Wooderful Floors

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Hardwood Floor Refinisher Business Plan

Market Analysis Summary

Wooderful Floors has identified two market segments that it will target: remodelers and restorers. Remodelers are redecorating one or more rooms within a house, restorers are refinishing their wood floor to the original shine. These two segments are targeted due to their willingness to do a complete, refinishing job to their floor and to their environmental commitment.

Wooderful Floors operates within the wood floor refinishing service business. There are many different competitors in this niche that are described in detail in the Service Business Analysis, and Competition and Buying Patterns sections.

4.1 Market Segmentation

Two distinct market segments will be targeted for Wooderful Floors' marketing and sales campaign.

Remodelers
Home owners who are remodeling one or more rooms of a house. The remodeling is likely to include both floor work, wall coverings/movement, and possibly ceiling work. Each project is fairly extensive. Demographic data for this group includes:

  • 1st or 2nd time home buyers
  • >$60,000 in household income
  • Single family
  • Have lived in their home for at least 1.7 years
  • 65% have an undergraduate degree
  • 27% have a graduate degree
  • Are environmentally conscious
  • 17% buy organic produce
  • 52% participate in some sort of human powered activity such as hiking or cycling at least twice a week
  • 17% had a SUV but sold it out of environmental concerns

Restorers
Home owners refinishing the surface of their wood floor.

  • 1st time home buyer
  • Median household income is $51,000
  • Single family
  • Have lived in the home for 2.3 years
  • 57% have an undergraduate degree
  • Are environmentally conscious
  • 44% participate in a human powered activity twice a week
Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Remodelers 6% 98,747 104,672 110,952 117,609 124,666 6.00%
Restorers 7% 103,225 110,451 118,183 126,456 135,308 7.00%
Total 6.51% 201,972 215,123 229,135 244,065 259,974 6.51%

4.2 Target Market Segment Strategy

The two market segments were chosen as a way of identifying customers that would use wood floor refinishing services. The difference between the target segments is the extent of the project. Remodelers may be harder to reach than the restorers, since the remodelers have more demands on their time dealing with multiple decisions for the whole project.

As the demographic data in the Market Segmentation section indicates, both groups of customers have environmental tendencies. This is an important characteristic for Wooderful Floors because its water-based floor finishing treatment offers the most value to those that have environmental concerns.

4.3 Service Business Analysis

Wooderful Floors operates within the wood floor refinishing service business. This industry is primarily residential base since 90% of wood floors are found in private residences. This industry is primarily made up of refinishers who can make small repairs. A smaller segment are installers who also offer refinishing. The industry was valued at $588 million in 2002 in the USA.

The industry has many competitors. Some competitors have a minimum square footage requirement, most offer all types of finishing products, but others like Wooderful Floors may only offer one type of finishing product. Some companies compete on price, some on speed, some on service, some on finished product quality. Companies within the industry indicate that 19% of their business is from word-of-mouth referrals.

4.3.1 Competition and Buying Patterns

A search in the Yellow Pages finds twelve companies that offer wood floor refinishing. Four offer the water based-finishing product, but Wooderful Floors is the only company that exclusively offers the water-based product. Four popular competitors include:

  • Spotless Floors: This company installs wood floors as well as refinishes them. Customers must wait 4-6 weeks before a service appointment can be made.
  • Touch of Class Wood Floor Refinishing: They offer all types of floor refinishing, competing on price. Quality of work is average.
  • Nicolusi Brothers Wood Floor Refinishing: They only offer QuickBooks refinishing, claiming it is the only type of finish that they can recommend.
  • Floor Finishes: A high end, full service floor contractor, offering work in wood, tile, and carpet.