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Construction Business Plan - P1

BY: Nguyen-Ngoan  |   July 25, 2018
Business Plan
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1. Executive Summary

Introduction

Fosse Commercial Contractors LLC is a small construction company formed from the merger of Fosse Painting & General Construction and West General Contractors. The company has successfully operated in the Houston area for the past ten years working on both small and large scale construction, repair, and alteration projects focusing on residential contracting. With the business boom that is occuring in our local area and the desire to improve overall profit margins, the company is planning to shift its target market from residential clients to the larger commercial customers. This business plan will lay out our goals and tasks to make this transition successful and create enough market share to succeed in this highly competitive market.

The Company

Houston based Fosse Commercial Contractors, LLC began in 1985 when Mr. Robert Fosse began his own company, Fosse Painting and General Construction. In 1993 the original company was merged with another small scale local company, West General Contractors and the company began to bid successfully for larger scale projects.

As part of its growth and altered focus, FCC is planning on changing its charter from a limited liability company to a class C corporation registered in Texas. This will allow FCC greater access to investment funds to fuel its growth.

Services

Fosse offers comprehensive services designed allow the company to do whatever it takes to finish a project. Some of these services include; design work, remodeling and alterations, permitting, site preparation, carpentry, cement foundations, painting, and plumbing and utilities installation. In addition, skills Fosse lacks can be subcontracted.

The Market

The Houston area is booming at this moment, overall business growth during the past seven years has averaged approximately 9.5% and is expected to continue for at least the next four years. This makes for a very attractive market for Fosse Commercial Contractors.

We will be concentrating on the customers that will provide us with the greatest margin, in other words those clients desiring office building construction. This is the fastest growing segment of commercial clients requiring our services. The other categories that we will serve include the restaurant segment, the special facilities segment, and all other potential commercial clients.

Financial Considerations

Fosse has only a small amount of debt and intends to stay that way. We expect to see increased profits from our market shift efforts by the end of Year 2. Over the next three years we expect lower profits as we make inroads into this tough market. We estimate that we will be able to reduce marginal costs and increase overall profitability by Year 3 or Year 4 as we grow and take advantages of economies of scale.

1.1 Objectives

Fosse Commercial Contractors plans to:

  • Significantly expand into the commercial and office building contracting market to improve profit margins and increase local market share.
  • Expand services and decrease costs by creating a permanent painting crew, as well as adding a bookkeeper and an accountant to our staff.
  • Begin to market and offer services in the San Antonio area in preparation for opening an office there in Year 4.

1.2 Mission

Fosse Commercial Contractors (FCC) strives to offer the finest quality design, site preparation, cost estimates, construction, repair, and alteration to clients needing large scale construction services, whether it be office buildings, warehouses, large apartment complexes, public works, etc. Fosse maintains the highest standards of service in the commercial construction industry.

1.3 Keys to Success

The local commercial construction market is booming at the moment. In order to achieve a defendable position in this environment, Fosse must concentrate on the following tasks.

  • Secure at least five large scale commercial contracts over the next three years.
  • Expand our customer base through expansion into other geographic areas to retain a sufficient level of profitability.
  • Increase marketing expenditures by 15%.

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