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Pyramid Engineering

Market Analysis Summary

A very broad and extensive market base exists which, if properly pursed, can easily allow us to achieve our stated revenue / growth goals. Our targeted client base is taken from the following sectors:

  • Governments – State, County, Local.
  • Private Sector/Commercial – Developers, Realtors, Banks, Building Owners.
  • Health Care/Senior Facilities
  • Educational Institutions – Private and Public universities, Private Schools.
  • Engineering/Architectural Firms – Subcontracting.

4.1 Market Segmentation

  1. Government:   After years of government downsizing, the need for local and state government work will continue to be steady, as state agencies and local governments begin to renovate existing facilities to handle their restructured programs. This means the addition of new facilities and renovated spaces. Government construction spending should be on the increase.
  2. Educational:  New school construction reached a high in the 1990’s, due to the ‘Baby-Boomer’ generation.   In spite of voter demand for reduced taxes, education appears to still be receiving a strong vote of confidence. Education construction projects show continued growth for the early 2000’s.
  3. Private and Commercial Sectors:  The emphasis is predominately on renovation of existing facilities, not new construction. Companies will continue to extract more efficient use of existing space, as they re-engineer existing operations through new work patterns. The retail industry is benefiting from an effort by many cities to rejuvenate core business districts.  Renovation of existing centers to attract or retain shoppers is the key theme.   Many retail chains are investing to give face lifts to older stores to remain competitive.  The growth of mega retailers continues, with smaller stores on line for less populated areas.
  4. Health Care / Senior Facilities:   Nationwide, managed care is in a state of flux. This new direction is fueling the potential growth and modification of health care delivery and health care facilities. Today, care giving and health maintenance have become natural extensions of existing businesses that include primary care, long term care, therapies, home care, hospice and respite care. Many other companies who have been on the sidelines over the years are now benefiting from expansion, including ancillary services, such as pharmacies, laboratories, medical equipment and drug research facilities. Investors and financial merger potentials are being attracted to larger scale ventures in the area of health care / senior facilities.
  5. Architectural and Engineering Firms: As a group, we have good working relationships with a number of architectural and engineering firms throughout the Northeast. We have consulted on several major projects over the last two years, and will continue to expand this segment of our services. 
Architectural engineering business plan, market analysis summary chart image

Market Analysis
2004 2005 2006 2007 2008
Potential Customers Growth CAGR
Educational 3% 200,000 250,000 300,000 262,656 269,222 7.71%
Health Care / Senior Facilities 0% 75,000 75,000 75,000 50,000 50,000 -9.64%
Commercial 0% 30,000 30,000 30,000 30,000 30,000 0.00%
Government 0% 30,000 30,000 30,000 30,000 30,000 0.00%
Program Management 0% 5,000 5,000 5,000 5,000 5,000 0.00%
Contractor / Design Build 0% 5,000 5,000 5,000 5,000 5,000 0.00%
Sub Contracting 0% 5,000 5,000 5,000 5,000 5,000 0.00%
Total 3.02% 350,000 400,000 450,000 387,656 394,222 3.02%

4.2 Target Market Segment Strategy

All of our target market segments have buildings or facility needs which require skilled engineering work to design and implement. They need engineers who understand their needs, their budget constraints, and the legal and code requirements for their facilities’ purposes and locations.

Our engineers are certified, with many years of experience in their fields, and ongoing relationships with government developers and planners, commercial developers, and local school districts throughout the Northeast. We will use these contacts to learn of new projects, develop competitive bids, and provide high-quality services to these market segments.

In addition, architectural and engineering firms often have need additional engineering consulting. Architects will always need skilled engineers to make their designs a reality, and large engineering firms sometimes have more work than they can handle.

In targeting work established architectural firms, our strategy is to offer them a viable resource from which to draw upon. We can undertake the entire mechanical, electrical, plumbing, and fire protection engineering process for their architectural projects.

4.3 Service Business Analysis

The engineering, design and consulting business consists of many smaller consulting organizations and individual consultants for every one of the few dozen well-known architectural / engineering companies.

Consulting participants range from major international name-brand consultants to hundreds of  individuals. One of Pyramid’s challenges will be establishing itself as a “real” engineering, design and consulting company, positioned as a relatively risk-free corporate purchase.

4.3.1 Competition and Buying Patterns

The key element in purchase decisions made at the Pyramid client level is trust in the professional reputation and reliability of the engineering firm.

Pricing of projects and billing rates are surprisingly variable. In engineering at this level, it is easier to be priced too low than too high. Clients and potential clients expect to pay substantial fees for the best quality professional advice. The nature of the billing, however, is sensitive. Clients are much more likely to be offended when a job starts at $20K and ends up at $30K because of overruns, than if the same job started at $30K or even $35K.

Clients rarely compare consultants directly, looking for two, or more, possible providers for a proposed project or job. Usually, they follow word-of-mouth recommendations and past reputation, rather than selecting from a menu of possible providers.

The most important element of general competition, by far, is what it takes to keep clients for repeat business. It is worth making huge concessions in any single project to maintain a client relationship that brings the client back for the future projects.