Concrete Fabricators is a company that provides concrete fabrication services, utilizing formwork, foundations, placement, and excavation. The company has worked on projects in Norman and Southwestern Oklahoma, and plans to bid on contracts for commercial concrete projects statewide.

The objective is to become the leading formwork-services provider for reinforced concrete in the state. This means having the best facilities, processes, and people. Concrete Fabricators will invest in competitive advantages for customers, such as structural plan review, equipment, and a full line of forming, reinforcing, and aftermarket products. A client evaluation form has been developed to gather feedback and improve the company.

The biggest concern in the industry is employee safety. Concrete Fabricators prioritizes safety and aims to be a “safe company.”

Concrete Fabricators participates in the concrete work industry, including contractors engaged in concrete work. Sales in this industry were approximately $21 million annually, with an average sales per establishment of $.7 million. Establishments primarily engaged in manufacturing portland cement concrete had sales of approximately $19 million, with an average sales per establishment of $6.5 million.

Formwork Construction Business Plan Example

Concrete Fabricators aims to be the top contractor in the industry, offering superior cement and concrete masonry services. Established in January 1987, the company is a sole proprietorship based in Norman, Oklahoma, founded by Lloyd and Anne James.

Formwork Construction Business Plan Example

Concrete Fabricators offers concrete fabrication services, including foundations, road construction, and excavation. They also create house slabs, driveways, and trailer path foundations. Jobs are obtained through bids from both businesses and individuals. The company serves customers in southwest Oklahoma and southeast Texas.

The system provided by Concrete Fabricators is adaptable to various construction requirements and offers high strength-to-weight ratio at cost-effective prices. Safety is a priority for the company, and they strive to eliminate hazards that could cause injury or illness. Concrete Fabricators operates in two market segments: commercial and residential.

In the commercial segment, they specialize in foundation construction and parking lot projects. Concrete is preferred for parking lots due to its durability, beauty, safety features, and load-carrying capacity.

In the residential segment, Concrete Fabricators offers basement walls, which provide extra room and storage, easy access to utilities, and a permanent finished look. They also specialize in driveways, which are durable, require minimal maintenance, and offer environmental benefits. Concrete driveways are also versatile and can be customized.

In terms of market analysis, the housing industry has been thriving in recent years, with record-breaking sales and construction activity. There is a significant market for single-family housing construction, residential construction (excluding single-family houses), heavy construction, bridge and tunnel construction, highway and street construction, and nonresidential construction.

Overall, Concrete Fabricators provides a range of concrete fabrication services for both commercial and residential projects. With their expertise and commitment to safety and quality, they are well-positioned to meet the demands of the thriving construction industry.

Formwork Construction Business Plan Example

Market Analysis:

Potential Customers Growth 2000 2001 2002 2003 2004 CAGR

Single Family Housing 4% 1,094,541 1,132,850 1,172,500 1,213,528 1,256,012 3.50%

Other Residential Housing 3% 670,848 687,619 704,809 722,429 740,490 2.50%

Commercial Construction 2% 82,623 84,275 85,961 87,680 89,434 2.00%

Total 3.07% 1,848,012 1,904,744 1,963,270 2,023,637 2,085,936 3.07%

4.2 Target Market Segment Strategy

The Market Analysis table and chart show the estimated number of single-family homes, other residential units, and commercial buildings in Oklahoma. This information is derived from U.S. Census Bureau estimates and represents the total number of potential clients for Concrete Fabricators.

4.3 Industry Analysis

Market Size Statistics–Concrete work

Special trade contractors primarily engaged in concrete work, including portland cement and asphalt.

Estimated number of U.S. establishments: 30,214

Number of people employed in this industry: 230,338

Total annual sales in this industry: $21 million

Average employees per establishment: 8

Average sales per establishment: $.7 million

Establishments primarily engaged in manufacturing portland cement concrete, manufactured and delivered to a purchaser in a plastic and unhardened steel.

Estimated number of U.S. establishments: 5,798

Number of people employed in this industry: 89,662

Total annual sales in this industry: $19 million

Average employees per establishment: 17

Average sales per establishment: $7 million

4.4 Competition and Buying Patterns

Competition

Competitive threats come from other concrete fabrication companies in the area. Competitors include Jones Construction, James Boyd Construction, Jerry Manuel Construction, Quality Construction, and Charles Johnson, Inc.

Strategy and Implementation Summary

The company’s strategy is based on a continuous improvement process of setting objectives, measuring results, and providing feedback for growth and progress. This includes quarterly and annual reporting and crisis management plans.

The company plans to develop marketing alliances with industry leaders and pursue new sales to residential and commercial builders. The strategy is to capitalize on alliances by securing government contracts.

Concrete Fabricators is committed to ensuring that the products used on its customers’ job sites are safe and approved by OSHA. The company believes in managing potential loss in the work environment.

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Concrete Fabricators has adopted a corporate strategy dedicated to improving the performance of activities on its customers’ projects. The company builds on core strengths, innovative equipment, design engineering expertise, project and site management, and safety excellence.

From the customers’ point of view, this strategy translates into benefits such as reduction of set-up time for trades, increased site safety, project cost reduction, quality construction practices, immediate resolution of punch lists, and review of structural plans.

5.1 Marketing Strategy

Marketing Strategy and Plan. The overall marketing plan is based on segmentation of the market, distribution channels, and capturing market share over time.

Market Responsibilities. Concrete Fabricators has implemented an extensive promotional campaign to attract a quality workforce and customers who will choose the company for their construction projects. The company advertises in the yellow pages, newspapers, radio, and on billboards.

Promotion. In addition to standard advertising practices, Concrete Fabricators gains recognition through caps, T-shirts, signs, and word of mouth from satisfied customers.

Incentives. Concrete Fabricators plans to distribute promotional items such as coffee mugs, T-shirts, pens, and other advertising specialties with the company logo.

Brochures. Brochures portray Concrete Fabricators’ goals and products and demonstrate the latest technology in construction and building services.

Investment in Advertising and Promotion. Concrete Fabricators plans to allocate ten percent of revenues for its advertising campaign.

5.2 Value Proposition

The company plans to become the leading provider of formwork and foundation services. To achieve this, Concrete Fabricators invests in structural drawing review, pre-job conferencing, efficient material delivery, and a variety of concrete forming and foundation materials.

5.3 Sales Strategy

The following chart and table show the estimated sales forecast for this plan.

Formwork Construction Business Plan Example

Formwork Construction Business Plan Example

Sales Forecast
2000 2001 2002
Sales
Single Family Housing $144,399 $216,600 $324,900
Other Residential Housing $55,538 $83,308 $124,961
Commercial Construction $77,755 $116,631 $174,946
Total Sales $277,692 $416,539 $624,807
Direct Cost of Sales 2000 2001 2002
Single Family Housing $5,200 $10,400 $20,800
Other Residential Housing $2,000 $4,000 $8,000
Commercial Construction $2,800 $5,600 $11,200
Subtotal Direct Cost of Sales $10,000 $20,000 $40,000

Management Summary

The company’s management philosophy is based on responsibility and mutual respect. Concrete Fabricators maintains an environment and structure that encourages productivity and respect for customers and fellow employees.

Concrete Fabricators’ employees and management are committed to:

  • Providing a safe work environment to protect employees, customers, subcontractors, and the public.
  • Supplying safe products for customers.
  • Continuously improving the company’s safety program to reduce the risk of accidents and occupational illness in a changing work environment.
  • Encouraging employees to participate in accident prevention programs and take personal responsibility for their own and their co-workers’ health and safety.
  • Employing properly trained personnel, equipment, and procedures necessary for regulatory compliance and high safety standards in the industry.
  • Monitoring workplaces, enforcing safe work practices, and communicating the company’s safety performance.
  • Making safety a value-added service provided to customers.

6.1 Management Team

Concrete Fabricators’ management is highly experienced and qualified. The key management team includes Mr. Lloyd James, Mrs. Anne James, and Mr. Sam McDonald. Mr. James acts as general manager, construction consultant, and occasionally as a site manager. Mrs. James carries out office management duties, and Mr. McDonald acts as the primary on-site manager.

6.2 Personnel Plan

The following table shows the Personnel Plan, with salaries, raises, and additional employees.

Personnel Plan
2000 2001 2002
Lloyd James $28,800 $30,240 $31,752
Anne James $18,000 $18,900 $19,845
Sam McDonald $26,400 $27,720 $29,106
Cement Layer No. 1 $22,104 $23,209 $24,370
Cement Layer No. 2 $22,104 $23,209 $24,370
Cement Layer No. 3 $22,104 $23,209 $24,370
Part-time Cement Layer No. 4 $0 $5,688 $12,000
Part-time Cement Layer No. 5 $0 $0 $5,688
Total People 6 7 8
Total Payroll $139,512 $152,176 $171,500

Financial Plan

Summary of three-year financial projections

Financial projections are based on sales volume at the levels described in the revenue section; they present, to the best of management’s knowledge and belief, the company’s expected assets, liabilities, capital, revenues, and expenses. Furthermore, the projections reflect management’s judgment of expected conditions and expected course of action, given hypothetical assumptions.

Financial notes and assumptions

  • Revenues will be derived from sales of services for the installation of reinforced-concrete utilizing formwork, reinforcing steel, embedded items, concrete placement, and engineering. Concrete Fabricators plans to bid and receive contracts for commercial concrete projects at all levels throughout the state. Management also expects to achieve a small percentage of revenues resulting from consulting services arising out of training.
  • Annual Growth The company expects annual growth to increase by 110% through increased sales efforts and new partnerships and alliances that will foster growth and extensions of our markets. These strategies are designed to build momentum and critical mass within the company and its sales.
  • Cost of Goods Concrete Fabricators expects high markup on its services, resulting in relatively low cost of goods. Cost of goods includes equipment, products, bank charges due to credit card transactions (not passed along to the consumer), and labor.
  • Operating Expenses Concrete Fabricators groups sales and marketing expenses, and general and administrative expense items under this category.
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7.1 Break-even Analysis

The Break-even Analysis chart and table show that if costs stay at the current, stable level, we will be able to increase profits by the second year.

Formwork Construction Business Plan Example

Break-even Analysis

Monthly Revenue Break-even: $23,465

Assumptions:

– Average Percent Variable Cost: 4%

– Estimated Monthly Fixed Cost: $22,620

Projected Profit and Loss:

The table below shows our expected profit and loss for fiscal years 2000-2002.

Formwork Construction Business Plan Example

Formwork Construction Business Plan Example

Formwork Construction Business Plan Example

Formwork Construction Business Plan Example

Pro Forma Profit and Loss

Pro Forma Profit and Loss
Sales $277,692 $416,539 $624,807
Direct Cost of Sales $10,000 $20,000 $40,000
Other $3,000 $6,000 $12,000
Total Cost of Sales $13,000 $26,000 $52,000
Gross Margin $264,692 $390,539 $572,807
Gross Margin % 95.32% 93.76% 91.68%
Expenses
Payroll $139,512 $152,176 $171,500
Sales and Marketing and Other Expenses $34,344 $47,610 $71,010
Depreciation $47,997 $50,333 $52,668
Rent/Mortgage $12,420 $12,420 $12,420
Supplies and Equipment $9,926 $19,851 $39,702
Insurance $14,459 $21,688 $32,533
Services $2,833 $2,833 $2,833
Payroll Taxes $9,947 $10,800 $12,600
Other $0 $0 $0
Total Operating Expenses $271,437 $317,711 $395,266
Profit Before Interest and Taxes ($6,745) $72,828 $177,541
EBITDA $41,252 $123,160 $230,209
Interest Expense $1,597 $922 $288
Taxes Incurred $0 $17,977 $45,052
Net Profit ($8,342) $53,930 $132,201
Net Profit/Sales -3.00% 12.95% 21.16%

Projected Cash Flow

7.3 Projected Cash Flow

The following chart and table display our estimated cash flow for this plan.

Formwork Construction Business Plan Example

Pro Forma Cash Flow

Pro Forma Cash Flow
2000 2001 2002
Cash Received
Cash from Operations
Cash Sales $69,423 $104,135 $156,202
Cash from Receivables $194,193 $293,703 $440,554
Subtotal Cash from Operations $263,616 $397,838 $596,755
Additional Cash Received
Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $2,000 $0 $0
New Other Liabilities (interest-free) $0 $0 $0
New Long-term Liabilities $0 $0 $0
Sales of Other Current Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0
New Investment Received $3,000 $0 $0
Subtotal Cash Received $268,616 $397,838 $596,755

Projected Balance Sheet

The following table provides Concrete Fabricator’s projected balance sheets for 2000-2002.

Pro Forma Balance Sheet
2000 2001 2002
Assets
Cash $30,101 $108,010 $261,966
Accounts Receivable $37,403 $56,104 $84,156
Other Current Assets $8,830 $8,830 $8,830
Total Current Assets $76,333 $172,944 $354,951
Long-term Assets $507,687 $507,687 $507,687
Accumulated Depreciation $93,688 $144,021 $196,689
Total Long-term Assets $413,999 $363,667 $310,999
Total Assets $490,332 $536,611 $665,950
Liabilities and Capital 2000 2001 2002
Current Liabilities
Accounts Payable $7,910 $13,159 $22,063
Current Borrowing $900 $0 $0
Other Current Liabilities $16,785 $10,785 $4,785
Subtotal Current Liabilities $25,595 $23,944 $26,848
Long-term Liabilities $11,766 $5,766 $0
Total Liabilities $37,361 $29,710 $26,848
Paid-in Capital $3,000 $3,000 $3,000
Retained Earnings $458,313 $449,971 $503,901
Earnings ($8,342) $53,930 $132,201
Total Capital $452,971 $506,901 $639,101
Total Liabilities and Capital $490,332 $536,611 $665,950
Net Worth $452,971 $506,901 $639,101

Business Ratios

The following table includes Industry Profile statistics for the concrete work industry, as determined by the Standard Industrial Classifications (SIC) Index code 1799. These statistics show a comparison of industry standards and the key ratios for this plan.

Ratio Analysis
2000 2001 2002 Industry Profile
Sales Growth 42.86% 50.00% 50.00% 7.50%
Percent of Total Assets
Accounts Receivable 7.63% 10.46% 12.64% 34.20%
Other Current Assets 1.80% 1.65% 1.33% 27.20%
Total Current Assets 15.57% 32.23% 53.30% 67.00%
Long-term Assets 84.43% 67.77% 46.70% 33.00%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 5.22% 4.46% 4.03% 42.20%
Long-term Liabilities 2.40% 1.07% 0.00% 12.30%
Total Liabilities 7.62% 5.54% 4.03% 54.50%
Net Worth 92.38% 94.46% 95.97% 45.50%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 95.32% 93.76% 91.68% 33.10%
Selling, General & Administrative Expenses 77.24% 65.33% 58.70% 18.10%
Advertising Expenses 2.52% 3.36% 4.48% 0.30%
Profit Before Interest and Taxes -2.43% 17.48% 28.42% 3.20%
Main Ratios
Current 2.98 7.22 13.22 1.63
Quick 2.98 7.22 13.22 1.30
Total Debt to Total Assets 7.62% 5.54% 4.03% 54.50%
Pre-tax Return on Net Worth -1.84% 14.19% 27.73% 8.60%
Pre-tax Return on Assets -1.70% 13.40% 26.62% 18.80%
Additional Ratios 2000 2001 2002
Net Profit Margin -3.00% 12.95% 21.16% n.a
Return on Equity -1.84% 10.64% 20.69% n.a
Activity Ratios
Accounts Receivable Turnover 5.57 5.57 5.57 n.a
Collection Days 59 55 55 n.a
Accounts Payable Turnover 12.46 12.17 12.17 n.a
Payment Days 39 24 24 n.a
Total Asset Turnover 0.57 0.78 0.94 n.a
Debt Ratios
Debt to Net Worth 0.08 0.06 0.04 n.a
Current Liab. to Liab. 0.69 0.81 1.00 n.a
Liquidity Ratios
Net Working Capital $50,738 $149,000 $328,103 n.a
Interest Coverage -4.22 79.02 615.82 n.a
Additional Ratios
Assets to Sales 1.77 1.29 1.07 n.a
Current Debt/Total Assets 5% 4% 4% n.a
Acid Test 1.52 4.88 10.09 n.a
Sales/Net Worth 0.61 0.82 0.98 n.a
Dividend Payout 0.00 0.00 0.00 n.a
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Appendix

– Jan, Feb, Mar, Apr, May, Jun, Jul, Aug, Sep, Oct, Nov, Dec

Plan Month: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12

– Current Interest Rate: 10.00%

– Long-term Interest Rate: 10.00%

– Tax Rate: 30.00%

– Other: 0

Pro Forma Profit and Loss:

– Sales: $16,000, $21,000, $24,000, $21,500, $24,250, $26,520, $22,500, $22,500, $23,952, $24,750, $25,500, $25,220

– Direct Cost of Sales: $833

– Other: $250

– Total Cost of Sales: $1,083

– Gross Margin: $14,917, $19,917, $22,917, $20,417, $23,167, $25,437, $21,417, $21,417, $22,869, $23,667, $24,417, $24,137

– Gross Margin %: 93.23%, 94.84%, 95.49%, 94.96%, 95.53%, 95.92%, 95.19%, 95.19%, 95.48%, 95.62%, 95.75%, 95.70%

– Expenses

– Payroll: $11,626

– Sales and Marketing and Other Expenses: $2,862

– Depreciation: $4,000

– Rent/Mortgage: $1,035

– Supplies and Equipment: $827

– Insurance: $1,205

– Services: $236

– Payroll Taxes: 15%, $829

– Other: $0

– Total Operating Expenses: $22,620

– Profit Before Interest and Taxes: ($7,703), ($2,703), $297, ($2,203), $547, $2,817, ($1,203), ($1,203), $249, $1,047, $1,797, $1,517

– EBITDA: ($3,703), $1,297, $4,297, $1,797, $4,547, $6,817, $2,797, $2,797, $4,249, $5,047, $5,797, $5,517

– Interest Expense: $161, $156, $151, $146, $141, $136, $131, $126, $121, $116, $111, $106

– Taxes Incurred: $0

– Net Profit: ($7,864), ($2,859), $146, ($2,349), $406, $2,681, ($1,334), ($1,329), $128, $931, $1,686, $1,411

– Net Profit/Sales: -49.15%, -13.61%, 0.61%, -10.92%, 1.68%, 10.11%, -5.93%, -5.91%, 0.54%, 3.76%, 6.61%, 5.60%

Pro Forma Cash Flow:

– Cash Received

– Cash from Operations

– Cash Sales: $4,000, $5,250, $6,000, $5,375, $6,063, $6,630, $5,625, $5,625, $5,988, $6,188, $6,375, $6,305

– Cash from Receivables: $11,663, $12,063, $12,125, $15,825, $17,938, $16,194, $18,244, $19,790, $16,875, $16,911, $17,984, $18,581

– Subtotal Cash from Operations: $15,663, $17,313, $18,125, $21,200, $24,000, $22,824, $23,869, $25,415, $22,863, $23,099, $24,359, $24,886

– Additional Cash Received

– Sales Tax, VAT, HST/GST Received: 0.00%

– New Current Borrowing: $2,000

– New Other Liabilities (interest-free): $0

– New Long-term Liabilities: $0

– Sales of Other Current Assets: $0

– Sales of Long-term Assets: $0

– New Investment Received: $3,000

– Subtotal Cash Received: $20,663, $17,313, $18,125, $21,200, $24,000, $22,824, $23,869, $25,415, $22,863, $23,099, $24,359, $24,886

– Expenditures

– Expenditures from Operations

– Cash Spending: $11,626

– Bill Payments: $40,871, $8,238, $8,233, $8,228, $8,223, $8,218, $8,213, $8,208, $8,203, $8,198, $8,193, $8,188

– Subtotal Spent on Operations: $52,497, $19,864, $19,859, $19,854, $19,849, $19,844, $19,839, $19,834, $19,829, $19,824, $19,819, $19,814

– Additional Cash Spent

– Sales Tax, VAT, HST/GST Paid Out: $0

– Principal Repayment of Current Borrowing: $0, $100, $100, $100, $100, $100, $100, $100, $100, $100, $100, $100, $100

– Other Liabilities Principal Repayment: $500, $500, $500, $500, $500, $500, $500, $500, $500, $500, $500, $500, $500

– Long-term Liabilities Principal Repayment: $500, $500, $500, $500, $500, $500, $500, $500, $500, $500, $500, $500, $500

– Purchase Other Current Assets: $0

– Purchase Long-term Assets: $0

– Dividends: $0

– Subtotal Cash Spent: $53,497, $20,964, $20,959, $20,954, $20,949, $20,944, $20,939, $20,934, $20,929, $20,924, $20,919, $20,914

– Net Cash Flow: ($32,834), ($3,651), ($2,834), $246, $3,051, $1,880, $2,931, $4,481, $1,934, $2,175, $3,440, $3,973

– Cash Balance: $12,474, $8,824, $5,990, $6,236, $9,287, $11,167, $14,098, $18,579, $20,513, $22,688, $26,128, $30,101

Sales Forecast
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Sales
Single Family Housing $8,320 $10,920 $12,480 $11,180 $12,610 $13,790 $11,700 $11,700 $12,455 $12,870 $13,260 $13,114

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