Twin Brothers Construction

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Commercial Contractor Business Plan

Strategy and Implementation Summary

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. The owners of TBC want to emphasize to their potential customers that they are more than general contractors, they are complete construction coordinators.

TBC plans to advertise in magazines, newspapers, and radio. Initially a website with information on the company owners, their construction background, and contact information will be available online. References to the website will be mentioned in all other forms of advertising. Channels used to reach market segments include: sales associates, the Internet and direct mail.

In addition, The table and chart below outline the company's sales forecast for FY2005-2007. In our sales forecasts, the cost of sales includes only direct labor costs.

5.1 Competitive Edge

The company plans to become a leading provider of construction services in the local area. To achieve this, TBC will invest in many ways that will pay off in competitive advantages for its customers, for example:

  • Pre-job conferencing upon request
  • Assist in technical or conceptual design
  • Assist in supervision when other contractors are employed
  • Organize project supervision facilities and staff
  • Organize delivery of purchased materials
  • Furnishing after-market products

5.2 Marketing Strategy

Our marketing strategy is the key to our success:

  1. Emphasize our name and unique services through advertising, including a Web page of contact information. An amount of $10,000 for the design of the website has been included in the Start-up expenses with ongoing maintenance costs estimated monthly.
  2. Focus on commercial building and renovation projects as our initial and primary target markets.
  3. Use completed projects to showcase our customized construction project management to prospective clients.  

5.3 Sales Strategy

Sales success requires planning. The company will formulate its sales strategy and tactics to achieve sales success by following these steps: 

Step 1 - Analyzing The Company's Potential: Step through a structured process to help us develop a sales strategy.

Step 2 - Strategize Around Strengths: The description of sales activity will be analyzed to produce a report on factors impacting sales potential and ways to strengthen this potential.

Step 3 - Develop Tactics: Receive guidance to develop a comprehensive tactical plan to achieve success.

Step 4 - Measure Our Past Success: Develop key measurements that mark the progress of financial estimates that guide our growth.

Final Step - Employ An Action Plan for Success: Provide sales force with a tactical plan that is aligned with management's strategic objectives.

5.3.1 Sales Forecast

The company will start its operation in the first year by focusing on two areas:

  1. Direct construction work
  2. Renovation of existing buildings

Starting later in the second year and continuing into the third year the following areas of operation will be added:

  • Renting of Industrial Spaces
  • Sale of components and other building materials and components

The following table details the forecasts.

Sales Forecast
Year 1 Year 2 Year 3
Sales
Direct Construction Projects $135,000 $175,000 $218,750
Building Renovations $123,000 $153,750 $192,188
Building Rentals $0 $75,000 $200,000
Sale of Components and Goods $0 $75,000 $150,000
Other $9,000 $10,000 $12,000
Total Sales $267,000 $488,750 $772,938
Direct Cost of Sales Year 1 Year 2 Year 3
All construction work $54,000 $70,000 $87,500
Renovations $49,200 $61,500 $76,875
Rentals $0 $15,000 $40,000
Sale of Components and Goods $0 $30,000 $60,000
Other $9,000 $1,000 $1,200
Subtotal Direct Cost of Sales $112,200 $177,500 $265,575

5.4 Milestones

The milestones table describes the steps required for the beginning of operations. Steps might take longer than estimated, however the owners and the staff will do their utmost to adhere to this timetable.

Milestones
Milestone Start Date End Date Budget Manager Department
Establishing Permits 1/1/2005 1/15/2005 $500 Chairman Department
Establishing office 1/15/2005 1/20/2005 $500 CEO Department
Preparing Web Site 1/15/2005 2/15/2005 $1,000 Consultant Department
Purchasing work equipment 1/15/2005 2/25/2005 $6,000 CEO Department
Hiring staff 2/1/2005 3/1/2005 $0 Chairman@CEO Department
Purcase Initial Inventory 2/15/2005 3/25/2005 $20,000 Chairman&CEO Department
Receive Stock 3/1/2005 4/1/2005 $500 Staff Department
Start Operation 4/1/2005 4/30/2005 $0 Everybody Department
Totals $28,500