Creation of a Web Based Business - Property Website

Isidoros Ioannou

Creating an Innovative Business

Nowadays, the cost of living has been increased significantly in the majority of the European countries. This raise can be reflected on the high amount of money spent by people for renting flats to reside. Especially, UK is the country that charges the highest rent rates to tenants among the other European countries (Guardian, 2015). It is inevitable for several groups of people, particularly students and young professionals to seek and rent a room in a flat share.

The process of finding the suitable property and the appropriate future housemates is not easy at all. Living with other people is usually a complicated and difficult situation, because people’s characters are different and not everybody matches with each other. There are several aspects to consider when someone is choosing a property to rent or flat mates to live with. Most of the times people do not respect your privacy and this can lead to various conflicts (BBC ,2013), (thefirstpint, 2010). As a result, UK citizens spend every year a serious part of their income to find a residence that could meet their preferences and countless time to search for important information, such as potential housemates.

In order to alleviate the problem of the significant amount of time and money invested for the process of finding a flat and suitable flat mate, a corresponding service provider needs to be developed. The company will focus on helping especially students and young professionals, since these two categories of humans are noticed to search usually for renting properties.

The company named “easyproperty” would be web-based it would give the opportunity to their customers to search for the more suitable people to share a common property, according to their preferences. Customer will have to register first and submit their preferences and characteristics. These would be for example, occupation, gender, nationality, age, habits, interests, the amount of money they could afford to spend, their preferred location, etc. They could have also the capability to prioritize some of their input preferences, in order to the matching algorithms could give more effective results regarding their preferences.

The customer could then perform a search on the website of the company. Its search mechanism will find the people that match mostly the customer’s preferences and concurrently will provide in the same page property recommendations from the databases of various agencies. The capability of altering the location and other attributes before search will be also included. The people list and property list will be sorted based on the people and properties that matched more successfully the person’s inputs that conducted the search activity.

However, the property list will be displayed with some peculiarities. In other words, for properties that nearly showed the same percentage of matching with the user, priority will be given to them that contain already residents. For instance, if a house consists of two rooms and only one is vacant, this house will be in a higher position in the list, compared to other houses.

Currently in the market some competitors exist that offer similar services. The most renowned are SpareRoom.com, Rightmove.co.uk and Zoopla.co.uk. The technologies that these competitors use and the ones that the suggested company is going to use will be analyzed in detail in the following chapter.

First of all, the immediate competitor of the author’s suggested company is SpareRoom.com. It allows clients to perform searches for suitable flats or flat mates based on their preferences and characteristics. spareroom.com provides its services across all the UK and USA and it is the pioneer on its activity field in the UK since it counts nearly 6,499,202 registered users (spare room, 2017). The user can also register to the website and upload advertisements about suitable rooms or flat mates that he wishes to find. Other users can review these advertisements by performing search tasks to the system’s database. One of the drawbacks that spareroom.com has it possess its own database system. This means that the searches are limited to the properties that are included only in its database. In addition, due to spareroom.com targets a wide range of the market, it is difficult to focus on certain categories of people, which in this case are students domestic and international among with young professionals. The operation and success of easyproperty will be based on its attempt to tackle the drawbacks of spareroom.com. It will use databases of each areas local estate agencies to offer more options to its users. The options will be mostly compatibles to the two fore mentioned categories of people that the company aims to target.

On the other hand, the other remaining competitors, rightmove.co.uk and zoopla.co.uk provide only the option to users to search for the suitable room. They do not offer options for the user to search for a suitable flat mate. Both also use databases from local estate firms they cooperate with and offer a wide range of available property choices. Particularly rightmove.co.uk provides renting and sale services only in the UK while provides also selling services across Spain and France. (rightmove, 2017). Likely zoopla.co.uk provides renting and selling features only in UK but provides selling features for a wider domain of countries, nearly all over the world (zoopla, 2017). The competition with these companies is noticed on the establishment of cooperation with the local estate firms.

The web based firm that the author suggests and will penetrate into the property estate market aims to offer efficient features to students and young professionals who are the main groups who cannot afford to rent a house by themselves and need to share a flat. The service that easy property offers is unique as it offers the opportunity to their users to find the most suitable house mate and at the same time it assists them to choose the most desired property to live.

From the description of the services that the company will provide it is conceived that the environment of its activity will be the World Wide Web (WWW). According to Gong and Zhu (2009), the main service that an e-commerce electronic website provides is user registration, query, shopping and communicating online. As a result for our business, a functional e-commerce website would be the ideal choice. “An electronic commerce website should equip WWW browse, data server, e-mail service, customer operation system together with web service system and so on software and hardware” (Gong & Zhu, 2009). In addition, the usability factor is vital for this kind of website, since it determines the intention of the customer to use and exploit the services of the website. The term usability refers to both a set of independent quality attributes such as user performance, satisfaction, and learnability (Green & Pearson, 2011). In order to, satisfy these requirements and produce an effective and user friendly application, the author chose carefully the components that will constitute the website.

The website will be developed using the WordPress Content Management System (CMS). It is a free open source tool that requires little programming experience and various free plugins. It will be integrated with php and HTML 5 web development technologies, since they are scripting languages focused on implementing website pages. They will offer dynamic connections to other websites and great responsiveness when the company’s website will be displayed on different devices. This practice would result in a better user experience for the user, thus in a better usability (websitesetup.org, 2017). In addition, the Woo Commerce platform will be incorporated to the website as bridge with the company’s server which will help with the data retrieval and manipulation from the server.

Regarding the other components that are crucial for the operation and tasks of the website and were mentioned above, the author is going to use the most value for money solutions. For the domain name which will be www.easyproperty.co.uk the namecheap hosting company will be chosen. Other software elements, for example the web server and the business email server are provided also from the same company.

The technology of cloud computing is really attractive to the majority of the small and medium size companies, since they are not obliged to invest a significant asset on hardware or software services. ”Cloud computing is a model for enabling ubiquitous, convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and services)” (Jula et al., 2014). The service and the maintenance of the infrastructure is the responsibility of the cloud provider. Companies can exploit the high performance and the support that cloud providers offer without spending extra money (Laudon & Laudon, 2016). From the four cloud computing service models: Software as a Service, Platform as a Service (PaaS), Infrastructure as a Service (IaaS) and Network as a Service (NaaS), the company will depend on IaaS model for utilizing its data storage. Microsoft cloud will be chosen as the cloud provider.

According to Payne and Frow (2005), a very important practice that plays important role in the success of the business is Customer Relationship Management (CRM). It is a practice that if a company implement efficiently, can easily achieve better relationship with its customers and increase the flow of them. The clients will be regularly notified about offers and services by sending those emails that will be stored in the company’s database.

Finally, the aim of the company is to expand its service by implementing the website into mobile applications. Cross-Platform tools enable the development of applications for multiple mobile operating systems (OS). It allows reusing the same source code for building an application for multiple platforms (Charkaoui, et al., 2014). By using one of the available cross platform tools it will save a lot of time and cost comparing to using native application development tools, since it requires developing separate apps for the different mobile OS and in a different programming language.

Business model is the content, the structure and the administration of the transactions, which have been designed to create value and to exploit the various business opportunities. (Zot & Amit, 2011). It explains the insight that a business should have in order to achieve revenue by defining its position into the value chain. (Rappa, 2010). According to Ostwalder and Pigneur (2010), the business model describes how an organization can achieve value creation, value delivery and value capture. The authors have also invented the Business Model Canvas which is a tool that organizes all the activities an organization should implement from the initial value proposition stage to the final stage of value capture. It is two dimensional depiction of nine vital blocks that help the organization to fulfill its objectives, achieve its goals and manage its products and resources.

The Business Model Canvas contains the tree elements that define the successful activity lifecycle of a company. Value proposition is the activity of designing services and products that would provide value to customers. Value delivery is the activities the business implements for delivering their products and consequently the value to customers and value capture is the way the company has income from the above activities. The Business Model Canvas, as well as the detailed description of each block is discussed below.    

Figure 1: Business Model Canvas

1. Customer segments

Customer segments are the category of people that the company aims to offer value. The targeted audience of the easyproperty company will mainly consists of university students and young professionals, since these categories are most likely to be searching for flat mates in order to share an apartment.

2. Value propositions/creation

The value creation or value proposition is an element really important for any business. Any new business that enters the market should offer something unique or provide better services/products from similar organizations, in order to attract customers. The aim of the company is to provide advanced search features for its customer so that they could find the perfect roommate. This is achieved by providing many fields for entering the customer preferences and the ability to prioritize the ones that are more important for them. The next step is to give them a wide list of properties to choose from in various locations. By using the databases from local estate agencies and the advertisements of private landlords, clients have a lot of options to choose from. Finally the company will provide the opportunity for real estate companies to advertise themselves through the company’s website.

3. Channels

The channels block contains all the means that the company communicates with its customers and these means are used mainly for marketing purposes. Social media like Facebook and Twitter will be used mostly. Then the website will contain all the links for our social media and also information about all the estate companies we cooperate along with links to their websites and social media. In addition, once the company will target students, the universities of each city could provide assistance in promoting the company. Also the student unions of each university. Finally for promoting our company on the web the Google AdWords is going to be used that could offer better positions on their search engine and advertisement.

4. Customer relationships

Customer relationships include the means that the company provides for interaction with its clients. The company will use the customer relationship management practice for maintaining close relationship with the customers and provide them with various means to contact. This could be achieved by direct interaction by visiting the company’s office. Moreover through the telephone support that it will be provided on a 24 hour basis. In addition through the website or the mobile application by submitting a contact form and by posting on the social media.

5. Revenue streams(Value Capture)

In the revenue streams the sources of the company’s income are explained. Firstly, the main source of income will be from the agencies and landlords once a client will get in contact with them and agree to rent or buy the property. The agreement process will begin from the website but it will be finalized face to face. Then the agency or landlord will finalize the deal to the company’s website and pay the fee, which will be a 10% commission of the first rent. The customer can also cancel the deal and the fee will be returned. All these activities with the agencies will be agreed under contracts. Another source of revenue will be capability of agencies to be advertised through our company. The tool Google AdSense will be used which is operating in pay-per-click manner.

6. Key resources

The Key resources are the activities and resources used for developing the Value proposition/creation and for delivering the value to the clients. As resources could be considered first the company staff that will develop the website and is going to support the client’s issues later. Another key resource is the staff that will operate the promotion campaign of the company. Finally the information about the properties of the private landlords that will be stored in the company’s database and the databases of the estate agencies.

7. Key activities (Value Delivery)

Key activities are the most crucial operations for the execution of the company’s business plan. This block contains all the tasks for delivering the value which was created in the value creation block. The initial activity is to develop a fully functional website that it will serve all the services explained in the value creation block. The next step is to sign contracts with the landlords and especially with the estate agencies. This is a very important step as the agencies databases will provide the clients with many options to choose. As advertisement and promotion plays an important role for every new established company, assign to a marketing team the promotion of the business is the next steps. Signing contracts with universities for promotion purposes in order to support students searching for apartments belongs also in this step. Finally as the business starts operating the final step is to develop mobile application for providing furthers to our clients to use our services.

8. Key partnerships

Key partnerships include the cooperation network of the company. The network will consist of the real estate agencies and the supply of their databases. Moreover, experience promoting agencies, the University staff and students.

9. Cost structure

It summarizes the different costs the company has to make for the value creation. In the cost structure, the staff wages and the hardware equipment are included, for example computer infrastructure. Also the cost of hiring a promotion company and flat wages for the domain and the email server. Finally the annual costs of the cloud services (database) and the hosting server should be added.

Previous researchers like Rappa proposed a classification of the various business models instead of a detailed description of what each includes. He supports that a business model should just describe how a firm produces revenue based on its position in the value chain. He proposes nine main categories of business model: Brokerage, Advertising, Infomediary, Merchant, Manufacturer, Affiliate, Community, Subscription and Utility model (Rappa, 2000). The proposed business belongs to some of these categories and the reason is explained below.

Firstly the company could be classified to the Brokerage model, since its activities focus on the business to customer (B2C) market as it helps customers who are searching for a room to let, to contact the estate agencies that manage the room they wish to rent. In other words it operates as an intermediate between students, young professionals and the real estate agencies. In addition the company charges a fee as commission for every agreement it is achieved between customers and agencies. Particularly, based on the subcategories of the Brokerage model, the company could be described as a distributor as it offers catalogue services and acts as a bridge between customers and agencies. Moreover, it is a search agent as it enables the customer to search properties according to its preferences (Rappa, 2010). The company also could be classified also to the advertising model. The income from the advertisements of the agencies is secondary. The website contains advertises of agencies and new entried apartments in the form of banners. Also advertisement messages about new apartments that were inserted and match the user’s previous searches are sent to the emails of registered users. Finally it could be stated that the company has some characteristics of the Affiliate model. For instance, it enables the client to contact the agency or the landlord, whenever the customer has access to the Internet. Also it charges the agencies that advertise themselves through the website by the pay per click way.

According to Timmers (1998) a business mode is an architecture for the product, service and information flows, incorporating simultaneously descriptions of the sources of revenues, description of the actors and the benefits for them. He recognized eleven business models for the operation of the business transactions which are: e-shop, e-auction, e-mall, e-procurement, third party marketplace, virtual communities, value chain service providers, value chain integrators, collaboration platforms and information brokers.

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