Concrete Coating Company
Techno-Coatings USA

4653 Hidden Knoll
Oxford, Mississippi 38677

Using this business plan, the owner of a company that uses concrete to restore, protect and beautify surfaces quickly raised $150,000 of the $250,000 he eventually hopes to secure from investors.

EXECUTIVE SUMMARY

Mr. Gary Wright, sole shareholder of Techno-Coatings USA (TCU), wants to borrow $250,000 and spend it over a period of 15 months. These funds will be used to grow his business. He will accomplish this growth by adding three additional crews and a manufacturing component for custom concrete work that will enable him to take on more and larger jobs. Growth is expected to hit $3,000,000 by the end of year 2.

Today's climate is extremely favorable to his type of business. New, larger custom homes are popular; remodeling older homes is still a growing industry and commercial renovations are finding concrete rehabilitation an economical choice while enhancing the appearance of the floors and/or walls.

This growth will require that he fully outfit the new crews; hire supervisors, stock necessary materials and supplies and have operating funds to cover expenses during the training and ramp-up periods.

In return, Mr. Wright will pay 12% interest annually on the investment for a period of five years. Investors can leave their monies in for the full period or withdraw at any time after two years. Since Mr. Wright basically is the company, insurance will be procured and maintained for the life of the investment to cover all monies involved. This insurance will cover both death and inability to perform his job.

COMPANY HISTORY

This is Gary Wright's second year of operation. In that time he has created an excellent reputation for himself and his company based on professional and creative completion of each cement-based overlay project.

His "can-do" attitude has enabled him to set himself apart the average concrete refinishers or painters in the area. Remodeling was the initial area of work, but new home construction soon followed. Commercial renovation is becoming a popular and economical alternative to tile and carpet. Self-leveling overlays offer tremendous benefits that explain the widespread use in many casinos, hotels, restaurants, shopping malls, resorts, theme parks and office buildings.

NOTE: In situations where a concrete slab has cracked, spalled or aged, cementicious overlayment can provide a solution when compared with the time-consuming and cost alternative off ripping out the old slab and pouring new concrete. Self-leveling overlays, flowable, polymer-modified cementicious toppings have the huge advantage of setting within a few hours. Provided they are properly and regularly maintained, self-leveling overlayments will also last indefinitely, which offers a clear advantage over carpet, tile, vinyl and other more traditional floor coverings. Additionally, overlays are considerable less expensive than pricier alternatives such as granite, terrazzo or marble.

In central south Mississippi, Gary is in the forefront with this technology. With the advent of new paints, polymers and techniques, contractors needed some time to figure out what to do with these new products. Despite this, they're still learning and eager to realize the opportunities. Combine this with the improved willingness to spend on home improvements, and Gary has a winning combination.

OBJECTIVES

Gary's goals are to achieve sales of approximately $700,000 in Year 1 and over $3,000,000 in Year 2. He will accomplish this with four crews of experienced contractors primarily from the painting field. By far the majority of his people will be mature workers who realize that this is their last chance to make money and prepare for retirement. It is Gary's intention to retain his employees by creating a two-way commitment that works to everyone's benefit—including but not limited to competitive pay; a simple retirement plan; and recognition/bonuses for work well done.

His long-term goals are to create a niche for TCU in which he can offer new, creative designs and products while his staff performs the daily operations. His artistic designs coupled with the excellent training and execution of staff will ensure business continuity.

The overall objective for TCU is to create a sustainable organization that provides a good living for Gary and allows him to enjoy his family. TCU must also 1) provide a good living for his employees and laborers, and 2) provide a valuable service to home and business owners throughout Mississippi who wish to improve the intrinsic and aesthetic values of their properties.

PRODUCTS & SERVICES

There are three areas for his services: older home remodeling, new home construction and commercial renovation.

There is a great demand for materials and techniques designed to restore, protect and beautify concrete surfaces that have deteriorated due to normal aging, acid rain, salt attack and high traffic. Older homes and commercial buildings with cracks, stains, uneven surfaces or simply needing a face-lift are great candidates. He has even been working with counter tops, sinks and bathtubs for interior drama. Then consider new construction that wants the cost and durability of concrete with the look of tile or natural rock. (See the list of TCU services later in this plan.)

What we are discussing here is the implementation of ideas. Gary's forte is listening to what the customer wants—be it patio, living room floor, building entrance or bathtub—and converting that idea to reality.

His medium is concrete, his palette consists of paints, stains and polymers and his brushes are stamp kits, rakes and brooms. What he creates become integral parts of the buildings and items of pride to their owners.

Gary has taken a conventional business and raised it to an unconventional level; adding beauty and drama to horizontal or vertical surfaces.

MARKET ANALYSIS

Gary currently services a geographical market comprised of central, south Mississippi. His current size limits his range; but so far he has more work than he can handle.

A current list of customers who can keep his current and future crews working regularly is found later in this plan.

Once his crews are trained, jobs can be handled anywhere in Mississippi. A distinct advantage to the services is the fast-track turnaround time on most renovation projects. Even new construction schedules (concrete curing) can be adhered to fairly easily allowing work to be negotiated months out.

Competition

Suppliers of materials are offering paint and concrete contractors training in how to apply their products. Local contractors who used to spend their time repairing concrete in preparation for laying carpet are now being asked to add decorative finishes and skip the carpet.

Suppliers are not moving into the DIY (Do It Yourself) Market as there are too many ways to spoil a job. Warranty issues have always been a concern and even professionals new to the business have problems. Correct substrate preparation is mandatory. Too much moisture content will ruin a job, just as not following specifications exactly!

So competition is limited to the trades, primarily concrete finishing and painting contractors. Except for the largest companies, most contractors are either residential or commercial with little crossover. The larger companies can afford the training charged by suppliers and many will probably have some crews trained for their commercial divisions. Employees of contractors will also be taking jobs on the side. Small contractors may enter with minimal, if any, training. Some of these will "dirty" the business with poor workmanship.

Competition exists—always has, always will. But this is too hot of an area to ignore. Success will depend on two things: marketing and word-of-mouth recommendations.

OPERATIONS

Marketing & Sales

Gary needs to spend more time marketing the business. This is why the first supervisor will be his father-in-law, Sonny. Officially retired from his first career but still full of energy and ideas, Sonny has worked with Gary and understands the business. He also has extensive supervisory experience gained from his previous career. Gary will still design the job and mix the product for it, but will be freed from the routine preparation.

The first resource needed is a color brochure that can be for general distribution. The second resource is a more complete portfolio of jobs with before and after pictures, especially for the larger commercial and custom jobs. Both will require a professional photographer and a layout designer. The third resource will be actual samples of the possible finishes: field stone, brick, tile, acid-stained (with some color differentiation in all categories). As manufacturing starts, a website will aid in promoting the designs and concepts developed by Gary and his crews.

Word-of-mouth advertising has worked well so far in the residential sector. The brochures left behind with satisfied clients can be given out. Gary's work will be to get the brochures out to new-home builders and general contractors as well as to hotel, mall and office building owners and managers.

The promotion will focus on the substantial cost savings as well as quick turnaround time. Gary's time spent in sales will prove invaluable here. He knows his products and how to present them and himself. Armed with cost analyses of the various options his renovation services look really inviting. We must also look at the intangible to be marketed—the skill to create a one-of-a kind solution. The portfolio will assist, but the ability to listen and understand what a client wants and then deliver something a client falls in love with is a real factor here. When we spoke of competition, we also have to look at what separates TCU from the competition, and Gary's ability to work and think "out of the box."

Management Summary

Gary Wright is the only management at this time. He is an experienced Top Sales Achiever with a solid record of performance in setting benchmarks and a proven set of skills that include:

• Excellent Presentation
• Strong Closing
• Sales Process Knowledge
• Relationship Building
• Customer Service
• Staff Training
• Problem Solving
• Market Penetration

His principal personal strengths include a high energy level, an ability to set and attain challenging goals, and a healthy sense of urgency. He is a team leader and team player who can be counted on to attain better than expected results.

From 1996 to 2003, Mr. Wright was employed by Good Deal Enterprises in Jackson, Mississippi. He progressively advanced to positions of increased challenges and responsibilities in support of car sales operations that include: Sales Representative, Sales Manager, and General Sales Manager. In this role, he was selected by senior management to direct the expansion of this dealership from 2 acres to 7 acres and oversaw all aspects of construction. He concurrently hired and trained a staff of 27 personnel that included the sales and support staff. During this time he consistently met established construction goals while continuing to increase sales of new and used vehicles.

Before this, Mr. Wright was employed as a Food Broker for L&M Foods in Writer, Mississippi. While in this position, he aggressively marketed the company's preprocessed meat products to major accounts in Mississippi including Kroger's, H-E-B Grocery Company, Albertsons, Super K-Mart, Super Wal-Mart, and other grocery companies.

Gary's first supervisor will be his father-in-law, put in place to manage his crew. The second crew will be added within four months and will have its own supervisor. Ten months into Year 1 there will be a third crew and supervisor. Six months into Year 2 will be a fourth crew and supervisor. It is planned that most, if not all, supervisors will come from within the crews.

Gary will continue with the basic office functions, and be helped by his wife the first year. He will also continue to be advised by his accountant. In Year 2, a full-time administrator will need to be hired to free additional time for Gary.

Here is a picture of TCU in five years. Gary is still the primary figure, spokesperson and leader. Each division will have its own manager as well as crews and supervisors. The administration section will have grown to accommodate the accounting and support needs of each division. Crew supervisors, depending on artistic and technical skill levels, will mix their own products for each job. It is not TCU's intention to develop a large organization but to maintain sales in the $10 million range, always with an emphasis on quality production versus quantity.

Finanical Analysis

These expenses will be incurred as crews are added according to schedule.

Assumptions used in the preparation of proformas include:

Labor

• Labor runs 22 percent of sales.
• It is intended to operate with contract labor initially until an individual proves reliable, thoroughly knowledgeable on the job and requests a more permanent relationship with TCU, estimated to be nine months. At that point, they will become employees.
• TCU has been and will continue to take on more mature labor with a history in concrete construction to reduce the basic training time.
• Training is very important in this business because it is custom work.
• Payroll taxes are calculated for Social Security, Medi, TWC (2.7 percent) and FUTA.

Materials

• Materials currently run 18 percent of sales. Assume 19 percent due to recent increases.
• Even though economies of scale will be available at the higher volumes, we are not figuring this into the calculations. This should cover additional increases in costs.
• Sometime in year 2 a storage facility will be purchased and placed on Wright's land to house materials.

Interest

• Interest on the investment is calculated at 12 percent.

Personnel

• Gary Wright, in the first year, will be a full-time working Supervisor until his father-in-law Sonny can take over.
• Gary's father-in-law will work as the supervisor until the manufacturing operation grows. He will then relinquish that responsibility and will be replaced from within if possible.
• Gary will be spending more time mixing project stains for the crews, creating new products and marketing the business.
• A full-time office administrator will be hired to free Gary's time for the start of Year 2.

Services

Suppliers

Our suppliers are located in Mississippi and nearby states.

• Limeracoat
• KP Tile Store
• Kerry Contractors Supply
• Morfilled Polymers
• Lowes and Home Depot of Jackson, Mississippi

Customers

Our customers are all located in Mississippi.

• Gregg Custom Homes
• Sabinal Group
• N-Site Architects
• YP Construction
• Joyous Construction
• Marvin Gregg Homes
• Kenneth Quick Homes
• Purte & Larry
• FMT Management
• Leading Edge Flooring

• Insider Looks
• LL Tiling
• Horizon Green Solutions Inc.
• MS Construction