The Water Well Drilling Contractor Financial Model and Business Plan provides you with comprehensive tools for creating a capital raising document. Please see the video below for more information!
1.0 Executive Summary
Water Well Drilling Contractor, LLC (“the Company”) will specialize in the installation of water wells for both residential and commercial property owners in Bethel, Connecticut. The Founder of the business is Matthew Jones. At this time, the Company is seeking $650,000 in order to acquire vehicles and the necessary equipment to engage in water well drilling. The business will also provide ongoing maintenance of water wells, which will be a major profit center.
1.1 The Services
The Company will maintain its own fleet of vehicles and crews when drilling water wells on client properties. The business will recognize income not only from labor but also from the sale of pipes and other apparatuses that are used during the installation process. Depending on the type of underlying ground, the Company will generate $30 to $60 per foot drilled.
The business will also generate substantial revenues from the ongoing maintenance and repair of water wells. This is a highly important revenue center as it will produce highly predictable streams of income that are not swayed by negative changes in the economy. These services remain in demand as proper water sources for structures is a necessity.
The third section of the business plan will further document the operations of the business.
1.2 Financing
Management is seeking a $650,000 SBA loan order to acquire the operating assets necessary to establish the business operations. This document assumes that the Company will receive a 10-year loan carrying an 8% interest rate. The funds will be primarily used for the following:
• Office and warehouse space in Bethel
• Vehicles
• Furniture, fixtures, equipment, and tools
• Working capital
• Initial marketing
Water will drilling contracting businesses are highly stable enterprises, which makes the Company a strong candidate for expansion financing in the future. This document assumes that the Company will finance its ongoing growth with the retained earnings of the business.
1.3 Mission Statement
Water Well Drilling Contractor’s mission is to cost effectively provide access to water using state-of-the-art drilling methods.
1.4 Management Team
Matthew Jones has 12 years of experience in the field of water well drilling, maintenance, and repair. He will be able to bring this enterprise to profitability while expanding revenues on a year-on-year basis through continued acquisition of additional operating assets.
1.5 Sales Forecasts
1.6 Expansion Plan
The business will continually acquire new vehicles, hire additional staff, and expand its marketing operations to further increase the number of water well installations undertaken by the business. The Company will also coordinate its operations with regional real estate developers that will have the business install wells during the course of new constructions.
2.0 Company and Financing Summary
2.1 Registered Name and Corporate Structure
Water Well Drilling Contractor, LLC. The business is registered as a limited liability company in the State of Connecticut.
2.2 Required Funds
Management is seeking a $650,000 SBA loan. The funds, including $150,000 provided by the Founder, will be allocated as follows:
2.3 Investor and Management Equity
Matthew Jones will continue to retain a 100% ownership interest in the business.
2.4 Exit Strategy
As water well contracting enterprises are able to remain profitable in any economic climate, the demand for established firms is substantial. The Company, in the event of a business sale, can expect a premium of up to four times the previous year’s earnings. The business will coordinate with its CPA, advisors, and attorney to manage the divestiture. This will not occur for at least ten years.
3.0 Operations
The primary revenue center for Water Well Drilling Contractor, LLC will come from the ongoing installation of water wells throughout Bethel and Fairfield County. This is the most effective way of bringing water into both residential and commercial structures in this area. Through the Company’s state-of-the-art drillings systems, the Company will be able to bore holes as deep as 800 feet. The business will charge on a per foot basis with fees ranging depending on the underlying soil and rock.
A major component of the Company’s ongoing profitability will come from the continued maintenance of systems that have been installed by the business as well as systems that have been put in place by other firms. These revenues are wholly immune from negative economic swings. These operations will also allow for substantial reinvestment into the Company’s operating infrastructure over the next three years.
The Company will have all staff members directly employed by the business. To reduce issues that may occur with onsite injury, the Company will have numerous insurance policies in place.
4.0 Strategic and Market Analysis
4.1 Economic Outlook
Currently, the economic climate in the United States is positive. Interest rates are coming down as is the rate of inflation. The Federal Reserve and major global central banks have made substantial in roads for ensuring the overall economic outlook remains positive.
Given that access to water is an absolute necessity, the demand for water well drilling contracting will remain strong at all times. The business will have highly controllable operating costs, which will ensure that the business can remain profitable while also allocating a portion of its after-tax capital for expansion purposes.
4.2 Industry Analysis
Nationally, there are X contractors that install water wells as their primary revenue source. These companies aggregately produce $X billion per year in revenue while providing X jobs to the general public.
This is a mature industry and the ongoing growth rate of the industry will be similar to that of the economy as a whole.
4.3 Customer Profile
Water Well Drilling Contractor, LLC will work with both residential and commercial property owners throughout the Fairfield County market area. Any structure in this market requires a water well, and admittedly – the demographics that the business will target are broad. It should be noted that this is a wealthy market area and its residents/businesses have substantial economic staying power (especially as the market is located near New York City).
The business will also partner with regional real estate developers and general contracting firms that will call on the Company during the course of new developments. As discussed earlier, this will be a major avenue for corporate growth over the next three years.
4.4 Competition
Water Well Drilling Contractor, LLC will face ongoing competition from other providers in this market. One of the primary ways in which the business will remain competitive is by offering reasonable pricing. In order to achieve this, the Company will maintain highly controllable operating costs which will allow operational cost savings to be passed on to the business’ clients. The business will also use state-of-the-art drilling methods that will allow for deeper drilling. This will also set the business apart in this market.
5.0 Marketing Plan
The Company will use a number of direct marketing, outreach, and online focused marketing in order to create substantial awareness in the Bethel and Fairfield County market. The business, as it relates to its direct outreach programs, will work closely with real estate developers that create new properties in Western Connecticut.
5.1 Marketing Objectives
• Maintain a presence among all social media platforms as well as through a proprietary website.
• Foster ongoing relationships with real estate developers throughout Western Connecticut that will use the Company’s services during the course of new constructions.
• Enroll among numerous trade organizations on a regional level to further referrals.
5.2 Marketing Strategies
Water Well Drilling Contractor will use a number of marketing strategies that will drive substantial interest in the services offered by the business. Foremost, the Company intends on developing ongoing relationships with contractors as well as real estate developers within Bethel and the Western Connecticut market. This will allow for ongoing engagements as it relates to water wells on new constructions. This type of marketing will be one of the Company’s biggest priorities throughout the life of the business.
The business will maintain an online presence that encompasses both a search engine friendly website as well as pages among all major social media platforms. The platform will showcase the state-of-the-art drilling equipment while also providing general information about Water Well Drilling Contractor, LLC. The platform will be registered among directories that list providers of drilling services. As it relates to social media, the Company will focus on fostering ongoing relationships through LinkedIn. The business will post photos and videos of completed work on YouTube, Facebook, and Instagram. The business will use targeted advertisements on these platforms specific for residential customers.
In addition to these operations, the Company will become a member of numerous regional chambers of commerce as well as trade associations specific for the needs of contractors. This will further facilitate referral operations.
6.0 Organizational Plan and Personnel Summary
6.1 Corporate Organization
6.2 Payroll
7.0 Financial Plan
7.1 Underlying Assumptions
• Water Well Drilling Contractor, LLC will acquire $650,000 via an SBA loan.
• Matthew Jones will invest $150,000.
• The business will have a growth rate of 11% per annum.
7.2 Sensitivity Analysis
As has been one of the main points throughout this business plan, the revenue of Water Well Drilling Contractor, LLC are immune from negative changes in the economy. The business is providing an absolutely necessary service to ensure that water can be properly piped into homes and businesses. The business will generate predictable income from maintenance, which will further contribute to profit stability. This, along with the controllable operating costs, will ensure that the business is able to thrive in the Western Connecticut market.
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
