Are you about starting an excavation company? If YES, here is a complete sample excavation company business plan template & feasibility report you can use for FREE.
Okay, so we have considered all the requirements for starting an excavation company One of the many business opportunities in the value chain of the construction industry is excavation business. If you live in the united states, you will agree that there are a host of excavation companies that are making money from this line of business.
It is important to state that if you want to be actively involved in running an excavation company, then you should ensure that you acquire the relevant working experience and business network. It will be to your advantage to network with contractors in the construction industry.
They are your major clients; they are the people that can give excavation contracts that can keep you afloat in your line of business.
If you are sure that this type of business is what you truly want to do after you must have conducted your market research and feasibility studies, then the next step to follow is to write a good business plan. Below is a sample excavation company business plan template that will help you successfully launch your own business;
Establishments in the Excavation Contractors industry mainly excavate land for building construction. They are known to carry out activities such as drilling shafts, foundation digging and drilling and grading et al. The excavation work performed by these companies could be new work, additions, alterations and repairs.
If you are a closer observer of happenings in the Excavation Contractors industry, you will notice that the revenue generated by players in the industry has registered a sharp increase over the last half a decade. This is supported by the increase in demand from downstream construction industries.
So also, improvement in the performance from the industry matched with the rapid expansion in demand for excavation services in the booming housing market and nonresidential building market in the United States.
Moreover, some earthmoving contractors benefited from a boost in United States government funding for road, bridge and other infrastructure construction during this period, bolstering revenue even further for the larger contractors. Going forward, industry revenue is expected to continue growing, albeit at a slower pace.
The Excavation Contractors industry is indeed a large industry and pretty much active in most countries of the world most especially in the United States of America, Nigeria, south africa, Egypt, United Kingdom, Mexico and Canada et al.
Statistics has it that in the United States of America alone, there are about 44,246registered and licensed (big, medium scale and small) excavation companies scattered all across the United States responsible for employing about 281,416 people and the industry rakes in a whooping sum of $47 billion annually.
The industry is projected to enjoy 1.3 percent annual growth within 2011 and 2016. It is important to state that no establishment can boast of having the lion share of the available market in this industry.
A recent report published by IBISWorld shows that the Excavation Contractors has a low level of concentration, as it is mainly composed of small- to medium-size contractors that operate in specific regional markets. The three largest players currently generate less than 3.0 percent of industry revenue.
The report further stated that, operators are increasingly offering services across several states or metropolitan areas in an attempt to lower downturn risks associated with local markets to increase revenue.
According to the US Census County Business Patterns data and IBISWorld estimates, 80.6 percent of industry participants employ fewer than 10 people, and 64.2 percent of establishments employ fewer than five people. Only 9.3 percent of establishments employ more than 20 people.
Starting and operating an excavation company can be tasking and challenging, but the truth is that it can be rewarding at the same time.
One good thing about the industry is that it is open for both big time investors who have the capacity to start the business with fleet of earthmoving tractors and trucks and aspiring entrepreneurs who may one to start with just one earth moving tractor and truck.
West Coast® Excavation Contractors, LLC is a standard and registered excavation company that will be based in 8009 ND Highway 23 Belle Fourche North Dakota. We will provide essential services such as earthmoving, excavating, ground de-watering, land clearing, leveling and grading, removing overburden, trench digging, foundation drilling, and drilling of shafts.
Our services and operations will center around construction sites and other locations in an around South Dakota, North Dakota, Southern Illinois; St Louis, Missouri; Southeast Missouri; Evansville, IN; Nashville, Tennessee; Memphis, Western Kentucky, Tennessee and Chicago land areas et al.
West Coast® Excavation Contractors, LLC has been able to secure all the relevant license and permits to operate throughout the United States and Canada. We will ensure that we abide by the rules and regulations of the Excavation Contractors industry and we will only hire experienced and qualified drivers with valid commercial driver’s license (CDL).
At West Coast® Excavation Contractors, LLC, our clients’ overall best interest would always come first, and everything we do will be guided by our values and professional ethics. We will ensure that we put standard structures and processes in place that will enable us meet and surpass our business goals and also stay highly competitive in the industry.
Our customers and potential customers alike can be rest assured that they will get quality services at competitive rates when they hire our services.
We will go the extra mile to ensure the safety is at the top burner in all that we do and our customers get value for their money. At West Coast® Excavation Contractors, LLC our goal is to provide excellent excavation service to our customers and we pride ourselves on the integrity and competence of our company and our employees.
West Coast® Excavation Contractors, LLC will at all times demonstrate her commitment to sustainability, both individually and as a pet sitting services business, by actively participating in our communities and integrating sustainable business practices wherever possible.
We will ensure that we hold ourselves accountable to the highest standards by meeting our clients’ needs precisely and completely. We will cultivate a working environment that provides a human, sustainable approach to earning a living, and living in our world, for our partners, employees and for our clients.
Our overall business goal is to position West Coast® Excavation Contractors, LLC to become one of the leading excavation company brands in the United States of America within the first 5 years of operations.
This might look too tall a dream but we are optimistic that this will surely come to pass because we have done our research and feasibility studies and we are enthusiastic and confident that North Dakota is the right place to launch our excavation business.
West Coast® Excavation Contractors, LLC is a family business; it is owned by Allen Newton and his immediate family members.
Allen Newton has a BSc in Business Administration and also a Diploma in Transport and Logistics Management with well over 10 years hands on experience in the construction cum excavation contractor industry working for some of the leaders in the industry both in the United States of America and Canada.
West Coast® Excavation Contractors, LLC is a company that look forward to deliver excellent services in terms of helping our customers carry out excavation jobs in a professional manner from one destination to another destination. We want to be known as the excavation company that truly care for her customers.
Our intention of starting our excavation company is to favorable compete in the industry and of course to make profits from the industry and we will do all that is permitted by the law in the United States of America to achieve our aim and business goal.
Our business offerings are listed below;
Our Business Structure
At West Coast® Excavation Contractors, LLC, our business structure will be designed in such a way that it can accommodate but full – time employees and part – time / contract staff; those who just want to take some time off to generate additional incomes.
We intend starting our excavation company with a handful of full time employees (professional truck drivers and back office staff) and some of the available earthmoving machine operators and truck driving roles fill be handled by qualified contract operators and truck drivers. Adequate provision and competitive packages has been prepared for all our full – time employees.
As a means of maximizing operational cost, we will contract the maintenance of all our earth moving machines and trucks to service provider, we don’t intend to maintain a very large overhead from the onset. But as soon as the business grow and stabilize, we will assemble our own professional in – house maintenance team. Below is the business structure and the roles that will be available at West Coast® Excavation Contractors, LLC;
Chief Executive Officer – CEO:
Admin and HR Manager
Sales and Marketing Manager
Transport and Logistics Manager
Accountant
Truck Drivers and Earthmoving Machine Operator
Client Service Executive
Our intention of starting West Coast® Excavation Contractors, LLC in North Dakota with operations center around construction sites in an around South Dakota, North Dakota, Southern Illinois; St Louis, Missouri; Southeast Missouri; Evansville, IN; Nashville, Tennessee; Memphis, Western Kentucky, Tennessee and Chicago land areas et al is to test run the business for a period of 2 to 4 years to know if we will invest more money, and expand the business all around in the United States of America and Canada.
We are quite aware that there are several excavation companies scattered all over the United States and Canada and even in the same locations where we intend starting ours, which is why we are following the due process of establishing a business.
We know that if a proper SWOT analysis is conducted for our business, we will be able to position our business to maximize our strength, leverage on the opportunities that will be available to us, mitigate our risks and be well – equipped to confront our threats.
West Coast® Excavation Contractors, LLC employed the services of an expert HR and Business Analyst with bias in start – ups to help us conduct a thorough SWOT analysis and to help us create a Business model that will help us achieve our business goals and objectives.
This is the summary of the SWOT analysis that was conducted for West Coast® Excavation Contractors, LLC;
Our core strength lies in the power of our team; our workforce. We have a team that can go all the way to give our clients value for their money; a team that are trained and equipped to pay attention to details and to deliver excellent jobs.
We are well positioned and we have standard and reliable earthmoving machines and tippers (trucks). we know we will attract loads of clients from the first day we open our door for business.
Our weakness could be lack of finance, high debt burden, cost structure, lack of scale compared to our peers who have already gained ground in the construction industry.
The opportunities that are available to us as an excavation company operating both in the United States of America and Canada are online market, new services, new technology, and of course the opening of new markets within our target locations.
Some of the threats that we are likely going to face are mature markets, bad economy (economy downturn), stiff competition, volatile costs, and rising fuel prices. Basically, just like any other business, one of the major threats that we are likely going to face is economic downturn.
It is a fact that economic downturn affects purchasing / spending power. Another threat that may likely confront us is the arrival of an excavation company in same location where ours is located. unfavorable government policies can also pose a major threat to businesses such as ours.
The market trends as it involves the Excavation Contractors industry especially in the United States of America and Canada is indeed dynamic and at the same time highly competitive and challenging.
But one thing is certain, once an excavation company can gain credibility, it will be much easier for the company to secure permanent deals / contracts with big time construction companies and government contractors who are always carrying out construction works on a regular basis.
If you are a closer observer of the trends in the Excavation Contractors industry, you will notice that the revenue generated by players in the industry has registered a sharp increase over the last half a decade. This is supported by the increase in demand from downstream construction industries.
So also, improvement in the performance from the industry matched with the rapid expansion in demand for excavation services in the booming housing market and nonresidential building market in the United States.
Moreover, some earthmoving contractors benefited from a boost in United States government funding for road, bridge and other infrastructure construction during this period, bolstering revenue even further for the larger contractors. Going forward, industry revenue is expected to continue growing, albeit at a slower pace.
Lastly, another common trend in this industry is that once an excavation company has gained credibility, it is easier for them to go for brand new trucks and earthmoving machines on a long-term leasing contract as against making use of second hand trucks and earthmoving machines which are usually expensive to maintain due to constant wear and tears of essential parts of the truck.
Our target market are basically construction companies and of course the government of United States of America and Canada. We cover both short distance (inter states) and long distance (intra states). We are in business to move stuffs and anyone who has stuffs to move within the United States or from the United States to Canada, can contact us.
In other words, our target market is the whole of the United States of America and Canada and below is a list of the people and organizations that we have plans to do business with;
Our competitive advantage
We are aware of the competitive nature of the Excavation Contractors industry and we are ready to get into the mix and favorably compete with players in the industry.
Our major competitive advantage is the vast industry experience and solid reputation of our owner, Allen Newton and our management team. West Coast® Excavation Contractors, LLC no doubt is a new excavation company, which is why we took our time to do a thorough market research and feasibility studies before launching the business.
We were able to highlight some factors that will give us competitive advantage in the marketplace; some of the factors are trust, honesty, good network and excellent relationship management, well – qualified and experienced management team, robust fleet operations, direct access to construction sites in the United States of America and Canada, our size advantages, cost advantages, supply chain, customer loyalty and strong reputation amongst domestic industry players.
Another competitive advantage that we are bringing to the industry is the fact that we have designed our business in such a way that we can comfortably work with both individual clients (contractors) and big construction companies.
Lastly, our employees (earthmoving machine operators and truck drivers and back office staff members) will be well taken care of, and their welfare package will be among the best within our category (startups excavation companies in the United States) in the industry meaning that they will be more than willing to build the business with us and help deliver our set goals and achieve all our business aims and objectives.
West Coast® Excavation Contractors, LLC will ensure that we leverage on our strength and the opportunities available to us in the U.S. and Canada market to generate enough income that will help us drive the business to stability. We will go all the way to explore every available source of income in the excavation industry.
Below are the sources we intend exploring to generate income for West Coast® Excavation Contractors, LLC;
One thing is certain, there would always be construction companies and other related businesses who would need the services of excavation companies to help them move materials and equipment from one locations to another throughout the United States of America and Canada.
We are well positioned to take on the available market in the United States of America and Canada and we are quite optimistic that we will meet our set target of generating enough income / profits from the first six month of operations and grow our business and our clientele base.
We have been able to critically examine the Excavation Contractors industry market in the United States of America and we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. The sales projections are based on information gathered on the field and some assumptions that are peculiar to similar startups in the United States of America.
Below are the sales projections for West Coast® Excavation Contractors, LLC, it is based on the location of our company and of course the wide range of excavation services that we will be offering;
N.B: This projection is done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and natural disasters within the period stated above. So also, there won’t be any major competitor (excavation company) offering same additional services as we do within same location. Please note that the above projection might be lower and at the same time it might be higher.
No doubt, networking is an effective way to begin building your client base as a business man or woman and we have plans in place to leverage on all our networks. In view of that, we will look out for gatherings where we can network with captain of industries, construction contractors and government contractors et al. As a matter of fact, our first port of call will be to connect with the nearest Chamber of Commerce; we are likely going to get our first major deal from them.
At West Coast® Excavation Contractors, LLC all our employees will be directly or indirectly involved in sales and marketing of our services. We will create provision for our employees to earn commission when they bring in business for the organization. We will also encourage freelancers to work with us; whenever they refer clients to us they will earn a percentage of the deal as agreed by both parties.
Lastly, we will leverage on the power of the media by advertising our services using both online and offline platforms. We will work hard to ensure that get repeated business from any business deal we execute and also, we will encourage our customers to help us refer their friends to us. Part of our strategy is to reward loyal customers and to leverage on word of mouth marketing from satisfied customers.
Over and above, we have perfected strategies to network with people who are likely to refer business our way on a regular basis. In summary, West Coast® Excavation Contractors, LLC will adopt the following sales and marketing strategies in sourcing for clients for our business;
Despite the fact that our excavation company will be well located, we will still go ahead to intensify publicity for the business. We are going to explore all available means to promote our business.
West Coast® Excavation Contractors, LLC has a long term plan of covering various locations in major cities in the United States and Canada which is why we will deliberately build our brand to be well accepted in construction sites in an around North Dakota, South Dakota, Southern Illinois; St Louis, Missouri; Southeast Missouri; Evansville, IN; Nashville, Tennessee; Memphis, Western Kentucky, Tennessee and Chicago land areas et al before venturing out to other cities both in the United States of America and Canada.
As a matter of fact, our publicity and advertising strategy is not solely for winning customers over but to effectively communicate our brand. Here are the platforms we intend leveraging on to promote and advertise West Coast® Excavation Contractors, LLC;
West Coast® Excavation Contractors, LLC has a lease arrangement with various companies and the company’s pricing is based on miles per thousands of tons of materials transported. We have perfected our plans to charge competitive rates since we have minimal full – time overhead compared to our competition in the industry.
We will ensure that we leverage on price to win over customers; our prices will be affordable and negotiable. The fact that our business door is open to both individuals and corporation organizations means that we will have different price range for different category of clients.
We are aware that government contracts comes with a bidding template, we will ensure that we abide by such bidding templates whenever we have the opportunity to bid for government contracts. As the business grow, we will continue to review our pricing system to accommodate a wide range of clientele.
The payment policy adopted by West Coast® Excavation Contractors, LLC is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of the United States of America.
Here are the payment options that West Coast® Excavation Contractors, LLC will make available to her clients;
In view of the above, we have chosen banking platforms that will enable our client make payment for services rendered without any stress on their part. Our bank account numbers will be made available on our website and promotional materials to clients who may want to deposit cash or make online transfer for services rendered.
In setting up any business, the amount or cost will depend on the approach and scale you want to undertake. If you intend to go big by renting a place, then you would need a good amount of capital as you would need to ensure that your employees are well taken care of, and that your facility is conducive enough for workers to be creative and productive.
This means that the start-up can either be low or high depending on your goals, vision and aspirations for your business.
The tools and equipment that will be used are nearly the same cost everywhere, and any difference in prices would be minimal and can be overlooked. As for the detailed cost analysis for starting an excavation company; it might differ in other countries due to the value of their money.
When it comes to starting, an excavation company the major areas that you look towards spending the bulk of your cash is in the purchase of standard earthmoving machines and trucks and of course renting or leasing a well-located facility / yard large enough to accommodate your fleets of trucks. Aside from that, you are not expected to spend much except for paying of your employees, maintaining your trucks and fueling.
This are the key areas where we will spend our start – up capital;
Going by the report from the market research and feasibility studies conducted, we will need about two million and two hundred thousand (1.2 million) U.S. dollars to successfully set – up a medium scale but standard excavation company in the United States of America.
Generating Funds / Startup Capital for West Coast® Excavation Contractors, LLC
West Coast® Excavation Contractors, LLC is a family business that will be owned and managed by Allen Newton and his immediate family members. They are the sole financial of the business which is why they decided to restrict the sourcing of the start – up capital for the private school to just three major sources.
These are the areas we intend generating our start – up capital;
N.B: We have been able to generate about $400,000 (Personal savings $350,000 and soft loan from family members $50,000) and we are at the final stages of obtaining a loan facility of $800,000 from our bank. All the papers and document has been duly signed and submitted, the loan has been approved and any moment from now our account will be credited.
The future of any business lies in the numbers of loyal customers that they have, the capacity and competence of the employees, their investment strategy and the business structure. If all of these factors are missing from a business (company), then it won’t be too long before the business close shop.
One of our major goals of starting West Coast® Excavation Contractors, LLC is to build a business that will survive off its own cash flow without the need for injecting finance from external sources once the business is officially running. We know that one of the ways of gaining approval and winning customers over is to engage in affordable, timely, safe and efficient exaction services at all times.
West Coast® Excavation Contractors, LLC will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and re – training of our workforce is at the top burner.
As a matter of fact, profit-sharing arrangement will be made available to all our management staff and it will be based on their performance for a period of three years or more. We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.
Check List / Milestone
