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BUSINESS PLANRMPALOMO Builders (Construction Company)I. Executive Summary1 Overview:RMPalomo Builders Company plans to become a leading provider of construction and renovation services in the local area of Sta. Rosa City. The company's overall strategy will be based on a continuing improvement proce...

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BUSINESS PLAN RMPALOMO Builders (Construction Company)

I. Executive Summary 1.1 Overview: RMPalomo Builders Company plans to become a leading provider of construction and renovation services in the local area of Sta. Rosa City. The company's overall strategy will be based on a continuing improvement process of setting objectives, measuring results, and providing feedback to facilitate further growth and progress. RMPalomo Builders will start with the local market, people, organizations and the government in Sta. Rosa City, then eventually hoping to spread their nets to clients from other cities/municipalities in Laguna and thereafter other provinces of the Philippines. The company will be known for working with smaller clients (various individuals) as well as working for bigger clients (various governments and organized private sector). RMPalomo is a registered company, with principal office located at B8 L16 PH 4E Golden City Subdivision, Sta. Rosa City, Laguna. The company's management is highly experienced and qualified - the owner and his trusted friends, who will lead the management team who have all accumulated over ten years of experience in the construction and engineering industry both local and international. The company is fully aware that starting a construction business requires huge capital base, which is why they prepared this business plan as a platform to show their perfected plans in construction business and eventually encourage financing institutions to lend the company an additional capital of P2,000,000 for financial flexibility. This supplemental financing is to be used in office improvements, tools and equipment purchases, purchase of service vehicle, and to cover-up expenses in the first year of operations.

1.2 Mission and Vision Statement Mission: RMPalomo strives to offer the finest quality design, site preparation, cost estimates, construction, repair, and alteration to clients needing small to large scale construction services, whether it be family houses, stores, apartments, office buildings, warehouses, public works, etc. RMPalomo maintains the highest standards of service in the commercial construction industry.

Vision: To be the number 1 construction company in Sta. Rosa City, Laguna, that continuously providing a world class construction services.

1.3 Goals and Objectives RMPalomo’s objectives for the entire operation include:    

To have up to three construction projects established within the first year To have two building renovation projects in progress by the end of the first year. To achieve at least 10% revenue increase yearly. To begin to market and offer services outside Sta. Rosa area on the start of second year.

1.4 Keys to Success The keys to the success for RMPalomo Builders are:    

Using the most updated materials and equipment to assure quality construction projects for ourselves and our customers. Educating the customers and providing valuable advice during the construction planning stages. Overseeing the logistics associated with a project, this can include arranging local transportation, booking meetings, etc. Assigning the actual work to an experienced and qualified third-party contractors and sub-contractors.

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II.

Company Summary

2.1 Company Description: RMPalomo Builders Company is a construction company that is set to undertake both small construction projects and massive construction projects for governments, private sectors and for individuals. Its principal office located at B8 L16 PH 4E Golden City Subdivision, Sta. Rosa City, Laguna. Our business offerings (small to large scale) are listed below; Repairs and/or construction of:      

Commercial Buildings Family houses Stores Apartments Warehouses Public works

2.2 Details: Founder of the business: Mr. Rodolfo Murillo Palomo Home Address: B8 L16 PH 4E Golden City Subdivision, Sta. Rosa City, Laguna Business Address: B8 L16 PH 4E Golden City Subdivision, Sta. Rosa City, Laguna Telephone No./ Cellphone No.: 0929-203-6598 Type of Business: Single Proprietorship

2.3 Background of Business: Mr. Rodolfo Murillo Palomo, the owner of RMPalomo Builders, has been interested ever since in finding a means to supplement their income. Mr. Palomo, a retired OFW, worked as a Manufacturing Engineer and Sales Engineer in abroad for a total of 11 years. He retired in the year 2017 and planning to put-up a family business, a construction company. Being an engineer, managing a construction company is not a new thing to him plus the fact that he has a lot of trusted friends who are engineers also, each in different fields of expertise.

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Due to the increasing demand for the construction business in the Philippines, the owner sees a profitable business ahead of him by expanding his existing construction business to cater. However, as of today, the owner has a limited fund to expand such profitable business idea and that is why the company is planning to borrow funds from the bank to support its financial requirements.

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III. Market Aspect 3.1 Market Description: The city of Sta. Rosa area is booming at this moment, overall business growth over the past five years has averaged approximately 9.5% and is expected to continue for at least the next ten years. This constitutes an attractive market for RMPalomo Builders. On the beginning of the years, the company will be concentrating on the customers that will provide them with the greatest margin, in other words those clients desiring construction and/or renovation of commercial buildings. This is the fastest growing segment of all the clients requiring their services. The other categories the company will serve include family houses, apartments, stores, warehouses, roads, public constructions, renovation and others.

3.2 Demand: 3.2.1 Total Demand: Total potential clients around the Sta. Rosa City area maybe estimated around 100 individuals/businesses who are looking for construction contractors. Out of that total population, let us say the company can get 2 clients in the first year, who are asking both for 2-storey houses. 3.2.2 Catered Demand and Uncatered Demand: As of now, there are 22 registered construction companies/contractors in Sta. Rosa City. If each company can cater an average of 3 projects per year, a total catered demand out of 100 potential clients will be 66 (3projects x 22 contractors), and therefore, leaving 33 potential clients remain uncatered, assuming they are looking for contractors around Sta. Rosa City only. 3.2.3 Target Demand: Out of the total uncatered demand of 33 potential clients, only 2 clients with medium scale requirements (2-storey building) are safely expected by the company this year.

3.3 Marketing Strategy: 3.3.1 Product, Place and Pricing: RMPalomo will sell its services to clients in the area of commercial and non-commercial construction and renovation. The company's staff will design specialized construction drawings that outline the schedule, work sequence and the materials needed for building and renovation construction projects. Owners, developers and general contractors will realize substantial savings in labor and material costs by using RMPalomo’s customized

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performance methods. RMPalomo's methods will offer complete adaptability at costeffective prices. The drawings that the company will furnish to the contractor will specify the order of assembly and construction, including the location of the strongbacks and joists, the location and actual loading of the ties, location of accessories and advise clients of the maximum allowable rate of concrete placement. RMPalomo Builders will start with the local market, people, organizations and the government in Sta. Rosa City, then eventually hoping to spread their nets to clients from other cities/municipalities in Laguna and thereafter other provinces of the Philippines. The company will be known for working with smaller clients (various individuals) as well as working for bigger clients (various governments and organized private sector). Part of business strategy is to ensure that the company will work within the budget of its clients to deliver excellent and world class construction projects. The company is quite aware that there are major players in the construction industry in the Sta. Rosa City who are not interested in small business deals, and that is why RMPalomo has positioned itself to take on such contracts. To enter the market with minimum overhead costs, RMpalomo plans to utilize in the first year of operation mainly trusted engineer friends for its building and renovation projects. Accident prevention will be the cornerstone of RMPalomo's safety commitment. The company will strive to eliminate foreseeable hazards which could result in personal injury or illness; at RMPalomo Builders, health and safety will not be compromised. Although the prices may not be outrageously lower than what is obtained in the industry, but the company hopes that whatever price they bill to their customers will be amongst the lowest they can get in the industry. The fact that they are going to be billing their clients lower than what is obtainable in the industry does not in any way going to affect the quality of their construction projects.

3.3.2 Promotion: • Tarpaulin and Online Advertising - The company will advertise regularly on popular social media sites, such as Facebook. Aside from online advertising, the company will place tarpaulin ads on the main street of the subdivision.

3.4 List of Customers: Individuals and businesses, who’s looking for a decent and reliable contractor around Sta. Rosa City area.

3.5 List of Competitors: About 22 construction contractors are registered in Sta. Rosa City. All of them are considered competitors aside from contractors that are not registered.

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3.6 Income Projection: Targeted Total Contract Projects for the 1st year Less: Estimates Cost of Service (Based on industry ave. 65%) Gross Profit Less : Operating Expenses (Based on industry ave. 12.50%) Net Income for the 1st year

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P P P

4,000,000 2,600,000 1,400,000 500,000 900,000

IV. Technical Aspect 4.1 Service Description: It is the duty of anyone going into business to identify how the owner intends to generate sales. It is for this reason that RMPalomo Builders is established with the aim of maximizing profits in the construction business and the company will go all the way to ensure that they do all it takes to attract the target market. RMPalomo Builders will generate income by offering the services - re pairs and/or construction of:      

Commercial Buildings Family houses Stores Apartments Warehouses Public Works

4.2 Business Location and Size: RMPalomo Builders Company is a construction company that is set to undertake both small construction projects and massive construction projects for governments, private sectors and for individuals. Its principal office located at B8 L16 PH 4E Golden City Subdivision, Sta. Rosa City, Laguna.;

4.3 Sketch of Business Site:

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4.4 Time and Days of Operation The RMPalomo Builders’ office is open at daily, from Monday to Saturday, 8am to 5pm, except declared non-working holidays. However, the office is flexible when the need for overtime is needed to accommodate the personnel working on fields beyond the office hours.

4.5 Building and Facilities The construction office will be placed in a commercial building located at B8 L16 PH 4E Golden City Subdivision, Sta. Rosa City, Laguna. The structure is the house of Mr. Rodolfo Murillo Palomo and currently renovated to become partly an office and partly house of the owner. 1 month before the business operates, the office part will undergo more improvements to suit with the needs and looks of a construction office, while Mr. Palomo will process other business legal papers. CCTV cameras will also be installed in all parts of the office.

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4.6 Estimated Project Cost

4.7 Sources of Funds

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The total pre-operating expenses amounting to P2, 500,000 will be financed 20% by the owner, and the 80% will be loaned from the bank, collateralized by his another property, a house and lot with current market value of P2,000,000 plus.

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V. Organization and Management The following section highlights ownership and future staffing expectations of RMPalomo Builders:

5.1 Organizational Structure: The personnel plan will be managed by Mr. Rodolfo Palomo. Having been in business for over 11 years, he has agreed to draw very low salaries for the first two years to offset some of the initial expenses in starting the business. For the first year, the company will hire 2 regular office staff, and temporary and parttime construction workers, and sub-contract with consultants and construction professionals from his network of friends to perform the variety of tasks needed.

5.2 Management Team Gaps: RMPalomo does not have an accountant or attorney on its staff. Income tax preparation and consulting services will be provided by the owner’s long term personal public accountant.

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VI. Financial Aspect The RMPalomo Builders has a long-term experience in the local construction industry. They are willing to invest heavily in this new company and their accumulated experience will insure success for the new venture. It will be important to watch closely the direct materials, direct labor and construction overhead, based on the industry average of samesized construction business entity, to assure that the company will meet his target profit. The financial plan is based on the following assumptions: a. The company assumes a conservative entrance and steady growth in the market. b. The company assumes financial expenses based on the industry average, same-sized construction business entity c. The company assumes there will not be an economic crash that would greatly hinder our target market's access to their personal luxury finds. The following sections describe the financials for RMPalomo Builders:

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VII. Environmental Aspect Compliance in City ordinances in terms of Sanitary and Environmental activities and certificates will be strictly adhered by the company.

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