Team: Bill Dickey '05, Stephanie Sewell '06, Giulio Ruffo '04, Sean McElduff '05
Areas: Business Plan and Financial Model
Supervisor: Julian Brown, Assistant Director, Developing Justice Project
The Developing Justice Program was founded in 2000 with two purposes: to help people recently released from prisons locate opportunities for housing, jobs, and education, and to provide a forum for community discussion and activism around criminal justice issues. The program is designed and staffed by formerly incarcerated individuals and sponsored by the Fifth Avenue Committee, an organization in South Brooklyn whose mission is to advance social and economic justice through developing and managing affordable housing, creating employment opportunities, organizing residents and workers, and providing adult-centered education opportunities.
As part of the Developing Justice Program, Brooklyn Moves seeks to become a local residential and commercial moving company in the New York City Metropolitan area, that trains, hires, and places twenty to thirty hard to employ individuals a year, and that offers high-quality moving services. In particular, Brooklyn Moves is in the process of developing a business plan and solidifying financing, with the goal of operating the company on a sustainable financial basis. We hope a solid business model will increase the opportunities for career growth and development of its participants over time.
Developing the Business Model
Our primary role was to research the costs and inputs integral to starting and maintaining a moving company, and to summarize this information in a financial model. We started out by exploring the market opportunity in the New York Boroughs, looking at the number of units and average turnover in three segments (rental, commercial, and captive units controlled by FAC), and speaking with various industry representatives. Next we developed a cost analysis, looking closely at general moving rates, packing, storage, materials, licensing, insurance, and truck renting, leasing, and purchasing costs across the industry. Having gathered an extensive amount of data, we built a model, estimating the initial cash needs and break-even volume of moves. After carrying out a sensitivity analysis with various assumptions, we were able to recommend an organizational structure that will enable Brooklyn Moves the best opportunity to achieve profitability in three years.
Social Outcomes
"The 600,000 prisoners released each year, if not the biggest problem on the social agenda, has to be in the top 5," said Williams B. Emicke, a Columbia University professor of management, who recently completed a study of job programs for ex-offenders for the Manhattan Institute. The primary objective of Brooklyn Moves is to rotate the workers through every six months to one year, in order to provide training and experience and transition into the workforce. Brooklyn Moves has the potential to have a substantial impact by training, hiring, and placing 20-30 individuals a year.
Working on this project provided a unique opportunity to apply the technical skills we are developing in business school to developing a business plan, with the goal of launching a socially responsible business. The New York advantage is huge! The choice of New York-based projects presented to us at the beginning of the semester was incredibly diverse and interesting. Regular meetings with Julian Brown (Assistant Director of the Developing Justice Project) and discussions with local industry representatives were invaluable. And, a key to our success was our team structure. Our team leader Sean McElduff effectively allocated the work, set realistic targets, and coordinated regular brainstorming sessions and meetings with the client so we received feedback from the client throughout the project.
This team was awarded the first prize in the 2004 Small Business Consulting Program.