Water Tubes Plumbing

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Plumbing Business Plan

Strategy and Implementation Summary

Water Tubes will first increase visibility through networking activities.  Don will leverage his years as a local plumber working for a larger company.  Once Water Tubes has developed visibility, they will highlight their competitive advantages of professionalism and trim quality with a test project for the builder.  Generally, Water Tubes will be able to win over contracts after their initial display of workmanship.

5.1 Competitive Edge

Water Tubes has two competitive advantages that they will leverage to gain market share:

  • Professionalism. Fortunately for Water Tubes, professionalism seems to be absent among many plumbers skill sets.  Water Tubes will exhibit their professionalism in all aspects of customer interaction as well as job performance.  It is very common for plumbers to bid out for more items that they can handle at once.  This is done because the assumption is that they will not get all the jobs they bid for so it is likely that their job load will be balanced out in the long run.  Some times this works, other times it fails.  This is a common source of unprofessionalism that will not happen at Water Tubes.  Additionally, all employees will be indoctrinated into this customer-centric culture, ensuring that all interactions with anyone from Water Tubes will be a positive experience.
  • Trim Quality. This is the part of the job that is visible to the customer as opposed to the bulk of the work that is hidden behind cabinets and walls.  There are not a lot of plumbing companies that have consistently good trim quality.  This is one way that Water Tubes can easily stand out relative to the competitors.  Having high trim quality is also an easy way to impress home builders since they will have to fix any issues that are unsatisfying to home-buyers, so sloppy trim work will usually have to be remedied at some point, usually when it is inconvenient.

5.2 Marketing Strategy

As mentioned earlier in the Target Market Segment Strategy, Water Tubes marketing campaign will be based on both networking as well as advertising.

  • Networking. This will consist of meeting with builders that Don had worked with in the past, as well as others in the industry.  Don will chat with them and let them know about his current venture and request a trial build to prove himself.  Because the industry is so closely networked, whenever he runs into someone he will mention his new company.  This will spread the word rather fast as contractors tend to bump into each other all over town, both socially as well as professionally.
  • Advertising. Don will be running advertisements in the local home builders journal.  This publication is a printed resource that home builders will typically consult when they are in need of a contractor for a specific service in the construction of their house.  Because the readership is targeted and so closely interconnected, advertisements will be quite effective.  Don will also put an advertisement in the Yellow Pages, however Don believes that the advertisements in the trade journal will be more effective due to the closer demographics and behavior factors of the readership group.

5.3 Sales Strategy

Water Tubes sales strategy will be to get at least one job with the new builder to provide them with an example of Water Tubes work.  Based on the current competition, a display of Water Tubes competitive edges of professionalism and trim quality will likely be more than sufficient to turn a prospective customer into a long-term relationship.

5.3.1 Sales Forecast

The first month will be used to set up the business.  The second month will be used to train an employee as well as to undertake several jobs.  The third month will be used to train two more employees as well as do a few other jobs.  By the fourth month it is forecasted that Water Tubes will have a volume relationship with one builder.  Month four will also see a custom home built.  Month six will mark the development of another volume builder.  From month six on there should be a steady increase in sales activity.

Sales Forecast
Year 1 Year 2 Year 3
Sales
Non-custom homes $104,858 $151,987 $165,454
Custom homes $29,000 $38,765 $49,876
Total Sales $133,858 $190,752 $215,330
Direct Cost of Sales Year 1 Year 2 Year 3
Non-custom homes $10,486 $15,199 $16,545
Custom homes $2,900 $3,877 $4,988
Subtotal Direct Cost of Sales $13,386 $19,075 $21,533

5.4 Milestones

Water Tubes will have several milestones:

  1. Business plan completion.
  2. Office set-up.
  3. Training of all employees.
  4. The establishment of the second volume home builder.
  5. Profitability.
Milestones
Milestone Start Date End Date Budget Manager Department
Business plan completion 1/1/2001 2/1/2001 $0 ABC Marketing
Office set-up 1/1/2001 2/1/2001 $0 ABC Department
Training of all employees 1/1/2001 4/1/2001 $0 ABC Department
The establishment of the second volume home builder 1/1/2001 7/1/2001 $0 ABC Department
Profitability 1/1/2001 9/1/2001 $0 ABC Department
Totals $0