General Contractor / Construction Company

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Executive Summary

Cornerstone Builders is a general contracting company serving homeowners, landlords and small businesses in our county and the nearby towns. We manage and build remodels, additions and light commercial projects, hiring and supervising the skilled trades. A construction project is one of the biggest things many people ever buy, and many have been burned by contractors who start late, go over budget or disappear. We will win clients by giving a clear written contract and schedule, keeping the budget honest, communicating weekly and standing behind our work. Here is what our numbers show. We expect sales of about $342,000 in Year 1, growing to about $1,372,000 by Year 5 as we add project managers and take on more remodel and light commercial projects. We expect a loss of about $5,900 in Year 1 while we build our customer base, then about break-even in Year 2 (a profit of about $200) and a profit of about $53,800 in Year 3, growing to about $139,600 by Year 5. We need $92,000 in total. That covers $41,000 in startup costs (a truck and trailer, tools, software, opening materials, license and bond fees, insurance, contract templates and advertising) and a cash cushion of about three months of bills. I am putting in $30,000 of my own money, and I am asking for $62,000. The startup costs include a used pickup truck and a trailer. I am Eric Kim, the owner. These numbers are estimates based on the assumptions listed at the end of this plan, not promises.

Company Description

Cornerstone Builders will be a limited liability company (LLC) in Arkansas, owned by Eric Kim. We will work from my home, with the truck and trailer parked on my property and records kept in a home office. What we believe. Put everything in writing, price honestly, communicate every week and finish what we start. What we offer:
- Kitchen and bathroom remodels. - Room additions, basements and decks. - Repairs after water, fire or storm damage. - Light commercial build-outs for offices and shops. - Project management for owners who want to coordinate trades. Licenses and insurance. General contracting is licensed in most states, usually requiring experience, an exam, a bond and insurance, with permits and inspections for most work. Our state requires a general contractor license for jobs over $5,000, which I will have in place before opening. We will never start work without the license and permits our area requires. We use written contracts with a clear scope, schedule and payment plan, follow the state's rules on deposits and lien rights, carry general liability and workers' compensation insurance and require insurance from every subcontractor. Where things stand today. I have worked in construction for ten years, including four as a site supervisor, I will take my contractor exam before opening and I have a list of reliable trades.

Problem & Opportunity

Homeowners and small businesses near us want building projects done right, and a contractor they can trust. 1. Late and over budget. Many projects drag on and cost more than quoted. 2. Poor communication. Clients often do not hear from the contractor for days. 3. Unlicensed work. Some cheap options skip permits, which can cause trouble when selling or insuring. 4. Disappearing contractors. Some take a deposit and do not return. How we know people want this. Six homeowners asked me for remodel quotes last year, and an architect said she would refer projects.

Products & Services

What we sell. 1. Residential remodel projects. Kitchens, baths, additions and repairs, with a clear contract. Our plan assumes an average of about $18,000 per project in Year 1, rising to about $20,000 by Year 5. Materials, subcontractors and direct costs run about $12,500 per project. We expect about 12 projects in Year 1, growing to about 41 a year by Year 5. 2. Light commercial projects. Build-outs and renovations for offices, shops and restaurants. Our plan assumes an average of about $42,000 per project in Year 1, rising to about $46,000. Direct costs run about $31,000 per project. We expect about 3 projects in Year 1, growing to about 12. Our prices. Bathroom remodel from $14,000. Kitchen remodel from $28,000. Deck from $12,000. Basement finishing from $30 a square foot. How it works for the customer:
1. A free consultation and a site visit, with a clear discussion of goals and budget. 2. A written estimate, contract, schedule and payment plan, and permits arranged by us. 3. Weekly updates, photos and a single point of contact. 4. A final walk-through, a punch list completed and a warranty on our work. Gross margin, explained. "Gross margin" is the share of each sale left after paying for materials and direct job costs. Our plan shows about 29% in Year 1. That money pays the owner and crew, vehicle costs, insurance and other bills.

Market Analysis

Who will hire us:
- Homeowners remodeling kitchens, baths and basements. - Homeowners adding rooms or decks. - Landlords and property managers renovating units. - Small businesses building out or updating space. Where we will work. A service area close enough to visit job sites daily, starting with our county and the two neighboring towns, within 30 minutes of my home. Season. Construction is busiest in the warm months, and indoor projects fill the winter. We schedule projects so that crews stay busy all year. Our plan is careful on purpose. About 12 remodel projects and 3 light commercial projects in Year 1 is a workload the owner can manage well, with trusted subcontractors.

Competitive Landscape

Other choices customers have:
1. Larger construction companies. Heritage Remodeling (a made-up name) charges about $20,000 for a bathroom; known for quality, but over budget in reviews. 2. Small contractors and handymen. Cheaper, but often not licensed or insured. 3. Doing it yourself. Cheaper, but risky for large projects. How we will win customers: clear contracts, honest budgets, weekly updates, licensed and insured work and a warranty on our work.

Marketing & Sales Strategy

How people will find us. - A free Google business listing with photos of finished projects, and a simple website. - Asking every happy client for a review and a referral. - Relationships with architects, designers, real estate agents and suppliers. - Yard signs at job sites, with permission. - Bids on small commercial projects, once we have a track record. Marketing budget. About $6,000 a year for marketing and bidding. Truck lettering, yard signs and the website are paid for from startup costs.

Operations Plan

How the business runs day to day. Estimates and projects. The owner meets clients, writes bids, hires and schedules subcontractors, orders materials and supervises the work. In Year 1 the owner works alone, with trusted trades. We add one project manager in Year 2 and grow to two by Year 5. Each project has a contract, a permit, a schedule and a final inspection. Equipment. About $25,000 to start: used pickup truck; utility trailer; tool sets, saws and ladders; laser levels and measuring tools; tablet and estimating and project software. We set aside about $5,000 to $6,000 a year for repairs and replacements. Upkeep. Tools and the truck serviced on schedule, project files and photos organized and subcontractor insurance and licenses kept current. Safety. A safe job site, with protective gear, proper ladders and scaffolds, and clear safety rules for every trade. We require subcontractors to carry insurance and follow safety rules. Running costs in Year 1: licensing, bonding and insurance about $14,000, marketing and bidding about $6,000, admin and office about $10,000. Scheduling and billing. Project management software, with clients billed on a schedule tied to milestones.

Management & Organization

Who runs the business. Eric Kim, owner. As owner I will estimate and win projects, manage contracts and budgets, supervise work, communicate with clients and handle the money side of the business. I plan to pay myself $62,000 a year in salary in Year 1. Crew. Project managers at about $58,000 a year each (or part-time pay): none in Year 1, one in Year 2, one in Year 3, two in Year 4 and two in Year 5. People who will help us: a bookkeeper or tax preparer, an insurance agent, and a free mentor from SCORE or the Small Business Development Center (SBDC). Steven Singh serves as a key volunteer advisor.

Milestones Narrative

Our goals and when we plan to reach them. - Before starting: get the license, bond and insurance, register the business, buy the truck and tools, and line up reliable subcontractors. Target start: March 2027. - First year: complete about 12 remodel projects and 3 light commercial projects, for about $342,000 in sales. - Year 2: add a project manager, about $566,500 in sales, and a profit of about $200. - Years 3 to 5: grow to two project managers and about $1,372,000 in sales by Year 5. Growth depends on hiring good people and winning the work, so treat the later years as goals, not promises. What we check every week: projects on schedule, budget versus actual, change orders, invoices paid, and cash in the bank.

Funding Request

How much we need and how we will use it. Total needed: $92,000. This number comes from the Funding Need Calculator in this plan. It adds up: - Startup costs of $41,000, listed item by item in the Startup Costs section (about $25,000 for the truck, trailer, tools, levels and software, $3,000 for opening materials, $3,000 for contractor license, exam and bond fees, $6,000 for the first insurance payments, $1,500 for entity formation, contract templates and bookkeeping, and $2,500 for truck lettering, yard signs and a website). - A cash cushion of about $51,000: the deepest cash dip in the early months plus about three months of bills, so slow weeks do not put the business at risk. Lenders call this "working capital." - Together that comes to about $92,000 (rounded up to the nearest $500), which is the total we are planning for. Where the money comes from: - My own money: $30,000. - Amount requested: $62,000. Kind of funding we are looking for: an SBA 7(a) loan through a local bank or community lender. How we will pay it back. We expect a loss of about $5,900 in Year 1 while we build our customer base, then about break-even in Year 2 (a profit of about $200) and a profit of about $53,800 in Year 3, growing to about $139,600 by Year 5. With this funding, the business has money in the bank every year of the plan. The loan is planned at 12.75% interest over 10 years, the most the SBA allows for a loan this size, so payments of about $917 a month are already included in our cash flow. What we are offering the lender: our truck and equipment as collateral and my personal guarantee A smaller first step, if needed. If we cannot raise the full amount right away, we can start smaller and grow into this plan: - Phase 1: start with small remodel and repair jobs under the dollar limit that needs a license, working with trusted trades, while keeping your current job. Startup can be under $3,000. - Phase 2: once you have more projects than you can handle part-time, get your license, buy the truck and tools and follow this plan. To plan the smaller start, make a copy of this plan (use Duplicate) and lower the numbers to match. All numbers in this plan are estimates. We will update them as real results come in.

Appendix Notes

Documents to attach before you send this plan:

- Your resume (one page is fine) and any licenses or certificates. - A personal financial statement (a list of what you own and what you owe; lenders usually provide a form). - Business registration papers and your EIN (your business tax number from the IRS, free at irs.gov). - Proof of insurance, or a quote. - Your contractor license and bond, or the steps to get them. - A sample contract and estimate. - Photos of past work and references, if you have them. If you don't have any of this yet, no worries - let's continue. The assumptions behind our numbers (change them in the Financials section to match your own):
- Residential Remodel Projects: about $18,000 per project in Year 1, rising to $20,000; about $12,500 per project in direct costs; about 12 projects in Year 1, growing to 41. - Light Commercial Projects: about $42,000 per project in Year 1, rising to $46,000; about $31,000 per project in direct costs; about 3 projects in Year 1, growing to 12. - Owner salary: $62,000 a year. Crew: $58,000 a year each, from none in Year 1 to two in Year 5. - Other yearly costs in Year 1: licensing, bonding and insurance about $14,000, marketing and bidding about $6,000, admin and office about $10,000. - Tax rate: 21%. - Every dollar amount is an estimate. Replace them with your own quotes and research.

Startup Costs