Gravel Rock Products Business Plan

Durango Gravel, Inc. produces and sells types and grades of gravel to public and private customers in the Four Corners Region, concentrating around Durango, Colorado. In just five months, we operated at a profit, recording $250,000 in sales and selling almost 49,000 tons of gravel products.

Our goal this year is to penetrate the profitable and limited competition asphalt market. By adding an asphalt plant and meeting our minimum goals of 45,500 tons of asphalt, we plan to sell over 191,000 tons of gravel products to municipalities, contractors, and end-users. This will result in sales of over $2,696,000 and net profits of $854,000.

We have achieved significant success in the local market by offering superior products and customer service.

Our keys to continued success are:

1. Expanding into the asphalt market.

2. Establishing and maintaining working relationships with major institutional users.

3. Exploiting the upcoming void in gravel supplies to establish a niche.

4. Developing a net profit margin above 30%.

5. Effectively communicating to our existing and potential customers our position as a differentiated provider of high-quality gravel and asphalt products.

Gravel Rock Products Business Plan Example

1.1 Objectives

Durango Gravel, Inc. objectives for the coming year:

– Establish strategic working relationships with major asphalt users in the area.

– Develop initial sales of 45.5K tons of asphalt, resulting in first-year sales of $1,638,000.

– Increase sales over a three-year period to 77K tons per year.

Gravel objectives:

– Continue to develop strategic working relationships with 10-15 major institutional users.

– Hit target gravel sales levels of 145.5K tons of road base and screened rock, resulting in gravel sales of $1,064,000.

– Continue to exploit weaknesses in major area competitors to increase presence in the local market area.

1.2 Mission

Durango Gravel, Inc. serves municipalities, construction companies, and individual users by providing superior-quality products manufactured to the highest standards at competitive prices. We communicate our commitment to quality and customer appreciation through outstanding product quality, personal service, and efficient delivery. Our commitment to customers is reflected through honest and responsible business practices.

1.3 Keys to Success

The keys to success for Durango Gravel, Inc.:

– Establishing and maintaining working relationships and contractual agreements with municipality and business sector clients.

– Increasing our facility’s maximum production within the next three years.

– Continuing our position as a customer-service-oriented company with competitive pricing.

– Increasing profit margins and decreasing production costs.

– Developing a presence in the asphalt market with area users.

Company Summary

Durango Gravel manufactures various types of gravel products from base rock, including 3/4″ and 3″ ABC, 3/8″, 1/2″, 3/4″ 1-11/2″ screened and washed rock, 1″-3″ cobble, and 4″-6″ cobble. We also provide pre-washed sand, fill dirt, topsoil, bedding materials, crusher fines, and various sizes of boulders. These products are sold to municipalities, business entities, and end users in the Four Corners Region, with a concentration around Durango, Colorado. Our pit site has been the location of Durango, a locally owned gravel pit, for over 15 years, and we have significantly expanded our customer base in the last six months.

2.1 Company Ownership

Durango Gravel, Inc. is incorporated as an "S" Corporation under the laws of Colorado, and Colorado laws shall govern and take precedence. Two classes of stock shares have been issued: 1000 Class "A" Stock Shares – Voting Rights Only – No Dividend Rights, and 1000 Class "B" Stock Shares – Dividend Shares Only – No Voting Rights. Net profits are distributed in the form of dividends on a basis determined from time to time. Corporate officers are Justin McCarty, the president, treasurer, chief executive officer, and chief financial officer, and Chad Hughes, the vice president, secretary, chief operating officer, and chief financial officer.

2.2 Company History

Durango Gravel, Inc. was formed in June 2000. The principals of the corporation are Justin McCarty, owner of an excavating, landscaping, trucking, and road grading business, and Chad Hughes, educated in natural resources management and with extensive customer-service experience. In June 2000, the corporation entered into a five-year lease agreement with Durango Gravel, a locally-owned gravel pit, to obtain the mineral rights. The corporation invested approximately $700,000 in crushing and production equipment and began operations on July 24, 2000. In the five months of operation in 2000, sales of 47,000 tons of material were recorded. Our goal of penetrating the local market and taking advantage of available opportunities was met, receiving gravel awards from municipalities, county, state, and institutional entities. We had an operating profit for 2000, despite unanticipated additional equipment maintenance costs. We are poised to make more major inroads in the local market.

2.3 Company Locations and Facilities

Our pit is located in Durango, Colorado, with a primary and secondary crusher, generators, loaders, excavators, an electronic scale, and approximately 60 acres of land. Our scale is located approximately 1/4 mile from the highway. The pit has a reserve of approximately 6,000,000 tons, the most in the area. Our corporate office is in Bayfield, Colorado.

Products and Services

Durango Gravel Inc. provides various gravel-related products, including 3/4″ ABC, 3″ ABC, 3/8″ screened and washed rock, 1/2″ screened and washed rock, 3/4″ screened and washed rock, 1-11/2″ screened and washed rock, 1″-3″ cobble, 4″-6″ cobble, pre-washed sand, fill dirt, topsoil, bedding materials, crusher fines, and various sizes of boulders. Customers can provide their own trucks for products, or we can deliver for a fee. Our standard average delivery fee is $65.00, with maximum related expenses of $40.00. We have our own trucks and subcontract to independent trucking companies.

3.1 Product and Service Description

We offer a range of products, including asphalt, 3/4″ ABC, 3″ ABC, 3/8″ screened and washed rock (pea gravel), 1/2″ screened and washed rock, 3/4″ screened and washed rock, 1-11/2″ screened and washed rock, 1″-3″ cobble, 4″-6″ cobble, pre-washed sand, fill dirt, topsoil, bedding materials, crusher fines, and various sizes of boulders. Royalty costs are $2.00/Ton, and manufacturing costs are budgeted at $1.15/ton. (*No manufacturing costs)

3.2 Competitive Comparison

Our significant competitors in the area are Oldcastle and LaFarge, both multinational corporations headquartered outside the United States. However, the local perception is that their profits go overseas instead of being reinvested in the local economy. Moreover, their corporate policies result in less customer-service orientation. C & J Gravel is another competitor with limited reserves and a limited product line. We compete by offering a larger selection of products, superior quality, better customer service, and competitive pricing with fast delivery.

3.3 Sales Literature

This year, we will produce a company catalog, including asphalt products for targeted customers.

3.4 Fulfillment

We produce almost all of our product line at our site, without the need for outsourcing materials.

3.5 Technology

The technology for gravel, gravel-related products, and asphalt production is well established. We have developed efficient marketing techniques, including convenient and time-saving loading of client trucks, and saving our institutional customers on trucking expenses.

3.6 Future Products and Services

Our major addition this year will be asphalt, as we have received interest from contractors. Our long-range plan includes opening a second pit to compete with producers in remote county areas.

Market Analysis Summary

There is a significant demand for asphalt products for road and driveway construction in the area, with only one area source for asphalt charging high prices due to their monopoly. Gravel and rock-related products are also needed for road building and remodeling projects. Our competitive advantage lies in our larger selection of products, superior quality, and better customer service. Price is secondary to customer service in this region.

4.1 Market Segmentation

Our major customer groups are municipalities, schools, state agencies, larger construction companies, and smaller construction and private companies. We have already established relationships with 5 out of 12 municipalities and received 12 awards from larger construction companies in the past six months. Smaller contractors are eager to utilize our products due to our reputation for customer service.

Gravel Rock Products Business Plan Example

Market Analysis

Market Analysis
2001 2002 2003 2004 2005
Potential Customers Growth CAGR
Public 15% 10 12 14 16 18 15.83%
Private 15% 65 75 86 99 114 15.08%
End User 20% 60 72 86 103 124 19.90%
Other 0% 0 0 0 0 0 0.00%
Total 17.35% 135 159 186 218 256 17.35%
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Contents

4.2 Target Market Segment Strategy

The Four Corners Area’s population has dramatically increased in the last 10 years, creating a greater demand for houses and roads. This increase is attributed to retirees and those with substantial incomes who have purchased a second home. Many people from these groups have come from areas where good customer service is expected and were dissatisfied with the quality of customer service available before we began operations.

4.2.1 Market Needs

Our target market needs more than asphalt and gravel products. This need has grown due to increased population growth, the influx of a segmented customer base with disposable income, and our competitors’ failure to meet increased customer service requirements.

4.2.2 Market Trends

The market for asphalt, gravel, and gravel-related products has steadily grown for the past seven years and continues to grow. There are trends toward more institutional and private road development and increased private end-user interest in quality and customer service.

4.2.3 Market Growth

According to major suppliers in the region and the La Plata Area Chamber of Commerce, the market for construction products has grown at 12% per year for the past three years and is projected to increase. Additionally, over 35% of existing county roads will require maintenance in the next four years due to a 45% increase in the county’s population in the last 10 years. The region’s extensive winters also contribute to the demand for road maintenance.

4.3 Service Business Analysis

Nationwide corporations have consolidated suppliers in the last decade. These companies often have non-user-friendly policies that do not meet the particular needs of this region.

Currently, there is only one producer in the area asphalt market. They have predictable non-competitive pricing and customer service policies.

4.3.1 Competition and Buying Patterns

Word-of-mouth endorsements play a crucial role in the Durango area. Private end-user customers choose their provider based on quick delivery, friendliness, and customer service. Business and construction-related users choose based on the establishment of a trustworthy relationship.

4.3.2 Main Competitors

Oldcastle (Four Corners Materials)

Strengths – long-term relationships, 30 years in business, long-term employees, decent quality.

Weaknesses – product, price and credit flexibility, foreign ownership, product reserves, travel and loading time, monopolistic practices in regards to asphalt.

C & J

Strengths – established, local ownership.

Weaknesses – limited products, limited reserves, location.

4.3.3 Business Participants

The main sales volume in this area is now concentrated in the following companies:

Asphalt: Oldcastle (Four Corners Materials).

Gravel (Durango): Oldcastle (Four Corners Materials), Durango Gravel, Inc., C & J, Sandco.

(Outlying Areas): LaFarge, Gosney & Sons, Hocker.

All of these other companies compete with similar limited products and unchanging company policies. Products are similar, costs are important, but customer service and perception of honesty are critical. Our company has increased its participation in the local gravel market by 400% in just five months.

Strategy and Implementation Summary

Durango Gravel, Inc.’s strategy is as follows:

  1. Add an asphalt plant quickly to penetrate the asphalt market.
  2. Continue to expand gravel sales.
  3. Continue our uniquely designed service for customers with their own delivery trucks.
  4. Establish long-term, mutually-beneficial relationships with commercial accounts.
  5. Implement a program to cut delivery costs for municipalities and industry end-users.
  6. Aggressively market our consumer-oriented focus.

We intend to maximize product sales through aggressive marketing, penetrate the asphalt market, and increase our targeted marketing efforts.

5.1 Strategy Pyramid

Our main strategy at Durango Gravel, Inc. is to position ourselves at the top of the quality scale, featuring our combination of fine quality products and the best customer service in the region.

We are committed to communicating our quality position to the market. Programs mainly include the continued acquisition of public-sector accounts.

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5.2 Value Proposition

We offer our target customer, who cares about personal service and product quality, a vendor who acts as a strategic ally. We provide the highest quality asphalt and gravel products at a premium price that reflects the value of reassurance that systems will work.

5.3 Marketing Strategy

The marketing strategy is the core of our main strategy and is multi-faceted:

  1. Penetrate the asphalt market.
  2. Emphasize personal service and support.
  3. Foster long-term relationship business.
  4. Focus on the public-sector, major contractor, and high-end homeowner as key target markets.
  5. Encourage more companies to utilize our delivery and loading strategies.

5.3.1 Pricing Strategy

Regarding products carried by our competitors, our pricing strategy will either match their prices or be marginally lower. We believe our superior service will be a major factor.

5.4 Competitive Edge

Our competitive edge is our quality product, location, emphasis on customer service, and long-term availability of products.

5.5 Sales Strategy

We need to sell our company, not just the products. We have to sell our service and support.

The Yearly Total Sales chart summarizes our ambitious sales forecast. We expect sales to increase from $250,000 last year to approximately $2.7 million next year. The marketing strategy is the core of our main strategy and is multi-faceted.

Gravel Rock Products Business Plan Example

5.5.1 Sales Forecast

Sales forecasts depend on the following information:

  1. An asphalt plant acquisition, to be completed by April 2001.
  2. A minimum of 45.5K tons of asphalt sales in the first year.
  3. Our gravel sales total includes 45.5K tons sold to our asphalt plant.

Gravel Rock Products Business Plan Example

Sales Forecast

Sales Forecast
2001 2002 2003
Unit Sales
Asphalt 45,500 61,000 77,000
Crusher Fines – for Asphalt 18,200 24,400 30,800
3/4 in. ABC – for Asphalt 18,200 24,400 30,800
1/2 in. Screened Rock – for Asphalt 9,100 12,200 15,400
3 in. ABC 23,800 25,000 26,500
3/4 in. ABC 31,200 33,000 35,000
Other Screened Rock 10,000 11,000 12,500
Sand 10,500 12,500 15,000
Cobble 6,100 6,500 7,000
Boulders 2,100 2,300 2,500
Topsoil 6,500 7,000 7,500
Other Dirt Products 10,000 11,000 12,000
Total Unit Sales 191,200 230,300 272,000

Milestones

The accompanying table lists important program milestones, with dates and managers in charge, and budgets for each. The milestone schedule indicates our emphasis on planning for implementation.

Milestones
Start Date End Date Budget Manager Department
Asphalt Plant 1/1/2001 4/1/2001 $500 McCarty Admin.
State Gravel Awards 1/1/2001 5/1/2001 $0 Mazur Admin.
County Asphalt Awards 1/1/2001 6/1/2001 $0 Hughes S & M
Add Five Major Contractors to Customers 1/1/2001 7/1/2001 $500 McCarty Admin.
Reputation and Name Recognition 1/1/2001 12/31/2001 $1,000 Mazur Admin.
Totals $2,000

Management Summary

Our management philosophy is based on responsibility and mutual respect. At present, including our trucking and excavating personnel, we number 11. We expect to grow to 17 with the addition of the asphalt plant, and to 20 by next year.

Organizational Structure

The team includes 11 employees, under our president. Our main management divisions are sales and marketing, production, delivery, and administration. Service is handled by all divisions, with direction from administration.

Management Team

Justin McCarty, Bayfield, Colorado – President, owner of an excavating, landscaping, trucking and road grading business, Mr. McCarty has extensive experience in all phases of gravel and rock hauling, production and industry practices. Mr. McCarty oversees operations of the corporation, and additionally, is a major consumer of plant products. He also will be a consumer of asphalt products.

Chad Hughes, Durango, Colorado – Vice-president, sales and marketing, educated in natural resources management, and with extensive customer-service experience, Mr. Hughes focuses on developing public accounts.

Gary Small, Mancos, Colorado – Production, Mr. Small has many years of crusher and asphalt-related experience.

Baylin Berg, Durango Colorado – Delivery, Mr. Berg has been instrumental in developing a revolutionary delivery plan to save money for our customers, as well as increase revenues for our trucking division.

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Bill Mazur, Durango, Colorado – Administration, Bill is responsible for the day-to-day company operation, as well as coordinating all the departments.

Personnel Plan

The following table shows the Personnel Plan for Durango Gravel.

Personnel Plan
2001 2002 2003
Production Personnel
Production Manager $26,300 $27,500 $28,800
Crusher 1 $24,000 $25,000 $26,000
Crusher 2 $21,600 $22,000 $22,500
Crusher 3 $21,600 $22,000 $22,500
Asphalt 1 $12,600 $17,000 $18,000
Asphalt 2 $12,600 $17,000 $18,000
Asphalt 3 $9,000 $17,000 $18,000
Asphalt Loader $12,600 $22,700 $24,000
Loader $21,600 $22,700 $24,000
Subtotal $161,900 $192,900 $201,800
Sales and Marketing Personnel
Sales/Marketing 1 $21,000 $23,000 $25,000
Other $0 $0 $0
Subtotal $21,000 $23,000 $25,000
General and Administrative Personnel
Administrator $28,000 $32,000 $37,000
Other $0 $0 $0
Subtotal $28,000 $32,000 $37,000
Other Personnel
Name or title $0 $0 $0
Other $0 $0 $0
Subtotal $0 $0 $0
Total People 9 12 15

7.3 Break-even Analysis

The table and chart below outline our estimated monthly break-even point. Based on our projected sales and expenses, the monthly break-even point is as follows.

Gravel Rock Products Business Plan Example

"

Break-even Analysis
Monthly Units Break-even 3,170
Monthly Revenue Break-even $44,704
Assumptions:
Average Per-Unit Revenue $14.10
Average Per-Unit Variable Cost $1.90
Estimated Monthly Fixed Cost $38,670

"

7.4 Projected Profit and Loss

We anticipate concluding 2001 with strong sales and respectable profits.

Gravel Rock Products Business Plan Example

Gravel Rock Products Business Plan Example

Gravel Rock Products Business Plan Example

Gravel Rock Products Business Plan Example

Pro Forma Profit and Loss

2001 2002 2003
Sales $2,696,400 $3,633,780 $4,694,100
Direct Cost of Sales $364,000 $488,000 $616,000
Production Payroll $161,900 $192,900 $201,800
Asphalt Plant Maintenance $226,590 $303,780 $383,460
Asphalt By-Product Additives $273,000 $36,600 $46,200
Other $0 $0 $0
Total Cost of Sales $1,025,490 $1,021,280 $1,247,460
Gross Margin $1,670,910 $2,612,500 $3,446,640
Gross Margin % 61.97% 71.89% 73.42%
Operating Expenses
Sales and Marketing Expenses
Sales and Marketing Payroll $21,000 $23,000 $25,000
Advertising/Promotion $6,000 $6,600 $7,200
Travel $1,200 $1,500 $1,800
Miscellaneous $2,400 $3,000 $3,600
Total Sales and Marketing Expenses $30,600 $34,100 $37,600
Sales and Marketing % 1.13% 0.94% 0.80%
General and Administrative Expenses
General and Administrative Payroll $28,000 $32,000 $37,000
Sales and Marketing and Other Expenses $0 $0 $0
Depreciation $18,000 $24,000 $30,000
Leased Equipment $124,800 $145,000 $145,000
Equipment Expense $18,000 $21,000 $25,000
Equipment Fuel $21,600 $33,500 $48,000
Utilities $9,000 $12,000 $15,000
Insurance $21,600 $24,000 $30,000
Office Expense $4,800 $6,000 $6,500
Miscellaneous $36,000 $42,000 $48,000
Pit Lease $120,000 $150,000 $180,000
Payroll Taxes $31,635 $37,185 $39,570
Other General and Administrative Expenses $0 $0 $0
Total General and Administrative Expenses $433,435 $526,685 $604,070
General and Administrative % 16.07% 14.49% 12.87%
Other Expenses:
Other Payroll $0 $0 $0
Consultants $0 $0 $0
Contract/Consultants $0 $0 $0
Total Other Expenses $0 $0 $0
Other % 0.00% 0.00% 0.00%
Total Operating Expenses $464,035 $560,785 $641,670
Profit Before Interest and Taxes $1,206,875 $2,051,715 $2,804,970
EBITDA $1,224,875 $2,075,715 $2,834,970
Interest Expense $68,669 $61,994 $58,394
Taxes Incurred $284,552 $497,430 $686,644
Net Profit $853,655 $1,492,291 $2,059,932
Net Profit/Sales 31.66% 41.07% 43.88%

7.5 Projected Cash Flow

The cash flow depends on assumptions for inventory turnover, payment days, and accounts receivable management. Our projected 60-day collection days are critical and reasonable. We need $110,000 in new financing (current borrowing and additional investment) in March to get through a cash flow dip as we build up for mid-year sales.

Gravel Rock Products Business Plan Example

Pro Forma Cash Flow

Pro Forma Cash Flow
2001 2002 2003
Cash Received
Cash from Operations
Cash Sales $134,820 $181,689 $234,705
Cash from Receivables $2,589,881 $3,432,952 $4,437,746
Subtotal Cash from Operations $2,724,701 $3,614,641 $4,672,451
Additional Cash Received
Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $60,000 $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 $50,000 $0 $0
Subtotal Cash Received $2,834,701 $3,614,641 $4,672,451

7.6 Projected Balance Sheet

The Projected Balance Sheet is positive. We project no trouble meeting our debt obligations–if we achieve our specific objectives.

Pro Forma Balance Sheet
2001 2002 2003
Assets
Current Assets
Cash $1,290,410 $3,075,351 $5,146,039
Accounts Receivable $55,052 $74,191 $95,840
Inventory $293,640 $75,636 $95,475
Other Current Assets $0 $0 $0
Total Current Assets $1,639,102 $3,225,178 $5,337,353
Long-term Assets
Long-term Assets $1,056,350 $1,056,350 $1,056,350
Accumulated Depreciation $18,000 $42,000 $72,000
Total Long-term Assets $1,038,350 $1,014,350 $984,350
Total Assets $2,677,452 $4,239,528 $6,321,703
Liabilities and Capital 2001 2002 2003
Current Liabilities
Accounts Payable $29,963 $135,747 $193,990
Current Borrowing $0 $0 $0
Other Current Liabilities $10,835 $10,835 $10,835
Subtotal Current Liabilities $40,798 $146,582 $204,825
Long-term Liabilities $637,936 $601,936 $565,936
Total Liabilities $678,734 $748,518 $770,761
Paid-in Capital $1,134,896 $1,134,896 $1,134,896
Retained Earnings $10,168 $863,823 $2,356,114
Earnings $853,655 $1,492,291 $2,059,932
Total Capital $1,998,719 $3,491,010 $5,550,942
Total Liabilities and Capital $2,677,452 $4,239,528 $6,321,703
Net Worth $1,998,719 $3,491,010 $5,550,942

7.7 Business Ratios

The table shows our main business ratios. We aim to improve gross margin and collection days. Industry profile ratios for the Standard Industrial Classification (SIC) code 1442, Construction Sand and Gravel, are provided for comparison.

Ratio Analysis
2001 2002 2003 Industry Profile
Sales Growth 978.28% 34.76% 29.18% 11.10%
Percent of Total Assets
Accounts Receivable 2.06% 1.75% 1.52% 14.30%
Inventory 10.97% 1.78% 1.51% 6.70%
Other Current Assets 0.00% 0.00% 0.00% 32.60%
Total Current Assets 61.22% 76.07% 84.43% 53.60%
Long-term Assets 38.78% 23.93% 15.57% 46.40%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 1.52% 3.46% 3.24% 31.90%
Long-term Liabilities 23.83% 14.20% 8.95% 26.20%
Total Liabilities 25.35% 17.66% 12.19% 58.10%
Net Worth 74.65% 82.34% 87.81% 41.90%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 61.97% 71.89% 73.42% 39.10%
Selling, General & Administrative Expenses 30.36% 30.94% 29.69% 19.60%
Advertising Expenses 0.22% 0.18% 0.15% 0.10%
Profit Before Interest and Taxes 44.76% 56.46% 59.76% 3.70%
Main Ratios
Current 40.18 22.00 26.06 1.68
Quick 32.98 21.49 25.59 1.22
Total Debt to Total Assets 25.35% 17.66% 12.19% 58.10%
Pre-tax Return on Net Worth 56.95% 57.00% 49.48% 3.70%
Pre-tax Return on Assets 42.51% 46.93% 43.45% 8.80%
Additional Ratios 2001 2002 2003
Net Profit Margin 31.66% 41.07% 43.88% n.a
Return on Equity 42.71% 42.75% 37.11% n.a
Activity Ratios Sales Forecast
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Unit Sales
Asphalt 0% 0 0 0 4,000 6,000 9,000 9,000 9,000 4,500 4,000 0 0
Crusher Fines – for Asphalt 0% 0 0 0 1,600 2,400 3,600 3,600 3,600 1,800 1,600 0 0
3/4 in. ABC – for Asphalt 0% 0 0 0 1,600 2,400 3,600 3,600 3,600 1,800 1,600 0 0
1/2 in. Screened Rock – for Asphalt 0% 0 0 0 800 1,200 1,800 1,800 1,800 900 800 0 0
3 in. ABC 0% 1,000 1,300 1,500 2,000 2,000 2,500 3,500 3,000 2,500 2,000 1,500 1,000
3/4 in. ABC 0% 1,200 1,600 2,000 2,600 2,800 3,500 4,500 3,800 3,000 2,700 2,000 1,500
Other Screened Rock 0% 300 500 700 800 800 1,000 1,000 1,500 1,300 1,100 500 500
Sand 0% 100 300 500 1,000 1,000 1,500 1,500 2,000 1,500 500 300 300
Cobble 0% 100 100 500 1,000 1,500 1,000 500 500 300 200 200 200
Boulders 0% 50 100 150 200 250 250 250 250 250 200 100 50
Topsoil 0% 0 0 200 700 1,000 1,500 1,500 500 500 300 200 100
Other Dirt Products 0% 300 500 700 800 800 1,000 1,000 1,500 1,300 1,100 500 500
Total Unit Sales 3,050 4,400 6,250 17,100 22,150 30,250 31,750 31,050 19,650 16,100 5,300 4,150
Unit Prices Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Asphalt $36.00 $36.00 $36.00 $36.00 $36.00 $36.00 $36.00 $36.00 $36.00 $36.00 $36.00 $36.00
Crusher Fines – for Asphalt $10.50 $10.50 $10.50 $10.50 $10.50 $10.50 $10.50 $10.50 $10.50 $10.50 $10.50 $10.50
3/4 in. ABC – for Asphalt $5.50 $5.50 $5.50 $5.50 $5.50 $5.50 $5.50 $5.50 $5.50 $5.50 $5.50 $5.50
1/2 in. Screened Rock – for Asphalt $8.00 $8.00 $8.00 $8.00 $8.00 $8.00 $8.00 $8.00 $8.00 $8.00 $8.00 $8.00
3 in. ABC $4.50 $4.50 $4.50 $4.50 $4.50 $4.50 $4.50 $4.50 $4.50 $4.50 $4.50 $4.50
3/4 in. ABC $5.50 $5.50 $5.50 $5.50 $5.50 $5.50 $5.50 $5.50 $5.50 $5.50 $5.50 $5.50
Other Screened Rock $9.00 $9.00 $9.00 $9.00 $9.00 $9.00 $9.00 $9.00 $9.00 $9.00 $9.00 $9.00
Sand $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 $10.00
Cobble $13.00 $13.00 $13.00 $13.00 $13.00 $13.00 $13.00 $13.00 $13.00 $13.00 $13.00 $13.00
Boulders $9.00 $9.00 $9.00 $9.00 $9.00 $9.00 $9.00 $9.00 $9.00 $9.00 $9.00 $9.00
Topsoil $15.00 $15.00 $15.00 $15.00 $15.00 $15.00 $15.00 $15.00 $15.00 $15.00 $15.00 $15.00
Other Dirt Products $2.50 $2.50 $2.50 $2.50 $2.50 $2.50 $2.50 $2

Personnel Plan:

Personnel Plan
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Production Personnel
Production Manager $1,800 $2,000 $2,000 $2,100 $2,300 $2,300 $2,300 $2,300 $2,300 $2,300 $2,300 $2,300
Crusher 1 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000
Crusher 2 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800
Crusher 3 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800
Asphalt 1 $0 $0 $0 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $0 $0
Asphalt 2 $0 $0 $0 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $0 $0
Asphalt 3 $0 $0 $0 $0 $1,800 $1,800 $1,800 $1,800 $0 $0 $0
Asphalt Loader $0 $0 $0 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $0 $0
Loader $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800
Subtotal $9,200 $9,400 $9,400 $14,900 $16,900 $16,900 $16,900 $16,900 $16,900 $15,100 $9,700 $9,700
Sales and Marketing Personnel
Sales/Marketing 1 $0 $0 $2,100 $2,100 $2,100 $2,100 $2,100 $2,100 $2,100 $2,100 $2,100 $2,100
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal $0 $0 $2,100 $2,100 $2,100 $2,100 $2,100 $2,100 $2,100 $2,100 $2,100 $2,100
General and Administrative Personnel
Administrator $2,000 $2,000 $2,500 $2,000 $2,000 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal $2,000 $2,000 $2,500 $2,000 $2,000 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500
Other Personnel
Name or title $0 $0 $0

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

Sales: $17,300 $25,600 $41,650 $243,800 $344,350 $490,750 $494,250 $483,900 $269,350 $226,400 $33,000 $26,050

Direct Cost of Sales: $0 $0 $0 $32,000 $48,000 $72,000 $72,000 $72,000 $36,000 $32,000 $0 $0

Production Payroll: $9,200 $9,400 $9,400 $14,900 $16,900 $16,900 $16,900 $16,900 $16,900 $15,100 $9,700 $9,700

Asphalt Plant Maintenance: $0 $0 $0 $19,920 $29,880 $44,820 $44,820 $44,820 $22,410 $19,920 $0 $0

Asphalt By-Product Additives: $0 $0 $0 $24,000 $36,000 $54,000 $54,000 $54,000 $27,000 $24,000 $0 $0

Other: $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Cost of Sales: $9,200 $9,400 $9,400 $90,820 $130,780 $187,720 $187,720 $187,720 $102,310 $91,020 $9,700 $9,700

Gross Margin: $8,100 $16,200 $32,250 $152,980 $213,570 $303,030 $306,530 $296,180 $167,040 $135,380 $23,300 $16,350

Gross Margin %: 46.82% 63.28% 77.43% 62.75% 62.02% 61.75% 62.02% 61.21% 62.02% 59.80% 70.61% 62.76%

Operating Expenses:

Sales and Marketing Expenses: $0 $0 $2,100 $2,100 $2,100 $2,100 $2,100 $2,100 $2,100 $2,100 $2,100 $2,100

Advertising/Promotion: $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500

Travel: $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100

Miscellaneous: $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200

Total Sales and Marketing Expenses: $800 $800 $2,900 $2,900 $2,900 $2,900 $2,900 $2,900 $2,900 $2,900 $2,900 $2,900

Sales and Marketing %: 4.62% 3.13% 6.96% 1.19% 0.84% 0.59% 0.59% 0.60% 1.08% 1.28% 8.79% 11.13%

General and Administrative Expenses:

General and Administrative Payroll: $2,000 $2,000 $2,500 $2,000 $2,000 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500

Sales and Marketing and Other Expenses: $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Depreciation: $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500

Leased Equipment: $10,400 $10,400 $10,400 $10,400 $10,400 $10,400 $10,400 $10,400 $10,400 $10,400 $10,400 $10,400

Equipment Expense: $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500

Equipment Fuel: $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800

Utilities: $750 $750 $750 $750 $750 $750 $750 $750 $750 $750 $750 $750

Insurance: $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800

Office Expense: $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400

Miscellaneous: $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000

Pit Lease: $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000

Payroll Taxes: 15% $1,680 $1,710 $2,100 $2,850 $3,150 $3,225 $3,225 $3,225 $3,225 $2,955 $2,145 $2,145

Other General and Administrative Expenses: $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total General and Administrative Expenses: $34,830 $34,860 $35,750 $36,000 $36,300 $36,875 $36,875 $36,875 $36,875 $36,605 $35,795 $35,795

General and Administrative %: 201.33% 136.17% 85.83% 14.77% 10.54% 7.51% 7.46% 7.62% 13.69% 16.17% 108.47% 137.41%

Other Expenses:

Other Payroll: $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Consultants: $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Contract/Consultants: $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Other Expenses: $0 $0 $0 $0 $0 $0 $0 $

Pro Forma Cash Flow

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Pro Forma Cash Flow
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Cash Received
Cash Sales $865 $1,280 $2,083 $12,190 $17,218 $24,538 $24,713 $24,195 $13,468 $11,320 $1,650 $1,303
Cash from Receivables $41,677 $42,225 $16,698 $24,828 $45,969 $234,794 $331,769 $466,323 $469,210 $452,911 $254,522 $208,956
Subtotal Cash from Operations $42,542 $43,505 $18,780 $37,018 $63,186 $259,332 $356,481 $490,518 $482,677 $464,231 $256,172 $210,258
Additional Cash Received
Subtotal Cash Received $42,542 $43,505 $78,780 $37,018 $113,186 $259,332 $356,481 $490,518 $482,677 $464,231 $256,172 $210,258
Expenditures Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Expenditures from Operations
Cash Spending $11,200 $11,400 $14,000 $19,000 $21,000 $21,500 $21,500 $21,500 $21,500 $19,700 $14,300 $14,300
Bill Payments $19,870 $29,528 $31,643 $38,086 $111,628 $149,547 $202,681 $203,441 $198,206 $118,491 $102,919 $32,730
Subtotal Spent on Operations $31,070 $40,928 $45,643 $57,086 $132,628 $171,047 $224,181 $224,941 $219,706 $138,191 $117,219 $47,030
Additional Cash Spent
Subtotal Cash Spent $31,070 $40,928 $54,643 $57,086 $132,628 $210,047 $224,181 $224,941 $258,706 $138,191 $117,219 $56,030
Net Cash Flow $11,472 $2,577 $24,137 ($20,068) ($19,441) $49,285 $132,300 $265,577 $223,971 $326,040 $138,954 $154,228
Cash Balance $12,851 $15,428 $39,565 $19,497 $56 $49,340 $181,640 $447,217 $671,188 $997,228 $1,136,182 $1,290,410

Pro Forma Balance Sheet

Pro Forma Balance Sheet
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Assets Starting Balances
Current Assets
Cash $1,379 $12,851 $15,428 $39,565 $19,497 $56 $49,340 $181,640 $447,217 $671,188 $997,228 $1,136,182 $1,290,410
Accounts Receivable $83,354 $58,112 $40,207 $63,077 $269,859 $551,022 $782,441 $920,210 $913,591 $700,264 $462,433 $239,261 $55,052
Inventory $657,640 $657,640 $657,640 $657,640 $625,640 $577,640 $505,640 $433,640 $361,640 $325,640 $293,640 $293,640 $293,640
Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Current Assets $742,373 $728,603 $713,275 $760,282 $914,996 $1,128,718 $1,337,421 $1,535,489 $1,722,449 $1,697,092 $1,753,301 $1,669,082 $1,639,102
Long-term Assets
Long-term Assets $1,056,350 $1,054,850 $1,053,350 $1,051,850 $1,050,350 $1,048,850 $1,047,350 $1,045,850 $1,044,350 $1,042,850 $1,041,350 $1,039,850 $1,038,350
Accumulated Depreciation $0 $1,500 $3,000 $4,500 $6,000 $7,500 $9,000 $10,500 $12,000 $13,500 $15,000 $16,500 $18,000
Total Long-term Assets $1,056,350 $1,054,850 $1,053,350 $1,051,850 $1,050,350 $1,048,850 $1,047,350 $1,045,850 $1,044,350 $1,042,850 $1,041,350 $1,039,850 $1,038,350
Total Assets $1,798,723 $1,783,453 $1,766,625 $1,812,132 $1,965,346 $2,177,568 $2,384,771 $2,581,339 $2,766,799 $2,739,942 $2,794,651 $2,708,932 $2,677,452

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