1

OBRTNIĈKA ŠKOLA POŢEGA

OSJEĈKA 33

34000 POŢEGA

SLAVONIA CONSTRUCTION GUILD Home Improvement Referral & Resource Network Centre

FEASIBILITY STUDY

COST-BENEFIT ANALYSIS

Prepared by: mr.sc. DIJANA FERKOVIĆ, dipl.oec. & team

December 2012

2

ACKNOWLEDGEMENTS

We are grateful to Mrs Iva Snajder, Vocational school Pozega principle which

served as the financial sponsor of this feasibility study, and also the informal

FORUM of construction crafts in which strong local support for regional

SLAVONIA CONSTRUCTION GUILD was identified.

We also wish to thank the many professionals and people of Pozega,

Slavonski Brod and their counties who generously contributed time,

information and enthusiasm to our research process.

We appreciate the interest and guidance provided by the Croatian

Chamber of Commerce and Crafts as we explored the justification of setting

the SLAVONIA CONSTRUCTION GUILD in Pozega's Vocational school premises.

Special thanks to architects, designers, maintenance experts and current

investors for their encouragement as well as sharing detailed and specific

information about the construction projects with us.

Our project also benefited greatly from visiting existing Business incubators in

the county (Pakrac and Pleternica), as well as Entrepreneurial Centres,

working within them.

We wish to thank our reviewers for strengthening our report.

We very much appreciate the confidence and financial support provided by

the Vocational school, and their teachers. This support was essential for

moving our project beyond the stage of „just another good idea“, and

allowed us to systematically investigate the viability of a regional construction

guild, and its operative headquarters in form of HOME IMPROVEMENT CENTRE

in Pozega.

3

TABLE OF CONTENTS

Executive Summary…………………………..……………………………………. 4

1. Project Overview …………..…………………………………………………… 6

1.1. Background ………..………………………………………………………. 7

1.2. Why Construction Guild …………………………………………………. 8

1.3. Community Service Goals ……..……………………………………….. 9

1.4. Mission ………………………………………………………………………. 9

1.5. Slavonia Construction Guild: A Snapshot …….……………………… 10

2. Home Improvement sector …..……………………………………………… 12

3. Marketing & Sales ………..……………………………………………………. 14

3.1. Marketing ……….…………………………………………………………. 15

3.2. Initial Target Markets & Primary Clients ………………………………. 18

4. Technical an Organisational Requirements …………………………….. 20

4.1. Location ……….…………………………………………………………... 20

4.2. Referral & Resource Network Centre ………………………………… 21

4.2.1. Premises and layout ……..………………………………………… 22

4.2.2. Equipment and resources ……..………………………………… 27

4.2.3. Specialised features ……….……………………………………… 29

4.2.4. Energy Efficiency Specialization ……………………………….. 30

4.3. Home Improvement Referral & Resource Network Centre

Business Model……………………………………………………………… 32

4.4. Key Staff Positions…………………………………………………………. 34

5. Services………………………………………………………………………….. 35

5.1. Delivery of Services to Construction SMEs…………………………… 36

5.2. Services to Investors …………………………………………………….. 40

6. Financial Plan…………………………………………………………………… 41

6.1. Estimates of Capital Costs………………………………………………. 41

6.2. Estimates of Annual Operating Costs………………………………… 42

6.2.1. Human Resources…………………………………………………. 42

6.2.2. Utility Costs………………………………………………………….. 43

6.2.3. Transportation and Study Visit Costs………………………….. 43

6.2.4. Other Services Costs……………………………………………… 43

6.3. Projected Income and Profit/Loss……………………………………. 44

7. Feasibility Assessment………………………………………………………… 47

8. Possible Sources of Financing………………………………………………. 49

9. Conclusion & Recommendations…………………………………………. 50

ANNEXES……………………………………………………………………………… 51

COST-BENEFIT ANALYSIS ………………………………………………………….. 58

4

EXECUTIVE SUMMARY

The proposed project of setting and operating a functional HOME

IMPROVEMENT CENTRE (as Slavonia Construction Guild's operative body and

home improvement referral and resource network) is being designed to

significantly contribute to raise of competitiveness of regional construction

crafts and SMEs by improving access to reliable information, training and

education, relevant specialized services and networking and synergy

between individual construction crafts and SMEs in the region.

As part of Vocational school Pozega and Slavonia Construction Guild, the

Home Improvement Centre would provide improved access to services and

information (knowledge, skills) important for development of property-related

investments in the region. Raising the level of education and training within

the workforce (and construction companies) is critical to the region's overall

economic development. Upgrading employee skills in construction

companies will make them more competitive in the marketplace, while

upgrading the skills of the region's workforce pool will make it more attractive

for other related industries to move into the area. Offering modern materials

and methods in construction, that save energy, time and money for investors,

should inspire new investments, and create a new demand for construction

works in the region.

This study analyse the feasibility of building the Home Improvement Centre.

The summary of the major findings:

- A need for workers with relevant skills in a wide variety of technical

areas in regional construction SMEs is recognized. Also, there is a need

for existing engineers to have access to education in technology

management

- The current educational attainment level of unemployed residents in

the county is low. The greatest number of registered unemployed

persons has finished secondary education. However, the unemployed

not-registered are mostly without occupations or skills. The fact is that

many residents need to upgrade their work related skills and education

levels

- The Centre will provide on-going opportunities for improving existing

skills, developing new skills and to attain additional certificates and

degrees (in school or other institutions)

- For the region, the Home Improvement Centre would provide a hub for

economic development efforts and raising level of workforce that will

5

improve the quality of life for citizens and attract new business and

industry

- The Centre would provide improved work life opportunities for technical

staff, joint public-private investment projects

- For the educational institutions the Centre would provide prestige

access to jobs in construction companies for students, collaboration

with other entities, and enhanced opportunities for program

development and research

- The Centre will have a regional focus and will be a resource for the

wider Slavonia region (not only Pozesko-slavonska county)

- The Center would be established as a separate department of

educational public high-school institution and be managed by the

School Board, and Slavonia Construction Guild Board

- The Center would be approximately 473m2 with ample flexible space.

Large hanger door will allow larger pieces of equipment to be moved

in and out of the facility.

- The anticipated capital cost is EUR 646.611 to build and equip the

Center while the recommended initial annual operating budget is EUR

5.000.

- The Center would have broadband wireless access to the Internet

throughout the facility and be equipped with state-of-the-art

computing and two-way audio / video systems

- Overall, while not without major challenges, the creation of a Home

Improvement Center is a laudable project with great potential and

needed benefits for the region.

Ultimately, it can be considered that the Centre could operate sustainably

without the need for extensive fundraising or additional budgetary

pressure. In conclusion, we believe this project is an exciting way to

provide the regional construction sector with relevant business and

educational support. Funding support should be sought to ensure the steps

for set the up of Centre, so that is is organised in timely manner, so that the

project does not lose momentum.

6

1. PROJECT OVERVIEW

This document assesses the viability of Home Improvement Centre to serve

the Slavonian Construction Guild, VET school Construction Department and

investors in projects related to construction, building and property

improvement.

The primary goal of the analysis is to answer: Will the Home Improvement

Centre justify its establishment, will it be self-sustainable and should the

initiators of the project proceed with it?

The feasibility study of the Centre was conducted in period from October

2012 to January 2013. This investigation addresses the above question by 1)

identifying how the various components of a Slavonia Construction Guild

affect in order to serve the needs of the sector; and 2) developing models to

explore the potential pros and cons, and the costs and benefits of our

decisions.

Conducting this analysis allowed us to gain a more thorough understanding

of the opportunities and challenges in locating, designing and building a

Home Improvement Centre. It also helped define organisation and

functioning models and scenarios of possible directions in which Centre will

go. The analysis helped to describe in more details all aspects of the future

Home Improvement Centre.

The level of specificity of information provided in this study is dependent upon

the depth in which we were able to investigate the components, and the

degree to which we could reach resolution on particular issues.

Consequently, this feasibility study is best viewed as a solid point for

developing more refined business and operational plan.

7

1.1. BACKGROUND

Over the last decade, a construction sector (in Croatia, as well as in Pozesko-

slavonska county) has experienced a strong rise and even stronger decline in

terms of economic performance. Construction has in the last two years (2011

and 2012) lost more than 40% of total number of employees, while many

construction companies, due to chronic insolvency, have bankrupted.

VET school with its Construction Department has felt strongly all the market

changes, and it reflected on the school's image and enrolment of students.

Construction jobs have for long been considered unwanted and less

attractive than some other service occupations. This is why the school

principal (Snajder) together with the school internship program coordinator

(Kovacevic) initiated in 2011 the consultations with the associate construction

companies (18 companies) in order to identify the reasons of weak

construction SMEs economic performance in the region.

The group reviewed several scenarios and configurations for Home

Improvement Centre including various purposes and outcomes that might

benefit the community and construction business sector. No similar projects or

institutions were seen in Croatia. Only segments of Home Improvement

Centre's activities can be noticed, but in different form. The project

developed in this case would present a transformation of CLUSTER-

VOCATIONAL SCHOOL-CONSULTANCY-CHAMBER of companies, comprised in

a totally different form. Similar projects have been important in shaping the

thinking and enthusiasm of project partners. However, none existing examples

of business-support institutions could be exactly replicated, nor did any fit

exactly the specific regional needs regarding the construction sector.

Consequently, in September 2012 the group of project partners developed a

new framework to help organise their own investigation of what would work in

Pozesko-slavonska county and its construction sector. Home Improvement

Centre used all available resources in the locality, and took into consideration

the specific requirements of the regional construction sector. During the

following months, a sequence of interviews were conducted with

construction entrepreneurs, in order to 1) identify potential members of

Slavonia Construction Guild; 2) learn about investment preferences in the

region; 3) explore how a new business-support could meet the needs of

companies and crafts, as well as their clients; 4) gauge SMEs' interest in

becoming a member of the Guild (and user of Centre's services).

8

1.2. WHY CONSTRUCTION GUILD

There are several reasons for developing a specialised regional construction

guild. The Guild primarily serves as networking tool in order to develop

cooperation between competing small companies and crafts.

The Guild is owned by its members and driven by the needs of its clients.

Members of the Guild are primarily the smallest family-run construction crafts

and companies. Its members belong to wide range of disciplines (brickwork,

tunnelling, electricity, paving, tile works, building carpentry, insulation …).

Members benefit of access to Guild from a wide variety of expertise and

knowledge that assists them to run their business more efficiently. The Guild

runs lectures and presentation, but also connects by round-table meetings

and business brunch gatherings and discussions.

Guild will protect its members via expert assistance for compliance, support

and indemnification in their daily businesses. However, being a member of

Guild is much more than just access to free relevant educational seminars

and trainings. The seminars and educational themes cover a range of topical

subjects across sectorial expertise, but also law, tax and policies. High profile

speakers will be hosted regularly by the Guild.

Guild works closely with labour agency (Croatian Employment Service) in

securing that workers are available and that no conflicts come out of the

about legal regulations. VET school provides internship of young construction

school students.

Guild representatives and Home Improvement Centre staff develop close

relationship with all Guild members and the type of trust that comes with a

long lasting, quality service.

In addition to serving its members, Guild also helps them meet the demands

of the companies above them in the contractual chain (if member is

subcontractor) in order to achieve security in payments and respecting the

contractual requirements.

Towards the clients, the Guild provides contact to all construction (and

property related) services. It helps and connects the client with the

contracting companies or individual subcontractors. In doing so, the Guild

absorbs segments of legal and tax risks that would otherwise be borne by

clients or construction companies.

9

1.3. COMMUNITY SERVICE GOALS

There are numerous reasons for developing Home Improvement Centre as

Slavonia Construction Guild's operative institution.

Project partners envision Home Improvement Centre serving and benefiting

community of Pozesko-slavonska county (and wider) by

Increasing investments in property improvement in the region

Improving business performance (profitability, efficiency) of regional

construction SMEs

Creating small construction companies partnerships for easier applying

to public tendering procedures

Creating local employment and training opportunities

Educating local community and investors about energy efficient

solutions in construction (and building maintenance) by holding

lectures, workshops to the public

Increasing the availability, quality and quantity of local property

improvement initiatives and investments (building and construction)

Providing services and advice for local population

Assisting construction SMEs in attempt to respect all legal requirements

about construction business

Feeding eventual excess of income over costs back to the community

through improvement of VET school construction department and

conditions for work in vocational program

1.4. MISSION

… to significantly contribute to the growth of regional construction sector and

increase of number and value of investments into property improvement or

new construction in the region. Access to improved and better services of

local companies will stimulate energy efficient initiatives and activities.

Home Improvement Centre will achieve this by forming a direct connection

between investors (clients) and construction companies built on knowledge

exchange and relevant information. Strong relationship between members of

the Guild will become a seed of new and stronger joint cooperation and

synergy in operative performance.

10

1.5. SLAVONIA CONSTRUCTION GUILD

The Slavonia Construction Guild is a networking platform that assists in

provision and search of high-quality construction services in the region. Its

members' have great overall experience in working as contractors and

subcontractors and through their connection achieve even higher level of

reliability, quality and sustainability.

Slavonia Construction Guild will be an economical interest grouping,

established by construction companies and institutions in the fields of building

design, consulting, engineering, contracting and production of building

products. The main goal of the Guild is to improve domestic regional

competitiveness of its members through commercial cooperation and

networking, education, training and even some policy action. Guild vision is

to become a network of construction companies offering complete solutions

for the regional (and wider) market. Guild will build its long term

competitiveness on technological and organisational innovations,

development and quality.

Slavonia Construction Guild operates informally through Home Improvement

Centre, coordinating and assisting the work of the Centre's work by direct

involvement in its organisation and performance.

ACTIVITIES: By providing its members with infrastructure, services and

coordination of development projects, the Slavonia Construction Guild

creates conditions for:

- Increase of productivity and business efficiency

- Increase of innovation and transfer of good practices

- The growth and development of competitiveness through the

application of clustering principles

- Efficient training for personnel

- Mutual business and other cooperation in the value chain

- Search for new business opportunities in the region, and wider

- Protecting interests and cooperating with the government and other

public institutions, financial organisation and other.

KEY TECHNOLOGIES that Slavonia Construction Guild members could offer

are: structural and architectural design of buildings, roads and highways,

bridges, viaducts, underpasses, overpasses, galleries and retaining walls,

wastewater treatment plants, hydropower plants, repair works and special

technical solutions, consulting, engineering of buildings and civil engineering

works, in indoor environment, energy in buildings, in geotechnics, geology,

11

technical consulting, quality assurance and supervision, expert opinions,

inspection, examinations and testing of concrete, mortar and of products,

aggregates and stones, conformity assessment and certification, construction

contracting of buildings (apartments, business and industrial buildings), civil

engineering works, communal infrastructure, external arrangements (asphalt,

stone-pits, horticulture), prefabricated products for construction of

apartments, hotels, hospitals, construction materials and products,

stonecutting, building shuttering system, building and stone restoration,

sustainable construction, environment management systems ISO14000,

EMAC, IPPC.

Guild defines topic-related teams of experts (tax, accountancy, law,

construction, energy, financing) that work jointly on achievement of full legal

and tax compliance of work of its members.

Guild does not employ staff, but rather works through Home Improvement

Centre work, and work of individual Guild members. It can be expected, after

the initiation phase, when members of Guild experience the concrete

advantage of networking and joining the Guild, there could be suggestions of

further formalization of the network, and development of professional service

to each of the members.

Slavonia Construction Guild staunches commitment to genuine self-

employment.

GUILD BENEFITS

FOR COMPANIES

-Identification of common

needs and its

improvement

-mutual development

projects

-cost sharing

-development of human

resources

-increase innovation

-business climate

improvements

-access to new markets

FOR EDUCATIONAL

INSTITUTIONS

-knowledge of industry

needs

-tailor-made education

-applied research

-profit from research and

development

-technology transfer

-access to funds

FOR PUBLIC SPHERE

-targeted support

-support of competitive

industry

-region specializations

-FDI attraction

-improved

competitiveness

Improved communication, common needs identification

Realization of mutual projects

12

2. HOME IMPROVEMENT SECTOR

Home Improvement is a concept that joins together several interrelated

sectors of economy: building and construction; home maintenance;

installation and repair (heating, cooling), energy efficient investments and

interior optimisation and redesign. Primarily it focuses on the construction

sector, that covers in a wider sense all these mentioned subsectors.

The construction sector in Croatia makes a very important part of the

economy. It has reached in pre-crisis 2008. 8,2% of GDP, thanks to the growing

investments (capital infrastructural projects, mainly road construction), but

also apartment building. The construction sector has suffered a great loss in

the last 2-3 years, coming to a level of 6,2% of GDP. Greater supply of

demand for new apartments was not adequately compensated by other

construction or home improvement activities on the market. The trend is not

positive. The number of issued building permits is showing even worse

immediate future for construction if there will be no readjustments to market

change.

Significant fall is evident not only in

building construction segment, but

also i traffic infrastructure. The

overall investment capacity of

investors and construction industry

is lower.

Since 2008 the number of persons

employed in construction sector

Number of building permits, source: DZS has constantly decreased,

approximately for 20.000 workers. Around 38% of all employed work in

segment of building construction, 33% work in civil engineering and the rest

are working in specialised construction sectors.

In 2011 there were 14.784 construction companies active in Croatia. 88% of

them are smaller companies and crafts employing less than 10 workers.

Generally, economic fall, unemployment growth and the decrease of

income disposable for investments (due to the growing costs of food and

communal costs) create a consumer's pessimism and delay the decisions to

invest.

13

The average salary in construction sector in Croatia in 2011 was 4.522kn that is

18% lower than Croatian average. The reason lies primarily in the lower

educational level of construction workers (mostly without qualifications).

The analysts expect in 2013 the continuation of negative trends in

construction sector in Croatia. High unemployment, stagnation of income,

low crediting, great number of unsold apartments, all influence the decline of

construction works. Low-quality property prices are falling, and existing

entrepreneurs (builders) should redirect towards the property improvement

investments, in order to raise the value while waiting for buyers.

Joining the EU (1.7.2013.) will turn the trend towards the greater demand.

Available EU funds for investments should also affect positively the

construction sector market. However, EU introduces many quality related

preconditions regarding the property (legality, energy efficiency,

environmentally friendly processes, adequate waste disposal, etc.).

Growth of private investments is slowed down by administrative barriers and

complicated procedures. The potential for growths can be seen in smaller

reconstruction and renovation projects of public building (kindergartens,

schools, building certification, etc.), in some cases funded by the EU funds.

In the following years, it is expected that ENERGY and energy efficiency will

be in focus of investors, as well as environmentally important projects

(sewage, water supply and protection, and similar).

Due to the great competition from large European construction companies, it

is expected that some Croatian companies will not manage and will lose

battle against competitors. This is why the segment of domestic HOME

IMPROVEMENT projects is very important, since it is not interesting for the EU

competition and leaves a vast area of market niches where construction

crafts and SMEs can act. The solution is perceived in establishing of flexible

and competitive CLUSTERS or other forms of associations based on well

familiar knowledge, tradition and competences.

Home Improvement Sector, as part of construction sector in general, is not

without perspective (on the contrary). However, the existing model of work is

spent. Decrease of living standard will influence the level of new construction

and put stronger focus on adaptations, sanations, improvements,

optimisation, and similar activities related to construction field.

14

3. MARKETING AND SALES

Marketing and sales of Home Improvement Centre are derived from the

actual situation of marketing and sales (business performance) of regional

construction sector, that is Slavonia Construction Guild members and other

construction sector actors.

Construction companies in the county are going through a challenging

period of adaptation, primarily due to previously described situation on

national level, but also because of numerous upfront costs. In a competitive

environment, operating margins of construction companies are slim, at ca.

5%. During construction booms, margins may reach higher levels, but still not

high compared to other sectors.

Key success factors for regional construction SMEs are:

Efficient project management, especially in terms of planning

(projecting, budgeting, forecasting availability of needed materials)

Economies of scale and available resources (access to financing,

labour force), possibly through networking and cooperation

Reliability of contractors and subcontractors

And quality of construction work.

The recognized key risks are:

Underbids (bidding a contract at a price that turns out to be too low to

complete the project)

Possible cash flow instability due to early-on costs and relatively late

incomes in most projects

Rising costs of building materials and labour.

Investors themselves are also face with several risks, and this must be taken

into account when observing the regional construction market. They

experience the risks of: high administrative barriers, rising costs of services and

materials, high level of land prices, high interest rates reducing access to

financing (both for investors and construction companies).

In this changing and hard to predict market environment for construction and

construction related SMEs in the region, HOME IMPROVEMENT CENTRE will seek

opportunities to help companies and investors (both parties of the

investment) achieve greater satisfaction with the investment in terms of return

and profit.

15

3.1. MARKETING

Certain aspects of the county's construction sector have been investigated in

order to define how Home Improvement Centre should act and operate. The

defined characteristics of the regional construction SME sector in Pozesko-

slavonska county (and even wider) are:

There is a public commitment that small construction companies survive

Quality of service and customer relations are not on high level

Accumulated experience and practice of construction crafts

Population decline, particularly in villages

Industrial decline, due to the difficult process of transition to a free

economy and closing down of big systems; lack of domestic and

foreign direct investments, dependence on imported goods, negative

financial results of companies

High unemployment in the county, while the number of employed

persons in the county shows even worse situation (large number of

inactive population, or emigration)

Stagnation in investments in property due to economic crisis

Poor working conditions and low educational standard

Fast changing legal framework.

Considering the above described situational facts, Home Improvement

Centre MUST BE A REGIONAL CENTRE serving Pozesko-slavonska county, but

equally all neighbouring counties. In its work, it must focus on emphasising the

strengths of the situation, and mitigating the weaknesses. Hence, from the

above defined facts, arise possible services that can be provided in the

Centre:

SITUATION:

-There is a public commitment that small

construction companies survive

-Quality of service and customer relations are

not on high level

-Accumulated experience and practice of

construction crafts

-Population decline, particularly in villages

-Industrial decline, due to the difficult process

of transition to a free economy and closing

down of big systems; lack of domestic and

foreign direct investments, dependence on

imported goods, negative financial results of

companies

ANSWER:

-public-private partnership and networks

could trigger the development

-training and skills improvement is in focus of

educational activities

-promotional efforts must be improved in

order to attract new clients

-investments into renovation, demolish

-assisting the growth of SMEs, management

and entrepreneurial training, consultancy on

foreign supply, accounting basics training,

cash-flow control in SME businesses,

successful contracting to large companies,

quality service management upgrade

16

SITUATION:

-unemployment in the county, while the

number of employed persons in the county

shows even worse situation (large number of

inactive population, or emigration)

-Stagnation in investments in property due to

economic crisis

-Poor working conditions and low

educational standard

-Fast changing legal framework

ANSWER:

-human resources development, how to

recruit the best people, investing into

people, reskilling of labour, new markets in

other regions

-informing about investments in property and

home improvement (cost reduction)

-working and health conditions on workplace

standard implementation

-training on legal requirements for SMEs

It is important that the Centre starts small. It will probably take 3-5 years for

Centre to fully develop all its envisaged services and to become a reliable

and recognisable point in the eyes of construction SMEs, as well as their

clients. Stakeholders must be patient during the early developmental stages.

It is also important to note that the development and strengthening of

Slavonia Construction Guild is what is going to drive the Home Improvement

Centre forward.

Initially, the focus of the Home Improvement Centre should be on developing

programs and activities that would benefit the Slavonia Construction Guild

members, their employees and employees of their subcontractors. It should

begin by utilizing educational and training programs provided by the project

initiator (VET school) and their associates (suppliers of specialized materials

and equipment). As the Centre develops, it should expand on these

programs (management, tendering, work safety, energy efficiency,

informative lectures for public and investors …).

Programs should be selected according to the level of its immediate practical

application, and based on the real demand for concrete training curricula

(or subject of presentation). Enhancement of recruitment of new workers and

retaining the current ones should be priority in terms of goals and objectives

of these programs (considering the benefits for VET school).

A number of technical training (and certification) programs are needed for

the region and would be offered at the Centre. Participants will be able to

receive training in carpentry, masonry, electrical, HVAC, plumbing, tiling,

flooring, and other related construction skills to prove the needed skills sets for

area's employers.

Centre will develop ad-hoc and tailor-made programs according to

particular need of construction companies (specialized skills in application of

new materials or methods, computer training, drainage, etc.).

17

In the second phase of its development, Home Improvement Centre should

develop in sense of providing online and distance learning technologies, in

order to expand to the wider area than the regional market, and to achieve

the sufficient critical mass to be cost effective in providing educational

offerings.

Details of market approach (4P: product, price, promotion, placement) will

be defined in the Marketing Strategy that must be developed immediately

after the launch of the project. Marketing Strategy should build upon and

promote business opportunities in the prominent construction and building

sector of the region. Marketing Strategy must have these key strategic aims:

Expansion of the „brand“ of Home Improvement Centre by

communication of its benefits that „Under the Slavonia Construction

Guild you are in a better position working together than you are

individually“

Developing longer term sectorial partnership in which local companies

and educational institutions can collaborate and work together on joint

Guild initiatives

Promoting construction and building sectors as cornerstone industry of

the County's economy and as a strategic knowledge based growth

sector, that can attract additional investment, talent and jobs

Communicate to citizens the many opportunities for smart solutions in

their properties and homes that save energy and money.

18

3.2. INITIAL TARGET MARKETS AND PRIMARY CLIENTS

The initial target market of the project make companies and population of

Pozesko-slavonska county, primarily construction companies.

Recently, Pozesko-slavonska county has experienced a decline in each of the

most important industrial areas (textile, furniture, agriculture), and

employment futures of many of the residents are threatened. The initial

concept of Home Improvement Centre was developed in 2012 as a result of

the following identified needs related to providing residents with skills that

would ensure their employability: technical education, career education,

entrepreneurial skills, lifelong learning. Considering that construction sector is

one of the prosperous ones in the region, it was chosen to be supported

through this project.

Home Improvement Centre will become an umbrella organization, offering

different services to construction SMEs, but also their clients, and investors in

construction related projects in the region.

Since the project represent a unique and pioneer idea in the region, the

demand for the services of the Home Improvement Centre will have to be

created through well thought marketing campaign.

Primary clients of the Centre will belong to two main groups:

a) Construction SMEs in the region, at least 10 regular clients, members of

Slavonia Construction Guild; at least 20 occasional clients, participants

at Guild events and meetings; and at least 20 clients not interested in

activities of networking, but joining trainings and lectures.

b) Construction SMEs' clients – investors into their home improvement, at

least 60 participants in the first year of Home Improvement Centre's

work, to grow to expected annual number of participants at

informative lectures of 180 individual participants.

Secondary group of clients belong to (estimate cca 200 persons / year):

c) Unemployed persons, looking for quality education and training, or

connecting to available employers through network of the Guild

d) High-school students, improving their skills and getting relevant and

immediately applicable knowledge, connected to employers

e) Experts, consultants, developers, contractors, researchers, scientists in

search of partners for their projects.

19

Developing various communication tactics will be crucial to disseminate

information to various target audiences. It is assumed that the „brand“ of

Home Improvement Centre will be maintained and incorporated into each of

these projects.

1.WEB PORTAL www.unapredenje-doma.hr

The Internet will be the main source of information for potential customers

seeking information about the regional construction opportunities, service

providers, members of Slavonia Construction Guild, smart construction

solutions, energy efficient building, etc. It is imperative that web portal

maintain a highly functional, informative and user-friendly website. In order to

achieve the full potential, it must be populated with relevant and timely

information. For example: industry news, articles, white papers, news clippings,

upcoming events in the region regarding new investments in the sector,

events, tradeshows, benefits of Slavonia Construction Guild, membership

conditions, testimonials from businesses in the sector, links to relevant

institutions, etc. Regular maintenance and updating is very important and

certain time and resources need to be put in place to ensure this. This website

should provide a favourable first impression of the Slavonia Construction Guild

and Home improvement Centre for those who visit it. It must be up-to-date,

well-populated and easy to use, at all times.

2.PROMO NOTEBOOK and other printed material

As a unique way of providing relevant information about the Home

Improvement Centre, the staff will contract a distinct product: Promo

Notebook. This will be a regular small (A5 format) notebook, with available

space for writing. The special feature of this book will be the information

about the Home Improvement Centre in the bookends, providing a quick

overview of the Guild and the Centre. This way, the information about the

Centre will stay longer at disposal to all that receive this promotional product.

Other very important element of the Centre's promotion are business cards,

created for all Home Improvement Centre staff, but also for the interested

Slavonia Construction Guild's members (with Guild LOGO), as a way of

creating a brand.

3.REGIONAL CRAFTS TRADESHOWS participation

Every year, there are tradeshows in Pozega and other towns (Pakrac,

Slavonski Brod) where participation of Slavonia Construction Guild and Home

Improvement Centre will be beneficiary for Guild members, as indirect way of

their presentation.

20

4. TECHNICAL AND ORGANISATIONAL REQUIREMENTS

The project depends on the great support of local stakeholders. This is why the

project's technical and organisational elements should remain SIMPLE and

CLEAR, understood by all participants in the partnership.

4.1. LOCATION

The location of Home Improvement Centre is in the premises provided by the

Vocational school Pozega, above the existing construction workshops and

labs (masonry, carpentry, wall-painting). The building, that was used as horse

stable, is very old (more that 100 years) and it used to be a part of big manor's

property. Conservation experts were involved in the development of the

technical drawing in order to preserve all the architectual values of 19th

century. External outlook must be fully respected, while indoor lay out will be

adapted to the modern and relevant purpose, beneficial to the community.

21

VET school construction workshops April 2013

4.2. REFERRAL AND RESOURCE NETWORK CENTRE

Although a more detailed operations analysis and consisting expertise is

required prior to the initiation of operations, the following sections outline the

expected operational design of the Home Improvement Centre, run under

the Slavonia Construction Guild's mentorship.

Home Improvement Centre will develop in form of referral and resource

network centre for its users. In this sense, REFFERAL means that it provides users

(construction SMEs and investors) with efficient and quality service,

specialized in field of construction and energy efficiency. RESOURCE means

that it offers current and comprehensive information about all related topics,

or it directs towards the information source. NETWORK means that it relies on

the work and service of all involved project partners and their associates in

provision of above described services. Home Improvement Centre specializes

in answering questions about regional construction sector, but also about

Pozesko-slavonska county economy perspectives. Centre's staff help clients

navigate through all the Centre's resources and services, provide expert

referrals, and promote and provide ways for clients to get connected with

contractors and stay informed about their investment.

Home Improvement Centre will succeed only if construction sector in the

region shows increase rate in level of income and number of employees.

22

In the pioneer phase, in the first years of the Centre's work, it is important to

stick to the clear idea of Home Improvement Centre, with its defined goals

and strategy. A strong initiator (Vocational school Pozega) will remain for

some time an informal leader of the project, offering guidance and

motivating other stakeholders to join the project. Decision making must stay

simple, without procedures (by consensus). Assignment of duties should be

based on individual wishes, more than qualifications (since the level of

motivation is a crucial success element of this project).

Since Vocational school Pozega sees great interest in development of this

project, in order to preserve the construction occupation and to provide

more and better jobs to their students, it will secure all the technical, as well as

human resources for the initiation of this project.

4.2.1. PREMISES AND LAYOUT

While the Home Improvement Centre received a strong support by the

regional construction companies associates of Vocational school, as

expressed in the survey interviews, they also urged caution, recommending

that the Centre dedicates necessary edifice in realistic dimensions and

connected to the expressed level of local needs.

In order to have local ownership of the building, which contributes to the

sustainability of the project, the Vocational school Pozega has agreed to

consign its premises (that need to be reconstructed) above the existing

construction, wall-painting and carpentry workshops and labs for this purpose.

The specific location is excellent for such a purpose, since it is the position in

the middle of high-school educational complex centre, only 3km from the

Town's centre, but in the quiet and easily approachable place (easy for

finding and for parking).

During the first half of 2011, the architects have proposed a draft of the

reconstruction of the „old attic“ above the construction department

workshops. It is an edifice of total surface of 472,48 m2, out of which 218,80

m2 are classrooms, 74,56 m2 are cabinet offices, and the rest are staff-room

(lounge), toilets, and hall.

The first concept of the draft had in mind only the narrow school purposes

(classrooms and staff cabinets), without expansion to other fields of

community influence. However, previously described problems in the sector

have asked for a strategical turn in sense of assisting the construction sector in

the region, so that VET construction school could maintain its economic

23

justification for its work, and that students could more easily find a way to

employment in the sector.

EXISTING

GROUND FLOOR

1 Carpentry workshop m2 193,78

2 Office m2 8,01

3 Hall m2 49,35

4 Entrance hall m2 5,7

5 Toilet m2 5,54

6 Depository m2 1,9

7 Masonry workshop m2 139,84

8 Office m2 6,11

9 Wall-painting workshop m2 56,4

TOTAL: 466,63

NEW:

RECONSTRUCTION OF GROUND FLOOR

3 Hall m2 27,73

4 Entrance hall m2 10,6

5 Portal m2 4,98

6 Depository m2 4,78

10 Toilet m2 8,46

11 Toilet m2 10,27

TOTAL: 66,82

NEW:

1ST FLOOR

1 Hall and stairway m2 129,28

2 Toilet m2 10,69

3 Classroom1 m2 42,96

4 Cabinet office m2 32,7

5 CONFERENCE ROOM (ex:Classroom2)

m2 74,25

6 CLASSROOM (ex:Cabinet office)

m2 41,86

7 Classroom3 m2 44,72

8 CABINET OFFICE (ex:Classroom4)

m2 56,87

9 ROUND TABLE ROOM (ex:Staff-room lounge)

m2 39,15

TOTAL: 472,48

24

25

26

27

There will be 2 offices (cabinets) for expert services, 3 classrooms for traditional

educational programs of the sector (smaller groups), 1 conference room (50

persons), 1 round-table room (18 persons seating) and necessary sanitary or

communication space (halls, entrance port, presentation and exhibition

area). Since most of the training that will take place in this facility revolves

around the construction industry, there is a need for a larger open space that

allows for large samples to be moved in and out as needed. Classrooms will

be specialized for different areas of construction (1- CONSTRUCTION PHYSICS

with presented materials and equipment for saving thermal energy and

calculation of heat insulation coefficients; 2- BUILDING CONSTRUCTIONS

related to construction structures of buildings, with sectional views; 3- HOME

INSTALLATIONS, including electrical, plumbing, heating, ventilation and other)

with available LAB EQUIPMENT (chemistry, physics) for easier demonstration.

4.2.2. EQUIPMENT AND RESOURCES

Office furniture, video conferencing and other capital expenditure, such as

new computers and software are required. This will present an additional start-

up cost of Home Improvement Centre. Detailed list of furniture and

equipment items is presented in the Cost-benefit analysis financial

presentation. Equipment for energy audit is presented on next page.

The entire building must have secure broadband wireless access to Internet.

Portability will be the key to maximizing the use of equipment and taking

advantage of the flexible space the building offers. Consequently, all or most

of the computing should be via notebook computers that may be moved

from space on carts. Likewise, most of the desks, chairs, etc. (in classrooms)

should be stackable on portable carts to accommodate easy setup. Two-

way audio and video for conferencing and instruction can be provided with

portable systems. To the extent possible testing equipment, engineering

simulation stations, and other lab equipment should be on wheeled

workspace so they may be moved from space to space as needed.

Centre will have relevant software programs related to construction works,

preferably for provision of 3D simulations. Special equipment for energy audit

will also be procured. The detailed presentation of this equipment is visible on

next page.

In order to enable efficient work, it will be necessary for the Home

Improvement Centre to purchase a simple vehicle, for the field work of the

Centre's staff.

28

1. Blower door. They help evaluations and aid diagnostic work. While the

common thermal bypasses are well known, a blower door can starkly show

the extent and size of air leakage problems.

2. Infrared camera Helpful for locating air leakage, moisture issue, thermal

bridging, or insulation irregularities that can lead to poor thermal

performance. Useful in visually demonstrating building problems to

homeowners.

3. Digital pressure and flow gauge. It is integral to blower-door testing but is also very useful on

its own. Zone diagnostics (poking air tubes into rooms and framing cavities) is very

informative. Pressure gauges can more finely detail the heat loss and air leak pathways. A

pressure gauge is also used for flue gas pressure testing and depressurization testing of

the combustion air zone.

4. Gas leak detector. For natural gas and propane heating systems.

5. Carbon monoxide detector. Carbon monoxide levels need to be monitored during an

audit. The heating system is checked with the combustion analyzer and this monitor tracks

atmospheric CO in the house throughout the audit.

6. Combustion analyzer. The combustion analyzer tests the efficiency of heating and hot water

systems. It can test flue gases for O2, CO2, heating system efficiency and carbon monoxide. It

can also double as a CO detector.

7. LED flashlight.

8. Digital camera.

9. Longer heavy-duty extension cord.

10. Tape measure.

11. Cordless drill. Many times the heating system exhaust pipe doesn’t have an access hole

drilled yet for the combustion analyzer probe. A drill is also needed for checking inside a

wall cavity.

12. Telescoping ladder. Attic access hatches are often tucked away and hard to reach. A

full ladder might not fit in an awkward closet. A heavy-duty telescoping ladder will make

snaking through a clothes closet to the attic hatch that much easier.

13. Moisture meter. Hygro psychrometer allows to quickly read several moisture measures,

including relative humidity. While no substitute for year round metered data and

observation, it is incredibly useful for gaining a sense of the moisture levels in a

building.

14. Fiber-optic borescope. Borescope allows looking inside wall cavities, sealed

crawlspaces, duct work. Useful for figuring out what’s happening in the building

shell.

15. Pin-type wood moisture meter. This device is very useful for testing sill plates or

other structural elements you suspect may have moisture issues.

16. Pinless moisture meter. When testing moisture in finish wood, trim, or other surfaces.

17. Non-contact voltage detector. Testing whether they are live is important as insulating

near or over live knob and tube is a potential fire hazard.

18. Laser tape measure.

19. Distance measuring wheel.

20. Wizard Stick smoke creator. Useful for tracking air flows when the blower

door is running. It creates a pretty arresting visual when the smoke is sucked

through a crack no one suspected was a problem.

21. Hat with LED light.

29

4.2.3. SPECIALISED FEATURES

Home Improvement sector covers a wide area of very different segments, but

all related to improvement of living and resident conditions. Trends put focus

on living in harmonization with the nature, self-sufficiency in terms of energy,

simplicity of maintenance, minimalism of refurbishment, and similar … all for

the purpose of „freeing“ time and money for greater quality of life. This is why

Home Improvement Centre will make an effort to become a reliable advisory

institution, a starting point for all home improvement related projects, where

investors come and ask for free advice and consultancy. Some specific

services, that require greater time and engagement of additional resources,

will be charged at competitive prices.

Home Improvement Centre's staff will be trained and educated to provide

relevant information and services in matters of following issues:

RENEWABLE ENERGY – working together with investors in order to define

optimal solutions that help save and earn money, through application of

latest tools, technology and analytics. Clients could receive set of

deliverables, in form of documents, plans, drawings. After initial in-person

consultation, and development of drawings, 3D (4D) walk through

presentations can be provided. Contacts with regional contractors.

HOME REPAIR AND MAINTENANCE – a list of local providers of home repair

and maintenance services will be provided. Consultation on solutions.

USING NEW MATERIALS AND METHODS IN CONSTRUCTION - having excellent

communication with suppliers and producers of available new materials in

construction sector, enables regular presentations and trainings of using such

novelties. Providers offer these educations without charge for participants.

INTERIOR DESIGN & OPTIMAL ORGANIZATION OF SPACE – providing samples of

colour schemes, or furniture online shopping examples, Home Improvement

Centre staff can provide floor plan with furniture layout to help investors to use

their homes in the optimal way (functionally). Having catalogues of suppliers,

the Centre's staff will suggest accessories, light solutions and other tips for

modern interior design and organization.

3D VISUALIZATION OF SPACE – using high-tech software solutions (CAD)

RENOVATION OF FURNITURE AND EQUIPMENT – having carpentry workshop,

and experts in furniture production, clients will be provided with relevant

advice on how to reuse the existing furniture items, hence be environmentally

savvy.

30

4.2.4. ENERGY EFFICIENCY SPECIALIZATION

Energy use in buildings accounts for over a third of total energy requirements

and offers the largest single potential for energy efficiency (excluding the

industry supply). Since Croatia is joining the European Union, a Directive on

the Energy Performance of buildings will have to be respected, meaning that

some energy standards will have to be adopted. Furthermore, building

owners will have to label the information on the energy consumption of the

building (energy quality)1. Also, when selling or renting a building, this label

must be available. It is an instrument of price differentiation, since high

energetic quality means lower costs for heating or cooling.

Investments to energy efficient living are definitely expected in the future

period in Croatia, since huge potential lies in this field. Energy audit programs

must precede these investments, and these services are targeted to all end-

users.

HOME IMPROVEMENT CENTRE in the field of energy efficiency will act as non-

profit energy consultant. The expert staff, together with the cooperatives and

outsourced associates, will approach individually to every project, and help

the investor (owner or other) to determine how to make his home or business

premises more efficient and to close the financial construction. VET school

teachers will undergo the certification for energy audit and efficiency and will

work together with the client. The priority will be to become the investor's

advocate throughout the process in order that he gets the best deal at the

highest standard of quality.

Energy efficiency is a complex issue that concerns few things in isolation. Air

leakage in the attic, level of insulation in walls and ceiling, size of heating or

cooling appliances, etc. all influence the level of energetic quality. This is why

a „whole house“ approach is necessary that views all parts of one home as a

connected system.

PROCEDURE:

STEP1 – contacting Home Improvement Centre through website or by phone.

Centre's representative will explain how the investor can access subsidies and

financing to upgrade his home, and will offer to conduct a low-cost energy

consultation to get the process started. They recommend a package of

retrofit measures that maximizes savings for the lowest cost, while ensuring

there are no health or safety hazards.

1 So far, only buildings larger than 1000m2 are included in the directive.

31

STEP2 – connecting the investors with local energy contractor to conduct a

complete home performance assessment. They provide him with a clean,

understandable plan to improve home's efficiency and calculate the

potential energy savings. Full energy assessment should include blower door

test (measuring leaking of home, infiltration, exfiltration), building envelope

inspection (evaluation of windows and doors, insulation check, thermal

infrared imaging), HVAC inspection (HVAC – heating, ventilation, air

conditioning), appliance and lighting evaluation (cooking appliances, light

fixtures, proposal for more efficient lighting), health and safety testing

(ventilation, checking for mould, carbon monoxide, asbestos, …).

STEP3 – Client's home undergoes an energy efficiency retrofit, meaning the

life in a healthier, more comfortable and less expensive home. Home

Improvement Centre staff follows the investor during his investment

procedure, documents it and (with permission) displays the proof of home

improvement initiatives online.

On the web portal of Home Improvement Centre, the staff will develop a

simple online tool for calculation of potential energy savings in homes. Giving

some basic information about their home, the investor gets the indicative

guidelines about the results of their investments and results that can be

achieved.

Illustration:

Illustration:

32

4.3. HOME IMPROVEMENT REFFERAL AND RESOURCE

NETWORK CENTRE BUSINESS MODEL

WHY? The project here presented was developed to address the most recent

challenges in the regional construction sector, through initiative for sectorial

guild creation. Focus is shifting from construction of new buildings to

maintaining and repairing them. Thus construction companies have to

change in a way that they not only offer basic construction services but

rather a whole life-cycle package, including maintenance. This also should

include data management on property, and being able to react to eventual

needs

Another issue related to regional construction sector is the fact that the

average age of construction workers is high and that the sector does not

have a very glamorous image. Recruitment is difficult. Few students study

building and construction and dropout rates are high. Furthermore the

mismatch between what students learn at VET schools and real life is a

problem.

Guild of regional contractors was identified as a much-needed collaborative

synergy between regional construction SMEs, organized in a less formal way,

as a series of projects that develop and implement the tools and methods

necessary for sectorial development, is what has been imagined. More

specifically, work on support to regional construction SMEs and their clients,

through Home Improvement Centre business model.

HOME IMPROVEMENT CENTRE, as referral and resource network centre leaned

on the work of Slavonia Construction Guild, is dedicated to unlocking of

economic potential of Pozesko-slavonska county (and wider) construction

sector, through support to entrepreneurs and small business formation.

Home Improvement Centre works focus to all entrepreneurs connected to the

PROPERTY & HOME related activities, but primarily contractors in construction,

helping them navigate the difficulties of running and advancing a small

construction business. Centre's staff in their work use innovative approach in

counselling and business assistance.

Home Improvement Centre raises from the unique partnership composed of

educational institutions and economic developers (companies), as well as

regional and national agencies (Chambers).

33

GOVERNANCE – After reviewing several governance structures for similar type

of facilities, some potential models were researched in detail. Based on

consultations with project partners, and future members of Slavonia

Construction Guild that the Centre will likely have several funding sources, the

best governance model would be to establish a separate department within

the existing vocational school (public institution).

Home Improvement Centre, as part of the Vocational school, will not have

separate management, and will be supervised by the School Board.

Slavonia Construction Guild, on the other hand, will constitute a 3-member

Board out of 2 representatives of construction SMEs and one representative of

project partners. The Board will have the authority to decide on the work of

Slavonia Construction Guild and to recommend the features of activities of its

Home Improvement Centre (except the disposition of the building premises of

the Centre that remain under the school management)2. All major decisions

will have to be confirmed by the Guild's Assembly (brought by the majority of

all participating members of the Guild, on monthly meetings). The Board will

observe the work of the Centre's employees and give recommendations on

how to improve their work. The meetings of the Board must take place at

least once in three months. It is essential that construction entrepreneurs

remain on the Board to achieve local leadership and ownership. Keeping the

management simple and the Board small and functional is important. The

Board should meet on quarterly basis (minimum).

In its work, the Centre must act individually, in order to be less restricted in its

approach to develop partnerships with multiple agencies. By including

different agencies, institutes or development centres, Home Improvement

Centre will be in position to act in collaborative fashion towards the support to

regional construction sector.

Home Improvement Centre's staff will have responsibility of reporting twice a

year to the School Board and to the Board of Slavonia Construction Guild.

2 Home Improvement Centre is an institution defined by its activities and recognition in the

community, rather than a building or a formal bureaucratic body.

34

4.4. KEY STAFF POSITIONS

The key position in the Centre will be 2 members of staff, constantly at

disposal to Slavonia Construction Guild members and to clients-investors.

The special type of institution and distinctive regional circumstances in which

this project is developed has imposed a particular organisational scheme that

encompasses all the competitive advantages offered by the VET construction

school.

The first Home Improvement Centre employee will be the BUSINESS

CONSULTANT, who will need to provide overall management and guidance

for the organisation in addition to construction business development.

Estimated salary would be 1100 EUR monthly (approximately 2000 EUR

including benefits and travel). Business consultant will specialise in issues of

land registry (legality of buildings), work protection, accounting, bookkeeping

and tax regime of small construction companies, public procurement

elements, preparation of procurement documentation, waste disposal

regulations, and other administrative and legal elements important to

construction business. This will be a person employed externally over open call

for job vacancy. The required professional experience of min 10 years.

Education in economy or law.

The second Home Improvement Centre employee will be a CONSTRUCTION

ENGINEER, a representative of VET school Construction department. This will

be a person available at all times to investors and clients, providing them with

his/her advice and consultation regarding the choice of optimal solutions in

home improvement or building. However, this will be an employee of VET

school (teacher) and will be reassigned from the group of 6 construction

engineers in school. All of these 6 engineers will occasionally work as

consultants in Home Improvement Centre, depending on their schedule in

school. In the Centre at all times will be one person present (8h per day), but

working in shifts. This way the Centre will be in position to provide the expertise

of all employed school construction experts (engineers), and not be

burdened by additional staff costs. Within their regular work hours, the school

staff has available working hours for additional tasks, and engagement in

Home Improvement Centre will be one of them.

In the fifth year of work of Home Improvement Centre, this Study envisages

the employment of ELECTRICAL ENGINEER with focus on issues of energy

efficient buildings, passive houses, energy saving and renewable energy

sources for individual small investors.

35

5. SERVICES

Home Improvement Centre is established in order to serve regional

construction companies in their attempt of improving their businesses,

increasing level of income and profit, and developing new demand on the

regional market. Always having that in mind, all the services provided in the

Centre will serve these objectives. The services should be offered free of

charge or at minimal price that enables sustainability of the Centre (covering

only operative costs of the Centre).

Acting as referential point of all Slavonia Construction Guild members, the

Centre will be their representative institution. Its mission is to empower local

builders and construction professionals in the region, who have the reputation

for good work at a fair price.

Home Improvement Centre is also an institution open for public. It should

create a new and smart demand for new services related to construction

investments. Local population is facing a low living standard and small

average wages. This is even the reason more why their properties need

investments into energy efficient home improvement, or even into renewable

energy home-based projects.

Project partners have identified that sometimes investments are not limited

only by the available resources and funding, but also with the lack of relevant

information (about loans, new efficient methods, materials). Services of the

Home Improvement Centre are directed into assisting the entire construction

sector in the region.

36

5.1. DELIVERY OF SERVICES TO CONSTRUCTION SMEs

Having in mind that most of Slavonia Construction Guild members work by

referral only and do not advertise one of the services of the Home

Improvement Centre will be to connect, promote and brand each member.

Strong referral base is not built over night. It takes a solid track record over a

long period of time to earn the trust of customers. Reputation depends upon

the quality and cost of the work. This is why the Guild shall offer, through the

Centre's platform for promotion, a set of free services for promoting the work

and businesses in the Guild. Without having any preferences, all construction

SMEs in the Guild will be offered to be promoted the best possible way over

the Centre.

NETWORKING – PROMOTION – BRANDING - EXHIBITION HALL

Regional construction SMEs, in general, do not invest anything in their own

promotion. Using „word-of-mouth“ principle, they wait for clients to come and

rely on the fact that previous clients will provide contact information (mobile

phone number) to new clients. This is the model of promotion that 90% of

regional construction SMEs use. Establishing of Slavonia Construction Guild

and its operative body Home Improvement Centre can change this, in a

systematic and sustainable way.

Centre's staff will create a detailed regional construction SMEs Directory

(database) on WEB PORTAL, where all members of Guild (but also other

companies) will be presented, with all contact details and description of

specialisation. Guild members will further on be presented even with

referential works (photo galleries). Graphical presentation will clearly show by

location available contractors and their specialization. According to

preferences, it will be possible to present with more information the individual

contractor (owner, prices, staff expertise, etc.).

Home Improvement Centre will provide space for permanent exhibition of

quality works of regional construction SMEs, as a form of systematic and

attractive tradeshow presentation. Rarely regional construction SMEs have

time or money to participate in the crafts tradeshow, or they do not see the

immediate interest in this. Centre's available space (wide hall) will attract

visitors and show good example of works in home improvement projects.

CORPORATE TRAINING – EDUCATION – LECTURES - PREQUALIFICATIONS

Skilled and adaptable labour is needed in order to develop the SME sector.

This is achieved only by dedication to life-long learning in all segments of life. It

37

is necessary to support prequalification and training programs in the small

economy, since inadequate offer of skills in the labour market prevents new

jobs creation and long-term development of the sector. How this can be

done3?

By supporting the modernisation of business activities through

education of entrepreneurs

By supporting the improvement of vocational competencies of

entrepreneurs and their employees through engagement into different

forms of informal education (seminars, courses, etc.)

By provision of expert support to key aspects of business management,

like innovation, quality management and marketing

By developing new models of approach and adoption of „best-

practice“ management and promotion of success stories in order to

spread the innovative management in SME sector

By supporting the general awareness of the necessity for education

and training, and greater adoption of life-long learning principle.

Some sectorial educational topics that could be organised and conducted in

forms of several days long seminars (or shorter lectures) are (according to the

input made in the planning phase by construction entrepreneurs themselves):

-Advanced Entrepreneurship in Crafts

-Brazing Approval

-Chemical Safety Awareness

-Confined Space Operations and Training

-Construction Informatics and Management

-Disability Access Application

-Emergency Lighting Systems

-Entry Level to Refrigeration & Air Conditioning

-F-Gas & ODS Refrigerant Handling Theory and Practical Workshops

-Fire Detection & Alarm Systems

-Forklift Training

-Introduction to Legislation & Standards in Maintenance, Servicing & -

Construction Safety & Activities

-Managing Safety & Health in the Workplace

-Ladder Safety

-Legislation & Standards in Maintenance, Servicing & Construction Safety &

Activities - Managing Safely for Construction Managers

-Manual Handling Instructor

-Mobile Elevated and Access Working Platform Training

-Passive House Design

3 From the national Strategy of Entrepreneurship Development 2020, adopted in May 2013.

38

-Project Management Professional

-Portable Fire Extinguisher Maintenance & Servicing

-Preventative Maintenance

-Solid Fuel Awareness & Installation

-Wiring Diagrams.

More general topics, but still concerning running and improving the business

could include the following topics:

-Advanced Entrepreneurship in Crafts

-Entrepreneurial Training Program- Are You Ready to Start a Small Business?

-Building the Foundation for Your New Business

-Business Basics

-Start Smart

-Crafting A Business Plan

-Strategic Planning and Execution

-Choosing A Legal Structure

-Buying A Business

-Entrepreneurial Training- Business Plan, Legal Issues & Info Resources; Financial

Management

-Finding Money To Start A Business

-Creating Financial Projections

-The Entrepreneurial Strategies

-Hiring and Managing Employees

-Accounting

-Money Smart: Record Keeping for a Small Business

-Understanding Advertising and Promotions

-Creating Buzz: Small Business Marketing

-Market Insight and Research

-Pricing Strategy and Tactics

-Competing with the Big Boys

-Windows, Signs, and Visual Displays

-YouTube Marketing for Small Business

-Online Tools to Help You Work Smarter - Not Harder

-DIY Marketing Tips

-How to Be A State Contractor.

FOCUS GROUPS – BRUNCH MEETINGS – CONVENTION CENTRE

RENTING PREMISES - Project partners predict solid demand for usage of Home

Improvement Centre in the future, not only for Vocational school Pozega's

school activities and Slavonia Construction Guild activities (networking and

advisory), but also for other activities of the same kind („soft“ activities of

counselling, education and know-how sharing).

39

Town of Pozega does not have many places where events of more than 50

participants can take place4. Home Improvement Centre's advantage in this

case lies in its location and accessibility (closeness to educational institutions,

available even in afternoon hours, etc.). Also, through cooperation with the

Students' Dormitory where participants in educational activities could reside,

the overall atmosphere of this Centre is the one of „campus“ that stimulates

the knowledge apprehension.

Hence, Home Improvement Centre could expect the demand for usage of its

premises (conference room, in particular), by other cooperating institutions for

minimum 4 times a year.

One of the most important elements of the project is networking element that

connects all interested construction companies in the region, in a way that

enables them better exchange of information and joint action in matters of

common interest. The model of frequent and regular gathering that will be

used within this project is already confirmed in many other sectorial networks

in EU – brunch meetings. Brunch is concept of morning meetings related to

some specific topic with distinguished spokespersons, usually followed with

light breakfast. The overall casual atmosphere creates an environment where

all attitudes are welcome and where opinions can be expressed without

prejudices.

BRUNCH MEETINGS could be held each 2nd Friday (or Saturday), in the

premises of Home Improvement Centre (round-table room).

Slavonia Construction Guild will be established without the obligation of

payment of membership fee for the first year. However, it is expected that

after the first year the Guild proposes a yearly membership payment that will

be symbolic in regard to quality services provided by the Home Improvement

Centre staff.

The second model of financial contribution to the Guild's activities could be

through payment of each individual service provided. However, considering

that the price of each service would be in total significantly more expensive

than a „package price“ the membership fee would be a smarter and more

rational solution.

4 Besides large sports halls and hotel's restaurant areas, that are completely inadequate for

such events, only Croatian Chamber of Commerce and Chamber of Craft dispose with

lecturing space for more than 50 participants.

40

5.2. SERVICES TO INVESTORS

Regional investments in property can be supported by provision of relevant

and timely information. Several services of the Centre are described here.

ONLINE SERVICE:

Illustration: - ASK CONSTRUCTION EXPERT –

Through web portal of Home Improvement

Centre clients and contractors are in position to

ask direct and specific questions regarding their

property or investment. Experts that will regularly

answer to questions will be all members of the

VET school Construction Department.

Depending on the type of the question, Home

Improvement Centre will seek for appropriate

answers from authority institutions, all with

purpose of developing the same-practice

principle and exchange of valuable

experience among regions. The service of

answering to relevant questions will be offered

without charge to clients.

- INTERIOR & EXTERIOR DESIGN SOLUTIONS –

As a promotional tool, on the web site, one client's request each month will

be chosen to design a drawing on interior design solutions, without charge.

According to availability, service of drafting the interior or exterior design

solutions to investors will be provided at competitive price.

- COUNCELLING ON FUNDING OPTIONS –

Investors are not informed enough about the possible financing options, not

only about the financial institutions, but also about relevant subsidies or

incentives (grants) that exist in the market. Centre's staff must have all related

information on one place, or be familiar where such information can be

found.

- LECTURES –

Open to public lectures will be regularly provided connected to property

related topics, in wide range of segments (i.e. legal status of property,

building permit issuing procedure, solar panels in homes, energy saving, etc.)

41

6. FINANCIAL PLAN

In order to make a Home Improvement Centre a reality, project partners

have developed a timetable, with span of 2 years (related to construction)

and up to 5 years (related to its full functionality and sustainability).

Stakeholders must have patience, and things must be initiated with a defined

schedule and proportioning. The Centre should develop in reasonable

phases, as a process.

According to the operative action plan of establishing the Home

Improvement Centre, and based on the information from the technical

design, a detailed financial plan (estimates) was developed. The exact

figures and prices can only be defined after the conduct of tendering

procedures for procurement of works or equipment.

6.1. ESTIMATES OF CAPITAL COSTS

An estimate of costs to build and equip the building was made during the

planning phase of the project. The building cost is based on the Bill of

Quantities made by the architectural design company KID d.o.o. that has

drafted the building design. Costs of necessary equipment were defined

through partnership work, during the planning phase of the project.

- EUR 399.561 for building, total of 472,48 m2 of facility

- EUR 47.100 for solar energy panels (30kWh)

- EUR 199.950 for equipment including:

o Hardware for building-wide wireless network

o Notebook computers

o Portable two-way audio / video equipment

o White boards, smart boards

o Exhibition furniture and equipment

o Energy audit equipment

o Portable projection systems

o Stackable chairs, desks, tables, etc.

o Mobile workbenches

o Office & conference room furniture

o Lift platform for access of disabled

o Soup kitchen equipment

o Sanitary equipment.

42

6.2. ESTIMATES OF ANNUAL OPERATING COSTS

Operating costs (including maintenance) are those post-construction costs

necessary to ensure or verify the continued effectiveness of a remedial

action. These costs are estimated on an annual basis.

Annual operating costs include all labour, equipment, material and personal

service costs that make the Centre's work possible.

6.2.1. HUMAN RESOURCES

BUSINESS CONSULTANT, a newly employed person: besides provision of

advisory services and consultancy to construction companies, the Consultant

will conduct management and administration related trainings and seminars,

but also supervise and take care of the facility, be a marketer of the facility,

be a broker for education, training, services, work with Board to secure

funding. During the set up phase of the project, he/she will also act as project

manager. Working for 50% of working hours, his/her estimated year wage is

12500 EUR.

CONSTRUCTION ENGINEER will be a person (persons) employed in Vocational

school Pozega, who are in position to provide specialized service to

construction companies within their regular working hours (additional work),

and this cost does not add on Home Improvement Centre's operative costs.

Will work for total of 12 hours/week, in a way that each VET school teacher

dedicates every week 2 hours (within their additional tasks working hours) to

working in Home Improvement Centre.

ELECTRICAL ENGINEER will be a person employed in Home Improvement

Centre, in the fifth year of the Centre's work to provide specialized advisory

services to investors and contractors related to energy efficient investments,

but also to renewable sources of energy that can replace the existing fossil oil

based energy. Focusing on achievement of self-sustainable homes, this expert

will work for total of 10 hours/week, being every day at disposal to client at

the same working hours.

43

6.2.2. UTILITY COSTS

Concierge service, maintenance and janitorial service, as well as 27000 EUR

per year for overhead costs (utilities, wireless & telecommunication access,

other administrative costs) are covered by the funding of Ministry of

education, since the building remains for the VET school purposes (due to the

fact that during the vacant hours, the school will use classrooms and premises

for regular school programs). Since the work of Home Improvement Centre

mostly includes the intellectual services and counselling, it is not expected

that it generates large utility costs. There are no large machines or equipment

to be used within this project, so energy spending will be relatively small.

6.2.3. TRANSPORTATION AND STUDY VISIT COSTS

As important element of the project, in the way of providing service to

construction companies and clients, a vehicle must be provided to the

Centre's staff and their work at field. Considering that Home Improvement

Centre staff will operate on field, and that they must frequently travel to other

institutions (Zagreb, Slavonski Brod, Osijek, abroad) in order to develop long-

lasting relations with other Centres of excellence, and to find adequate

lecturers and experts, the project team finds purchase of the Centre's vehicle

more efficient and more rational model of transport, than using private cars

for the institution's work.

The project also envisages organisation and conduct of different

construction-related study visits to regions of good examples and best

practice. Study visits will be covered by the fees of participants, in

accordance to not-for-profit model of work, and organised with taking into

consideration the professional purpose of the visit (simple and modest

accommodation, staying at the host institutions, etc.).

6.2.4. OTHER SERVICES COSTS

Construction works are a complex activity, frequently connected to legal and

general economic issues. In order to be relevant in their consultancy work,

and to cover the complexity of this sector, Home Improvement Centre will

have to occasionally consult legal and other experts. These services will be

used according to specific requirements, and will be paid based on the

actual number of consultancy hours provided.

44

6.3. PROJECTED INCOME AND PROFIT/LOSS

Income of Home Improvement Centre is derived from the set of services

described in the 5th chapter, offered and provided for the regional

construction companies and investors (clients, public).

The project anticipates the establishment of Slavonia Construction Guild

organisation whose members will be primarily supported by the Centre's

service, and that will be interested to participate on regular basis in its

financial support. Also, other more specific services will be provided for the

general population in Pozesko-slavonska county, in terms of construction and

energy efficiency, some to be offered without charge, other at competitive

or symbolic price.

The Cost-benefit analysis has presented details of income generation, where

assumptions are that the Centre will offer trainings, lectures, promotion,

counselling, and other services at low price, attractive for the regional

companies and investors to use. Also, the Centre will generate income from

production of electrical energy (and selling it to the electrical network), that

makes an important element for sustainability and potential for improvement

of Centre's activities and investing into new services and marketing products.

NETWORKING – monthly brunch meetings, round table meetings, focus

groups, lectures of relevant speakers – these activities will be offered to

construction SMEs, at affordable prices. Total of 20 such events

(minimum) per year will be offered at price of 2000kn (as subscription),

or 100kn/event.

PROMOTION – through participation in Slavonia Construction Guild, all

members will be strongly promoted within the promotional activities of

the Home Improvement Centre. The staff of the Centre will produce

promotional material (leaflets, booklets, brochures, business cards) of

the Guild's members, and will work on their continuous advertisement

and recommendation. Online promotion on the Centre's homepage

will be possible. Home Improvement Centre will inform clients about the

available contractors in the region, and provide contact. The price of

complete package of promotion for each construction company will

be 1000kn/year (simple package in detail defined by the Centre staff).

BRANDING – Home Improvement Centre will develop its own brand

during time, focusing on the clients' trust, quality of service and

relevance of its programs. The CENTRE must become recognizable as

Construction Extension (Advisory) service. The interested construction

45

SMEs will be offered to obtain the Home Improvement Centre's SIGN

(logo, mark) as a proof of their engagement in the Centre's activities

(showing that the company is investing in its growth and education).

Joining the Centre's branded group will be offered to companies at

symbolic price of 200kn/year.

EXHIBITION – Home Improvement Centre's premises will represent a

constant exhibition space (tradeshow). The interested construction

SMEs will have the option to present their referential work in form of

section views (separates of walls, windows, etc.), large photos, ppt

presentations, or similar. This option will be offered to companies at the

price of 500kn/exhibition (i.e. 10 items of presentation, 30 days long

presentation).

CORPORATE TRAINING – EDUCATION – LECTURES – PREQUALIFICATIONS –

specialized trainings, educations, lectures and other forms of transfer

the knowledge and skills will be regularly organised and conducted in

the Home Improvement Centre. Focus on competency based training

(operating with equipment or material, in safe and effective manner)

with primary role to ensure that participant has the skill to undertake a

specific operation. Trainings are centred on demonstrations and

application, while lectures remain theory based. Participation on each

individual educational event will be offered at the least possible price

(to cover the expense of the event), starting from the FREE courses or

lectures, up to several thousands of kunas (for 40h trainings).

SPECIALIZED WINTER SCHOOL FOR CONSTRUCTION SMEs – in

cooperation with the Students' Dormitory, every year a Winter school

(course) for specialized training for construction SMEs will be offered.

Duration of minimum 40 hours, and possibility of cheap and quality

accommodation in the Dormitory could attract dozens of participants,

from entire Croatia. Quality of program will depend on the expert

lecturers, and program curricula. The package price without

accommodation could be around 2500kn, while the package with

accommodation and meals included will be 5000kn.

CONVENTION CENTRE – a small portion of the revenue for the Centre

will come from renting its spaces and facilities to outside groups and

businesses. Projections are very conservative because the priority will be

for Slavonia Construction Guild members and partner institutions to use

the Centre as much as possible to provide courses, stimulate regional

business development and market local services.

46

ASK CONSTRUCTION EXPERT – these services will be offered as a

promotional tool, primarily. One such service will be offered free of

charge each month, online. Other services, if they will ask for more time

and resource consuming activities, will be offered at competitive price

(80kn/hour of consultancy work).

INTERIOR & EXTERIOR DESIGN SOLUTIONS – as another promotional tool,

attracting the attention of investors on Home Improvement Centre's

work and development of clients' trust, it will be offered (one every

three months) free of charge „design makeover“ projects. If asked

more frequently, clients will be charged 500kn/design solution (3D).

ENERGY AUDIT – the project includes education and training of VET

school teachers in segment of energy efficiency and energy audit

servicing. These services will be offered to investors (and contractors) at

affordable price of 800-2000kn/audit. Since new legal regulations

demand that all properties receive certificate on energy quality, it can

be expected that demand for such services will grow exponentially

(min10 services in the first year, 20 in the second, with growth trend in

the following).

The alternative to the income presented in the Cost-benefit analysis is the

possibility that members of the Slavonia Construction Guild cover the

complete Operative costs of Home Improvement Centre and 1(one) expert

(business consultant) – 25.000kn/month5. This can be expected only if Guild

members recognize the direct benefit for their businesses and staff, and if they

can transfer the membership fee to the increase of their profit. Project

partners believe that their interest will be gradually built and sufficient only

after the 3rd year of the Centre's work, when quality of services and

consultancy becomes familiar and strongly branded in the region.

The financial viability of Home Improvement Centre must be achieved. The

educational and consultancy institution must at least operate at a break-

even level, in order to have long-term perspective.

5 20 members would have to pay monthly membership fee of 1.250kn.

47

7. FEASIBILITY ASSESSMENT

The purpose of Home Improvement Centre is to shake up the status QUO, to

broaden access to education and business development opportunities, and

to ultimately stimulate the local economy and bring economic benefit to

population in Pozesko-slavonska county and wider.

The project aims to: stimulate new investments in property improvement and

new construction, triggers new business development related to construction

and energy efficient investments, and to increase employability of

construction experts and workers in the region. The ultimate goal of these

activities is to: bring more money into local communities (into region) through

increasing the number of people employed, and increase the internal

circulation of resources (money) to support a greater variety and scale of

local businesses.

Having in mind these ambitious goals of this project, it is clear that FEASIBILITY

could be hard to estimate. However, by using the CBA method, the figures

have shown the sustainability of the project, but with certain conditions. The

funding of capital investments must be in form of public support (Ministries, EU

funding or similar) without the obligation of return, or interest payments. Other

very important condition is to „let“ users (construction SMEs) have a strong

influence on the design and management of Home Improvement Centre's

work, through optimal models of governance.

The pace and scale of the growth for the Home Improvement Centre is very

difficult to predict. It will depend on the development and strength of

Slavonia Construction Guild, and the general development of regional

construction sector.

There is also a concern to what is called „chicken or the egg“ situation.

Should the educational/advisory institution be established first and then

attempt to attract employers and clients? Or there should be first the

demand for such an institution? Based on the demographics and character

of current population and economy, it is difficult to expect such demand,

considering that similar networking and informing institutions in the region do

not exist. Future clients will have to be informed and motivated to use the

offered services.

The research during this feasibility study development has shown several key

points that will have significant influence on the success of Home

Improvement Centre project:

48

Hiring a person familiar with issues of regional construction, but also with

secondary education and available funding of education, who has a

passion for this type of project, and who is willing to stick with

developing the project in early stages, even when things appear to be

difficult to carry through

Management of Vocational school Pozega, that remains the owner of

the building and equipment, must strongly support the initiative, having

in mind that success of this project will positively influence the image of

school, as well as probability of employment for high-school graduates

Support from regional or national institutions should not remain only

declarative, but in time grow into financial.

Sustainability of the project can be assured if following reasons are respected:

Continuous operation of Vocational school

Gradual improvement of the standards of VET school from basic level to

advanced one

Involved teaching personnel permanently employed by the school

Involved teaching personnel implements a long-term vocational

teaching programs (and life-long learning concept)

Slavonia Construction Guild members are involved in the establishment

and monitoring of the program, so it can be adjusted to suit their

changing requirements

Durability of equipment and furniture will last for minimum of 10 years

Renovation and upgrading of new building premises will last for at least

30 years.

49

8. POSSIBLE SOURCES OF FINANCING

When possible sources of financing of Home Improvement Centre are

observed, the objectives of its operations are crucial.

Home Improvement Centre (as operative body of Slavonia Construction

Guild) will act as an enterprise-led support body dedicated to the promotion

and facilitation of enterprise training and workforce learning, as key elements

in sustainable regional competitiveness.

The aim of Home Improvement Centre (among other) is to increase

participation in enterprise training by firms to improve their competitiveness

and provide improved access for workers to skill's development. It should

continue to foster and support networked and partnership approach to the

provision of relevant training and expand and develop that approach by

supporting workforce retention / activation–related learning.

If these objectives and aims of the Centre's work are properly presented, it is

clear there are several other sources of financing present in Croatia that

could be used for the work of Home Improvement Centre. Ministry of

Entrepreneurship supports every year business-support institutions, as well as

VET schools that could apply for this funding. Town of Pozega and Pozesko-

slavonska county support their business-support institutions, according to the

current budgetary limitations and possibilities. VET schools that are project

partners, both generate substantial income from commercial activities

conducted in their workshops that could be partially used for financing of

Home Improvement Centre.

Income can also be generated from renting the conference room for

occasional public events, presentations, book promotions, etc. However, it is

estimated that the interest for this service will not be significant, so it is not

mentioned in the Cost-benefit analysis.

The presented income from the energy production of SOLAR PANELS is the

conservative version estimate of income, considering that the price of kWh in

Croatia is guaranteed at 2,7kn/kWh, and that in Pozega's area can be

expected that 30kW solar panels could produce around 30.000 kWh

annually.6

6 81.000 kn is the income level according to providers of solar panel energy plants. For the

purpose of Cost-benefit analysis, the level of income of 55.200 kn is planned.

50

9. CONCLUSION & RECOMMENDATIONS

The major underlying question related to the presented project is „Is this

concept feasible?“ Our answer to this question is YES. However, all parties

must realize this is not an easy project and will require the coordinated effort

and support of all.

The concept is laudable one and the potential outcomes and benefits from

establishing Slavonia Construction Guild only. Home Improvement Centre is

certainly needed and would greatly aid the region. All of the stakeholders in

the area with whom we spoke or who answered surveys were excited about

participating in the project.

This is quite a unique project as it involves cooperative efforts among the

public institutions, private ventures, not-for-profit organizations and individuals.

A great deal of creativity will be needed in how to sustainably develop this

project to upgraded phase (next level), since „tight budgets“ at national or

regional level may have a definite impact on the ability to carry some

elements of the project.

The identified recommendations that would improve the implementation and

success of this project are:

- Much of the success of the Centre will depend on the homogeneity of

Slavonia Construction Guild and their genuine sense of ownership over

this Centre

- It is important that Centre has some early success stories to provide

momentum for future growth of programs and services. It is anticipated

that it will take several phases over a period of min 3-5 years for the

Centre to reach its full potential

- The staff of the Center would need to be identified early and brought

on board prior to construction to champion its mission and develop the

linkages to the region that will be necessary to ensure early successes

- The most important feature of the physical structure of the Center will

be its flexibility to adapt to needs as they are identified and change

over time.

51

ANNEX 1

Construction SMEs in Pozesko-slavonska county

associates of Vocational school Pozega

1. Izvođač građevinskih radova "RAGUŢ ing. KREŠIMIR", Poţega, Zelena 24

2. ARMIRANJE I BETONIRANJE "ESTRICH", vl. Ţeljko Pranjić, Poţega, Zrinska 68

3. Građevinski obrt "FRITZ", vl. Zoran Marković, Kutjevo, T. Tomića 14

4. Moderna IVIĆ GRADNJA, vl. Ivo Ivić, Velika, Strossmayerova 32A

5. PRIVATNI PODUZETNIK " VINKO GRADNJA " vl. Vinko Adţaga, TRNOVAC 26 A

6. GRAĐEVINARSTVO MARKOVIĆ, vl. Pero Marković, Kutjevo, Tomislava Tomića 16

7. P. D. "GRADNJA", vl. Petar Draţetić, Brodski Drenovac 172

8. GRAĐEVINSKI OBRT "2M", vl. Marko Majstorović, Kutjevo, Vinkomir 27

9. Građevinski obrt LOVRIĆ, vl. Tihomir Lovrić, Migalovci 27

10. GRADITELJSTVO STEHLIK, vl. Ivica Stehlik, Resnik 41

11. Soboslikarski i ličilački radovi GATJAL, vl. Tomislav Gatjal, Dervišaga, Srpanjska 1

12. GRAĐEVINSKI OBRT " BEMBO", vl. Ivica Tadijal, POŢEGA, B. P. ŠUBIĆA 12

13. Soboslikar i ličilac "PERUZOVIĆ", vl. Josip Peruzović, Poţega, Vranduk 83

14. "BOJA" SOBOSLIKARSKI I LIĈILAĈKI RADOVI, vl. Damir Janeš, Poţega, Točak 9

15. SOBOSLIKARSKI I LIĈILAĈKI RADOVI "VALA", vl. Branko Vala, TEKIĆ 5

16. Obrt za soboslikarske i ličilačke radove "ŠPIRANEC", vl. Zlatko Špiranec, KUNOVCI 1C

17. SOBOSLIKAR I LIĈILAC "MARIO HORVAT", vl. Mario Horvat, Poţega, Dubrovačka 8

18. Soboslikarski i ličilački obrt COLOR KOVAĈEVIĆ, vl. Ivan Kovačević, Poţega, Ivana Mesnera 24

52

ANNEX 2

Construction SMEs in Pozesko-slavonska county

to be invited to join Slavonia Construction Guild

1. "Zidarska radnja Branko Sadilek", vl. Branko Sadilek, Kaptol, Vetovačka 17

2. Zidar "VINKO ĆOSIĆ",vl. Vinko Ćosić ,Golo Brdo 93, , Kaptol

3. Građevinski obrt "PAUK", vl. Ljubomir Marković, Kutjevo, Vinkomir bb

4. Obrtnička radnja "INTERIJERI-KREŠIĆ", vl. Nikica Krešić, Jakšić, S. Radića 38

5. Samostalna stolarska radnja "AŠENBRENER", Kutjevo, Bana Josipa Jelačića 24A

6. "PARKETARSKA RADNJA PAVELIĆ",vl. Ivica Pavelić, Pleternica, E. Podubskog 14

7. Zidarsko-fasaderska radnja "PETRANOVIĆ", vl. Dragan Petranović, Bzenica 17

8. Samostalni zidarski obrtnik "SAM-PROMET", vl. Josip Buturac, Grabarje, M. Gupca 50

9. Usluge građ. strojevima "JURĈAK ZVONIMIR", vl. Zvonimir Jurčak, Poţega, Industrijska bb

10. Građevinsko obrtnički radovi "ZOKA - Kaptol", vl. Zoran Zeba, Kaptol, Poţeška 50/b

11. Obrtnička radnja "LIMARIJA - PAŢIN", vl. Dalibor Paţin, Jakšić, S. Radića 47

12. "ROVOKOPAĈKE USLUGE", vl. Ivan Stipić, Blacko 46

13. "LIMARIJA JANOTA", vl. Stevo i Dejan Janota, Dervišaga, Zrinska 3

14. "ZIDARSKO FASADERSKA RADNJA", vl. Ţeljko Tomić, Golo Brdo 72

15. KERAMIKA JAMBREŠIĆ, vl. Berislav Jambrešić, Orljavac 59

16. GRADNJA, vl. Ivica Stjepić, Viškovci 1 e

17. Građevinski obrt "4M", vl. Ivan Malčić, Poţega, E. Kvaternika 193

18. "AG" GRADNJA, vl. Marina Abramović, Velika, Dr. F. Tuđmana 2 H

19. GRAĐEVINSKI OBRT - ZOVKO, vl. Mato Zovko, Stari Brestovac 93

20. "Z.D.S. ĈOLIĆ" - STROJNO ŢBUKANJE, vl. Stipo, Zdenko i Dragan Ĉolić, Stara Lipa 76

21. Strojno ţbukanje ANTIK, vl. Darko Janjiš, Vidovci, Svibanjska 8

22. Strojno ţbukanje BONUS, vl. Ivica Nikolić, Ivandol 17

23. ELEKTRO-GRADNJA, vl. Ivica Banoţić, Pleternica, Smrik 9

24. OBRT ISKOP " MARIJANOVIĆ ", vl. Frano Marijanović, Kaptol, Majstorska 1A

25. GRADNJA TROHA, vl. ANTUN TROHA, POŢEGA, A. ŠENOE 16

26. STROJNO ŢBUKANJE ZEBA, vl. Jozo Zeba, Straţeman 14

27. DELUX GRADNJA, vl. Dalibor Ĉokrlić, Biškupci 13

28. OBRT "GRADIS", vl. ŢELJKO EREIZ, NOVO SELO, HRVATSKIH DRAGOVOLJACA 106

29. OBRT FENIX, vl. Igor Ĉorković, Poţega, Kralja Krešimira 9A

30. BLIC interijeri, vl. Flamenko Senjak, Pleternica, Vinogradska 36

31. GRAĐEVINSKI OBRT "LUĈIĆ", vl. Stipo Lučić, Bekteţ 78

32. GRAĐEVINSKI OBRT "VRELA", vl. Josip Cvitković, Ciglenik 10

33. "PARKETI BRABEC", vl. Goran Brabec, Poţega, O. Kučere 19

34. GRAĐEVINSKI OBRT "ŠOP", vl. Ivica Šop, Grabarje, Stjepana Radića 68

35. KERAMIKA "BILOBRK", vl. Milan Bilobrk, Velika, Hrvatskih branitelja 19

36. OBRT STIPIĆ, vl. Ivica Stipić, Kaptol, Velička 7A

37. KERAMIKA "VIDOVIĆ", vl. Robert Vidović, POŢEGA, DR. F. TUĐMANA 6

38. GRAĐEVINSKI OBRT SOKOL, vl. Stipo Lovrenović, Vidovci, Radnička 5

53

39. M2 - GRADNJA, vl. Mijo Jozić i Mario Mrvelj, Gradac, S. Radića 132

40. STOLARIJA "SOKOLOVAC", vl. Ivica Valiček, POŢEGA, SV. JOSIPA 23

41. OBRT "PUŠKARIĆ", vl. Josip Puškarić, BUĈJE 48

42. LIĈILAĈKI OBRT "DUMANĈIĆ", vl. Vlado Dumančić, VIDOVCI, J. MUŢEVIĆA 18

43. OBRT STROJNE GLAZURE "ĈOKRLIĆ", vl. Milan Ĉokrlić, RADOVANCI 47

44. GRAĐEVINSKI OBRT "ZORAN I STIPO", vl. Stipo Davidović, DARANOVCI 39

45. OBRT ZA GEO-BUŠENJE, vl. Goran Šinko, GRADAC, A. STARĈEVIĆA 7

46. TOMAŠEVIĆ SUHA GRADNJA, vl. Stjepan Tomašević, POŢEGA, A. MIHANOVIĆA 4

47. SAMOSTALNI OBRT "PEIĆ", vl. Mario Peić, GRADAC, P. RADIĆA 23

48. USLUŢNI OBRT "ŠOKAC", vl. Tomislav Ruţička, GOLOBRDCI 23

49. INTERIJERI - ŠUNJO, vl. Vinko Šunjo, BRESNICA 11

50. GRAĐEVINSKI OBRT CRNKOVIĆ, vl. Robert Crnković, POŢEGA, VRANDUK 121

51. Završni radovi "FINIŠ", vl. Ante Anušić, CEROVAC 47

52. GRADNJA PAVIĆ, vl. Ivica Pavić, Busnovi 32, Brestovac

53. OBRT "HORVAT", vl. Nenad Horvat, Poţega, Pavla Radića 133

54. ALU I PVC PERKOVIĆ, vl. Hrvoje Perković, Poţega, Sv. Roka 14

55. Završni građevinski radovi "TAPET", vl. Miodrag Vukelić, ANTUNOVAC 1A

56. TRGOGRADNJA, vl. Damir Galić, BEKTEŢ 20

57. ALU-PVC BISTRICA, vl. Dario Bistrica, Poţega, B. Hanţekovića 8

58. Fasadni i štukaturski radovi "MARIO FASADE", vl. Marijan Galović, Pleternica, M. Gupca 94

59. OBRTNIĈKA RADNJA TONI, vl. Anto Milišić, KUTJEVO, S. RADIĆA 39

60. STOLARSKI OBRT KRALJEVIĆ, vl. Ivan Kraljević, Draga 46

61. LOVRENOVIĆ GRADNJA, vl. Jakov Lovrenović, Vidovci, Radnička 5

62. ĈATLA, obrt za pruţanje usluga u građevinarstvu, vl. Ţeljko Ĉatlaić, Poţega, Ive Ĉakalića 3

63. ŠITUM OBRTNIĈKA RADNJA, vl. Frano Šitum, Baruna Trenka 2, 34 340 Kutjevo,

64. INTERIJERI JELUŠIĆ, vl. Stipo Jelušić, TRNOVAC 2C

65. Usluge u građevini "PEĈENI", vl. Anto Zeba, KAPTOL, MAJSTORSKA 6

66. DŢAJA, obrt za građevinarstvo, vl. Kata Marković, Kutjevo, Kneza Trpimira 21

67. ANTUN, obrt za soboslikarske radove, vl. Antun Ĉakalić, Ĉešljakovci 66

68. KURAJA, obrt za usluge, vl. Miro Kuraja, Kuzmica 70C

69. GRADEKO, obrt za usluge, vl. Tihomir Radoš, Vesela 7

70. LOVRENOVIĆ INTERIJERI, obrt za usluge u građ. vl. Valentina Lovrenović, Vidovci, Radnička 5

71. SVITOK, obrt za građevinske usluge, vl. Ivan Svitok, Kutjevo, Ţupnika Mirka Messnera 43

72. INTERIJERI FD, obrt za usluge, vl. Dario Frantz, Poţega, Orljavska 44

73. HNATYŠYN, obrt za usluge, vl. Danijel Hnatyšyn, Vidovci, Josipa Muţevića 3

74. GRADNJA, vl. Antun Nenadović, Donja Obrijeţ, Donja Obrijeţ 81

75. Limarski obrt, vl. Nenad Stojaković, Lipik, Školska 12

76. Zidarsko-fasaderska radnja, vl. Petar Kovač, Poljana, Varoška 28

77. Soboslikar i ličilac Franjo Martinović, Prekopakra, Frankopanska 17a

78. Staklarski servis "VILGLAS", vl. Vilko Pilat, Pakrac, Hrvatskih velikana 8

79. "KM" Montaţa metalnih konstrukcija za stropove, vl. Stjepan Kelemen, Filipovac, Lipička 15

80. Obrt "VISKOVIĆ", vl. Zlatko Visković, Pakrac, P. Polaka 25

54

81. AJMAN-GRADNJA, vl. Dario Ajman, Prekopakra, Matkovac 9

82. "FRIVANTO", vl. Ivan Frićer, Prekopakra, Matkovac 82

83. OBRT "GORAN", vl. Pero Prodanović, Brezine, Brezine 104

84. SOBOSLIKARSKO-LIĈILAĈKI OBRT MAĈEK, vl. Mario Maček, Pakrac, Kneza Branimira 37

85. NOVALIS SOBOSLIKAR LIĈILAC Draţen Sudetić, Prekopakra, S. Radića 48

86. BAGARIĆ OBRT ARMIRAĈKI RADOVI, vl. Dragan Bagarić, Prekopakra, S. Radića 23

87. SOBOSLIKAR I LIĈILAC, vl. Srđan Potrebić, Pakrac, G. Viteza 18

55

ANNEX 3

EXCERPT OF COUNTY'S DEVELOPMENT STRATEGY OF

POZESKO-SLAVONSKA COUNTY 2011-2013

3.3.7. SME economy

Even though entrepreneurs are not divided into „small“ or „big“ but only on

successful and less successful, SME segment has a special importance since smaller

economic actors adapt more easily to market demands and accept faster the

structural changes than the big systems. With few business resources engaged they

achieve better financial results, and record increase in employment. This is the

reasons why small and medium entrepreneurs have greater and greater role in the

overall economic development of certain region.

It is understandable that small economy cannot operate separately and that it adds

on the big companies in activities that are strategic directions of the entire

economic development. Hence, one of the goals of SME development is its

(inter)connection between the SME system itself, but also with big companies.

The most spread and the most important form of SMEs in the area of Pozesko-

slavonska county are CRAFTS and small and medium companies. The cooperative

economy, as a form of entrepreneurial organising, on the level of the County is not

significantly present.

Table: Structure of businesses by size in 2009.

STRUCTURE Businesses Employees

Number % Number %

Crafts 965 66,7 3.045 26,6

Small companies 462 31,9 3.842 33,6

Medium companies 16 1,1 2.406 21,1

SME sector 1.443 99,7 9.293 81,3

Big companies 5 0,3 2.134 18,7

TOTAL 1.448 100,0 11.427 100,0

Even in the crisis period that is facing with significant decrease of overall number of

businesses, the number of employees in SMEs shows the trend of increase.

CRAFTS in Pozesko-slavonska county, as a traditional economic activity, cover the

greatest number of all economic forms of organising with tendency of growth.

56

Table: Number of crafts and employees

YEAR 2004 2005 2006 2007 2008

Number of

crafts

1.182 1.195 1.201 1.234 1.225

Employees

(incl.owner)

3.328 3.520 3.688 3.717 3.797

Average

no.employees

2,82 2,95 3,07 3,01 3,10

In 2009, the total financial result for SME sector (only companies) has been positive

(18,6 million kunas), while the big companies have resulted negatively (26,5 million

kunas). This negative business result in segment of large companies had a negative

impact on the entire business sector, through spill-over effect.

57

ANNEX 4

SECTOR IMPLICATIONS

Changes in competitive conditions:

Demand for turnkey services is growing, maintenance is becoming part of the

construction package

Increased use of partnership-based operational model. Sector is including

more specialized SMEs. Providing full package requires close collaboration

since customers prefer working with one contractor (instead of several)

Increased competition in design solutions

Prequalification of contractors is becoming more common in competitive

bidding for contracts

Changes in operational environment:

The ratio of new construction to renovation decreases. Companies have to

have several competencies or be able to collect a consortium with right

competencies. Focus on networks and flexible specialization

Changes in building regulations promote quality but often increase costs. If

prices go up, contractors must be able to work more efficiently

Growing competition for skilled labour, greater need for training

Changes in final construction products

IT infrastructure becomes standard accessory in homes. This requires new

competencies for contractors and partnerships with IT suppliers

Increased emphasis on health and safety in the selection of materials and

structural components. Contractors must have access to the right data and

the skills to analyse and apply this data

Changes in customers' needs

Owners are interested in the whole package and its profitability, not the

details of construction. The contractor must act as an intelligent interface

between the customer and consortium of specialized subcontractors.

Customers' business needs often require the rapid completion of projects

Changes in demand for construction

Construction SMEs must handle maintenance and repair

Quality and equipment continue to increase. The value show positive trend,

meaning there will be fewer but bigger projects. Specialized contractors will

face extinction unless they operate in a consortium

Renovation of real estate and infrastructure will increase in the future

58

COST-BENEFIT ANALYSIS

The Feasibility Study summarises the project plan to set up: a) Home

Improvement Centre, as operative body of Slavonia Construction Guild,

through the reconstruction of existing building of Vocational school Pozega

construction workshops; b) its rationale, a market analysis for this kind of

business support institution and c) the institutional setting of the project.

This Cost-benefit analysis, as its integral part, summarises the analysis of its

financial viability and sustainability.

The study will present the short background, justification for the project and

the key financial assumptions of the project’s recurrent costs and revenues.

These estimates have been used to develop a financial model to test the

viability and sustainability of the project. It follows the conclusions of the

financial model.

A distinction is made between:

Commercial viability (returns to the project at full investment cost)

Financial sustainability (returns to the project at investment cost to the

promoter-investor)

Economic and social sustainability (returns to the project including

indirect and intangible costs and benefits).

BACKGROUND AND JUSTIFICATION OF THE PROJECT

Home Improvement Centre is a regional project intended to contribute to

regional economic development through assistance to regional construction

entrepreneurs and service providers. The project was widely supported in the

locality and the county, that is being confirmed through the partnership of 2

vocational schools (Vocational school Pozega, providing programs in

construction and carpentry, and Technical school Pozega) and Chambers of

Crafts and Commerce. The cooperation is expected by dozens of relevant

institutions out of which the most important ones are: Pozesko-Slavonska

County, Town of Pozega, Collega in Pozega and others.

This centre is supposed to act as a networking link between the construction

SMEs, in their joint attempt to improve their business performance, to apply

and commercialize new methods and materials in the field, to promote SME

competitiveness, and (not the least important) addressing social inclusion of

59

disadvantaged groups (young unemployed VET school students) and helping

them engage in entrepreneurial activity.

Considering that Pozesko-Slavonska County is a lagging-behind region, the

Centre is focusing its activities on construction sector, being considered as

prosperous and important for overall development. Construction is here

observed in the widest possible sense, including all activities connected to

HOME and living (electricity, plumbing, heating, carpentry, interior design,

maintenance, energy efficiency…). All home improvement activities will be

supported, that should lead to the companies' growth, better technological

solutions (environmentally friendly), greater value-added in already present

services and works. It should also assist in creation of better living conditions

and higher standard of local population.

The risks of the project are connected to the (potential) weak linkages

between businesses, inadequate support structures for high growth firms, an

under-developed entrepreneurial culture, or these and other factors

combined.

There are almost no examples in Europe of full private funding of projects of

business-support institutions. The public funding accounts for high proportion

of set up costs in any such institution.

When it comes to operating costs, depending on the services structure, the

operating costs are covered by the public subsidies. Incubators receive

around 60%, business-counselling institutions around 70%, while institutions that

focus on education and training up to 100% of operating costs cover by the

public (or Business-networks) subsidies.

The fact is that many of these institutions serve the public interest and

therefore the subsidies are justified. Still, there is a strong argument that

incubators must be encouraged to maximise income generation from its

services, so that the public support can be spread across a larger range of

schemes.

60

KEY FINANCIAL ASSUMPTIONS

Initial investment:

The Centre will initially be highly dependent on public financing. This is in line

with the expectations (and usual practice), given that one of the functions of

business-support institutions is to address market challenges of existing

companies (helping them survive and grow) and to facilitate accelerated

SME growth to new businesses which, by their very nature, have little in the

way of collateral or revenue until they have reached the mature stage of

their development.

Revenues of the project:

Taking into account that the future Home Improvement Centre will operate

within the not-for-profit VET school institution, and that it will be founded with

the purpose of helping the local construction SMEs, it cannot be expected

that it will create significant revenue. The founders (Vocational school Pozega

and construction entrepreneurs) are bounded to finance all the difference

created from costs and benefits. Pozesko-slavonska county and Town of

Pozega have also expressed their support in terms of financing and promoting

of Home Improvement Centre.

However, because of the limited budget potential of the founder and

supporters, it is strongly suggested that the Home Improvement Centre

becomes financially sustainable and self-sufficient. This is a challenge that is

achievable through the long-term credibility building in the marketplace and

developing a comprehensive range of business support services.

61

Share of certain types of revenues are calculated on the basis of CSES study:

Types of Business Support Services In house External

No. % No. %

(1) Pre-incubation services 66 11,74% 15 3,16%

(2) Business planning and forming a company 62 11,03% 25 5,27%

(3) Training to develop business skills 36 6,41% 47 9,92%

(4) Accounting, legal and other related services 16 2,85% 57 12,03%

(5) Market research, sales and marketing 31 5,52% 52 10,97%

(6) Help with exporting and/or partner search abroad 28 4,98% 52 10,97%

(7) Help with e-business and other aspects of ICT 39 6,94% 42 8,86%

(8) Advice on development of new products and services 43 7,65% 35 7,38%

(9) Help with raising bank finance, grandts, venture capital 68 12,10% 28 5,91%

(10) Incubator venture capital fund, business angel network 31 5,52% 32 6,75% (11) Advice on recruitment of staff and personnel

management 32 5,69% 35 7,38%

(12) Networking, e.g. with other entrepreneurs, customers 64 11,39% 24 5,06%

(13) Mentors, board members and other senior advisers 38 6,76% 27 5,70%

(14) Other services 8 1,42% 3 0,63%

TOTAL / Percentage 562 100,00% 474 100,00%

The Centre will focus on provision of necessary educational and advisory

services primarily for the members of Slavonia Construction Guild. This

organisation is the main target group, and will have the possibility to manage

and lead the work of Home Improvement Centre, together with the

Vocational school Pozega.

They will be offered to establish a membership fee that will be at a

competitive monthly price that will subsequently provide some exact services

of trainings, lectures, education, networking activities or counselling by

construction or energy efficiency experts. However, since the actual interest

for regular membership fee cannot be estimated in the initial phase, the Cost-

benefit analysis is using the principle of payment of each service or training

(by the number of services or trainings).

The Centre will seek to provide its clients with a comprehensive range of

services with a full-service offering a combination of business support services,

counselling, more specific services (energy audits) and other assistance. The

quality of the service, and not the physical aspects, is the most critical aspect

of the Centre's operation. However, it is a fact that the physical proximity to

other entrepreneurs can plan a beneficial role, both by catalysing the

entrepreneurial process and by facilitating networking, alliances and

collaboration between firms.

Start-up services is a term that describes support services to would-be

entrepreneurs before they launch their business. This includes assistance in

creation of a business plans, training and advice of forming a company.

62

Business support services include business planning, advice on accessing

capital, marketing, identification of suitable partners and others. Some

specialist services (e.g. legal, accounting) can be provided by the external

providers with whom the staff has established relationship. These services are

of interest to SMEs while large private sector does not search for such

consultancy in business incubators.

Technology-Innovation services assume access to centres of excellence

(R&D), or involvement in development of regional technology clusters.

After Care, Outreach, Networking and Virtual Support Services – are some of

the services that might be provided by the Centre.

The principle of pricing the provided services, used in this analysis is next:

VET school operates under the national support, being not-for-profit institution

that educates for immediately applied jobs in regional economy. Home

Improvement Centre will also operate under these rules, but taking care

about the financial sustainability of the programs. VET school teachers have

up to 10 hours weekly for „additional work“ within which they assist in

organisation of different school activities (Graduation exam, competitions of

students, promotion of school, etc.). This project assumes their direct

engagement every week for minimum of 2hours/each. 6 (six) VET school

teachers will be actively engaged in the Centre's work, through holding

lectures, training, provision of services, etc. Most of their services will be

provided at symbolic charge or free of charge.

The situation is different when the services are being outsources to external

suppliers (lecturers, consultants, etc.). In those cases, the full price must be

paid, although there is a need for public funding to cover part of these costs

and make them more attractive to users. The price of the services will be

calculated on the basis of needed number of working hours to perform the

service. 7 It is expected that suppliers and authorised agents of producers of

new construction materials (i.e. Ytong, Knauf …) will hold lectures about their

materials free of charge.

Another revenue source is expected to come from the financial support

provided from the Ministry of Entrepreneurship and Crafts; possibly of Ministry

of Regional Development. Certain project can be funded by the Fund for

Environmental Protection and Energy Efficiency, Ministry of Tourism (or even

7 For example, creation of quality business plan usually takes at least 7 working days of

experts. Taking into account that, the market price totals (7days x 8h x 15EUR/h = 840 EUR)

63

Ministry of Culture, in case the specific project promotes tradition or cultural

heritage in architecture or construction).

Financial support is expected from the Town of Pozega and Pozesko-

slavonska county that have a direct interest for this project.

COSTS

Recurrent cost implications have been calculated by estimating the

resources needed to operate the Centre and associated equipment.

Recurrent costs include wage costs, material cost, maintenance services,

heating etc. It is estimated that the annual operational costs equal

approximately EUR 44.900. See calculation tables for more details.

The key position in the Centre will have two members of staff:

a) The first Home Improvement Centre employee will be the BUSINESS

CONSULTANT, who will need to provide overall management and

guidance for the organisation in addition to construction business

development. Estimated salary would be 1100 EUR monthly

(approximately 2000 EUR including benefits and travel).

b) The second Home Improvement Centre employee will be a

CONSTRUCTION ENGINEER, a representative of VET school Construction

department. This will be a person available at all times to investors and

clients, providing them with his/her advice and consultation regarding

the choice of optimal solutions in home improvement or building.

However, this will be an employee of VET school (teacher) and will be

reassigned from the group of 6 construction engineers in school.

In the fifth year of work of Home Improvement Centre, this Study envisages

the employment of ELECTRICAL ENGINEER.

Total estimated operative annual cost of Home Improvement Centre is 44.900

EUR with a full complement of staff and including all expenses.

During the start-up phase the Centre will need working capital to pre-finance

the first 90 working days in the 1st year. This amount is estimated to 5000 EUR,

as sufficient to cover the basic costs.

Other important financial assumptions are presented on Sheet:

MAIN ASSUMPTIONS in the CBA calculation.

64

MARKET ANALYSIS

Demand:

Due to the lack of elemental information (Labour Force Survey data) it is hard

to get a clear picture about the regional labour market, especially a part on

educational and training needs of entrepreneurs, small and medium

enterprises.

Based on the inputs provided by the project partner Chamber of Crafts, in

regard to training services, entrepreneurs are aware of importance of

technical training, market research training, IT training and management

training. The usage, purchase and repetition do not follow the expression of

interest, though. Trainings connected with the legal requirements (safety

training, accountancy regulations, etc.) are the most attended. Regarding

the consulting services, the highest level of awareness was related to

technology, product development, IT, financial management investment and

legal consulting services.

Entrepreneurs KNOW they should ask someone for advice and services, but

they usually do it only in emergency case. They still consider themselves as the

best advisors for their businesses. Also, they still want to control everything in

their businesses.

In regard to business development services, the highest level of awareness is

related to fairs, lobbying and representing. Using and purchasing is low,

though. Linking with business partners is frequently perceived as very

demanded service, even considered as some kind of magic solution for many

enterprises (as an easier way to start export or start using new technology).

The structured interviews conducted by the Vocational school have shown

that entrepreneurs are not satisfied by the associations that should provide

services of training and consultancy (Chamber of Commerce, Chamber of

Crafts).

In the Employers' Survey, conducted by the Croatian Employment Service in

April 2011, on the question about the need for additional education, only

19,2% of employers has answered positively. They have expressed this need

mostly in context of retaining the existing jobs. Only 7 employers have

expressed the need for more extensive additional training for their workers in

technical skills and expert vocational skills. IT training was recognized by 11

employers. Foreign languages are needed by only 5 employers. 8 employers

want to improve relations with clients, while team work needs improvement

(as is stated in the Survey) at 6 employers.

65

According to the above described facts, the demand will have to be partly

developed and „redirected“ towards quality services that will improve the

competitiveness of SMEs and performance success of companies.

Supply:

The only institutions that can be considered as competitors (of any kind) are:

Entrepreneurial Centre and Incubator in Pakrac, and Entrepreneurial Centre

and Incubator in Pleternica, both offer excellent premises and services for

new companies. However, even if it is in the same county, Pakrac and

Pleternica are dislocated from Pozega, so it cannot be taken into account for

the local businesses. The first Centre targets the market of Lipik, Daruvar and

other western towns (as expressed in their Marketing plan). The distance of 50

km and weak traffic connections make it impossible for the local companies

to receive appropriate service or advice in Pakrac. On the other hand, the

lack of relevant entrepreneurial training, forces Pozega's managers and

entrepreneurs to travel to Pakrac and Pleternica, since there are no similar

events closer (as testified in Pakrac' Center). Pleternica is focused on

development of rural economy, primarily food processing and rural tourism

related activities. So, the target group of this project cannot receive the

necessary services.

Centre for Technological Development Slavonski Brod – works as a regional

development agency. Because of their limited capacities (staff), they are

usually not available for providing assistance to Pozesko-Slavonska County's

companies. The interest of their local businesses does not leave much space

for assisting the neighbouring County.

Business-Innovation-Science Centre Nova Gradiška – an excellent newly built

Incubator space that offers also complex services and assistance in product

development. This is also very dislocated premise, and weak traffic

connections make it hard for Pozesko-Slavonska County companies to get

more involved and engaged into their work.

Also, there are no examples of Incubators and Centres that are focused or

specialized in construction economy and entrepreneurship. The Home

Improvement Centre shall give focus on the property related field, in order to

serve the actual need of the locality.