / Property Managers

Real Estate Agents

Companies and Individuals in the Lodging Industry

Appendix with Business Canvas Model

13

Operations

Property managers will be expected to treat each customer like royalty. Working to ensure that the trip

planning perk service they are conducting for each customer presents them with the best deals for

travel arrangements and excursions, in addition to locating the best places to make dinner reservations

and explore. Additionally, it is critical that property managers are readily available 24/7 and have the

knowledge to effectively answer any customer concern, and give our travelers advice and guidance.

Operations After Year 5

As the business begins to scale, it is essential that customers have the same Peregrinator’s experience

no matter what location they check into. Of course the memories made at each destination will be

completely unique, but we understand that customers will only return if Peregrinator’s Paradise

provides consistent quality at a high level. To ensure such results, a small Human Resources team will be

assembled to oversee our property managers and assist the regional managers. Property managers will

be held to high expectations and will be given clear standards presented by the human resources team

that will then be enforced by our regional managers.

On the supply side of our business, as briefly mentioned above in the scalability section, regional

managers will oversee the construction of new locations to ensure that the contractors are properly

assembling the tiny homes and are meeting timelines, budgets, and producing interiors that fit the

Peregrinator’s aesthetic. Lastly, it is vital that each guest steps onto a neatly groomed site and walks into

a clean tiny home with all amenities in perfect working order. Peregrinator’s Paradise also plans to

partner with local landscaping business to ensure lot upkeep.

The basic operations of Peregrinator’s Paradise is as follows:

14

Value Proposition

Too often, individuals end up incredibly stressed over travel and vacation planning. Maybe it’s because

they want to get the most out of their limited time and money. Travel itineraries, hotel arrangements,

excursion planning, dinner reservations – the list goes on forever. But imagine if flights were booked,

lodging was set, reservations were made, and you were staying right in the heart of the place you

wanted to experience? That is the heart of Peregrinator’s Paradise.

Peregrinator’s Paradise gives travelers the power to live in the environment they have always longed to

visit. Our minimalistic homes are mindfully placed in breathtaking environments ensuring that they will

explore & adventure - making more memories than they would at a hotel or resort. Additionally,

Peregrinator’s Paradise premier Trip Planning Perk Service guarantees that travelers will never worry

about spending countless hours searching for the best deals on flights, site tours, and in-vacation travel.

Ultimately, Peregrinator’s Paradise is the only lodging option that puts travelers in the middle of the

location they have chosen to explore while allowing them the comfort, convenience, and intimacy of a

home. Affordable prices coupled with the company’s trip planning service guarantees a reduction in

traveler anxiety while giving vacationers the ability to vacation longer and invest in greater experiences.

Strategy

Because Peregrinator’s Paradise is all about providing customers with an affordable yet unique lodging

option, we will abide by a multifaceted Low-Cost / Differentiation competitive strategy.

As the company grows and revenues increase, it will be tempting to offer more services and in-home

amenities to customers. In order to maintain cheaper prices than hotels and resorts, while capitalizing

on the aspects that make Peregrinator’s Paradise unique – minimalistic lodging in the heart of locations

travelers desire to visit encouraging individuals to go out and explore, the company will remain

conservative.

Simply put, Peregrinator’s Paradise will not enter into markets where it cannot claim that it is the

affordable lodging option. With this being said, the two biggest expenditures the company will have

consist of construction costs and land prices, and will always be negotiated and evaluated with the

customer in mind. After careful analysis, if developing a property and opening a branch at “X” location

requires the business to offer prices at or above market average in the region, Peregrinator’s Paradise

will not enter into that market.

The business will be vigilant in finding affordable properties in the heart of locations travelers desire to

visit so individuals can spend less on lodging and more on making memories.

15

Management and Organization

History

Peregrinator’s Paradise is the brainchild of Cara Berrigan. From a young age, Cara was enthusiastic about

traveling, often taking weekend road trips throughout high school. Her passion for exploration earned

her the nickname of “Peregrinate” – someone who travels or wanders from place to place, from friends

and family alike. By the time Cara was a sophomore in college, her desire to travel culminated in a four-

month study abroad program in Dublin, Ireland.

Throughout her journeys, Cara began to notice an unfulfilled need for nonstop travelers: a minimalistic

lodging space that was affordable to the lone wolf or couple, and was off the beaten path away from the

commercialized hotel chains. At the same time, she began to become actively involved in America’s

rising tiny house movement. Thus, Peregrinator’s Paradise was born.

During senior year, Cara decided to pitch her business idea to her fellow classmate and best friend, Alex

Lisowski. Deciding that this was something she actively wanted to pursue after graduation, Cara enlisted

the help of Alex because he showed interest in the simplicity and resourcefulness of the tiny house

movement. Peregrinator’s Paradise currently operates out of Duquesne University in Pittsburgh,

Pennsylvania.

Management Structure

Peregrinator’s Paradise was founded and is led by Cara Berrigan, a senior Entrepreneurship and

Marketing double major at Duquesne University. When not in the classroom, it is likely that you will find

Cara at a local incubator. Since she has interned for multiple start-up companies in the Pittsburgh area,

she has experienced what it takes to manage and grow a small business.

Lending a helping hand is Alex Lisowski, a senior Accounting and Information Systems Management

double major at Duquesne University. With his knowledge and background in accounting, he brings an

analytical, yet creative, mindset to the team. With his outgoing personality and strategic decision

making, Alex makes for a perfect fit for both great customer service as well as providing feedback on the

scalability aspect of the business.

The company’s management hierarchy will resemble the business model itself: resourceful, minimalistic,

and simple. As the company grows, the owners will recruit property managers for franchise locations

across the country. Once the locations are up and running, regional managers will be hired to ensure

that franchisees are maintaining tiny home upkeep, and providing customers with their trip planning

perks including guidance, advice, and 24/7 service. As the company continues to grow, we plan to hire

senior executives to help guide the company. The positions we plan to hire for include, but are not

limited to: Vice Presidents of Marketing, Human Resources, and Real Estate & Land Development, as

well as a Chief Financial Officer, and an attorney.

16

Advisory Board for Peregrinator’s Paradise consists of:

• Joseph Callaway – Founder and CEO of RE360: has advised Peregrinator’s Paradise on different aspects

of real estate, including information on permits, zoning codes, and streamlining our business model into

already existing codes and laws.

• Timothy Lightholder - VP Technology & Development for AmCom: has advised our team on scalability

and marketing tactics, including initial scaling strategies, guerilla marketing strategies, and marketing

campaigns that we can use at any stage in our business.

An organizational structure of Peregrinator’s Paradise is as follows

17

Long-term Development

Scalability

If Peregrinator’s Paradise wants to fulfill its vision of being at the forefront of the moment towards

resourcefulness and simplicity, scalability is of utmost importance. Luckily, our three-home business

model was designed with scalability in mind.

Prior to substantial growth, the first step is to understand the real life implications and realities of

running such a business. For starters, our first location will be in Key West, Florida. Peregrinator’s

Paradise owners will oversee all aspects of the project. Cara and Alex will secure a property with a real

estate developer; communicate with engineers to design three tiny homes that align with our creative

vision; select a contractor and provide the builders with oversight to ensure that the homes are built

according to plan. Finally, Cara will act as the property manager on site. She will focus on attracting

customers to the location, planning their trips, dealing with customer concerns, and providing continual

upkeep on the two rented homes. Being heavily involved in the inaugural location will give us insight on

what we need, want, and expect going forward. Thus providing us with the experience (in terms of

building, cost, duration, customer service etc.) needed in the future.

Once the Key West, Florida location has proven itself as a sustainable success over the course of two

years, Peregrinator’s Paradise will begin to scale. During this second step, our first order of business is to

identify locations where the company can obtain properties and build our three tiny home model

without having to charge at or above regional lodging market prices. Peregrinator’s Paradise will look at

all available options: established vacation spots, growing vacation hotspots, undeveloped or “hidden

gem” locations, and small towns outside of state and national parks.

Potential Established Vacation Locations Include:

Outer Banks, North Carolina

Myrtle Beach, South Carolina

San Francisco, California

New Orleans, Louisiana

Nashville, Tennessee

Potential Growing Vacation Hot Spots Include:

Hocking Hills, Ohio

White Mountains, New Hampshire

Ruidoso, New Mexico

Big Bear Region, California

Potential Undeveloped Vacation Locations Include:

Cherry Springs, PA

Potential Small Towns Outside of National Parks Include:

Trout Lake, Washington – near Gifford Pinchot National Forrest, home to Mt. St. Helens

Flagstaff, Arizona – near Grand Canyon National Park

18

Keystone, South Dakota – near Mt. Rushmore National Memorial

After a successful two years in Key West, Florida, Peregrinator’s Paradise will look to expand into two of

the most attractive locations on the list above. However, because the company’s business model is

modular and able to be easily replicated across the country Peregrinator’s Paradise can move into most

of the locations mentioned above relatively soon.

In order to accomplish this, we will outsource tiny-home building and partner with Tumbleweed Tiny

Homes, a reputable manufacturer of tiny homes based out of Denver, Colorado. Tumbleweed Tiny

Homes offers modular tiny home wood frames on trailers able to be transported anywhere in the

country. Once Tumbleweed transports the modular frames, we will enter into partnerships with

contractors across the country, region by region. These agreements will make a few select, trusted and

reputable contracting companies the official “end builders” of Peregrinator’s Paradise. These companies

will be tasked with paneling the exterior of the homes and completing the home’s interior. Based off of

our experience in Key West, the company will communicate expectations to the interior contractors on

project budget and timelines, as well as in-home layout, amenities needed, and interior design to ensure

that once built, we can offer customers below market lodging prices. Conclusively, outsourcing the

home’s construction, but keeping the home’s interior design within the confines and oversight of the

business will allow us to expand rapidly while maintaining the Peregrinator aesthetic and layout.

After the modular three home plots are constructed across the country, Peregrinator’s Paradise will look

for individuals and couples to become property managers for each location. This individual or couple will

become a franchisee and will rent the property from us for $1,000 / month and receive a base salary of

$35,000. They will live in one tiny home and become the lot’s property manager. This individual or

couple will also oversee the other two tiny homes on the lot, and provide guests with trip planning

guidance and advice. With the help of our branding and resources, Peregrinator’s Paradise will assist

locations with the marketing tools and outreach needed to attract customers, as well as dealing with

general home repairs, and customer service.

When multiple locations across the United States have proven to be sustainably successful, the final step

towards becoming a nationally recognized company is to attract companies and individuals already in

the lodging business. Targets include: owners of campgrounds, ski lodges, RV parks, and bed-n-

breakfasts. Peregrinator’s Paradise will enter in partnerships with these individuals and companies

whereby offering shared revenues with said owners if they give us an allotment of land on their

property to build our three tiny-home model. Overall, it would be a win-win for each company as they

get more traffic because of increased lodging space, and we get to offer customers with new and

exciting destinations where they are able to make lasting memories.

Refer to Section E.) Financials for rough estimates regarding Revenues and Costs for Expansion.

19

Financials

2017 - 2018

In 2017 and 2018, Peregrinator’s Paradise will bring in $169,870 of revenue per year. Unit A will be

rented at $150 per night for 365 days. Unit B will be rented at $200 per night for 365 days. This will

amount to $127,750. The remaining $42,120 will come from the Trip Planning Perk service. This revenue

is derived by taking 15% of the Unit’s planning / vacation costs (booking flight, excursion planning etc.).

These projections assume that half of our guests would stay for one full week and half of our guests

would stay for half of one week.

Unit A: ($33,800+59,800)*15% = $14,040

Full Stay: $1,300*26 stays = $33,800 Flight = $500 round trip * 2 individuals = $1,000 Excursions =

$150 total * 2 individuals = $300

Half Stay: $1,150*52 stays = $59,800 Flight = $500 round trip * 2 individuals = $1,000 Excursions = $75

(Half Stay, So Half the Excursions at Half the Costs) * 2 individuals = $150

Unit B: (67,600+119,600)*15% = 28,080

Full Stay: $2,600*26 stays = $67,600 Flight = $500 round trip * 4 individuals = $2,000 Excursions = $150

* 4 individuals = $600

Half Stay: $2,300*52 stays = $119,600 Flight = $500 round trip * 4 individuals = $2,000 Excursions = $75

* 4 individuals = $300 Our Cost of Goods sold for 2017 and 2018 will be $35,000. Since we are a

service business this number is derived from labor and salary of the property manager, Cara Berrigan.

Our Operating Expenses for 2017 will be $83,979.84, but for 2018 they will be $21,567. This is because

in 2018 we will not have any supply costs. Supply costs in 2017 include the construction and furnishing

of the three units at Key West which was built in 2016 but accounted for in 2017 when it began

generating revenue. Each home will cost $20,804.28 to build. $17,000 of this is for the home itself, and

the remaining $3,804.28 is for appliances and home furnishings. For remaining operating expenses, net

profit, and cash flow refer to Appendix C.

2019 – 2020

In 2019 and 2020, Peregrinator’s Paradise will open an additional location at a more inexpensive

location.

In terms of revenue for these two years, we will bring in $275,745 per year. We concluded that

$169,870 would come from the Key West location in regards to rental prices and trip planning perk

services. As land is cheaper, we will halve our nightly prices. Therefore, if Unit A is $75 per night and Unit

B is $100 per night and they are filled continuously for the year, total revenue will be $63,875. Based on

rough estimates, we assumed that the Trip Planning Perk Service would generate $30,000 per year at

the second location. Finally, since this location will have a property manager that is not an owner, we

will bring in $1,000 per month in rent (which the manager will owe) totaling $12,000 per year.

$169,870 + 63,875 + $30,000 + $12,000 = 275,745 per year for both 2017 and 2018

20

In 2019 and 2020 Cost of Goods sold will $70,000. This takes into account the $35,000 paid to each

property manager (Cara Berrigan & “X”)

Our Operating Expenses for 2019 will be $96,300.82, but for 2020 they will be $33,888. This is because

in 2020 we will not have any supply costs. Supply costs in 2019 include the construction and furnishing

of the three units for Location #2 which was built throughout 2018 but accounted for in 2019 when it

began generating revenue. Each home will cost $20,804.28 to build. $17,000 of this is for the home

itself, and the remaining $3,804.28 is for appliances and home furnishings. For remaining operating

expenses, net profit, and cash flow refer to Appendix C.

2021

In 2021, our revenue will total $487,495. This will be from the Key West location generating $169,870

and Location #2 which will generate $105,875. This totals our year revenues in both 2019 and 2020 at

$275,745. In 2021 we will have two additional locations (#3, #4) that will generate the same revenue as

Location #2. Locations #3 and #4: $105,875 + 105,875 = $211,750 + 105,875 (Location #2) + 169,870 (Key

West) = $487,495. In 2021 our Cost of Goods sold will be the salary of $35,000 times 4 property

managers (Locations #1 – 4) = $140,000.

Our Operating Expenses for 2021 will equal $183,355.64. Supply costs in 2021 will be $124,825.64.

Supply costs in 2021 include the construction and furnishing of the three units at both Locations #3 and

#4 (62,412.82 per Location) which was built throughout 2020 but accounted for in 2021 when it began

generating revenue. Each home will cost $20,804.28 to build. $17,000 of this is for the home itself, and

the remaining $3,804.28 is for appliances and home furnishings. For remaining operating expenses, net

profit, and cash flow refer to Appendix C.

Milestones – Crowd Funding

To help launch our business we will use a crowd funding campaign that will help us cover the costs of

tiny home construction in 2016. The goal is to launch of our Kickstarter Campaign by the end of April

2016, with a target of $30,000.

Kickstarter Levels are as followed:

$1 – Virtual Hug (Unlimited)

$5 – Handwritten Thank You Note from Founders (Unlimited)

$15 – Personalized Peregrinator’s Paradise Koozie (200 Available)

$25 – Custom Wooden Postcard (200 Available)

$50 – Handmade Model Tiny Home Resembling Our Future Units (200 Available)

$100 – Conference Call with Peregrinator’s Paradise Founders (50 Available)

$150 – All of the Above Goods (20 Available)

$200 – A Reservation as One of Our First Guests (20 Available)

$2000 – Peregrinator Prize Pack! Be the First Person to ever stay at our Peregrinator’s Paradise,

Receive all prizes mentioned above, and Dinner with the Founders (2 Available)

21

Milestones – Five Year Timeline:

April 2016: Launch Kickstarter Campaign

May 2016: Begin Construction for Location #1 (Suites A, B & C)

June 2016 to September 2016: Continue to Build, Decide on + Finalize Property in Key West, FL

September 2016: Finish Construction, Transport Homes to Key West, FL

February 2017: Open Key West Location

February 2017 to February 2019: Continued Operations and Growth of Key West Location

February 2019: Scale to Location #2

February 2019-February 2021: Continued Operations and Growth of Key West + Location #2

February 2021: Scale to Locations #3 & #4

22

Risks & Challenges: How Will They Be Met?

As a small stage hospitality and lifestyle startup, there are a variety of different risks and challenges that

could face Peregrinator’s Paradise both in the beginning stages, but also as the business begins to grow

and evolve. These risks and challenges include:

Weather – especially for the first location that we want to penetrate (Key West), weather is a

crucial component to business operations. Seeing as the largest and main segment of our target

market is vacationers, we want to make sure that all the necessary precautions are taken for

hurricane season. Weather is a main reason why we have chosen to build all three units on

wheels, so that we will not necessarily have to pay for hurricane insurance.

Seasonality – the changing of the seasons, and the change in vacation goers from season to

season could present a challenge in regards to pricing each unit and filling the occupancy of

each unit. We must also look at seasonality as Peregrinator’s Paradise chooses to expand,

because high-season and low-season for vacationers and travelers differs from location to

location.

Decrease in the tiny house movement – even though the tiny house movement has grown

substantially and gained traction within the past seven years, there is always the possibility that

the movement will decline or lose the following that it currently has. If this happens, we must

restructure our marketing strategy to fit the current situation

Zoning codes and permits – although a tiny house on wheels follows all of the same permit

requirements as an RV, zoning codes differ from one municipality to the next. When conducting

research into possible markets we wish to expand to, it is crucial that we thoroughly research

and streamline our business model in with the existing codes and regulations in each market we

enter.

23

Appendices

Appendix A

24

Appendix B

FACTORS

PP Key

West

Old

Town

Cottage

Duval

Balcony

Suite

Zeke’s

Retreat

Garden

Cottage

Location TBA 5 blocks from Duval

Duval Street

Around Duval Street area

Few blocks

from west coast

Units 3 Entire home

Entire apt.

Entire home

Entire home

Avg Price/Night

$150-200

$265 $275 $449 $745

# of Beds 2 2 1 2 3

Cleaning Fees

$150 N/A N/A N/A

Security Deposit

N/A $1000 N/A N/A N/A

Minimum Stay

2 days

7 days 1 night 2 nights 3 nights

Kitchen ✔ ✔ ✔ ✔ ✔

25

FACTOR

S

Peacef

ul

Tower

Retreat

Floating

Vacation

Bungalo

w

The

Shotgu

n

Cottag

e

The

Baby

Cabin

The

Tree

Cabin

Location Carmel Valley,

CA

Sanford, FL

New Orleans,

LA

North Woodstoc

k, NH

Waterford,

Vermont

Units Entire home

Entire home

Entire home

Entire home

Entire home

Avg Price/Night

$175 $160 ($600+)

$140 $60 $120

# of Beds 1 2 1 1 1

Cleaning Fees

- $100 $50 - -

Weekly Discount

- 15% N/A - 12%

Minimum Stay

1 Night 1 Night 3 - 30 Nights

1 Night 1 Night

Kitchen & WiFi

Internet Only

✔ Kitchen Only

X ✔

26

Appendix C