The Electrical Contractor Financial Model features a dashboard that provides you with a real-time overview of your profit and loss statement, cash flow analysis, and balance sheet. Please see the video below!
1.0 Executive Summary
Electrical Contractor, LLC (“the Company”) is a Fort Lauderdale, Florida based business that will provide a wide range of contracting services specific for residential and commercial electrical systems. The Company was founded by Peter Alexander. The business will engage new constructions as well as providing ongoing repairs/maintenance of electrical systems. At this time, the Founder is seeking $185,000 in order to establish its operations.
1.1 The Services
The first revenue center for the business will come from the ongoing installation of electrical systems into new constructions. The business will coordinate these efforts with regional real estate developers as well as general contractors in the market area. In addition to these services, the Company will also install generators for residential and commercial properties.
The Company will generate highly predictable streams of revenue from the ongoing maintenance/repair of electrical systems. At the onset of operations, the business will have two vehicles that will be operated by journeymen electricians. This is an important revenue center as it will provide high margin revenue.
The third section of this business plan will further document the services offered by Electrical Contractor.
1.2 Financing
An SBA loan of $185,000 is needed to establish operations in Fort Lauderdale. This business plan assumes that the Company will receive a 10-year loan carrying a 7.5% interest rate. The funds will be allocated towards the following:
• Location development in Fort Lauderdale, Florida
• Vehicles and electrical contracting equipment
• Initial marketing
• Initial payroll
Peter Alexander will provide $25,000 towards the business. Moving forward, Electrical Contractor, LLC could easily acquire expansion capital on an as needed basis given the economic stability of the business.
1.3 Mission Statement
Management’s mission is to provide cost effective electrical systems installation and maintenance/repair services to the Fort Lauderdale market.
1.4 Management Team
Peter Alexander is a master electrician with more than 22 years of experience. He will be able to effectively launch the operations of Electrical Contractor, LLC with a focus on increasing bottom line profitability on a year-on-year basis.
1.5 Revenue Forecasts
1.6 Expansion Plan
Management will continue to acquire new vehicles while hiring additional electricians in order to boost the revenues of the business. The Company may also expand its operational capabilities to include large-scale installations specific for industrial enterprises.
2.0 Company and Financing Summary
2.1 Registered Name and Corporate Structure
Electrical Contractor, LLC.
2.2 Required Funds
A $185,000 SBA loan is being sought by Peter Alexander in order to establish the operations of Electrical Contractor, LLC in Fort Lauderdale. The funds will be used for the following:
2.3 Management Equity
At this time, Peter Alexander retains a 100% ownership interest in the Company. This ownership structure is not expected to change within the next three years.
2.4 Exit Strategy
The Company will most likely be sold a third-party contractor or real estate developer that wants to vertically integrate electrical contracting into their operations. This event is not expected to occur for a substantial period of time (at least ten years). A business brokerage, attorney, and CPA will be hired to manage the sale.
3.0 Operations
As discussed in the executive summary, Electrical Contractor will provide an immense scope of electrical contracting services within the greater Fort Lauderdale market area. Foremost, the Company will focus on engaging in new construction (commercial and residential) as these projects will generate $25,000 to $100,000. The business, for these operations, will employ two to three staff electricians that will provide services in tandem with Peter Alexander. As will be discussed in the fifth section of the business plan, the Company will use a number of marketing strategies to facilitate relationships with real estate developers and general contracting firms.
In addition to these services, the Company will provide high margin revenue streams from the ongoing maintenance and repair of electrical systems in residential and commercial settings. The Company will also provide installations of whole house and whole building electrical generators (which will produce $4,000 to $6,000 per sale).
Electrical Contractor, LLC, at all times, will maintain numerous insurance policies to protect the business in the event of an accident. The business is properly licensed to render electrical contracting and electrician services.
4.0 Strategic and Market Analysis
4.1 Economic Outlook
Electrical contracting and electrician services are relatively immune from negative changes in the economy. Very few individuals are comfortable completing their own electrical repairs. Only licensed and trained professionals should provide these services. The only economic issue that would impact the Company’s revenues would be an overall pullback in the real estate market. In this event, the Company will remain profitable as a result of ongoing repair/maintenance services.
At this time, the economy is doing well. Inflation is declining as are interest rates. Unemployment rates remain low and housing prices have remained stable despite interest rate fluctuations.
4.2 Industry Analysis
There are 180,000 electrical contracting firms currently in operation. These companies aggregately produce $200 billion of revenue while concurrently employing 600,000 people.
This growth of this industry will continue to remain in line with the growth of the economy as a whole. This is a highly stable industry, and there are no known issues that would impede its continued growth.
4.3 Customer Profile
As it relates to residential property owners that will use the Company’s services, the following is noted:
• Household income of $50,000 to $200,000
• Will spend $200 to $600 per service order or $4,000 to $6,000 on generators
• The property is located within 15 miles of Electrical Contractor’s location
For commercial clients, this profile will be used in conjunction with marketing operations:
• Owns a large scale commercial or apartment complex property
• Annual revenues of $250,000+
• Will spend $2,000 to $5,000 per annum on ongoing electrical repairs and maintenance services.
Here, you can further document specific attributes of your target market and why you chose your specific region for developing your electrical contracting business. You can examine important market statistics including population, median income, and median home values.
4.4 Competition
As electrical contracting is a highly stable business, there are numerous entrepreneurial electricians that establish operations in any given market. Electrical Contractor, LLC will maintain a competitive advantage by operating a low cost infrastructure that will allow the business to remain pricing competitive at all times. The Company’s ability to provide installations of generators will further provide a strong differentiating factor for the business. In this section, you can further discuss the ways in which you will maintain an advantage in your specific market.
5.0 Marketing Plan
The Company will use numerous marketing strategies that will ensure significant brand name awareness among residential property owners, commercial property owners, contractors, and real estate developers in the Fort Lauderdale market.
5.1 Marketing Objectives
• Develop outreach programs that will create ongoing relationships with real estate developers and contractors.
• Maintain an expansive online presence so that individuals can quickly find the business when emergency services are needed.
• Develop and maintain a presence among all social media platforms as well as platforms that list contracting services.
5.2 Marketing Strategies
Foremost, Electrical Contractor, LLC will establish ongoing relationships with real estate developers and general contractors that will call on the business to operate in a subcontracting capacity. The Company will foster these relationships on a regional basis, and they will be specific for new construction and major renovation services.
The Company’s website will feature content-rich information regarding the repair, maintenance, and generator installation services offered. The platform will also discuss the new construction and installation services. The website will be search engine optimized specific for the Fort Lauderdale market.
In addition to the Company’s own website, the business will maintain profiles on Facebook, Instagram (for pictures), LinkedIn, and YouTube. Specifically for LinkedIn, the business will use targeted advertising among people that are involved in the field of contracting and real estate development. On YouTube, the business will showcase videos of completed work. The business will frequently post new content on its social media pages in order to create engagement with potential customers.
Management will become a member of numerous trade organizations as well as Fort Lauderdale area Chambers of Commerce. The Company will also provide ongoing support for local charities and civics focused organizations.
5.3 Pricing
For new developments, the business will generate $20,000 to $100,000 per engagement. The installation of generators and related equipment will provide $3,500 to $6,000 (with an average of $4,500). Per hour service will be $150.
6.0 Organizational Plan and Personnel Summary
6.1 Corporate Organization
6.2 Payroll
7.0 Financial Plan
7.1 Underlying Assumptions
• Electrical Contractor, LLC will acquire a $185,000 loan carrying a 10-year term and a 7.5% interest rate on the principal balance.
• Management, in the form of equity, will contribute $25,000.
7.2 Sensitivity Analysis
The income of Electrical Contractor, LLC is wholly immune from negative changes in the economy. Property owners (all types) will continue to need these services at all times. The Company will generate highly predictable, high margin incomes from repairs and maintenance that will ensure that the business can fulfill its financial obligations at all times.
7.3 Source of Funds
7.4 Profit and Loss Statement
7.5 Cash Flow Analysis
7.6 Balance Sheet
7.7 Breakeven Analysis
7.8 Business Ratios
