The Granite Guys Business Plan PDF

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The Granite Guys L.L.C. Business Plan Owner/Operating Manager

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A. Executive Summary ............................................................................................................... 4 A1. Company Identification ........................................................................................................ 4 A2. Mission of the Company ...................................................................................................... 4 A3. Business Goals ..................................................................................................................... 4 A4. Keys to Success .................................................................................................................... 5 B. Company Summary ............................................................................................................... 6 B1. Industry History .................................................................................................................... 6 B2. Legal Form of Ownership ..................................................................................................... 7 B3. Location and Facilities .......................................................................................................... 7 B4. Management Structure.......................................................................................................... 8 B5. Products and Services ......................................................................................................... 11 C. Market Analysis ................................................................................................................... 12 C1. Target Market .................................................................................................................... 12 C2. Industry Analysis ............................................................................................................... 13 C3. SWOT Analysis ................................................................................................................. 16 D. Market Strategy ..................................................................................................................... 18 D1. 4Ps ................................................................................................................................... 118 D2. Price List............................................................................................................................ 21 D3. Promotional Strategy ......................................................................................................... 21 D4. Sales Forecast .................................................................................................................... 23

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E. Implementation Strategy ....................................................................................................... 25 E1. Overall Strategy .................................................................................................................. 25 E2. Monitoring Plan .................................................................................................................. 27 F. Financial Statements and Projections .................................................................................. 29 F1. Forecasted Profit and Loss Statement ................................................................................. 29 F2. Forecasted Balance Sheet.................................................................................................... 29 G. Financial Report .................................................................................................................... 30 G1. Financial Projections .......................................................................................................... 30 G2. Financial Position ............................................................................................................... 31 G3. Estimated Capital/Investment Needs .................................................................................. 31 H. References .............................................................................................................................. 33

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A. Executive Su mmary

A1. Company Identification: The Granite Guys custom fabricate and install natural stone products to the specification of the customer. They will specialize in new construction and remodeled kitchens and bathrooms. The business is located in Phoenix, AZ, and is a convenient five-minute drive to both; Interstate 10 and AZ101.

A2. Mission of the Company: The Granite Guy’s mission it to assist customers in transforming their houses into castles. This will be accomplished through respect, affordable pricing, and high-quality workmanship.

A3. Business Goals: One way to show respect is by being on time, that is the reason or fist business goal is to have a 95% or higher on time completion rate. This will be monitored so deficiencies can be identified and corrected.

Pricing of our services need to be fair to both the consumer and The Granite Guys. Our second goal will be to benchmark industry prices to ensure The Granite Guys price is within 10% of the industry average. This will be reviewed and adjusted on a biannual basis.

The final goal is to guarantee quality workmanship; it will be monitored by tracking the number of times The Granite Guys are needed to return and correct an issue. The goal is to keep call

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backs to under 3% of the total number of completed jobs. Ensuring quality workmanship will also show the consumer they are respected and help to keep the prices affordable.

A4. Keys to Success: The following are the keys to success for The Granite Guys:

1. The first key to success is to follow the “Golden Rule”, treat others the way you would like to be treated. Consumers usually know what they want, the big question is; Who will do it? The Granite Guys need to be respectful, timely, honest, transparent, and display a work-ethic unrivaled by their competitors. Ultimately, it will be these criteria they will be judged on when consumers are deciding on a contractor. These positive behaviors will also payoff for future business ventures, as referrals from satisfied customers is second to no other advertising techniques in the construction industry. 2. The second key to success is to exploit trends in the construction market. Within the construction market, sub markets such as commercial, residential, new construction, and remodeling exist. Knowing the ebb and flow cycle of each submarket will be imperative for the success of Granite Guys. As one submarket shrinks marketing efforts, will be redirected to the submarket that is growing. 3. The third key to success is to set and maintain high quality standards. Homeowners that use natural stone want to be awed by its beauty and elegance. Countertops that have imperfections and flaws detract from that experience. That may cause the costumer to have a negative impression of The Granite Guys, which could lead to unwanted reviews and less referrals.

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B. Company S ummary B1. Industry History: According to Brain Marker and Dolores Pereira (2016), natural stone has been used as construction material since approximately 4700 BC, in Egypt. The earliest use was primarily for structures that would be revered by members of society. It included buildings and artwork that exemplified the greatest attributes of religions, governments, royalty, wealthy families, and even death (Marker and Pereira, 2016). The use of natural stone in construction remained an option for only the richest people and organizations for thousands of years. The cost of quarrying and fabricating the stone made it prohibitive to most of society. It wasn’t until the 1990s that natural stone started to go mainstream in the United States. This occurred for two reasons: First, the cost of quarrying and shipping natural stone had significantly decreased. Technology from new and improved cutting saws and earth moving machinery greatly improved the efficiency of quarrying the stone. It also made it easier to cut the stone into manageable and standard sized slabs, making it easier and cheaper to transport the stone to anywhere in the world (Atler, 2011). The second reason is due to a shift in what society wanted in a house. New home buyers were looking for and buying homes with an open floor plan. Kitchens were not cordoned off from the rest of the house, the main living spaces flowed from one room to the next. In these types of homes often the kitchen was the focal point, it was put on display like no other time in the past. With the price dropping and need for elegance and beauty, that only stone can provide, natural stone has become the norm and not the exception in kitchen counters.

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B2. Legal Form of Ownership:

The Granite Guys have opted to form a Limited Liability Company. Benefits include; limiting the liability and protecting personal assets of the owner(s), fewer legal formalities to file at startup and maintain during the life of the company, and it allows the company flexibility in the way taxes are levied against it. To create a Limited Liability Company in Arizona; the name of the company must be available to use, and Articles of Organization and a fifty-dollar fee must be filed with the Arizona Corporation Commission. Arizona Corporation Commission also requires the type of management structure be identified, it can be managed by either; a member of the LLC or managed by a hired manager. Duration of life for the LLC must be indicated, it may be listed as either perpetual or a date of termination should be established. If the company expands as projected, the LLC ownership form will be reevaluated and contrasted against different types of Corporation ownership.

B3. Location and Facilities:

The fabrication shop for The Granite Guys will be located in Maricopa County, AZ (the greater metro Phoenix area). Maricopa County is centrally located to market areas The Granite Guys intend to serve. This location will also allow for flexibility in choosing suppliers and allows for multiple contingency plans in the event the current supply chain is interrupted. A warehouse in a “light industrial zone” as defined by the Maricopa County Zoning Ordinance, will be located and rented. Operating in a light industrial zone eliminates the need for special permits or waivers that would be required if operating outside of this zone.

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The space rented must have a minimum of 7,500 square feet, to allow for machinery and storage of new materials, and works in progress. The space will not exceed 10,000 square feet due to the additional costs associated with larger warehouses. The property will have at least one functioning restroom, and a separate room that employees may utilize for breaks. The property must be compliant with all local, state, and federal regulations. The amount of power to the building will be verified to ensure it meets the needs of the machinery utilized to fabricate the countertops. Internet of at least 50 Mbps download speed must be available, to allow for the real time tracking of supplies and materials. It must be located within a five-minute drive of a major State or Federal North/South Highway such as the AZ 101 and a major State or Federal East/West Highway such as Interstate 10. A garage door at least 12 feet tall and 16 feet wide will be required at one end of the building. A paved parking lot large enough to hold at least 15 cars, 2 trucks, and 2- 18 feet trailers must be made available. The entire property will be enclosed with 8-foot chain-link fencing, and the gate to the parking lot will have an electronic key pad opener accessible from any standard size vehicle. Optimal rental price will be less than $.50 SF/month, a maximum rental price of $.55 SF/month has been established to ensure operational costs remain within budgetary limits. A two-year lease will be requested with an option to extend for an additional one year.

B4. Management Structure: The Granite Guys will utilize a Functional Organizational structure. Employees will fall into one of three functional areas; Sales, Production, or Administration. Final decisions are the responsibility of the Owner/Operating Manager. Responsibilities of the Owner/Operating Manager and the positions that report directly to him include:

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The Owner/Operating Manager is responsible for the day to day operations of the organization. He will ensure the products being sold and installed meet the standards of the organization, and that production is completed efficiently to ensure that financial objectives are being met. He is responsible for establishing standards and policies so that employees are informed of expectations they are required to uphold. He will serve as a liaison between The Granite Guys and any outside consulting organizations. He will also serve as the customer service representative for the company, all complaints will be directed to him. He will be responsible for the financial wellbeing of the company and ensure all employees and suppliers are paid by the agreed upon terms. He will strategize for the future, with the ability to recognize and capitalize on opportunities and threats in the market.

The Office Manager will report directly to The Owner/Operating Manager. Duties the Office Manager is responsible for include: •

bookkeeping for accounts payable and accounts receivable,

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ensuring employee time cards are correct,

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maintaining office equipment, supplies, and technology,

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hiring and firing of office staff,

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serve as point of contact for The Granite Guys to outside suppliers and customers,

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serve as point of contact for The Granite Guys employees, as a Human Resource consultant,

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schedule and organize meetings,

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establish and submit an annual office budget,

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•

and establish, implement, and enforce office standards and policies.

The Sales Manager will report directly to the Owner/Operating Manger. Duties of the Sales Manager include: •

establishing and coordinating efforts of the sales staff,

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hiring and firing of sales staff,

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establishing and maintaining relationships with building contractors,

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devise and implement a marketing plan,

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establish sales goals and track actual sales,

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coordinate with the Production Manager to ensure sales are not outpacing production,

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establish and submit an annual sales and marketing budget,

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and establish, implement, and enforce sales standards, techniques, and policies.

The Production Manager will report directly to the Owner/Operating Manger. Duties of the Production Manager include: •

coordinating efforts of the production staff,

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hiring and firing of production staff,

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establish fabrication and installation schedules that ensures on time completion,

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ensures fabrication and installation quality standards are being met,

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coordinate with the Sales Manager to ensure due dates are being met, and that sales are not outpacing production,

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material and supply ordering,

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•

maintaining production equipment,

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establish and submit and annual production budget,

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and establish, implement, and enforce production standards and policies.

B5. Products and Services:

The Granite Guys fabricate and install custom kitchen and bathroom countertops, vanities, tubs, back splashes, showers and any other flat surface the customer would like covered with natural stone. We specialize in customizing natural stone products to fit the need of the consumer. Aside from granite, other natural stones we work with include: marble, quartz, limestone, crystalline and silestone. The services we provide include; templating the area to be covered, fabricating the natural stone to the template, polishing and finishing the stone with clear protective cover, and installing the product to the specifications of the customer.

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C. Mark et Analysis C1. Target Market: The target market includes both, other businesses and the end user of the product. Other businesses The Granite Guys will market include; custom home builders, commercial and industrial builders, general contractors that perform remodels, and interior decorators. Even though The Granite Guys will primarily be marketing these other businesses, they will need to research the primary market of the contractors. If a contractor’s primary market is outside the demographics of those likely to use natural stone countertops, it would be a waste of resources to market those contractors. This is the reason The Granite Guys has found it imperative to identify the end users that are more likely to want fabrication and installation of natural stone in their homes.

The primary end user market will be 25-64 year-old married-couple families, these demographics were chosen for two reasons. According to American FactFinder (2015), the 25-44 year old age bracket and the 45-64 year old age bracket comprise over 70% of the population in Maricopa County, AZ (greater Phoenix area). They also have the highest median incomes at $58,452 and 68,173 respectively. Couple that with the statistic that married-couple families represent 71.9% of the families in Maricopa county with a median income of $80,851, the largest of all the identified family groups by American FactFinder (2015). Not only are these the users with the largest demographics and make the most money, they are also more likely to buy a new home than the other demographics.

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According to the National Association of Realtors (2015), 32% of home buyers are those labeled as Gen Y (born between 1977-1994), followed next by Generation X (born between 1966-1976) with 27%. The young baby boomers (born between 1955-1965) round out the top three with 16% (National Association of Realtors, 2015). Combined they account for 75% of home buyers in the United States.

C2. Industry Analysis: Construction spending in the United States has been increasing at an annual rate of roughly ten percent. The graph below represents the amount of money spent annually on construction projects in the United States between 2011-2015, the statistics for the graph were obtained from the US Census Bureau (2016).

Annual Spending on Constructions Projects in the United States $1,200.00 1097.3

Billions of Dollars

$1,100.00 993.4 $1,000.00 910.8 857

$900.00 $800.00

778.2

$700.00 $600.00 2011

2012

2013

Year Construction Spending Trend

2014

2015

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The trend doesn’t st...