Opportunity
Problem
Customers in the Houston area are in need of beautiful office buildings, warehouses, public works etc. The area is growing rapidly and they need a company with the right materials and high quality work to build what was needed.
Solution
Fosse Commercial Contractors (FCC) strives to offer the finest quality design, site preparation, cost estimates, construction, repair, and alteration to clients needing large scale construction services, whether it be office buildings, warehouses, large apartment complexes, public works, etc. 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 be concentrating on the customers that will provide us with the greatest margin, in other words those clients desiring office building construction. This is the fastest growing group of commercial clients who require our services. Other potential clients we can serve are those in the restaurant and special facility segments.
Competition
There are three major competitors currently operating in the Houston region. These include Texas Specialty Construction and TNT General Contractors. Fosse targets the same clients that these companies do and they all have a great reputation for customer satisfaction. Houston’s market is rapidly growing and there is more demand than supply. This is a fantastic opportunity to gain market shares and be in a position of strength within the industry.
Why Us?
The best way to compete in the construction industry is through lower costs 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. FCC’’s General Projects manager, Mr. David West, is the nephew and owner of McHoughton’’s Lumber, one the Midwest’s most important construction material suppliers. Fosse was able to secure a favorable supplier contract that allowed Fosse to get its materials at a substantial discount. With this edge the company can underbid its rivals and achieve a low cost leadership role.
Expectations
Forecast
Fosse has very limited debt and intends that it stays that way. We expect to see higher profits as a result of our market shift efforts before the end of year 2. We expect lower profits in the coming three years as we gain more market share. 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 are confident we can continue to grow. For this next year we intend to significantly increase overall revenues to close to $900K, from $572K this past year. We have the market. We have the people. And we have the capabilities. It’s time to expand.
However, growth can be costly. We are prepared to inject new capital to support losses for most of this first year. We can turn profit in the second and third years.
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