Excavation Company

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Executive Summary

Groundwork Excavating is an excavation company serving homeowners, builders and small businesses in our county and the nearby towns. We clear and grade lots, dig trenches, foundations and ponds, haul material and prepare sites for driveways and buildings. Nothing gets built until the ground is ready, and builders and homeowners often wait weeks for an excavator who is fairly priced and reliable. Many jobs go over budget because of poor planning or hidden costs. We will win customers by planning carefully, calling for utility marks, giving clear prices and doing the work safely. Here is what our numbers show. We expect sales of about $314,000 in Year 1, growing to about $1,260,200 by Year 5 as we add equipment operators and take on larger residential and commercial jobs. We expect losses of about $77,100 in Year 1 and $45,800 in Year 2 while we build our customer base, then a profit from Year 3 (about $58,400), growing to about $189,100 by Year 5. We need $306,500 in total. That covers $191,500 in startup costs (used excavation equipment, trucks and trailers, attachments, opening supplies, license and bond fees, insurance and advertising) and a cash cushion of about three months of bills. I am putting in $40,000 of my own money, and I am asking for $236,000 as an SBA 7(a) loan, plus $30,500 from an investor or partner. The startup costs include used equipment and trucks. Equipment is the largest part of this business, and a smaller first step is described below. I am Karen Okafor, the owner. These numbers are estimates based on the assumptions listed at the end of this plan, not promises.

Company Description

Groundwork Excavating will be a limited liability company (LLC) in Maine, owned by Karen Okafor. We will work from my home, with the equipment parked on my property and fuel and parts stored in a locked shed. What we believe. Plan the job, mark the utilities, work safely, give a clear price and leave the site ready for the next trade. What we offer:
- Lot clearing, grading and site preparation. - Foundations, basements and trenches for utilities. - Driveways, parking pads and drainage work. - Ponds, ditches and erosion control. - Hauling, demolition and material delivery. Licenses and insurance. Excavation is regulated. Many states and cities require a contractor license, permits for grading and erosion control, and insurance and bonding for larger jobs. Before any digging, we call 811 so underground utilities are marked. Our state requires a contractor license for jobs over $2,500, and our county requires a grading permit. We will carry general liability, equipment and workers' compensation insurance, and follow trench safety rules, which require protective systems in deeper trenches. Where things stand today. I have operated equipment for a contractor for seven years, I hold my operator certificates, and I have priced a used mini excavator and dump truck.

Problem & Opportunity

Builders and homeowners near us need site work done right, and it is hard to find an excavator with time. 1. Long waits. Excavators are often booked for weeks, which delays building. 2. Surprise costs. Rock, water and poor soil can add cost, and many quotes do not allow for it. 3. Safety and utilities. Hitting a buried line is dangerous and expensive. 4. Poor drainage. Sites that are graded badly can flood or erode. How we know people want this. Six neighbors asked me for grading and trenching estimates last year, and a small builder said he needs a reliable excavator for his next three lots.

Products & Services

What we sell. 1. Residential site prep and grading. Clearing, grading, trenching and driveway prep for homes. Our plan assumes an average of about $5,200 per job in Year 1, rising to about $5,853 by Year 5. Fuel, hauling and direct costs run about $2,400 per job. We expect about 35 jobs in Year 1, growing to about 118 a year by Year 5. 2. Commercial and development excavation. Larger jobs: foundations, utilities and lot development. Our plan assumes an average of about $22,000 per project in Year 1, rising to about $24,761. Direct costs run about $11,000 per project. We expect about 6 projects in Year 1, growing to about 23. Our prices. Mini excavator with operator $130 an hour. Driveway prep from $1,500. Foundation dig from $4,000. Site clearing quoted by the acre. How it works for the customer:
1. A free site visit and a written estimate, with the assumptions listed. 2. A call to 811 and a plan for the work, with permits if needed. 3. A crew that arrives on time with the right equipment, working safely. 4. A final walk-through, with the site graded and ready for the next step. Gross margin, explained. "Gross margin" is the share of each sale left after paying for materials and direct job costs. Our plan shows about 52% in Year 1. That money pays the owner and crew, vehicle costs, insurance and other bills.

Market Analysis

Who will hire us:
- Homeowners building, adding or improving their land. - Home builders and contractors who need site work. - Landscapers and concrete companies who need excavation help. - Small businesses and landowners developing lots. Where we will work. A service area close enough to move equipment affordably, starting with our county and the two neighboring towns, within 40 minutes of my home. Season. Excavation is busiest in the dry, warm months, and slower in deep winter. We use slow weeks for maintenance, estimates and bidding. Our plan is careful on purpose. About 35 residential jobs and 6 larger projects in Year 1 is a pace the owner and one operator can handle well.

Competitive Landscape

Other choices customers have:
1. Larger excavation companies. Allied Excavating (a made-up name) charges about $130 an hour for an excavator and operator; known for quality, but booked for weeks. 2. Small operators with a backhoe. Cheaper, but may not be insured or licensed. 3. Renting equipment and doing it yourself. Possible for small jobs, but risky and often slower. How we will win customers: reliable scheduling, careful planning, safe work, clear written estimates and a clean finish.

Marketing & Sales Strategy

How people will find us. - A free Google business listing with photos of finished work, and a simple website. - Relationships with builders, concrete companies, landscapers and surveyors. - Asking every happy customer for a review and a referral. - Bids on small commercial and subdivision jobs, once we have a track record. - Truck lettering and signs at job sites, with permission. Administration and bidding budget. About $9,000 a year for administration, estimating and bidding. The truck lettering, business cards and website are paid for from startup costs.

Operations Plan

How the business runs day to day. Estimates and jobs. The owner visits sites, writes estimates, calls 811, schedules equipment and runs the machines. In Year 1 the owner works with one equipment operator, and we grow to four operators by Year 5. Each job has a plan, an utility locate, permits if needed, a safety plan and a final walk-through. Equipment. About $170,000 to start: used mini excavator; used skid steer loader; used dump truck; used equipment trailer; used pickup truck; buckets, grapple and auger attachments; laser level and grade tools; hand tools and safety gear. We set aside about $15,000 to $20,000 a year for repairs and replacements. Upkeep. Daily equipment checks (fluids, tracks, hoses and attachments), scheduled servicing and repairs, and careful transport so equipment is not damaged or dropped. Safety. Excavation is dangerous. We call 811 before every dig, slope or shore trenches as safety rules require, keep people away from moving machines, wear proper protection and never enter an unprotected trench. Running costs in Year 1: equipment maintenance and fuel about $38,000, licensing and insurance about $16,000, administration and bidding about $9,000. Scheduling and billing. A simple scheduling and invoicing app on my phone, with customers billed a deposit at booking and the rest at completion.

Management & Organization

Who runs the business. Karen Okafor, owner. As owner I will operate equipment, write estimates, call for utility marks, schedule jobs, keep the equipment running and handle the money side of the business. I plan to pay myself $62,000 a year in salary in Year 1. Crew. Equipment operators at about $52,000 a year each (or part-time pay): one in Year 1, two in Year 2, two in Year 3, three in Year 4 and four 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). Victor Kim 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 or finance the equipment, and set up the phone and website. Target start: March 2027. - First year: complete about 35 residential jobs and 6 larger projects, for about $314,000 in sales. - Year 2: add a second operator, about $482,500 in sales, and a loss of about $45,800. - Years 3 to 5: grow to four equipment operators and about $1,260,200 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: estimates given, jobs finished, equipment hours and repairs, fuel costs, and cash in the bank.

Funding Request

How much we need and how we will use it. Total needed: $306,500. The Funding Need Calculator in this plan shows a minimum, and we plan to raise a little more than that so the loan payments in the early years are also covered. The calculator's number adds up: - Startup costs of $191,500, listed item by item in the Startup Costs section (about $170,000 for the excavator, skid steer, dump truck, trailer, pickup, attachments and tools, $2,000 for opening fuel, oil and filters, $3,000 for the licenses and bond, $12,000 for the first insurance payments, $1,500 for business setup and bookkeeping software, and $3,000 for truck lettering, business cards and a website). - A cash cushion of about $115,000: 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 $276,000 (rounded up to the nearest $500), which is the minimum the calculator shows. We are planning for $306,500, which adds room for the early loan payments. Where the money comes from: - My own money: $40,000. - Amount requested: $236,000. - From an investor or partner: $30,500. Kind of funding we are looking for: an SBA 7(a) loan through a local bank or community lender, plus investor or partner money, which is not paid back with interest but gives that person a share of the business. How we will pay it back. We expect losses of about $77,100 in Year 1 and $45,800 in Year 2 while we build our customer base, then a profit from Year 3 (about $58,400), growing to about $189,100 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 $3,489 a month are already included in our cash flow. What we are offering the lender: our equipment and trucks 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 by renting a mini excavator and trailer for small jobs on evenings and weekends, while keeping your current job. Startup can be under $5,000. - Phase 2: once you have more jobs than you can handle part-time, buy the excavator and truck 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. - Quotes for the equipment and vehicle. - Your price list and a sample written 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 Site Prep & Grading: about $5,200 per job in Year 1, rising to $5,853; about $2,400 per job in direct costs; about 35 jobs in Year 1, growing to 118. - Commercial & Development Excavation: about $22,000 per project in Year 1, rising to $24,761; about $11,000 per project in direct costs; about 6 projects in Year 1, growing to 23. - Owner salary: $62,000 a year. Crew: $52,000 a year each, from one in Year 1 to four in Year 5. - Other yearly costs in Year 1: equipment maintenance and fuel about $38,000, licensing and insurance about $16,000, administration and bidding about $9,000. - Tax rate: 21%. - Every dollar amount is an estimate. Replace them with your own quotes and research.

Startup Costs