Excavation Contractor Business Plan, Marketing Plan, How To Guide, and Funding Directory
The Excavation Contractor Business Plan and Business Development toolkit features 18 different documents that you can use for capital raising or general business planning purposes. Our product line also features comprehensive information regarding to how to start an Excavation Contractor business. All business planning packages come with easy-to-use instructions so that you can reduce the time needed to create a professional business plan and presentation.
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Excavation contracting is extremely important especially for real estate developers and entities that need to have proper structures produced. Excavation contracting allows for the seamless application of foundations as well as drilling wells when required by the client. As such, these contracting businesses are typically able to remain profitable and cash flow positive in any economic climate given the ongoing demand for the services on an ongoing basis. The barriers to entry for excavation contractor are also very high given the very expensive equipment that is needed to be acquired in conjunction with these services. The typical startup costs for a new excavation contracting firm range anywhere from $500,000 to about $2 million depending on whether or not equipment is going to be purchased or leased. The gross margins generated from the services typically is around 50% to 80% depending on how much outside labor is used in conjunction with services rendered. In any given market there is usually only a handful of companies that provide excavation contracting services to the general public.
An excavation contractor SWOT analysis should be produced in conjunction with a business plan and a marketing plan especially if capital is going to be raised from third parties. As it relates to strengths, excavation contractors are always able to generate revenues given the fact that municipal agencies and real estate developers always need these businesses when clearing areas for new development. The gross margins generated are moderately high in the barriers to entry are extremely high for these types of contracting businesses.
For weaknesses, excavation contractors have very high operating expenses. Not only do they need to maintain an expansive inventory of equipment but the operating expenses pertaining to employees as well as insurance is also very high. There is a substantial risk of on-site injury, and as such – wins compensation insurance and injury insurance is very high for these businesses.
For opportunities, many excavation contracting businesses are able to readily expand simply acquiring additional pieces of equipment in order to provide larger scale excavations on behalf of clients. Additionally, many of these businesses are able to generate substantial additional revenues by developing ongoing contracts with municipal agencies that frequently have issues pertaining to sewage as well as other municipal and state owned structures.
For opportunities, one of the other ways of these businesses can expand simply by acquiring businesses that already operate within this market and have an established operating history.
For threats, there’s really nothing about the excavation contracting industry that is going to change over the next 20 years. The demand for new housing, new retail facilities, and improving municipal infrastructures allow these businesses to operate within a market that is economically viable.
Given the high gross margins, high barriers to entry, and, tinged demand for excavation services – all financial institutions are willing to provide the necessary capital to launch and expand these types of businesses. This is especially true given the large amount of equipment that need to be purchased which can act as collateral for any type of financing. Of course, and excavation contractor business plan is going to be required. This business plan should feature a profit and loss statement, cash flow analysis, balance sheet, breakeven analysis, and business ratios page. As it relates to industry research, there are approximately 45,000 companies in United States that render excavation and contracting services to the general public. Each year these businesses generate approximately $60 billion revenue and provide jobs to about 300,000 people. Within the business plan, a substantial demographic analysis should be included as it relates to attracting real estate developers, general contractors, utility contractors, and other related entities – such as municipal agencies – that require excavation contracting on ongoing basis. Given that this is a highly specialized form of contracting, and analysis of the general public as it pertains to population size and population density did not really need to be included within the business plan.
An excavation contractor marketing plan also needs to be developed especially as it relates to developing ongoing relationships with real estate developers, utility contractors, as well as municipal and state agencies. Foremost, it is imperative that the owner-operator have extensive relations with these entities so that they can be called upon for contracting services at the onset of operations. Most individuals that start their own excavation contracting business typically have already established relationships with people estate developers and contractors that will continually use the firm as operations are developed.
Of course, it is also important that the excavation contractor maintain an expansive website that showcases the services rendered, when available, house operation, and contact information. This website should be listed among all major search engines. One of the interesting things about owning and operating excavation contracting businesses at the marketing required by the business is somewhat minimal. Almost all excavation contractors typically work on a subcontracted basis, and they rarely have to generally heavily market their services to the general public. However, it is important that the excavation contractor maintain print advertisements and related flyers and mailers as relates to targeting real estate developers within a regional market.
Excavation contracting is always to be in demand, despite negative changes in the economy these businesses are typically able to remain profitable and cash flow positive at all times. The high barriers to entry for these businesses allows them to thrive in their local and regional market have established market presence. The risks pertaining to automation not really applicable to and excavation contracting business. As such, these can be highly lucrative estate focused construction and contracting businesses that can produce a substantial return on investment for their owners.