Business Plan: Formula For Success

If you do not have experience in writing a business plan, you should seriously consider hiring a professional to assist you with your business plan, before ever submitting it for any loan. I had 5 years of sales data and more than $1,000,000 in sales on the books to back up this plan. The words "branding" are the same in English, German, and Spanish. Creating a name brand is a very tough challenge to accomplish.

Executive Summary & Introduction

William Harrison is 30 years old and spent his first 23 years of his life in Alexandria, VA growing up. Nash Enterprises, Inc. is a small wood fence company located in North Carolina. The company was successfully operated in the Raleigh area from 2002-2006 when it expanded its territory in 2006 to cover the Charlotte, NC area. Nash Enterprises has shown a profit each year after its first year in business. Nash Enterprises, Inc. used to be Harrison Home Improvement, Inc, but changed names to rebrand as a company that no longer deals with home improvement, but focuses on wood fences.
The Company
William and Jamie Harrison purchased a home in Raleigh at the end 2001. William commuted every weekend for 6 months from Virginia to Raleigh while he sought employment. After 700 applications and NO instant success guaranteed, he quit his job in Northern Virginia and moved permanently 250 miles from home to Raleigh, NC. William looked for a technology job (his career at the time) and could not find one in Raleigh. Most people would see quitting your job and moving 250 miles from home with no income as irrational and ridiculous.  Actually, people underestimating William is what pushed him to turn something amazing out of NOTHING. The company has shown consistent growth over the last 6-7 years.
Services
Nash Enterprises provides wood fence installation services. We also provide fence protection (water sealing and staining) services.
The Market
With the economy in its current state, we feel this is the perfect time to expand our territory again. Although the housing market has slowed, the fence market is still a good business to be in. You see, things like decks, screened porches, patios are all project that can wait. A fence is something that is a NEED and not a WANT for Americans. People NEED fences to contain their pets, people NEED fences to protect their children, and people NEED a fence to ensure their privacy.
Financial Considerations
William Harrison and Nash Enterprises have managed their debt significantly well over the years and plans to keep it that way. Neither Nash Enterprises or its owners has EVER been late on any payment in a decade, since credit was first obtained. We expect to see increased profits from our expansion immediately upon spring of 2009. Over the next three years we expect increased profits as the websites gain steam and exposure. Because of our business experience and ability to focus on just wood fences, we really have no doubt that our potential for success is extremely good. Actually William has a write off for $175 to Verizon on his credit report which was unjust and inaccurate, but was paid years ago. He never realized one little bogus charge could affect his credit.

 

1.1 Objectives
Nash Enterprises plans to:

• Expand its coverage area back to his home turf in Northern Virginia.

1.2 Mission
Nash Enterprises mission is to continue to out manage its competitors by offering the highest quality wood fences at the lowest possible prices.
1.3 Keys to Success
The local commercial construction market is a tough market to be in for many companies. Because Nash Enterprises’ business structure is unlike ANY other fence company in the region or likely in the U.S., it can focus on the following tasks:

• Grow our already expanding base of website coverage.
• Expanding our coverage area back to Northern Virginia and potentially covering Richmond.
• Maintaining our North Carolina base.

Company Summary
Nash Enterprises is not going to have a really in depth business plan because it does not need to. You see simplicity and organization is what has made Nash Enterprises successful. Nash Enterprises was started with no knowledge of construction, but with a heart and determination like no other. Nash Enterprises has shown continued success year in and year out. 2003 sales, the first “official” year in business were a measly $55,000. The following year Nash Enterprises doubled those to $110,000. Its 3rd year, it grew sales again to a WHOPPING $288,000. The next year sales grew to $314,000 and the year after that to $481,000. While we realize sales and profit are completely different, it shows a trend of the need for fences and Nash Enterprises’ ability to meet that demand. The profit numbers can actually be misleading. William chooses to reinvest the profits into the business through assets, materials, tools, and does many good things for the community. Nash Enterprises believes that the biggest problem is our country as of today is CORPORATE GREED. Nash Enterprises would rather eat the cost of an entire fence for a person that cannot afford a fence, then show a profit of $100,000. William’s good nature and business skills allow him to live comfortably rather than live extravagantly. He feels that his company has a proven track record regardless of the profit shown on paper. At 30 years of age, Jamie and Will have a combined net worth of $150,000 to $200,000. Considering that the average American doesn't have savings, we hope that you will take into consideration the larger picture.
2.1 Company History
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The company began operations at the end of 2001, expanded to Charlotte, NC in Jan. 2007 and was able to cover Greensboro and Winston-Salem because the two cities were in the middle of Charlotte and Raleigh. We plan to use this same approach when we expand to Northern Virginia. Because of our locations we should be able to cover southern Virginia as well.

 2.2 Company Ownership
Nash Enterprises, Inc. is a S-Corporation in the state of North Carolina. Mr. William Harrison exclusively owns Nash Enterprises.
Services
We have streamlined our services to focus solely on wood fences and when desired fence protection, which is becoming more popular, but consider those jobs more of a bonus than worth counting on income from.
Market Analysis Summary
The Northern Virginia area is and has been one of the larger populated areas on the east coast. Its continued growth makes it a prime candidate for expansion. William frequent visits to the area and long history and knowledge of the area make it all that much easier for William to get started.
4.1 Market Segmentation
Our clients are 99.9% homeowners. We don’t deal with contractors or corporations or homebuilders. This eliminates quite a bit of headache when it comes to getting paid.
4.2 Target Market Segment Strategy
Since wood fence construction has the highest profit margin, least amount of headache and problems that occur with customers can easily be corrected with a cut of a saw, we will focus most of our marketing and advertising toward homeowners. The average fence cost is about $2,500-$3,500. 
4.3 Service Business Analysis
While the home boom may be over, the demand and need for fences is far from over. In our experience, most homeowners do not purchase a fence when they purchase their home. In fact, the turn around time from a home purchase to a fence purchase is about 2-3 years. This actually puts us in a good position, because so many homes have been built and people need to save money from the time they fork out all of that money at closing.
4.3.1 Competition and Buying Patterns
Competition is something that we have not had to worry too much about. Why? 99% of fence companies use subcontractors. Why does that matter? Subcontractors are basically fence companies that cannot afford advertising. A fence company spends $25,000 a year on telephone book ads and then instead of building the fences in house, they go and hire a subcontractor to build the fence. Subcontractors are EXPENSIVE. If you know about the construction industry, you will know they are required to have their own tools, their own insurance, their own vehicles and by the time all of that is paid for, that fence company has to charge an OUTRAGEOUS amount of money for a fence. For example, in Raleigh the average competitor charges $15 per foot for a standard wood privacy fence. Nash Enterprises price $13. We are the competition.
Another critical point is that our competitors ALWAYS allocated 2 days to build a fence, the first day to set the posts, and the second day to build the fence. Well, that incurs a lot of extra driving time, gas, vehicle wear and tear and unnecessary running around. We have found a way to successfully build an entire fence in 4-8 hours in a single day without sacrificing the quality of our goods. Remember the first paragraph of this Business Plan. People underestimated William, and he pushed himself harder to succeed. His competitor’s did the same thing; they forced William to seek change, to think how to make operations faster, easier, smoother, and more reliable.
William also found that yellow page ads are EXPENSIVE, UNPRODUCTIVE, and EXPENSIVE. At one point, a dollar bill size ad in the BellSouth and Talking Phonebook was costing him nearly $1,500 a MONTH. His competitor’s ads were of equal size or larger. Again, this forced change he sought a better way to get business. He put his computer skills and technology experience back to work and started to design more and more websites. He currently has a marketing and advertising company through which he does all of Nash Enterprises advertising.
Fences are a top item purchased with tax refund checks, making this an ideal time to startup operations in another city prior to refund checks being distributed.
Strategy and Implementation Summary
Nash Enterprises plans to continue market itself through a variety of methods.

5.1 Competitive Edge
The competitive edge we have, maintain and plan on continuing to hold is outlined in our Competition section, but are more than happy to reiterate it here again. NO EXPENSIVE TELEPHONE BOOK ADS. NO EXPENSIVE SUBCONTRACTORS. LOW ADVERTISING COSTS. NO ON-SITE ESTIMATES. NO HOURLY EMPLOYEES. This is another crucial advantage to our company’s strategy. Our employees are paid salary. If an employee can get 40 hours of work done in 30 hours, and still be paid for 40 hours, the employee is happier and we are happier. Hourly employees have no incentive to accomplish their work. In fact, our experience is they actually work much slower, maybe to make more money. Salary employees and temporary help when needed have been essential to our success. Our employee who will run the Raleigh, NC operations has been with our company for 3 years, has had 20 years of experience with the area of North Carolina and has shown his ability to make our company strong.
Another competitive edge we employ is NO on-site estimates. This is CRITICAL to our past, present, and future success.  This outrages our competitor’s. Think about it. ABC Fence Company spends 45 minutes driving out to your house to measure your yard, another 30 minutes measuring and talking to you, to then call you 3 days later to tell you it is going to cost you $4,500 for your fence. Nash Enterprises bases ALL of their fence prices by the foot. You now have your $4,500 estimate from ABC Fence Company and you call us, you say, “Hey will ABC quoted me $4,500 for 300 feet of fence.” I say well, we can do that same fence for $3,600. You ask if it is the same lumber. Yes. You ask if it is the same quality. Yes. How can you save us $900? Well, we don’t spend money driving around ALL year long doing estimates for jobs that we don’t get, and we don’t spend $1,500 a MONTH on phone book ads. Again, our competitive edges are exactly what made this company succeed.
We give a price. If you like our price, we setup a day to start. We get the lumber delivered directly from the supplier, the day prior to the start date, and meet with the customer the morning that we begin. Three trips consolidated into ONE. Time is money. William found that he was wasting far too much time. He found out of every 10 on-site estimates he was doing, he was lucky to close 3. The low percentage forced him to analyze why the numbers were so low. He found, everyone wants a price but most have no idea what the price is going to be. Most homeowner’s calling for fence quotes were window shoppers. Why was he wasting so many hours driving to get jobs? The customers were capable of measuring the yards. A yard is a yard is a yard. What did he really need to see?
Nash Enterprises has a LIFETIME WARRANTY against workmanship defects. There is nothing our competition hates more than us taking jobs for on-site estimates they did, than backing up our low prices with a LIFETIME WARRANTY. Sure we do not come to your house to meet you first, but you get a WRITTEN warranty backing up our claim that we do QUALITY work. Further, we don’t even get a deposit check from our customers until the day we start, AFTER the lumber is at their house, FURTHER adding to their PIECE OF MIND that we will not get a deposit check and run off with their money.
Lastly, our written contract protects our asses. Excuse the metaphor, but some lawyers have called this contract, the best-written contract they have ever read in their entire life. Well, we have included a copy of our standard contract with this business plan. This contract was written over the span of 7 years. William learned the hard way that in business, the first rule is to ALWAYS get a written contract. Because of his experience over the years, he learned to curtail this contract to conform to virtually every possible problem that a homeowner could complain about. Yes, unfortunately for the homeowners, BUT FORTUNATELY for Nash Enterprises, William, and Suntrust, this contract help protect the most important thing about any job, the PAYMENT. William and Nash Enterprises cannot be sued and cannot be subject to costly lawsuits.

 
5.2 Marketing Strategy

Nash Enterprises employs one and only one strategy when it comes to marketing. TOTAL ONLINE DOMINATION of the industry. We do not waste money on outdated advertising, direct mailings, telephone book ads, flyers, or any other costly method of gaining customers. William has already tried every method of marketing and advertising known to man and found nothing works better than a search engine. William currently has dozens operational websites and clients. William has the highest ranking websites across numerous search engines such as Google, Yahoo, etc. Last year EVERY single dollar spent on advertising was online. Nash Enterprises did $481,000 in sales SOLELY off the Internet, though he was still paid for telephone book ads from 2006 long into 2007. In 2007 $30,000 was spent on advertising, approximately $10,000 on that was for the prior year, leaving $20,000 for actual advertising costs in 2007. This is roughly cut in half again in 2008 and likely cut in half again in 2009 with the growing number of websites his marketing agency had been creating. By 2010, all online advertising costs had been eliminated.

5.3 Sales Strategy
The sales strategy is simple. Low operation costs equal low prices and in return, low prices equals more customers.
5.3.1 Sales Forecast
Nash Enterprises sales forecast is going to be exactly what we have seen in the Raleigh, NC area. However, due to the slumping economy, we are willing to cut these forecasts by 35%-50% just to prove that we can still succeed with ridiculously low predictions in a battered economy.

Management Summary
William and Jamie’s key duties or this expansion will be:

• Direct supervision of all work at the job sites in Virginia.
• Quality control and Customer Relations.
• Scheduling jobs and material deliveries.
• Verifying and insuring that all work is done in accordance with quality and proper methods.

As stated earlier, Chris’ duties will be to manage the North Carolina area while Jamie still assists him with the scheduling and ordering and coordination duties.
6.1 Personnel Plan
Chris, William, and Jamie are all more than experienced to continue to run the operations in both states. Temporary or day laborers will be hired as need. Traveling is no issue for our business.
Financial Plan

Nash Enterprises, again formally Harrison Home Improvement, Inc., already obtained a $50,000 business loan through Suntrust when we expanded operations to Charlotte, we used to money for a down payment on another home (second residence) to operate from. We have moved our headquarters to this address in Charlotte to comply with zoning laws and AVOID additional operating expenses. We have approximately $30,000 in equity in that home.

7.1 Important Assumptions
The following is our estimate of our financial assumptions based on previous experience. We assume that the market has softened but not so much to prevent this expansion from being feasible.

7.2 Break-even Analysis

We are seeking this loan as a cushion. We do not have an exact figure as to the allocation of the money. We recently totaled a truck, a trailer, and an auger, of a total value of about $20,000 from a simple tire failure. We made the unfortunate mistake of dropping full auto insurance coverage four days prior to the wreck, thinking that if we were in an accident we would take responsibility for any damage to our truck. Little would we know that the truck could be totaled by no fault of our own. Obviously we learn from our mistakes, and will never drop full coverage on a vehicle again. This money will partially be used to secure another vehicle and trailer and to move forward with operations. Some more of the money will be used to setup operations in Northern Virginia. We will also need to rent a storage area, rent an apartment and garage, or commercial space. The remaining money will be used to cover ongoing expenses such as phone lines, maintenance, and bills. We are in the process of selling another one of our rental properties, which we have about $75,000 in equity in. Because of the real estate market’s unpredictability, we are trying to secure this loan to cover our expenses and operations until we can get our money out of that property. When the property is sold, given the economy’s current state, we are hoping no longer than a year, we are going to use the proceeds to repay the majority of the loan as we did with our previous Suntrust business loan which was paid off much sooner than the terms. Our break-even analysis is roughly 12 months between incoming revenue and asset liquidation. Put it this way, one fence a week, (which can be done in 1-2 days) would be 52 fences a year. Lets just say we do 50 fences a year. 50 times the low end of $2,500 is $125,000 in revenue. Two fences a week would still be less than a full work week and roughly achieve $250,000 in revenue. The average profit after materials and before any expenses is about 55%. The potential profit before expenses is anywhere from $60,000 to $140,000.

 7.3 Projected Profit and Loss
History repeats itself. We are going to use a fraction of our previous numbers as a projection for future numbers. Attached are our previous profit loss sheets.
7.4 Projected Cash Flow
We do not expect to have any serious cash flow problems in the future. We plan on having all short-term and long-term debts paid within 2-4 years.
7.5 Projected Balance Sheet
History repeats itself. We are going to use a fraction of our previous numbers as a projection for future numbers. Attached are our previous balance sheets.
7.6 Business Ratios
We feel the ratios for the Virginia area should be similar to those of the current North Carolina market.