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A Sample Building Material Supply Business Plan Template
A Sample Building Material Supply Business Plan Template
1. Industry Overview
This industry consists of stores and dealers (e.g. lumberyards) that retail building materials such
as lumber, stones and bricks. This industry also supplies cabinets, floor coverings, roofing
materials, electrical and plumbing goods, doors and windows to the construction market. The
industry does not include home improvement centers, paint and wallpaper specialty stores or
hardware stores.
If you are a close watcher of the Lumber and Building Materials Stores industry, you will agree
that over the past five years, the Lumber and Building Material Stores industry has struggled to
rebuild itself, even as the overall economy strengthens. Industry goods are purchased by
professional contractors and consumers engaged in remodeling and construction projects.
Rising consumer confidence and household income have helped ignite remodeling activity
forestalled during the recession, providing additional demand for lumber and other building
materials used in home improvement projects. Even so, rising competition from large home
improvement stores has stifled revenue growth for lumber and building material stores.
The Lumber and Building Material Stores industry is indeed a large industry and pretty much
active in most countries of the world. Statistics has it that in the united states of America alone,
there are about 45,069 registered and licensed building materials supply stores scattered all
across the United States responsible for employing about 301,881 people and the industry rakes
in a whooping sum of $107 billion annually.
The industry is projected to grow at 4.4 percent annual growth within 2012 and 2017. It is
important to state that Builders FirstSource has the lion market share in this industry.
A recent report published by IBISWORLD shows that this industry sells a range of building
materials such as lumber, fencing, glass, doors, plumbing fixtures and supplies, electrical
supplies, prefabricated buildings and kits, kitchen, bath cabinets and countertops to be installed.
The industry’s major product categories are the following: Lumber and other structural building
materials account for 37.8 percent of sales, lumber and they dominate the industry’s product mix.
The varying types of structural materials include dimensional lumber, nontreated lumber, boards,
engineered wood products, glue-lam and laminated veneer lumber, floor and roof trusses,
connectors, joist hangers, tie-downs and framed wall panels.
The Lumber and Building Material Stores industry is highly regulated in the United States of
America and anyone who aspires to start a building materials supply business must apply and
obtain a license before they can legally operate in the industry.
Over and above, the lumber and building materials store industry is a profitable industry and it is
open for any aspiring entrepreneur to come in and establish his or her business; you can chose to
start on a small scale in a street corner or you can chose to start on a large scale with outlets in
key cities through the United States of America and Canada.
2. Executive Summary
Harrison Anthony™ Building Materials Store, Inc. is a registered building material supply
storebusiness that will be located in one of the busiest streets in Oklahoma City – Oklahoma.
We have been able to lease a facility that is big enough (a 15 thousand square foot facility) to fit
into the design of the kind of standard building material supply store that we intend launching
and the facility is located in a corner piece building in the biggest building material market in
Oklahoma City – Oklahoma.
Harrison Anthony™ Building Materials Store, Inc. will retail a wide range of building materials
such as lumber and other structural building materials, hardware, tools, plumbing and electrical
supplies, doors and windows et al. We are set to services a wide range of clientele in and around
Oklahoma City.
We are aware that there are several building material supply stores all around Oklahoma, which
is why we spent time and resources to conduct a thorough feasibility studies and market survey
so as to be well positioned to favorably compete with all our competitors. We have an online
service option for our customers, and our outlet is well secured with the various payment
options.
Harrison Anthony™ Building Materials Store, Inc. will ensure that all our customers are given
first class treatment whenever they visit our building material store. We have a CRM software
that will enable us manage a one on one relationship with our customers no matter how large
they are. We will ensure that we get our customers involved in the selection of brands that will
be on our store and also when making some business decisions.
Harrison Anthony™ Building Materials Store, Inc. will at all times demonstrate her commitment
to sustainability, both individually and as a firm, by actively participating in our communities
and integrating sustainable business practices wherever possible.
We will ensure that we hold ourselves accountable to the highest standards by meeting our
customers’ needs precisely and completely whenever they patronize our products. Harrison
Anthony™ Building Materials Store, Inc. is a family business that is owned by Harrison
Anthony and his immediate family members.
Harrison Anthony has a B.Sc. in Business Administration, with over 5 years’ experience in the
lumber and building materials industry, working for some of the leading brand in the United
States. Although the business is launching out with just one outlet in Oklahoma City, but there
are plans to open other outlets all around major cities in the United States.
Responsible for overseeing the smooth running of HR and administrative tasks for the
organization
Ensures operation of equipment by completing preventive maintenance requirements;
calling for repairs.
Defines job positions for recruitment and managing interviewing process
Carries out induction for new team members
Responsible for training, evaluation and assessment of employees
Responsible for arranging travel, meetings and appointments
Oversees the smooth running of the daily office activities
Store Manager:
Merchandize Manager
Manages vendor relations, market visits, and the ongoing education and development of
the organizations’ buying teams
Helps to ensure quality building materials are purchased and retailed in good price that
will ensure we make good profit
Responsible for the purchase of building materials for the organizations
Manages external research and coordinate all the internal sources of information to retain
the organizations’ best customers and attract new ones
Models demographic information and analyze the volumes of transactional data
generated by customer purchases
Identifies, prioritizes, and reaches out to new partners, and business opportunities et al
Responsible for supervising implementation, advocate for the customer’s needs, and
communicate with clients
Develops, executes and evaluates new plans for increasing sales
Documents all customer contact and information
Represents the company in strategic meetings
Helps to increase sales and growth for the company
Information Technologist
Accountant/Cashier:
Responsible for preparing financial reports, budgets, and financial statements for the
organization
Provides managements with financial analyses, development budgets, and accounting
reports; analyzes financial feasibility for the most complex proposed projects; conducts
market research to forecast trends and business conditions
Responsible for financial forecasting and risks analysis
Performs cash management, general ledger accounting, and financial reporting
Responsible for developing and managing financial systems and policies
Responsible for administering payrolls
Ensures compliance with taxation legislation
Handles all financial transactions for the organization
Serves as internal auditor for the organization
Ensures that all contacts with clients (e-mail, walk-In center, SMS or phone) provides the
client with a personalized customer service experience of the highest level
Through interaction with customers on the phone, uses every opportunity to build client’s
interest in the company’s products and services
Consistently stays abreast of any new information on the organizations’ products,
promotional campaigns etc. to ensure accurate and helpful information is supplied to
customers when they make inquiries
6. SWOT Analysis
Our intention of opening just one outlet of our building materials store in Oklahoma City –
Oklahoma is to test run the business for a period of 2 to 5 years to know if we will invest more
money, expand the business and then open other outlets all over major cities in Oklahoma and
the United States.
We are quite aware that there are several building material supply stores all over Oklahoma City
and even in the same location where we intend locating ours, which is why we are following the
due process of establishing a business.
We know that if a proper SWOT analysis is conducted for our business, we will be able to
position our business to maximize our strength, leverage on the opportunities that will be
available to us, mitigate our risks and be welled equipped to confront our threats.
Harrison Anthony™ Building Materials Store, Inc. employed the services of an expert HR and
Business Analyst with bias in supply chain business to help us conduct a thorough SWOT
analysis and to help us create a Business model that will help us achieve our business goals and
objectives.
This is the summary of the SWOT analysis that was conducted for Harrison Anthony™ Building
Materials Store, Inc.;
Strength:
Our business is located in a city with heavy construction and real estate activities and also, we
can boast of having good business relationship with top manufacturers in the building materials
manufacturing industry.
Weakness:
A major weakness that may count against us is the fact that we don’t have our own building
material production plant, we are a new building material supply store and we don’t have the
financial capacity to compete with multi – billion dollars building materials supply stores when it
comes to supplying building materials at a rock bottom prices.
Opportunities:
The fact that we are going to be operating our building material supply store in one of the busiest
building material markets in Oklahoma City, Oklahoma provides us with unlimited opportunities
to sell our materials to a large number of individuals.
We have been able to conduct thorough feasibility studies and market survey and we know what
our potential clients will be looking for when they order building materials from us; we are well
positioned to take on the opportunities that will come our way.
Threat:
Just like any other business, one of the major threats that we are likely going to face is economic
downturn. It is a fact that economic downturn affects purchasing / spending power especially
construction materials. Another threat that may likely confront us is the arrival of a new building
material store in the same location where ours is located. So also, unfavorable government
policies may also pose a threat for businesses such as ours.
7. MARKET ANALYSIS
Market Trends
If you are conversant with the Lumber and Building Materials Industry, you will quite agree that
the changes in disposable income, consumer sentiment, ever changing trends and of course the
rate of homeownership are major growth drivers for this industry.
No doubt, a massive rise in consumer confidence has also contributed in helping the industry
experience remarkable growth, but uneven performance in these drivers has led to slightly
constrained revenue growth.
So also, the rising demand for both building renovations, as a result of increasing disposable
income and consumer sentiment will result in revenue growth, but profit margins will stagnate as
building material supply stores keep prices low to attract more sales amid growing competition.
A close watch on industry activities reveals that, the retail market for building materials was hit
hard by the economic downturn experienced in recent time. As part of marketing strategies,
building material supply stores partner with key players in the construction and real estate
industry. They are in the best position to offer you building material supply contract.
Construction Companies
Plumbers
Home Remodeling Companies
Small Building Material Retail Stores
Harrison Anthony™ Building Materials Store, Inc. is in business to retail a wide range of
building material to the businesses and residents of Oklahoma City – Oklahoma. We are in the
lumber and building materials stores industry to maximize profits and we are going to go all the
way out to ensure that we achieve or business goals and objectives.
Harrison Anthony™ Building Materials Store, Inc. will generate income by;
Before choosing a location for Harrison Anthony™ Building Materials Store, Inc., we conducted
a thorough market survey and feasibility studies in order for us to be able to penetrate the
available market and become the preferred choice for key players in the construction and real
estate industry of Oklahoma City – Oklahoma.
We have detailed information and data that we were able to utilize to structure our business to
attract the number of customers we want to attract per time.
We hired experts who have good understanding of the lumber and building material supply
stores industry to help us develop marketing strategies that will help us achieve our business goal
of winning a larger percentage of the available market in Oklahoma City.
In summary, Harrison Anthony™ Building Materials Store, Inc. will adopt the following sales
and marketing approach to win customers over;
Open our building material supply store in a grand style with a party for all
Introduce our building material supply store by sending introductory letters alongside our
brochure to construction companies, plumbers, home remodeling companies and other
key stake holders in Oklahoma City – Oklahoma
Ensure that we have a wide range of building materials from different manufacturing
brand at all times
Make use of attractive hand bills to create awareness and also to give direction to our
building materials supply store
Position our signage/flexi banners at strategic places around Oklahoma City – Oklahoma
Create a loyalty plan that will enable us reward our regular customers
List our business and products on yellow pages ads (local directories)
Leverage on the internet to promote our business
Engage in direct marketing and sales
Encourage the use of Word of mouth marketing (referrals)
Payment Options
The payment policy adopted by Harrison Anthony™ Building Materials Store, Inc. is all
inclusive because we are quite aware that different customers prefer different payment options
but at the same time, we will ensure that we abide by the financial rules and regulation of the
United States of America.
Here are the payment options that Harrison Anthony™ Building Materials Store, Inc. will make
available to her clients;
In setting up any business, the amount or cost will depend on the approach and scale you want to
undertake. If you intend to go big by renting / leasing a big facility, then you would need a good
amount of capital as you would need to ensure that your employees are well taken care of, and
that your facility is conducive enough for workers to be creative and productive.
This means that the start-up can either be low or high depending on your goals, vision and
aspirations for your business. The materials and equipment that will be used are nearly the same
cost everywhere, and any difference in prices would be minimal and can be overlooked.
As for the detailed cost analysis for starting a building material supply store business; it might
differ in other countries due to the value of their money. These are the key areas where we will
spend our start up capital;
The Total Fee for Registering the Business in Oklahoma City – Oklahoma – $750
Legal expenses for obtaining licenses and permits as well as the accounting services
(software, P.O.S machines and other software) – $3,300
Marketing promotion expenses for the grand opening of Harrison Anthony™ Building
Materials Store, Inc. in the amount of $3,500 and as well as flyer printing (2,000 flyers at
$0.04 per copy) for the total amount of $3,580
The cost for hiring Business Consultant – $2,500
Insurance (general liability, workers’ compensation and property casualty) coverage at a
total premium – $2,400
The cost for payment of rent for 12 months at $1.76 per square feet in the total amount
of $105,600
The cost for shop remodeling (construction of racks and shelves) – $20,000
Other start-up expenses including stationery ($500) and phone and utility deposits
($2,500)
Operational cost for the first 3 months (salaries of employees, payments of bills et al) –
$60,000
The cost for Start-up inventory (stocking with a wide range of building materials) –
$250,000
The cost for counter area equipment – $9,500
The cost for store equipment (cash register, security, ventilation, signage) – $13,750
The cost of purchase and installation of CCTVs – $10,000
The cost for the purchase of office furniture and gadgets (Computers, Printers,
Telephone, TVs, Sound System, tables and chairs et al) – $4,000.
The cost of launching a Website – $600
The cost for our opening party – $7,000
Miscellaneous – $10,000
We would need an estimate of $750,000 to successfully set up our building material supply store
in Oklahoma City – Oklahoma.
Generating Startup Capital for Harrison Anthony™ Building Materials Store, Inc..
Harrison Anthony™ Building Materials Store, Inc. is a private business that is solely owned and
financed by Harrison Anthony and his immediate family members. They do not intend to
welcome any external business partners which is why he has decided to restrict the sourcing of
the startup capital to 3 major sources.
These are the areas we intend generating our startup capital;
N.B: We have been able to generate about $250,000 (Personal savings $200,000 and soft loan
from family members $50,000) and we are at the final stages of obtaining a loan facility of
$500,000 from our bank. All the papers and documents have been signed and submitted, the loan
has been approved and any moment from now our account will be credited with the amount.