Commercial Contractor Business Plan
Twin Brothers Construction (TBC) plans to become a leading provider of construction and renovation services in the local area. The company’s overall strategy will be based on a continuing improvement process of setting objectives, measuring results, and providing feedback to facilitate further growth and progress.
TBC is a company, with principal offices located in the local area. The company’s management is highly experienced and qualified: the brothers who will lead the management team have each accumulated over twenty five years of experience in the construction industry.
Through their years of experience, TBC’s owners have developed sophisticated bidding, scheduling and materials solutions for some of the most complex construction projects being done today. The company will use versatile and completely adaptable methods for a variety of building configurations.
Owners, developers, construction managers, general contractors, and sub-contractors are expected to realize substantial savings in labor and material costs by using the company’s construction methods and systems. Applications include commercial and residential structures.
The housing industry has been growing at a fast pace for several years. An all-time record was set in 1998, when 886,000 new-site single family homes were sold. That represented a 10% gain from the robust total of 804,000 homes sold in 1997. Although there was a slight drop in the number from 2003, this makes for an excellent opportunity for future expansion of the industry.
Twin Brothers Construction plans to rapidly develop marketing alliances with industry leaders and pursue new sales of its services to residential and commercial builders. The marketing strategy will focus on securing city, county, and state and federal government contracts.
TBC plans to use a direct sales force, relationship selling, and sub-contractors to reach its target markets. These channels are most appropriate because of time to market, reduced capital requirements, and fast access to established distribution channels.
Our mission is to be the best partner for our customers, suppliers and employees. To realize our vision, we will strive for profitable growth, operational excellence, customer satisfaction and strong brand positioning.
- To have up to three construction projects established within the first year.
- To have two building renovation projects in progress by the end of the first year.
- To locate and purchase our first rental building by the end of the first year.
- To achieve at least 7% profit by the second year.
1.3 Keys to Success
We believe our keys to success will be:
- Using the most updated materials and equipment to assure quality construction projects for ourselves and our customers.
- Educating the customers and providing valuable advice during the construction planning stages.
- Helping to confirm customer’s research about targeting markets and specific sectors.
- Overseeing the logistics associated with a project, which can include arranging local transportation, booking meetings etc.
- Assigning the actual work to an experienced and qualified third-party contractors and sub-contractors.
The brothers will invest a total of $90,000 combined ($55,000 and $35,000) in the start-up of the company. Initial cash requirements will total $50,000. Start-up assets total $55,000.
2.1 Company Ownership
The company ownership will be shared by the Chairman and Chief Executive Officer in the following percentage amounts:
Chairman = 60%
Chief Executive Officer = 40%
Both owners are veterans in the building industry, each with over 25 years experience.
Products and Services
TBC will sell its services to clients in the area of commercial construction and renovation. The company’s staff will design specialized construction drawings that outline the schedule, work sequence and the materials needed for building and renovation construction projects. Owners, developers and general contractors will realize substantial savings in labor and material costs by using TBC’s customized performance methods. TBC’s methods will offer complete adaptability at cost-effective prices. The drawings that the company will furnish to the contractor will specify the order of assembly and erection, including the location of the strongbacks and joists, the location and actual loading of the ties, location of accessories and advise clients of the maximum allowable rate of concrete placement.
A longer-term service will be commercial building rental management. This will include the purchase of commercial building sites or existing buildings that need renovation, coordinating the construction/renovation, then managing the rental of the property. The company will also be looking for existing property owners whose properties need renovation to update and increase its income potential, with TBC eventually taking over the management of these properties on behalf of the owner.
To enter the market with minimum overhead costs, TBC plans to utilize in the first year of operation mainly sub-contractors and independent experts for its building and renovation projects. Accident prevention will be the cornerstone of TBC’s safety commitment. The company will strive to eliminate foreseeable hazards which could result in personal injury or illness; at TBC, health and safety will not be compromised.
Market Analysis Summary
There were about 792,000 construction companies in the United States in 2002: 237,000 were building construction contractors; 60,000 were heavy and civil engineering construction or highway contractors; and 496,000 were specialty trade contractors. Most of these establishments tend to be small, the majority employing fewer than 10 workers. About 4 out of 5 workers are employed by small contractors.
Construction offers more opportunities than most other industries for individuals who want to own and run their own business. The 1.6 million self-employed and unpaid family workers in 2002 performed work directly for property owners or acted as contractors on small jobs, such as additions, remodeling, and maintenance projects. The rate of self-employment varies greatly by individual occupation in the construction trades. The local area is booming at this time, with many development projects running both by public and by private sources. Overall business growth over the past seven years has averaged approximately 9.5% and is expected to continue for at least the next several years. This constitutes an attractive market for TBC. The company will be concentrating on office building construction. This is the fastest growing segment of all the commercial clients requiring our services. The other categories to serve will include building renovation along with a segment it calls the general category, to serve other potential commercial clients.
One longer-term field of operation for the company will be the selling of building material and components to contractors. By slowly establishing itself as a first-rate material provider, the company expects to broaden and strengthen its stance in the local building industry. Initially it will focus on purchasing supplies for its own construction and renovation projects, then use those completed projects as marketing examples to showcase the quality of materials used and the customized approach used to design and construct them.
The company plans to develop marketing alliances with industry leaders and pursue new sales of its services to commercial builders. The market strategy is to capitalize on the company’s future alliances by securing city, county, and state government contracts. TBC also plans to use a direct sales force, relationship selling, and sub-contractors to reach its markets. These channels are most appropriate because of time to market, reduced capital requirements, and fast access to established distribution channels.