Little Oak Tiny Homes

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Executive Summary

Little Oak Tiny Homes is a small building company in Oregon that makes custom tiny homes and backyard cottages in our own shop and delivers them ready to set up. A tiny home is a complete small house, usually between 200 and 400 square feet, with a kitchen, a bathroom, a sleeping space and storage designed to fit the way one person, a couple or a small family really lives.

People come to us for different reasons. Some want a place for a parent or a grown child to live near them. Some want a backyard office or rental unit. Some want to own a home without a large mortgage. We offer three floor plans and a few choices inside each one, and we explain every step in plain language, including the local rules that decide where a tiny home may be placed.

Here is what our numbers show. We expect about $453,000 in sales in Year 1 from 6 homes, growing to about $1,342,400 by Year 5 from 16 homes. We expect a profit of about $7,500 in Year 1 and about $54,100 in Year 2, then about $81,500, $110,100 and $141,700 in Years 3 to 5. We need $178,500 to open, as the Funding Need Calculator in this plan shows, and we plan to start with $185,000: $55,000 of my own savings, $30,000 from family and a local investor and a $100,000 small business loan. These figures are estimates built from the assumptions at the end of this plan, not promises.

I am Caleb Hendricks, the owner and lead builder.

Company Description

Little Oak Tiny Homes will be a limited liability company (LLC) owned by Caleb Hendricks and based in Oregon. We will lease a small shop in an industrial area where we build homes indoors, out of the rain, and deliver them on our own trailer.

What we believe. A good home should not cost a lifetime of debt. Small, well-built homes can give people a place of their own at a price more people can manage.

What we offer.
- Three standard floor plans of different sizes, each with a few options for finishes, storage and layout.
- Custom changes, within reason, when a buyer needs something different, such as a ramp, wider doors or a work space.
- Delivery, setup and utility hookup coordination, so the buyer is not left with a building and a puzzle.
- A written warranty on our workmanship and plain-language care instructions.
- Help understanding the local rules for where the home may go.

What we do not do. We do not give legal or zoning advice. Rules about tiny homes differ by city and county, and they change. Whether a home may be lived in, where it may be placed, whether it needs a permit and how it connects to water, power and sewer all depend on local rules. We ask every buyer to check with the local planning office before they sign, and we help them prepare the questions. We build each home to the code or standard that applies to where and how it will be used.

Licensing and insurance. We will hold the contractor licenses our state requires, carry general liability and builder's risk insurance and use licensed subcontractors for electrical and plumbing work where the law requires it. These costs are in our startup budget.

Where things stand today. I have drawn three floor plans, priced the materials for each and found a shop for rent. Two people who asked me to build a backyard cottage have told me they are ready to sign once I have a license and a contract.

Problem & Opportunity

Many people cannot afford a traditional house. Rents are high, home prices have risen faster than many incomes and a typical mortgage can take a large share of a family's pay for decades.

At the same time, many people want something smaller. They want a lower monthly cost, a home that is simple to keep up and a place that fits their stage of life. Families want a place for an aging parent or a young adult. Older homeowners want to stay near family. Workers want a home near their job.

What makes this hard.
- Few builders make small homes. Many contractors prefer larger projects, so a person who asks for a tiny home often hears that the job is too small.
- Prices are unclear. Buyers see wide differences in what tiny homes cost and are not sure what is included.
- Rules are confusing. Zoning, building codes, permits and utility connections change from place to place. Buyers often find out too late that the place they chose will not allow their home.
- Quality varies. Some tiny homes are built well, and some are built poorly with materials that do not last. Buyers need to be able to see how a home is made.
- Financing is hard. Many lenders treat tiny homes differently from houses, and buyers should expect to ask many questions.

We do not claim to solve the housing problem. We can build a small number of good homes each year, explain the choices clearly and help buyers avoid costly surprises.

Products & Services

Little Oak Tiny Homes builds sturdy, well-planned small homes and guides buyers through the whole process.

How it works.
1. A free first meeting. We talk about who will live in the home, where it will go, how much space is needed and what the buyer can afford. We share our three floor plans and what each costs.
2. A local rules check. Before anything is signed, the buyer meets or calls the local planning office. We provide a short list of questions and a plain-language guide. If the home cannot go where the buyer hopes, we tell them early.
3. A clear written contract. It lists the floor plan, materials, price, payment schedule and an estimated delivery date.
4. Building. We build in our shop, using quality materials and showing the buyer photos at framing, insulation and finish stages. Buyers are welcome to visit the shop.
5. Delivery and setup. We deliver on our own trailer, work with the buyer's chosen site contractor for utilities and walk the buyer through the home.
6. Warranty and support. A written warranty on our workmanship and a call after the first month.

Pricing. A custom tiny home is about $72,000 in Year 1 on average, with delivery, setup and utility hookup coordination at about $3,500. Final price depends on the floor plan and options chosen. We list what is included and what is not.

How we pay for materials. We ask for a deposit at signing, a payment at framing and the final payment on delivery. This lets us buy materials without borrowing more.

Why it works. A shop is more efficient than a building site. We keep the same trusted subcontractors and buy materials in volume. The shop also lets us build year-round, regardless of weather.

What we do not promise. We do not promise that a buyer can place a home on any piece of land, that a lender will finance it or that a home will qualify for any incentive. We help buyers ask the right questions and make careful choices.

Market Analysis

Who we serve.
- Homeowners who want a backyard cottage for family, a home office or a rental, where local rules allow.
- Families who want a small home for an aging parent or an adult child.
- First-time buyers who want to own a home without a large mortgage.
- Retirees and downsizers who want less to maintain.
- Landowners and small developers who want to place a few small homes on a property where local rules allow.

How we estimate demand. We cannot say how many people in our region want a tiny home, so we plan from what we can count. Two people have told me they will sign as soon as I am licensed. Our Year 1 plan is 6 homes, or about one home every two months, which two builders in a shop can handle with careful scheduling. By Year 5 we plan for 16 homes a year with a team of six.

Where buyers come from.
- Word of mouth from our first customers.
- Our website and photos, which show how each home is built.
- Local planning offices and home-building associations.
- Community events, home shows and open house days at our shop.
- Real estate agents and landowners with space for small homes.

Seasons. Interest picks up in spring and early summer. We plan our build schedule so the shop stays busy all year, and we take deposits for winter builds in the fall.

Capacity. We will not take more homes than we can build well. A home that is late or poorly made harms the buyer and our reputation.

Competitive Landscape

What buyers do today, and how we are different.

1. Buying a conventional house. A traditional home is the first choice for many people, but the price and the mortgage are out of reach for many. A tiny home is not for everyone, and we say so.

2. Other tiny home builders. There are other builders, some far away, and some that ship homes from long distances. Local builders can show a buyer the shop, answer questions in person and stand behind the home. We aim to be the builder near you that you can visit.

3. Factory-built and prefabricated homes. These can be good options with lower prices for some designs. They are often larger and may need a bigger site. Our homes are smaller and more custom.

4. Building it yourself. Some people build their own. It can save money and also take much more time than expected. We can sell a partly finished shell to experienced buyers if that fits.

5. Renting. Many people rent because they cannot save for a down payment. A tiny home can be a path to owning at a smaller scale.

What makes us different.
- We build in a shop near the buyer, and buyers are welcome to visit.
- We explain the local rules honestly before the buyer signs.
- Clear prices and a written warranty.
- Photos at each stage of the build.
- A focus on a small number of homes done well.

What we will not do. We will not cut corners on insulation, moisture protection or structure to lower the price. A home should last.

Marketing & Sales Strategy

How buyers will find us.

Before we open (the three months ahead):
- Finish the website with floor plans, starting prices, what is included and a simple request form.
- Build a model home or a full-size mock-up of one room so visitors can see how the space works.
- Meet with local planning offices to learn the rules for tiny homes and accessory dwellings.
- Introduce ourselves to real estate agents, landowners and builders' associations.
- Take photos and video of the first build for the website.

After we open:
- Hold an open house day each quarter at the shop.
- Ask each buyer, with permission, to allow visitors to tour their home after they move in.
- Share simple, helpful guides on our website: What to ask the planning office, how to prepare a site and how to budget for utilities.
- Post progress photos on one social page each week so buyers can see the work.
- Attend two local home or garden shows each year.
- Keep a short email list of interested buyers and send a build update every month.

Pricing and offers. We publish starting prices and what each includes. We offer a small discount for buyers who place orders for the quieter winter months, and we never pressure buyers to sign quickly.

What we watch. Requests for information, first meetings, how many meetings become contracts and how buyers heard about us. We use that to decide where to spend our $8,000 marketing budget in Year 1.

Operations Plan

How the company will run day to day.

The build process. Each home is built in our shop on its own trailer base or foundation frame. We frame, sheathe and insulate, install windows and doors, then bring in licensed electricians and plumbers where required. Interior finish, cabinets and fixtures follow. We inspect at each stage and take photos.

Schedule. In Year 1 we plan 6 homes, with about 8 to 10 weeks per home. Two people in the shop can build one home while the next is being planned and ordered.

Staffing. In Year 1 it is me and one builder, paid $44,000. In Year 2 we add a second builder. In Year 3 we add a third builder and a part-time project coordinator, paid $30,000, who handles schedules, orders and customer updates. By Year 5 we have five builders.

Equipment. We buy about $60,000 of equipment at the start: shop tools such as saws, nailers, compressors, clamps and workbenches ($38,000), and a flatbed trailer and a lift for delivery ($22,000).

Materials. We keep about $20,000 of materials on hand for the first two homes. We order the rest as contracts are signed, with deposits covering the purchases.

Safety. We follow shop safety rules, require protective gear and keep records of training. Subcontractors must be licensed and insured.

Warranty and service. We offer a written warranty on our workmanship and call each buyer after the first month. Problems are logged and fixed promptly.

Risks and how we plan for them:
- Rising material prices. We list prices for 60 days, keep an escalation clause in the contract and buy in volume.
- A buyer cannot place the home. We require a local rules check before signing and keep deposits protected in the contract.
- A delay in the schedule. We keep a conservative delivery estimate and update buyers monthly.
- A quality problem. We inspect at every stage and keep a written warranty.
- An injury. Safety training, insurance and clear shop rules.
- Slow sales. Our cushion covers the first months and we keep fixed costs low.

Management & Organization

Caleb Hendricks, owner and lead builder. I started this company because I believe a small home, built well and priced honestly, can change a family's life. I will hold the contractor licenses our state requires before our first contract and keep up with changes to the building rules where we sell.

What I bring. I work carefully, I like drawing and planning and I enjoy explaining things to people who have never built anything. I understand small business basics: keeping simple books, pricing a job to cover its costs and writing a clear contract.

Who helps me.
- A volunteer advisory group of three people: a retired contractor, a small business owner and a person who lives in a small home.
- A licensed electrician and a licensed plumber who work with us on each home.
- An engineer who reviewed our floor plans.
- A bookkeeper, paid by the hour, who handles monthly books and taxes.
- An attorney who reviewed our sales contract.

Our team. We hire builders who take pride in careful work and are willing to learn. We train each new hire in shop safety and in our methods, and we pay fairly.

My pay. I pay myself $58,000 a year from the first year. That is built into the numbers in this plan so the company does not depend on unpaid work.

Milestones Narrative

Our goals and when we plan to reach them.

Before opening (Months 1 to 3):
- Month 1: Register the LLC, open a business bank account, sign the shop lease and obtain our contractor license.
- Month 1 and 2: Buy tools and set up the shop. Finish floor plans and the sales contract.
- Month 2: Hire the first builder and order materials for the first two homes.
- Month 3: Sign the first two contracts and begin building.

Year 1:
- Build and deliver 6 homes.
- Keep a clear record of every build and what it cost, so our prices stay accurate.
- Hold open houses and gather feedback from every buyer.
- Keep a written warranty record and fix every issue promptly.

Year 2:
- Build 9 homes.
- Add a second builder.
- Add one new floor plan based on what buyers ask for.

Year 3 and beyond:
- Build 12 homes in Year 3, 14 in Year 4 and 16 in Year 5.
- Add a project coordinator in Year 3.
- Consider a second shop only after three years of steady results.
- Look at partnerships with landowners or nonprofits who want to place small homes for families, and decide with care whether to pursue any of them.

Funding Request

How much we need and how we will use it.

Total needed: $178,500, as the Funding Need Calculator in this plan shows. We plan to start with $185,000, which covers that amount with a little room to spare.

Startup costs: $114,000.
- Shop tools: saws, nailers, compressors, clamps and workbenches: $38,000.
- Flatbed trailer for delivery and a lift: $22,000.
- Shop setup: electrical, lighting and dust control: $9,000.
- Materials for the first two homes: $20,000.
- Three floor plans with an engineer's review: $7,500.
- Contractor license, permits and attorney review of the sales contract: $5,000.
- Insurance first payment (general liability and builder's risk): $6,000.
- Website, photos and a model home walkthrough video: $4,500.
- Shop and truck signage: $2,000.

Cushion. The calculator adds about $40,000 for roughly three months of Year 1 expenses and about $24,010 for cash the business uses before it breaks even, so a slow first season does not force us to close.

Where the $185,000 comes from. $55,000 of my own savings, $30,000 from family and a local investor and a $100,000 small business loan (SBA 7(a)). Loan: $100,000 at 10.5% over 10 years, which comes to $1,349 a month.

Phase 1: Build two homes on firm orders with myself and one builder, using one floor plan and a small shop. Keep costs low until both are delivered.
Phase 2: Add the second builder, the other two floor plans and the model home once the first homes are delivered, using profit from Year 1 and Year 2.

Sales and profit. Year 1 sales are about $453,000. We expect a profit of about $7,500 in Year 1, about $54,100 in Year 2, about $81,500 in Year 3, about $110,100 in Year 4 and about $141,700 in Year 5. Year 5 sales are about $1,342,400.

Cash. The lowest year-end cash balance in the plan is about $89,100 at the end of Year 1. At the end of Year 1 customers owe us about $36,240, so we follow up on unpaid bills each week.

Where each Year 1 dollar goes. Pay: owner / Lead Builder $58,000; builder / Carpenter $44,000. Direct costs of goods and services: about $261,000. Other yearly costs: shop Lease and Utilities about $30,000; insurance and Licensing about $14,000; tool Maintenance and Shop Supplies about $6,000; marketing and Website about $8,000.

Appendix Notes

Documents to attach before you share this plan:

- Your business registration and contractor license.
- Your insurance certificates, including general liability and builder's risk.
- Your shop lease or letter of intent.
- Your floor plans and the engineer's letter.
- Your sales contract and warranty.
- A materials price list and subcontractor quotes.
- Letters of interest from your first buyers.
- Photos of your sample work.
- Your local rules checklist for tiny homes.
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):
- Custom Tiny Homes (built to order): 6 in Year 1 at $72,000, growing to 16 at $80,000 in Year 5. About $41,000 each goes to direct costs.
- Delivery, Setup and Utility Hookup (per home): 6 in Year 1 at $3,500, growing to 16 at $3,900 in Year 5. About $2,500 each goes to direct costs.
- Pay (a full year, per person, including payroll taxes and workers' compensation): owner / Lead Builder $58,000; builder / Carpenter $44,000; project Coordinator (part-time) $30,000.
- Other yearly costs in Year 1: shop Lease and Utilities $30,000; insurance and Licensing $14,000; tool Maintenance and Shop Supplies $6,000; marketing and Website $8,000. These grow between 3% and 5% a year.
- Equipment: $60,000 at the start, then $5,000 to $8,000 a year.
- Startup costs: $114,000, paid once from $185,000 in startup money.
- Homes built: 6 in Year 1, growing to 16 in Year 5.
- Payment schedule: a deposit at signing, a payment at framing and the final payment on delivery.
- About 8% of each year's sales is still owed to us at year end.
- Taxes: 21%, as a simple estimate. Check with a tax professional about how your business is taxed.
- Every dollar amount is an estimate. Replace them with your own prices, quotes and real costs.

Startup Costs