business plan for selling building materials in ethiopia

Building Materials Supply Business Plan [Sample Template]

By: Author Tony Martins Ajaero

Home » Business ideas » B2B Industry » General Supply & Contracting

Are you about starting a building materials supply company? If YES, here is a complete sample building materials supply business plan template & feasibility report you can use for FREE .

There are several money spinning business opportunities in the construction cum real estate industry and one of them is to start a building materials supply business.

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Just like all other investment vehicles, there are potential down sides that you need to look out for if you want to start a building material supply business. One of the major risks in the building materials supply business is a sudden downturn in the economy.

Part of what you need to do to make headway in this line of business is to ensure that your store is strategically positioned and you have good business relationships with contractors, constructions companies and key players in the real estate industry.

A Sample Building Material Supply Business Plan Template

1. industry overview.

This industry consists of stores and dealers (e.g. lumberyards) that retail building materials such as lumber, stones and bricks.

This industry also supplies cabinets, floor coverings, roofing materials, electrical and plumbing goods, doors and windows to the construction market. The industry does not include home improvement centers, paint and wallpaper specialty stores or hardware stores.

If you are a close watcher of the Lumber and Building Materials Stores industry, you will agree that over the past five years, the Lumber and Building Material Stores industry has struggled to rebuild itself, even as the overall economy strengthens. Industry goods are purchased by professional contractors and consumers engaged in remodeling and construction projects.

Rising consumer confidence and household income have helped ignite remodeling activity forestalled during the recession, providing additional demand for lumber and other building materials used in home improvement projects. Even so, rising competition from large home improvement stores has stifled revenue growth for lumber and building material stores.

The Lumber and Building Material Stores industry is indeed a large industry and pretty much active in most countries of the world. Statistics has it that in the united states of America alone, there are about 45,069 registered and licensed building materials supply stores scattered all across the United States responsible for employing about 301,881 people and the industry rakes in a whopping sum of $107 billion annually.

The industry is projected to grow at 4.4 percent annual growth within 2012 and 2017. It is important to state that Builders FirstSource has the lion market share in this industry.

A recent report published by IBISWORLD shows that this industry sells a range of building materials such as lumber, fencing, glass, doors, plumbing fixtures and supplies, electrical supplies, prefabricated buildings and kits, kitchen, bath cabinets and countertops to be installed.

The industry’s major product categories are the following: Lumber and other structural building materials account for 37.8 percent of sales, lumber and they dominate the industry’s product mix.

The varying types of structural materials include dimensional lumber, non treated lumber, boards, engineered wood products, glue-lam and laminated veneer lumber, floor and roof trusses, connectors, joist hangers, tie-downs and framed wall panels.

The Lumber and Building Material Stores industry is highly regulated in the United States of America and anyone who aspires to start a building materials supply business must apply and obtain a license before they can legally operate in the industry.

Over and above, the lumber and building materials store industry is a profitable industry and it is open for any aspiring entrepreneur to come in and establish his or her business; you can chose to start on a small scale in a street corner or you can chose to start on a large scale with outlets in key cities through the United States of America and Canada.

2. Executive Summary

Harrison Anthony™ Building Materials Store, Inc. is a registered building material supply store business that will be located in one of the busiest streets in Oklahoma City – Oklahoma.

We have been able to lease a facility that is big enough (a 15 thousand square foot facility) to fit into the design of the kind of standard building material supply store that we intend launching and the facility is located in a corner piece building in the biggest building material market in Oklahoma City – Oklahoma.

Harrison Anthony™ Building Materials Store, Inc. will retail a wide range of building materials such as lumber and other structural building materials, hardware, tools, plumbing and electrical supplies, doors and windows et al. We are set to services a wide range of clientele in and around Oklahoma City.

We are aware that there are several building material supply stores all around Oklahoma, which is why we spent time and resources to conduct a thorough feasibility studies and market survey so as to be well positioned to favorably compete with all our competitors.

We have an online service option for our customers, and our outlet is well secured with the various payment options. Harrison Anthony™ Building Materials Store, Inc. will ensure that all our customers are given first class treatment whenever they visit our building material store.

We have a CRM software that will enable us manage a one on one relationship with our customers no matter how large they are. We will ensure that we get our customers involved in the selection of brands that will be on our store and also when making some business decisions.

Harrison Anthony™ Building Materials Store, Inc. will at all times demonstrate her commitment to sustainability, both individually and as a firm, 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 customers’ needs precisely and completely whenever they patronize our products. Harrison Anthony™ Building Materials Store, Inc. is a family business that is owned by Harrison Anthony and his immediate family members.

Harrison Anthony has a B.Sc. in Business Administration, with over 5 years’ experience in the lumber and building materials industry, working for some of the leading brand in the United States. Although the business is launching out with just one outlet in Oklahoma City, but there are plans to open other outlets all around major cities in the United States.

3. Our Products and Services

Harrison Anthony™ Building Materials Store, Inc. is in the lumber and building materials industry to service a wide range of clients and of course to make profits, which is why we will ensure we go all the way to make available a wide range of building materials from top manufacturing brands in the United States and other countries of the world.

We will do all that is permitted by the law of the United States to achieve our aim and ambition of starting the business. Our product offerings are listed below;

• Retailing building materials
• Retailing doors and windows
• Retailing electrical supplies
• Retailing fencing
• Retailing floor coverings (wood or ceramic only)
• Retailing lighting fixtures
• Retailing plumbing supplies

4. Our Mission and Vision Statement

• Our vision is to become the leading brand in the building materials industry in Oklahoma and to establish a one stop building materials supply store in Oklahoma City and in other key cities in the United States of America.
• Our mission is to establish a world – class building materials business that will make available a wide range of building materials from top manufacturing brands at affordable prices to the residents of Oklahoma City and other key cities in the United States of America where we intend opening of chains of building materials supply stores.

Our Business Structure

Harrison Anthony™ Building Materials Store, Inc. do not intend to start a building material supply business on a small scale; our intention of starting a building materials business is to build a standard and one stop store in Oklahoma City – Oklahoma.

Although our store may not be as big as Builders FirstSource, but we will ensure that we put the right structures in place that will support the kind of growth that we have in mind while setting up the business. We will ensure that we hire people that are qualified, honest, customer centric and are ready to work to help us build a prosperous business that will benefit all our stakeholders.

As a matter of fact, profit-sharing arrangement will be made available to all our senior management staff and it will be based on their performance for a period of ten years or more. In view of that, we have decided to hire qualified and competent hands to occupy the following positions;

• Chief Executive Officer (Owner)
• Store Manager
• Human Resources and Admin Manager

Merchandize Manager

Sales and Marketing Manager

Information Technologist

• Accountants/Cashiers
• Customer Services Executive

Truck and Van Drivers

5. Job Roles and Responsibilities

Chief Executive Officer – CEO:

• Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountability; planning, monitoring, and appraising job results; developing incentives; developing a climate for offering information and opinions; providing educational opportunities.
• Creates, communicates, and implements the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
• Responsible for fixing prices and signing business deals
• Responsible for providing direction for the business
• Responsible for signing checks and documents on behalf of the company
• Evaluates the success of the organization

Admin and HR Manager

• Responsible for overseeing the smooth running of HR and administrative tasks for the organization
• Ensures operation of equipment by completing preventive maintenance requirements; calling for repairs.
• Defines job positions for recruitment and managing interviewing process
• Carries out induction for new team members
• Responsible for training, evaluation and assessment of employees
• Responsible for arranging travel, meetings and appointments
• Oversees the smooth running of the daily office activities

Store Manager:

• Responsible for managing the daily activities in the store
• Ensures that proper records of building materials are kept and warehouse does not run out of products
• Ensures that the store facility is in tip top shape and goods are properly arranged and easy to locate
• Interfaces with building material manufacturers
• Controls building material distribution and supply inventory
• Supervises the workforce in the building material sales floor
• Manages vendor relations, market visits, and the ongoing education and development of the organizations’ buying teams
• Helps to ensure quality building materials are purchased and retailed in good price that will ensure we make good profit
• Responsible for the purchase of building materials for the organizations
• Manages external research and coordinate all the internal sources of information to retain the organizations’ best customers and attract new ones
• Models demographic information and analyze the volumes of transactional data generated by customer purchases
• Identifies, prioritizes, and reaches out to new partners, and business opportunities et al
• Responsible for supervising implementation, advocate for the customer’s needs, and communicate with clients
• Develops, executes and evaluates new plans for increasing sales
• Documents all customer contact and information
• Represents the company in strategic meetings
• Helps to increase sales and growth for the company
• Manages the organization website
• Handles ecommerce aspect of the business
• Responsible for installing and maintenance of computer software and hardware for the organization
• Manages logistics and supply chain software, Web servers, e-commerce software and POS systems
• Manages the organization’s CCTV
• Handles any other technological and IT related duties

Accountant/Cashier:

• Responsible for preparing financial reports, budgets, and financial statements for the organization
• Provides managements with financial analysis, development budgets, and accounting reports; analyzes financial feasibility for the most complex proposed projects; conducts market research to forecast trends and business conditions
• Responsible for financial forecasting and risks analysis
• Performs cash management, general ledger accounting, and financial reporting
• Responsible for developing and managing financial systems and policies
• Responsible for administering payrolls
• Ensures compliance with taxation legislation
• Handles all financial transactions for the organization
• Serves as internal auditor for the organization
• Assists in loading and unloading goods/building materials
• Maintains a logbook of their driving activities to ensure compliance with federal regulations governing the rest and work periods for operators
• Keeps a record of vehicle inspections and make sure the truck is equipped with safety equipment, such as hazardous material placards.
• Inspects vehicles for mechanical and safety issues and performs preventative maintenance
• Complies with truck driving rules and regulations (size, weight, route designations, parking, break periods etc.) as well as with company policies and procedures
• Collects and verifies delivery instructions
• Reports defects, accidents or violations

Client Service Executive

• Ensures that all contacts with clients (e-mail, walk-In center, SMS or phone) provides the client with a personalized customer service experience of the highest level
• Through interaction with customers on the phone, uses every opportunity to build client’s interest in the company’s products and services
• Consistently stays abreast of any new information on the organizations’ products, promotional campaigns etc. to ensure accurate and helpful information is supplied to customers when they make inquiries

6. SWOT Analysis

Our intention of opening just one outlet of our building materials store in Oklahoma City – Oklahoma is to test run the business for a period of 2 to 5 years to know if we will invest more money, expand the business and then open other outlets all over major cities in Oklahoma and the United States.

We are quite aware that there are several building material supply stores all over Oklahoma City and even in the same location where we intend locating 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.

Harrison Anthony™ Building Materials Store, Inc. employed the services of an expert HR and Business Analyst with bias in supply chain business 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 Harrison Anthony™ Building Materials Store, Inc.;

Our business is located in a city with heavy construction and real estate activities and also, we can boast of having good business relationship with top manufacturers in the building materials manufacturing industry.

A major weakness that may count against us is the fact that we don’t have our own building material production plant, we are a new building material supply store and we don’t have the financial capacity to compete with multi – billion dollars building materials supply stores when it comes to supplying building materials at a rock bottom prices.

• Opportunities:

The fact that we are going to be operating our building material supply store in one of the busiest building material markets in Oklahoma City, Oklahoma provides us with unlimited opportunities to sell our materials to a large number of individuals.

We have been able to conduct thorough feasibility studies and market survey and we know what our potential clients will be looking for when they order building materials from us; we are well positioned to take on the opportunities that will come our way.

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 especially construction materials. Another threat that may likely confront us is the arrival of a new building material store in the same location where ours is located. So also, unfavorable government policies may also pose a threat for businesses such as ours.

7. MARKET ANALYSIS

• Market Trends

If you are conversant with the Lumber and Building Materials Industry, you will quite agree that the changes in disposable income, consumer sentiment, ever changing trends and of course the rate of home ownership are major growth drivers for this industry.

No doubt, a massive rise in consumer confidence has also contributed in helping the industry experience remarkable growth, but uneven performance in these drivers has led to slightly constrained revenue growth.

So also, the rising demand for both building renovations, as a result of increasing disposable income and consumer sentiment will result in revenue growth, but profit margins will stagnate as building material supply stores keep prices low to attract more sales amid growing competition.

A close watch on industry activities reveals that, the retail market for building materials was hit hard by the economic downturn experienced in recent time. As part of marketing strategies, building material supply stores partner with key players in the construction and real estate industry. They are in the best position to offer you building material supply contract.

8. Our Target Market

We have positioned our building material supply store to service the residents of Oklahoma City – Oklahoma and every other location where outlets of our building material supply stores will be located all over key cities in the United States of America.

We have conducted our market research and feasibility studies and we have ideas of what our target market would be expecting from us. We are in business to supply a wide range of building materials to the following;

• Construction Companies
• Home Remodeling Companies
• Small Building Material Retail Stores

Our Competitive Advantage

A close study of the lumber and building material stores industry reveals that the market has become much more intensely competitive over the last decade. As a matter of fact, you have to be highly creative, customer centric and proactive if you must survive in this industry.

We are aware of the stiff competition and we are well prepared to compete with other leading building material supply stores in Oklahoma City and throughout the United States.

Harrison Anthony™ Building Materials Store, Inc. is launching a standard building material supply store that will indeed become the preferred choice for key players in the construction cum real estate industry. Our building material supply store is located in a corner piece property in the largest building material market in Oklahoma City – Oklahoma.

One thing is certain, we will ensure that we have a wide range of building materials available in our stores at all times. It will be difficult for customers to visit our store and not see the type of building materials that they are looking for.

One of our business goal is to make Harrison Anthony™ Building Materials Store, Inc. a one stop building material shop for customers at all levels. Our excellent customer service culture, online store, various payment options and highly secured facility will serve as a competitive advantage for us.

Lastly, our employees will be well taken care of, and their welfare package will be among the best within our category 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 aims and objectives.

We will also give good working conditions and commissions to freelance sales agents that we will recruit from time to time.

9. SALES AND MARKETING STRATEGY

• Sources of Income

Harrison Anthony™ Building Materials Store, Inc. is in business to retail a wide range of building material to the businesses and residents of Oklahoma City – Oklahoma.

We are in the lumber and building materials stores industry to maximize profits and we are going to go all the way out to ensure that we achieve or business goals and objectives. Harrison Anthony™ Building Materials Store, Inc. will generate income by;

• Retailing plumbing supplies.

10. Sales Forecast

One thing is certain when it comes to building material stores, if your store is well stocked with various types of building materials and centrally positioned, you will always attract customers cum sales and that will sure translate to increase in revenue generation for the business.

We are well positioned to take on the available market in Oklahoma City – Oklahoma and we are quite optimistic that we will meet our set target of generating enough income from the first six months of operation and grow the business and our clientele base.

We have been able to critically examine the lumber and building material stores industry and we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. The sales projection is based on information gathered on the field and some assumptions that are peculiar to startups in Oklahoma City, Oklahoma.

• First Fiscal Year: $450,000
• Second Fiscal Year: $950,000
• Third Fiscal Year: $1. 9 million

N.B : This projection was done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and there won’t be any major competitor retailing same building materials within same location. Please note that the above projection might be lower and at the same time it might be higher.

• Marketing and Sales Strategy

Before choosing a location for Harrison Anthony™ Building Materials Store, Inc., we conducted a thorough market survey and feasibility studies in order for us to be able to penetrate the available market and become the preferred choice for key players in the construction and real estate industry of Oklahoma City – Oklahoma.

We have detailed information and data that we were able to utilize to structure our business to attract the number of customers we want to attract per time.

We hired experts who have good understanding of the lumber and building material supply stores industry to help us develop marketing strategies that will help us achieve our business goal of winning a larger percentage of the available market in Oklahoma City.

In summary, Harrison Anthony™ Building Materials Store, Inc. will adopt the following sales and marketing approach to win customers over;

• Open our building material supply store in a grand style with a party for all
• Introduce our building material supply store by sending introductory letters alongside our brochure to construction companies, plumbers, home remodeling companies and other key stake holders in Oklahoma City – Oklahoma
• Ensure that we have a wide range of building materials from different manufacturing brand at all times
• Make use of attractive handbills to create awareness and also to give direction to our building materials supply store
• Position our signage/flex banners at strategic places around Oklahoma City – Oklahoma
• Create a loyalty plan that will enable us reward our regular customers
• List our business and products on yellow pages ads (local directories)
• Leverage on the internet to promote our business
• Engage in direct marketing and sales
• Encourage the use of Word of mouth marketing (referrals)

11. Publicity and Advertising Strategy

Despite the fact that our building material supply store is well located, we will still go ahead to intensify publicity for the business. We are going to explore all available means to promote our building material supply store.

Harrison Anthony™ Building Materials Store, Inc. has a long – term plan of opening outlets in various locations all around Oklahoma and key cities in the United States which is why we will deliberately build our brand to be well accepted in Oklahoma City before venturing out.

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 Harrison Anthony™ Building Materials Store, Inc.;

• Place adverts on community based newspapers, radio and TV stations
• Encourage the use of word of mouth publicity from our loyal customers
• Leverage on the internet and social media platforms to promote our business
• Ensure that our we position our banners and billboards in strategic positions all around Oklahoma City – Oklahoma
• Distribute our fliers and handbills in target areas in and around our neighborhood
• Advertise our building material supply store business in our official website and employ strategies that will help us pull traffic to the site
• Brand all our official cars and trucks and ensure that all our staff members and management staff wear our branded shirt or cap at regular intervals

12. Our Pricing Strategy

Aside from quality, pricing is one of the key factors that gives leverage to building materials stores, it is normal for consumers to go to places where they can get building materials at cheaper price which is why big player in the lumber and building material supply stores industry will attract loads of clients.

We know we don’t have the capacity to compete with multi – million dollar building material stores but we will ensure that the prices and quality of all the building material that are available in our store are competitive with what is obtainable amongst building material supply stores within our level.

• Payment Options

The payment policy adopted by Harrison Anthony™ Building Materials Store, Inc. is all inclusive because we are quite aware that different customers prefer different payment options 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 Harrison Anthony™ Building Materials Store, Inc. will make available to her clients;

• Payment via bank transfer
• Payment with cash
• Payment via credit cards
• Payment via online bank transfer
• Payment via check
• Payment via mobile money transfer
• Payment via bank draft

In view of the above, we have chosen banking platforms that will enable our client make payment for supply of our building materials without any stress on their part. Our bank account numbers will be made available on our website and promotional materials.

13. Startup Expenditure (Budget)

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 / leasing a big facility, 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 materials 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 a building material supply store business; it might differ in other countries due to the value of their money. These are the key areas where we will spend our start up capital;

• The Total Fee for Registering the Business in Oklahoma City – Oklahoma – $750
• Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines and other software) – $3,300
• Marketing promotion expenses for the grand opening of Harrison Anthony™ Building Materials Store, Inc. in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580
• The cost for hiring Business Consultant – $2,500
• Insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – $2,400
• The cost for payment of rent for 12 months at $1.76 per square feet in the total amount of $105,600
• The cost for shop remodeling (construction of racks and shelves) – $20,000
• Other start-up expenses including stationery ( $500 ) and phone and utility deposits ( $2,500 )
• Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $60,000
• The cost for Start-up inventory (stocking with a wide range of building materials) – $250,000
• The cost for counter area equipment – $9,500
• The cost for store equipment (cash register, security, ventilation, signage) – $13,750
• The cost of purchase and installation of CCTVs – $10,000
• The cost for the purchase of office furniture and gadgets (Computers, Printers, Telephone, TVs, Sound System, tables and chairs et al) – $4,000.
• The cost of launching a Website – $600
• The cost for our opening party – $7,000
• Miscellaneous – $10,000

We would need an estimate of $750,000 to successfully set up our building material supply store in Oklahoma City – Oklahoma.

Generating Startup Capital for Harrison Anthony™ Building Materials Store, Inc..

Harrison Anthony™ Building Materials Store, Inc. is a private business that is solely owned and financed by Harrison Anthony and his immediate family members. They do not intend to welcome any external business partners which is why he has decided to restrict the sourcing of the startup capital to 3 major sources.

These are the areas we intend generating our startup capital;

• Generate part of the startup capital from personal savings
• Source for soft loans from family members and friends
• Apply for loan from the Bank

N.B: We have been able to generate about $250,000 ( Personal savings $200,000 and soft loan from family members $50,000 ) and we are at the final stages of obtaining a loan facility of $500,000 from our bank. All the papers and documents have been signed and submitted, the loan has been approved and any moment from now our account will be credited with the amount.

14. Sustainability and Expansion Strategy

The future of a business lies in the number of loyal customers that they have, the capacity and competence of their employees, their investment strategy and the business structure. If all of these factors are missing from a business, then it won’t be too long before the business closes shop.

One of our major goals of starting Harrison Anthony™ Building Materials Store, Inc. 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 retail our wide range of quality building materials a little bit cheaper than what is obtainable in the market and we are well prepared to survive on lower profit margin for a while.

Harrison Anthony™ Building Materials Store, Inc. 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 retraining of our workforce is at the top burner.

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

• Business Name Availability Check: Completed
• Business Registration: Completed
• Opening of Corporate Bank Accounts: Completed
• Securing Point of Sales Machines: Completed
• Opening Mobile Money Accounts: Completed
• Opening Online Payment Platforms: Completed
• Application and Obtaining Tax Payer’s ID: In Progress
• Application for business license and permit: Completed
• Purchase of Insurance for the Business: Completed
• Leasing of facility and remodeling the shop: In Progress
• Conducting Feasibility Studies: Completed
• Generating capital from family members: Completed
• Applications for Loan from the bank: In Progress
• Writing of Business Plan: Completed
• Drafting of Employee’s Handbook: Completed
• Drafting of Contract Documents and other relevant Legal Documents: In Progress
• Design of The Company’s Logo: Completed
• Graphics Design and Printing of Promotional Materials: In Progress
• Recruitment of employees: In Progress
• Purchase of the needed furniture, racks, shelves, computers, electronic appliances, office appliances and CCTV: In progress
• Creating Official Website for the Company: In Progress
• Creating Awareness for the business both online and around the community: In Progress
• Health and Safety and Fire Safety Arrangement (License): Secured
• Opening party planning: In Progress
• Compilation of our list of products that will be available in our store: Completed
• Establishing business relationship with vendors – manufacturers of building materials: In Progress

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