Comgate

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Remodeling Business Plan

Management Summary

Like other mill shops with less than $1 million in sales, the owner of Comgate has had to wear several hats and shuttle back and forth between production, site visits, the office, and client calls. The company is in the process of making major strides in establishing a more classical managerial structure, as the following chapters will explain.

6.1 Organizational Structure

Ideally, the owner of the mill shop should have three major functions:

  1. Identify and find customers.
  2. Maintain proper balance of people, plant and machines.
  3. Innovate, and set policies.

A plant manager should be responsible to see that the production staff and the available machinery work together at maximum efficiency. He needs to anticipate questions, answer them, and keep production rolling with a minimum of waste and a minimum of down-time. The CEO is now doing that when he is available.

An office manager should handle all the administration and coordinate well between the plant manager and the CEO. A need for the plant manager is well recognized by management, but a certain financial position needs to be reached to afford him. This position is planned to start in April, 2001, which will help substantially to free up needed time for the CEO to carry out the above listed major duties.

The office manager has, until recently, been performing the bookkeeping. This has taken up too much of his time, plus he is not trained in accounting practices. It has taken until July to get tax filing done, and at a heavy cost in accountant's charges. This has since been handed over to J&R Associates. Procedures have been set up which will serve as a beginning for a procedures manual. A courier is sent each week from J&R Associates to track all costs associated with a job. This is absolutely essential because without this reliable feedback, one can never be sure how accurate the job cost estimates are when putting together a bid. The handling of inventory is also dealt with in the procedures as well as paperwork flow to insure correctness in billing. A costing/pricing scheme has been devised to assure correct all-in costing and to insure that a fair profit margin is built in to the pricing.

The recent addition of a contract CAD man, has helped to ease the work load on the CEO, as there are fewer questions from production staff as a result of the very accurate drawings and cut lists.

6.2 Management Team

The management team, after the addition of the production manager in April, 2001, should be complete until a higher level of sales has been reached. At a level of approximately $1.5 million in sales, Comgate should add a project manager.

6.3 Management Team Gaps

At the present time, a production manager is needed. Without him, the CEO cannot devote enough of his time to CEO issues (see Chapter on Organization Structure). It would have been ideal to promote one of the production staff to that position, but none of the present four workers is suitable for the position. It is hoped that a production manager can be found by April, 2001. His salary and benefits have been provided for in the projections.

Another gap is project manager. The company needs to grow to be able to afford him. The project manager would follow everything from the point of "hand-off" (once the bid has been won) through conclusion. He would confer with architects, handle change orders, examine every facet: warranties, retainage, final payment, punch lists, access to premises, lifts and hoists, check everything. At the moment the CEO is doing this as best he can with the many other matters on his plate. The position of project manager becomes increasingly important when the company has multiple projects.

6.4 Personnel Plan

Milling Costs Personnel:
As of the writing of this plan, sales orders are strong and all four production staff are expected to be fully employed on a 40-hour/week basis. For the period of January through September, an average monthly labor amount will be entered based on the totals from the financials as of the end of September. A production manager/project manager has been projected beginning April, 2001, at an annual salary of $60,000 (see Chapter on Management Team Gaps).

Sales and Marketing:
Andrew Comins's salary of $40,000 is entered here although he is general manager/owner. He will continue to wear several hats until a plant manager and a project manager can be found.

General and Administrative Personnel:
The office manager, **Stacy Greer, earns $34,320 per year.

** Names have been changed for confidentiality.

Personnel Plan
2000 2001 2002
Production Personnel
**David Malkinson $39,066 $41,604 $41,604
**Simon Lang $37,335 $34,680 $34,680
**Brian Mason $8,670 $34,680 $34,680
Production/Project Manager $0 $45,000 $60,000
**Charles Davidson $38,355 $38,760 $38,760
Subtotal $123,426 $194,724 $209,724
Sales and Marketing Personnel
Andrew Comins $39,996 $40,000 $40,000
Other $0 $0 $0
Subtotal $39,996 $40,000 $40,000
General and Administrative Personnel
**Stacy Greer $34,320 $34,320 $34,320
Other $0 $0 $0
Subtotal $34,320 $34,320 $34,320
Other Personnel
Name or Title $0 $0 $0
Other $0 $0 $0
Subtotal $0 $0 $0
Total People 6 7 7
Total Payroll $197,742 $269,044 $284,044