Mubarak Al HajriJennifer Gasser

Stephanie HudsonZac HuffmanHanh Nguyen

Industry Size

2011 US Total - $787.2 billion 2010 US Total - $797.3 billion

2011 $39.9 billion Private Commercial Up 6.2% 2010 to 2011

Indicator 2010 2011 2012% Change2011-2012

Construction Spending – (millions, seasonally adjusted annual rate) – U.S. Census BureauPrivate NonresidentialLodging $10,904 $7,976 $8,455 6%Office $24,231 $22,315 $24,250 8.7%Commercial $37,647 $39,988 $43,050 7.7%Health Care $30,316 $29,575 $31,960 8.1%Educational $13,356 $13,424 $13,400 -0.2%Power $66,601 $75,105 $82,000 9.2%Manufacturing $37,478 $34,956 $37,753 8%Total – All Industries $261,796 $263,538 $281,836 6.9%

Estimated growth for 2012

Expected Growth

2011 to 2016 - US new public and private nonresidential construction - 7% annual compounded

13% growth next 2 years

Commercial and Heavy Construction Spending Growth Slows After Spike 

Growth anticipated to taper down to 5% by 2016

Influencing Low Growth

Economy Slowed economy Tight financing environment for construction loans “Bad construction loans and commercial mortgages could

amount to more than $200 billion in losses.”Highly Cyclical Demand Demand for new building can change rapidly 1995 to 2005 annual US construction increased by 75% 2006 to 2010, it fell 65% Demand in local markets varies even moreUneven Revenue, Expenses Amount retained after a project is complete Bad weather can delay construction, creating uneven cash

flow

Trend Projections

Specialization Roofing, framing, demolition and green construction Existing customersGreen Construction Tax incentives Green Investment Fund Joint Ventures Larger projects On-time costs Pool expertise and financial resources

Barriers to Entry

Small Company - Low Need fewer pieces

of equipment Rent equipment,

project-by-project basis

Large company - High Bonding Human Capital

Recommended Associations

Strong relationships within the commercial industry Oregon Association of Minority Entrepreneurs

Bidding Posts Tradeshows

Associated General Contractors: Oregon Columbia Chapter AGC University – continuing education and

training Port of Portland | Small Business Development Program

Mentor-Protégé Program

Commercial Bidding ProcessB

ID S

OU

RC

ES

Contractor's WebsitesOAMEAGCNetworksWOM

BID

WA

LK

TH

RU

Thomas and Omar coordinate walk thru

BID

TR

AC

KIN

G

CalendarComputer Software ie BidTrack

BID

PR

EP

ER

ATIO

N

Each bid has individual guidelinesBid FormBid BondList of Subcontractors

BID

S

UB

MIS

SIO

N

SUBMIT

Transition to Residential and Commercial

Scouting for a Residential Superintendent

Incorporate Thomas into his Business Development role

Omar’s focus will be monopolized by both residential and commercial

Organizational Chart

OMAR | Owner/President

Commercial Employees

Commercial Subcontractors

EMPLOYEE 1 | Residential

Superintendent (Hired in 2014)

Residential Employees

Residential Subcontractors

BECKA | Owner/Business

Manager

THOMAS | Director of Business

Development

Networking Marketing

Accountant/CPA

Bookkeeping

Contractors

Urban Renaissance Group Management firm Repair and remodel buildings

Hoffman Construction Company Wide range of job Engineering News-Record’s Top

400 general contractors

PESTEL

Political Factors | Minority owned business

Economic Factors | Low growth in construction

Social Factors |Shift in housing market

Technological Factors | LEED certificate

Environmental Factors | Energy efficient

buildings

Legal Factors | Labor Law

Promotional Plan

Networking AGC | Mentorship OAME Tradeshows

Web-based Company website Social network

site

SWOT AnalysisSTRENGTHS

Omar’s Engineering Background

Minority Owned Business

Carpentry and Framing Minority Niche

Becka’s Networking Relationships

Low Overhead

WEAKNESSES

Cash Flow

Low Risk Taking

Human Resources

Low Market Share

Time

OPPORTUNITIES

Minority Business Enterprise

Sustainable/Green Construction

LEED Certification

THREATS

Cost Leadership

Competition

Need Financial Investment

Projected Income

Year 1 goal: Save money to finance the risk associated with hiring an employee

Year 2 goal: Minimize losses through effective cost management

Year 3 goal: Work back to a profit; rebuild cash savings for internal financing of projects

Year 4 goal: Establish stability and financial norms

Projected Cash Flow

Beginning cash savings of $10,000 (minimum) Prevents borrowing Allows internal financing for projects Limits exposure, allowing the commercial segment to stay

engaged in the market even in the face of sustained operating losses

Reinvest earnings to the cash savings balance, for all of the same reasons The ability to finance projects with cash savings will make

the company more attractive and provide new opportunities

Annual Cash Flow

2013 2014 2015 2016 $-

$5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000

$25,408

$19,188

$24,566

$35,199

Ending Cash Flow

*Starting initial investment of $10,000

Variables in Financial Performance

Hiring a supervisor Altering the pricing

structure for estimates

Initial investment in the commercial segment (cash savings balance)

Purchasing a vehicle for the commercial segment

Financial Milestones

Note that our recommendations follow a strict budget and require financial milestones Cash savings $10,000 Hire employee when cash savings exceed $25,000 and sales

exceed $80,000 Maintain cost basis hourly rate of $50 with a premium

gradually increasing from $10 to $35 Purchase a vehicle when cash savings exceed $35,000 and

sales exceed $125,000

Annual Revenue

2013 2014 2015 2016 $-

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

$53,605

$83,112

$107,066

$128,226

Revenue

*50%, 25%, 12.5% Growth for years 2, 3, and 4 respectively