Opportunity
Problem
Houston customers are looking for beautiful office buildings, warehouses and public works. The area is expanding rapidly and they need a company that can provide high quality work and materials to build the spaces that were needed.
Solution
Fosse Commercial Contractors is committed to providing the best quality design, site prep, cost estimates, construction and repair services to clients who need large-scale construction services. Fosse provides the best quality service in the commercial construction sector.
Market
Houston is booming. There has been significant business growth over the last few years. It is expected that the trend will continue for at minimum the next four. Fosse Commercial Contractors is attracted to this market.
We will focus our efforts on clients that offer us the best margin, those who desire office building construction. This is our fastest growing client segment. Other segments we will be serving include the restaurant, special facilities, and all potential commercial customers.
Competition
Three major competitors are currently in Houston. These are Texas Specialty Construction (TNT General Contractors), Polanski Construction (Polanski Construction) and Texas General Contractors (TNT General Contractors). Fosse is the target client of each company, and all of them have excellent customer service records. The market in Houston is expanding so quickly that there is more demand than supply. This is an excellent opportunity to gain market share and a defensible position in the industry.
Why Us
In the construction industry the primary ways to compete are through low cost or better project management. One of the most important processes for winning a contract is the bid process. Fosse is unique in that it has an advantage over its competitors. Mr. David West, FCC’s General Projects Manager, is the nephew of Charles Nunn, who owns McHoughton’s Lumber, one of the Midwest’s major construction material suppliers. Fosse gained a very lucrative supplier contract which allowed Fosse significant savings on materials. This advantage allows Fosse to compete with its competitors and gain a position of leadership at low costs.
Expectations
Forecast
Fosse has very little debt and wants to remain that way. Our market shift efforts should result in increased profits by year 2. As we enter this difficult market, we expect lower profits for the next three-years. As we grow, and take advantage of economies-of-scale, we anticipate that we can reduce marginal cost and increase overall profitability by year 3 or 4.
We also think we can grow. Our goal is to double our revenues for the next year to nearly $900K from $572K in 2017. We have the market, the people, and the capabilities. It is time to grow.
Growth is costly. We are willing to inject additional capital to compensate for losses in the first year. We are able to turn a profit in years 2 and 3.
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