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Old 10-18-2012, 07:46 PM   #21
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Re: Business Plans


I've written business plans for a couple of businesses that I've started up and recommend them. I don't have a plan for what I'm doing right now and I think it shows.

How you write a business plan and what you put in it depend on the circumstances. When you're just starting out it's more of a "business guess" where you do a lot of market research and try to estimate your income and expenses to allow you to budget effectively. For new businesses it's important to be fluid and focus on the 6 month and 12 month plans as you have no idea what to expect in 5 years.

For an established business you might only focus on a couple aspects of your business that you'd like to change or improve. It can be really helpful as a lot of us find ourselves growing by accident which can lead to bad expense management and potential risk exposure. This is probably the case if you find yourself constantly buying tools, vehicles, insurance, etc. as a reaction rather than a planned purchase.

The competition thing also brings up another function of the business plan. Who your market is, what your product is and who you are competing with requires a fair bit of research on an ongoing basis. It's easy to start out building garages and end up building decks which can be fine but not if you don't put any planning into the transition. In my opinion anyone that you can lose a legitimate potential job to is competition. Some competition deserves consideration, others don't.
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Old 10-18-2012, 07:49 PM   #22
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Re: Business Plans


Summit what type of jobs are you doing now? Where does most of your work come from?

Are you in city or country? Big city will yield more leads and tire kickers too though and will take longer to get by on reputation. Small town you could be the go to guy by next week if you work for the right guy or gal.

Just curious where you are now vs where you see your self in 2 years.
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Old 10-18-2012, 07:54 PM   #23
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Re: Business Plans


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I've written business plans for a couple of businesses that I've started up and recommend them. I don't have a plan for what I'm doing right now and I think it shows.

How you write a business plan and what you put in it depend on the circumstances. When you're just starting out it's more of a "business guess" where you do a lot of market research and try to estimate your income and expenses to allow you to budget effectively. For new businesses it's important to be fluid and focus on the 6 month and 12 month plans as you have no idea what to expect in 5 years.

For an established business you might only focus on a couple aspects of your business that you'd like to change or improve. It can be really helpful as a lot of us find ourselves growing by accident which can lead to bad expense management and potential risk exposure. This is probably the case if you find yourself constantly buying tools, vehicles, insurance, etc. as a reaction rather than a planned purchase.

The competition thing also brings up another function of the business plan. Who your market is, what your product is and who you are competing with requires a fair bit of research on an ongoing basis. It's easy to start out building garages and end up building decks which can be fine but not if you don't put any planning into the transition. In my opinion anyone that you can lose a legitimate potential job to is competition. Some competition deserves consideration, others don't.
Good points. My point of asking about a business plan is just that. I've never had a "plan" I have taken any job that is profitable, At least I thought they would be profitable.

Kind of wondering how I would decide to focus on a specialty.

How I would decide my "price point" or who my competitors would be.

etc.
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Old 10-18-2012, 07:57 PM   #24
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Re: Business Plans


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Summit what type of jobs are you doing now? Where does most of your work come from?

Are you in city or country? Big city will yield more leads and tire kickers too though and will take longer to get by on reputation. Small town you could be the go to guy by next week if you work for the right guy or gal.

Just curious where you are now vs where you see your self in 2 years.
45 mins north of Atlanta. The bulk of my work has been for property management companies. "Handyman" type work. I would rather work for more home owners. Tired of net 30-45 days.

2 years? retired on a beach..
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Old 10-18-2012, 07:58 PM   #25
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Re: Business Plans


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Originally Posted by summithomeinc

Really? Isn't that one of the main parts of your plan? At least that was my take on it.

Personaly I m need to make a plan, it includes how to deal with my competition and, who I want to compete with.
You said you'd have to lower your standards to be in the same category as your competition.

The guys I wrote about I considered my competition because I knew of them and the type of work they do.

I meant that in your case, writing a business plan isn't going to make you automatically become competition with whoever you write down in it.
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Old 10-18-2012, 08:13 PM   #26
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Re: Business Plans


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Originally Posted by summithomeinc

Good points. My point of asking about a business plan is just that. I've never had a "plan" I have taken any job that is profitable, At least I thought they would be profitable.

Kind of wondering how I would decide to focus on a specialty.

How I would decide my "price point" or who my competitors would be.

etc.
You might be able to use my method or a hybrid version of it. It's served me well. I'll type out what I did when I get home. Maybe it'll give you some insight at least.
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Old 10-18-2012, 08:15 PM   #27
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Re: Business Plans


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Originally Posted by summithomeinc View Post
Good points. My point of asking about a business plan is just that. I've never had a "plan" I have taken any job that is profitable, At least I thought they would be profitable.

Kind of wondering how I would decide to focus on a specialty.

How I would decide my "price point" or who my competitors would be.

etc.
Part of having a written plan is that you actually drag it out and read it. With my last business, which was retail, I would go over the plan numbers once a week and read the whole plan at least every month. It keeps you focused on where you're heading. I'm not saying that you should ignore possible opportunities or head down a road that isn't working for you just because it's written down. You should also be willing to tear up the plan and rewrite it if necessary. It's more about consciously thinking about your goals. Unless you're writing it for a loan....

To answer your specific questions, taking a job that is profitable when you don't have other work lined up is a no-brainer as long as you have the ability to perform the job. If you don't have the ability then it probably won't be profitable anyway.

Choosing a specialty usually happens to generalists who find a niche that is fun and profitable and plentiful.

You need to calculate your price point by adding up your costs. Don't worry too much about your competitions price unless they are regularly performing comparable work for far less. You need to be competitive but you can certainly charge more if you're providing more or less if you're providing less. You aren't selling identical products.
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Old 10-18-2012, 08:20 PM   #28
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Re: Business Plans


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You might be able to use my method or a hybrid version of it. It's served me well. I'll type out what I did when I get home. Maybe it'll give you some insight at least.
Was hoping you would show up. Even if you seem way more outgoing than I am.

I do think Bam and Rob have had alot of the same experiences as far as how old our business is. Except they seem to have solved the issues I'm having problems with...

Then again..The grass is allways greener on the other side..
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Old 10-18-2012, 08:29 PM   #29
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Re: Business Plans


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Originally Posted by summithomeinc

Was hoping you would show up. Even if you seem way more outgoing than I am.

I do think Bam and Rob have had alot of the same experiences as far as how old our business is. Except they seem to have solved the issues I'm having problems with...

Then again..The grass is allways greener on the other side..
You don't need to be outgoing for what I do. It's a bonus but it's irrelevant. I'll keep that in mind when typing though. Lol

I'm warning you though, it's not easy to follow.
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Old 10-18-2012, 08:34 PM   #30
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Re: Business Plans


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I've never had a "plan" I have taken any job that is profitable, At least I thought they would be profitable.
This is one of the drivers of a business plan. Part of your business plan is determining a cost/pricing structure.

If you go through the process of assessing your costs and developing a price list based on these costs, what happens when you go a week without a job? Your costs do NOT disappear, which means you now need to make up that amount by being more productive, charging more, or end up making less...


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How I would decide my "price point" or who my competitors would be.

etc.
FORGET about your competitors... you are NOT retail. You can do absolutely NOTHING about what your competitor charges. As an example, if they are happy making $35K per year and you NEED to make $75K per year, you need to make (including encumbrances) approximately $25 MORE per hour than your "competitor". This is only one variable... what about the guy who doesn't have insurance and you do? Truck payment? Retirement plan? The list goes on... the point is your pricing structure needs to pay your bills and more importantly... YOU!

The one thing that you have to realize is that not everyone is your customer. No matter how much you want them to be, someone wanting to pay the "competition" a lower wage (which usually comes with more risk), is NOT your customer because they don't meet your needs.

If you don't have business... THAT IS YOUR JOB 100% of the time until you do (and some lined up to boot). A lot of times, we just don't want to recognize that fact...

You are NOT retail... Don't think in those terms. One of the most important things a business plan can yield you is a price list that supports your business.

Best of luck... congrat's on even looking at it... 90% don't...

Last edited by KAP; 10-18-2012 at 08:37 PM.
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Old 10-18-2012, 08:45 PM   #31
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This is one of the drivers of a business plan. Part of your business plan is determining a cost/pricing structure.

If you go through the process of assessing your costs and developing a price list based on these costs, what happens when you go a week without a job? Your costs do NOT disappear, which means you now need to make up that amount by being more productive, charging more, or end up making less...




FORGET about your competitors... you are NOT retail. You can do absolutely NOTHING about what your competitor charges. As an example, if they are happy making $35K per year and you NEED to make $75K per year, you need to make (including encumbrances) approximately $25 MORE per hour than your "competitor". This is only one variable... what about the guy who doesn't have insurance and you do? Truck payment? Retirement plan? The list goes on... the point is your pricing structure needs to pay your bills and more importantly... YOU!

The one thing that you have to realize is that not everyone is your customer. No matter how much you want them to be, someone wanting to pay the "competition" a lower wage (which usually comes with more risk), is NOT your customer because they don't meet your needs.

If you don't have business... THAT IS YOUR JOB 100% of the time until you do (and some lined up to boot). A lot of times, we just don't want to recognize that fact...

You are NOT retail... Don't think in those terms. One of the most important things a business plan can yield you is a price list that supports your business.

Best of luck... congrat's on even looking at it... 90% don't...
I really do know my costs. I know that not everyone is my customer. However, my costs are extremly low. So I actually can compete with "most" of the low ballers. If I choose to. The difference is in the scope of work and if I want to work for wages.

I won't work for wages. I can work for less than many thoghj because of my low overhead. I choose not to because my competition has to charge more. My opinion is why should I charge less just because I have less overhead....

Anyway it comes back to the plan I don't have and how do I get one.....
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Old 10-18-2012, 08:47 PM   #32
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Re: Business Plans


The best thing I got out of writing my business plan was that it got me to really research the competition in my area and all of the marketing that was available. Even if you dont end up writing out your plan on paper I would suggest still doing all of the research involved in it.
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Old 10-18-2012, 08:55 PM   #33
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I really do know my costs. I know that not everyone is my customer. However, my costs are extremly low. So I actually can compete with "most" of the low ballers. If I choose to. The difference is in the scope of work and if I want to work for wages.

I won't work for wages. I can work for less than many thoghj because of my low overhead. I choose not to because my competition has to charge more. My opinion is why should I charge less just because I have less overhead....

Anyway it comes back to the plan I don't have and how do I get one.....
Your wages are a part of your costs... a major part actually...

As far as getting a business plan is concerned... Google it, or contact your local S.C.O.R.E. chapter...
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Old 10-18-2012, 09:31 PM   #34
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Re: Business Plans


Quote:
Originally Posted by summithomeinc

I really do know my costs. I know that not everyone is my customer. However, my costs are extremly low. So I actually can compete with "most" of the low ballers. If I choose to. The difference is in the scope of work and if I want to work for wages.

I won't work for wages. I can work for less than many thoghj because of my low overhead. I choose not to because my competition has to charge more. My opinion is why should I charge less just because I have less overhead....

Anyway it comes back to the plan I don't have and how do I get one.....
The ones I considered my main competition, I received a few quotes from by having them meet with family members (evil I know but hey, they were free and try didn't pre-qualify well). At that point I didn't know everything about my costs, I just knew if they could charge that much, why couldn't I?

Since then, I've found my price point and what works for me.

There is a kid I know who started a painting company this year. The other day we were talking and he was asking me how I did it my first year because I guess he under cut everyone to get work. He didn't think like you. He thought because he has basically zero overhead, he can work for wages.

Now, he can't raise his prices on referrals because try expect him to be cheap AND he has to get another job.
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Old 10-18-2012, 11:27 PM   #35
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Re: Business Plans


I just got home and I'm dead tired. I'd like to share a few things I did initially that made a big difference in my business and I'll write that sometime tomorrow. It's been a long day.

Just keep in mind that you only need to establish a few things to make it work. We could pretend this is a Harvard classroom and use a bunch of fancy terms and talk about a big complex business plan but that's not reality. Remember, we are contractors and we got in this business because it's fun. We can make just as much as a Harvard man without all the BS work.

What I did wasn't a business plan really it was more of just a plan. I'm not sure what to call it. What I do know is it worked and I turned a profit in the first year.

You see, don't treat this like a giant exercise in crossing all your T's and dotting all your I's because you can't, it's impossible. You just need to do the few things that matter. It's kind of like the game of chess, you don't need to be a pro to beat 80% of the players in fact if you occupy the center 4 squares of the board with your players you can dominant a chess game quite handily and a business plan is the same thing. Screew the board, let's just focus on the middle four squares of business and learn the rest of the game as we go along.

My plan was just a simple grade school notebook I stole from my kids. I just needed to occupy the middle four squares so that's all I wrote in it. The notebook, which I still have and use, is comprised of what I personally feel are the middle four squares of winning the game called contracting.
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Old 10-18-2012, 11:42 PM   #36
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Life is too fluid for me. I have personal and business goals that I have set, but no business plan. Over the three plus years I have been at this venture, I have changed direction a few times. It's like determining a college major, landing on a business degree but you end up teaching junior high Social Studies.
That's the most common excuse people give for not writing one, "Well you don't know what's going to happen, everything can change". Nonetheless, it still helps you gain focus and put your strategies together. Sure your business can change direction, but your business plan can change too. It's no excuse for not writing one.

To the original poster, read a few books on the subject. Plan for Profitability by Lee Hargrave is good, if you send him your business plan he will write back and comment on it. But read a couple different books and pick a layout that you think will be the most useful to you. No reason to go more than three years for a construction company.
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Old 10-18-2012, 11:46 PM   #37
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Re: Business Plans


Part 1

ESTABLISH WHAT YOU WANT YOUR BUSINESS TO BE

This was my first entry. No rules. No guidelines. I could be whatever I wanted to be, all I had to do was simply write it down and stick to it. Sticking to something builds consistency. It keeps you focused.

What you want might not be what I want but that doesn't matter, what matters is you figure it out. So for me at least, I just wanted it simple. One guy with no employees can carve out a hell of a nice living. It's simple and it's doable.

So I started writing.

"I'm will be a one man plumbing company and I will continually focus on building a personal brand and maximize efficiency never giving thought to growth other that what I can personally do by myself"

That's that. Sounds simple and useless but man is that powerful because I just eliminated worrying about everything not associated with a "one" man operation. I now became focused. For the rest of my life I'll be a simple and small, but effective, plumbing shop. My goal is to see take it to the limit but with only myself as the ship - captain - crew.
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Old 10-18-2012, 11:59 PM   #38
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Re: Business Plans


Part 2

COMPANY COLOR, LOGO, LOOK, FEEL ETC

Here I kept it simple. I took a look at my competition and chose colors nobody was using. I did this because I didn't want to blend in, instead I wanted to occupy look that nobody was using. It didn't matter to me what color all I knew is that I needed use what others didn't. Nobody was using red, black and white. So that's what I did, it's not personal for me and I don't have favorite colors. It's about business only so that's my approach.

Logo

I kept it simple. I wanted it clean, readable memorable and dead simple. I wanted the length of the logo to be 3x's the height because that way it fits well on hats, shirts, trucks, etc etc. It doesn't have to be but since I'm starting from scratch I might as well use common sense. I named my business after the town I lived in. It seemed to make sense with search engines so I rolled with it. My 10 year old made my logo in a few minutes and it looked cool so stretched it to fit and that was that. I wasn't going to spend all day on it because that's not where the money is.

So things started taking shape and I kept writing in my notebook.

"Everything is going to be red, black and white including my shirts. I'm going to wear this color 7 days a week including at church. People will associate me with this set of colors and I'll be sure to make it memorable"
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Old 10-19-2012, 12:23 AM   #39
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Re: Business Plans


Part 3

POSITION

Once again I kept things simple. At this point my notebook was a few pages long and I was having fun writing. My brain was thinking faster than I could write but I could see where this was going already. My new company was taking shape and on paper and i could take this anywhere I wanted. It's quite a feeling. Being creative is fun but positioning in the marketplace is a little different. Sure, this is often called the 'innovation' part of business but that wasn't my approach. The innovation in my business was going to be in the efficiency side of the equation but not the market position. For that I was just gonna take a look at my competition and see what gap I can fill.

I took a look around and determined I had ONE company that had a decent focus on service and they have 8 employees. I had 5 companies that focused on remodeling with a little service work periodically, most were between 3-5 employees in size. I also had 3 companies that that did commercial type work and didn't mess with residential.

Those were the main competitors and I still had a dozen or so outside companies but I didn't feel they mattered much.

So I had to make a decision, I had to define my market position. I didn't spend more than 5 minutes on this but I wrote multiple pages ABOUT IT.

I've done darn near everything in plumbing. I've done service work, new construction, dairy parlors, heavy industrial and commercial. Ive worked by myself and I've ran crews 30+ in size plumbing large hospitals.

Well, first off I already determined I'm gonna be a one man shop so that leaves residential only. Done! That's settled.

I picked service work. I enjoyed doing this type of work and I found a gap within my competition. Nowhere in my area was a one man shop who totally focused on service. I felt the community would accept that in fact I felt they wanted that bad. I wasn't about to compete in areas where I'm a direct competitor that's just foolish. Instead, I found myself positioned well, I found myself in a position where others did not occupy this spot.

So where does this leave me now?

"I'm a one man service and repair shop named after the home town and my colors are red, black and white." Nobody else has any of these things.

So that's that
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Old 10-19-2012, 12:30 AM   #40
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Re: Business Plans


Part 4

FINANCIAL

I made the decision I was never going into debt. Never!

This part of the plan was simple. In my notebook it was less than 1 page in length, that's the beauty of no debt. I wasn't going to put myself or my family through any stress dealing with debt so I decided never to have it.

This posed to be somewhat of a problem but I solved it, it just took some time.

........to be continued

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