pwc business plan · page 1 of 46 paint with care business plan contact information brock garcia...

of 46

Paint with Care

Business Plan

Contact Information

Brock Garcia

3454 Center Parkway

Unit 10

Boca Raton Florida, 33434

303-888-1212

[email protected]

of 46

TABLE OF CONTENTS

I. Executive Summary ............................................................................................................................. 6

Executive Summary ............................................................................................................................. 6

II. General Company Description ............................................................................................................ 8

Vision ...................................................................................................................................................... 8

Physical Elements ............................................................................................................................... 8

Employee Traits ................................................................................................................................... 8

Financial Structure ............................................................................................................................... 8

Customer Traits ................................................................................................................................... 8

Product Features ................................................................................................................................. 8

Service Offerings ................................................................................................................................. 8

Customer Programs ............................................................................................................................. 8

Employee Programs ............................................................................................................................ 9

Company Vision ................................................................................................................................... 9

Industry ................................................................................................................................................... 9

Industry History, Trends and Statistics ................................................................................................. 9

Customers ............................................................................................................................................. 11

Customer Demographics ................................................................................................................... 11

Customer Attributes ........................................................................................................................... 12

Customer ........................................................................................................................................... 12

III. Market Analysis ................................................................................................................................. 16

Industry Analysis ................................................................................................................................... 16

Industry Statistics ............................................................................................................................... 16

Industry Trends and Influences .......................................................................................................... 16

Technology Transformations.............................................................................................................. 17

Government Regulation ..................................................................................................................... 17

Demographics Influences .................................................................................................................. 18

Economic Influences .......................................................................................................................... 19

Industry Summary .............................................................................................................................. 19

Competitive Analysis ............................................................................................................................. 20

SWOT Analysis ..................................................................................................................................... 21

Strengths ........................................................................................................................................... 21

Weaknesses ...................................................................................................................................... 21

Opportunities ..................................................................................................................................... 21

of 46

Threats .............................................................................................................................................. 21

Weaknesses to Strengths .................................................................................................................. 21

Threats to Opportunities .................................................................................................................... 22

IV. Products and Services ...................................................................................................................... 23

Products and Services Description ........................................................................................................ 23

Products and Services Plan ............................................................................................................... 23

Suppliers ............................................................................................................................................ 23

Services ............................................................................................................................................. 23

Features and Benefits ........................................................................................................................ 24

Product Pricing and Services Fees ........................................................................................................ 24

Competitor Pricing Analysis ............................................................................................................... 24

Pricing Methodology .......................................................................................................................... 24

After-Sales and Customer Incentive Programs ...................................................................................... 25

After-Sales Services .......................................................................................................................... 25

Customer Incentive Programs ............................................................................................................ 26

V. Marketing Plan .................................................................................................................................. 27

Company Brand .................................................................................................................................... 27

Company Purpose ............................................................................................................................. 27

Brand ................................................................................................................................................. 27

Distribution Channels ............................................................................................................................ 27

Company Distribution Channels ......................................................................................................... 27

Distribution Channels ......................................................................................................................... 27

Marketing Plan ...................................................................................................................................... 28

Marketing Plan Basis ......................................................................................................................... 28

Objectives .......................................................................................................................................... 28

Strategy ............................................................................................................................................. 28

Design ............................................................................................................................................... 29

Execute .............................................................................................................................................. 29

Measure ............................................................................................................................................. 29

Optimize ............................................................................................................................................ 29

VI. Operational Plan .............................................................................................................................. 30

Legal ..................................................................................................................................................... 30

Legal .................................................................................................................................................. 30

Accounting ......................................................................................................................................... 30

Facilities, Location, and Equipment ....................................................................................................... 31

Facility Requirements ........................................................................................................................ 31

of 46

Location ............................................................................................................................................. 31

Equipment ......................................................................................................................................... 31

Staffing .................................................................................................................................................. 32

Resource Planning ............................................................................................................................ 32

Suppliers and Inventory ......................................................................................................................... 33

Suppliers ............................................................................................................................................ 33

Cash Management ................................................................................................................................ 35

Cash Flow Management .................................................................................................................... 35

VII. Management and Organization ....................................................................................................... 36

Company Culture .................................................................................................................................. 36

Values ................................................................................................................................................ 36

Purpose ............................................................................................................................................. 36

Mission Statement ............................................................................................................................. 36

Organization and Management Team ................................................................................................... 36

Management Team ............................................................................................................................ 36

Professional Advisory Support............................................................................................................... 38

Professional Advisory Support ........................................................................................................... 38

VIII. Start-Up Expenses and Funding .................................................................................................... 40

Start-up Expenses ................................................................................................................................. 40

Start-up Expenses ............................................................................................................................. 40

Funding ................................................................................................................................................. 41

Funding .............................................................................................................................................. 41

IX. Financial Plan .................................................................................................................................. 42

Sales Forecast ...................................................................................................................................... 42

Product Sales Forecast ...................................................................................................................... 42

Service Sales Forecast ...................................................................................................................... 42

Sales Forecast ................................................................................................................................... 42

Payroll and Operating Expenses ........................................................................................................... 43

Payroll Expenses ............................................................................................................................... 43

Operating Expenses .......................................................................................................................... 43

Cash Flow Statement ............................................................................................................................ 44

Cash Flow Statement ......................................................................................................................... 44

Income Statement ................................................................................................................................. 45

Income Statement .............................................................................................................................. 45

Balance Sheet ....................................................................................................................................... 45

Balance Sheet ................................................................................................................................... 45

of 46

Break-Even Analysis ............................................................................................................................. 46

Balance Sheet ................................................................................................................................... 46

of 46

I. Executive Summary Executive Summary

Paint with Care (PwC) is a residential painting contractor that offers interior and exterior painting, staining, faux painting, material sealing, and much more. PwC products and services are superior in quality and the company brand is focused on quality, courtesy, and cleanliness.

PwC prides itself in consistent services through all its channels of sales, whether through a builder, designer, or direct to a consumer PwC offers the same level of service.

PwC offers continued support and services after each customer engagement. We encourage customer feedback, testimonials, and reviews. We offer annual maintenance programs to maintain the beauty of the home that includes power washing, resealing surfaces, trim touchup, surface touchup, and windows sill sealing.

PwC takes the burden off you for home TLC! Leave your home to PwC, to color it beautiful. We leave a home cleaner than when they arrived.

We keep track of our customer's home details, preferences, colors, products, and concerns enabling us to achieve a custom experience. Having the right tools to manage our customers will enable us to schedule their maintenance and subsequent services effectively with our customer's particular schedule restraints considered.

Paint with Care is a single member LLC, based in Boca Raton Florida, founded by Brock Garcia in 2019. PwC was created to compliment the commercial business founded and operated by Brock's father, Seth Garcia. The two companies plan to leverage each other's resources and relationships to better manage the suppliers, customers, and resources of the companies.

The target market is primarily homeowners between the ages of 30-70 that are focused on home improvement. The target market is comprised of individuals that have busy lifestyles that have limited or no time to focus on home improvement in a DIY manner. These customers have clearly identified the project scope and budget they are willing to pay for the quality services PwC offers.

PwC will offer initial service through builders, interior designers, and directly, but all subsequent services to the customer will be through a direct relationship. So all the maintenance and follow up services are the responsibility of PwC to manage and support.

PwC will attain customers through marketing efforts focused on company introduction, brand recognition, and word of mouth refers.

Marketing efforts include:

Company branded trucks and uniforms

Relationships with builders and interior designers

Valupak Mailings, flyers and coupons

Advertising in magazines, local papers, online, website, Facebook, Instagram, Pinterest, Linkedin, etc. Word-of-mouth

of 46

The competitors to PwC are located in the same area as PwC. The big differentiator is the after sale services offered by PwC. It is not only the services, but also the manner in which they are offered. PwC has uniquely packaged the maintenance programs for ease of service and cost savings to the customer. It also allows his maintenance customers to be put into a preferred status that allows him to prioritize them appropriately. The other unique attribute of PwC is the manner in which they conduct themselves. All the competitors are known to be disrespectful, at times, and uncleanly in and around the homes they service. This will truly set PwC apart to maintain a high standard of respect and cleanly behavior on projects.

PwCs' financial projections were built with a cautious view. The intent is to start with a limited crew and grow the services in each sales channel. Sales will be augmented by offering shared resources between the residential and commercials sides of the businesses. The financial projections have a modest growth rate and a worst case operating expense outlook.

PwC estimates the service sales begin at a 20% growth rate and steadily go to a 15% growth rate in the first twelve months and maintain the 15% for the next two years.

The profit margin on services is 70%, which accounts for the direct costs of the product usage and the cost of service for providing the services. Other significant expenses include loan payments for the work vehicles.

The cash flow statement shows a good positive cash flow throughout the first year of business. The initial investment 40k appears to be appropriate to start and manage the cash flow within the first 12 months. The subsequent year 2 and 3 also look to show healthy cash flow projections.

The income statement shows a healthy gross profit and a steady growth in revenue that matches up with the steady growth of the operating expenses (mostly made up of contractors) to support the revenue increase. The real risk to the business is that we do not meet the sales growth rate, due to weather or other unpredicted events. Having the extra cash on hand alleviates some this risk factor, allowing us more time to react and augment the missed sales projections.

PwC trusts that the business has minimal risk associated with the model. This is mostly due to the proper funding, shared staffing model, and the substantial industry relationships. The plan allows the business to react to unforeseen events and has a model that minimizes risk. The investment of $40,000 is sufficiently to fund the business.

of 46

II. General Company Description

Vision

Physical Elements

White trucks with an array of colors like a rainbow listing the services offered. White uniforms, painter's pants and t-shirts with company logo in upper left corner

Professional collared shirts and clean painter's pants for estimators

Employee Traits

Professional etiquette (adhere to set of manners becoming of our southern hospitality) Happy, cohesive teams, paired appropriately based on skillsets

Financial Structure

Work scope with change orders

Fixed bid and time-and-material based projects

Annual contract

Customer Traits

Home owners from 30+

Middle to upper income

Care about maintaining their homes

Want one company to cover services

Product Features

Benjamin Moore

Sherwin-Williams

Service Offerings

Painting (outdoor and indoor) Garage floors (epoxy sealing) Doors and windows (maintenance/sealing) Staining and faux painting

Stone and driveway sealing

Customer Programs

Annual maintenance programs

Referral programs

of 46

Employee Programs

Bonus program

Overtime program

Company Vision

Paint with Care (PwC) is a company that offers fixed bid and time-and-materials house painting, staining, faux painting, sealing, garage floor epoxying, and home maintenance services. PwC presents itself to clients with a clean palette by having estimators in white collared shirts and painter's pants arrive in white trucks with the company logo. All employees will adhere to respectful and courteous practices when speaking to clients, such as using Mr. and Ms. along with their given name.

The goal of PwC is to service our customers with a long-term relationship that allows for the maintenance and continued beauty of the home, both inside and out. PwC will offer an annual maintenance program that covers exterior home, soffit, eave cleaning and touch-up painting as well as indoor maintenance, including touch-up of walls, doors, and accent surfaces.

The PwC customer will live in the Boca Raton area and be a homeowner concerned with the care and updating of their home. These customers will be able to afford home maintenance through a professional painting service versus DIY activities. Most will be professionals or retirees who neither want nor have the time to do these services themselves.

PwC will establish solid relationships with its suppliers to provide quality products and services. These professional suppliers will allow PwC to offer warranties on the products and the peace of mind that they are providing quality long-lasting solutions.

PwC will share the success of the company with employees by setting up a bonus structure based on customer satisfaction, customer retention, and revenue contributions. A happy employee translates to happy customers.

Industry

Industry History, Trends and Statistics

Throughout history, people have decorated their living space with color. The early cave dweller adorned the walls with soot, earth, and animal fats pigmented with plant products. In Egyptian times, painters mixed glass and semiprecious stones, lead, earth, or animal blood with oils or fats. Their color palette included white, yellow, green, black, blue, and white. Egyptian, Greek, Roman, and Eastern cultures decorated walls with ornate paintings, which depicted stories. In the late 13th century, English painters founded painters' guilds. In 1502, two guilds merged to create the Worshipful Company of Painter-Stainers to protect and standardize the trade. A bill was enacted in 1606 requiring apprenticeships and protection against other trades performing painting tasks. Eventually, trade unions evolved to replace the guilds.

In the Americas, house paining was considered a display of immodesty, wealth, and vanity. The early settlers held Puritan beliefs and considered the practice of house painting immoral. In 1630, a preacher painted the interior of his Charleston home. He was criminally charged for sacrilegious behavior. As with anything prohibited and scandalous, a sudden demand was sparked and it soon

of 46

became stylish versus appalling behavior to adorn your home with paint. In England in 1718, Marshall Smith invented the "Machine for the Grinding of Colours," which ground ingredients to make varied pigments of color, and started the paint manufacturing industry. In 1866, Sherwin-Williams was formed to create the first ready-to-use paint producer and created the first resealable tin can. By 1883, Benjamin Moore entered the market as the first competitor offering specialized chemistry-based paint products. In 1884, the Painting and Decorating Contractors of America was founded to support the industry's manufacturers and suppliers. Currently, nearly 2000 contractors in North America are members.

In the mid-20th century, the industry went through an ingredient shift to accommodate the lack of linseed oil during WWII. Synthetic materials were introduced and held color better than natural products. This cheap alternative quickly replaced the oil-based products. Water-based paint, referred to as milk paint, was widely used in the 1800's and is making a comeback. This is mostly driven by its eco-friendly properties. Milk paint lacks the volatile organic compounds (VOCs) found in latex paint. Prolonged exposure to VOCs causes damage to the liver, kidneys, and central nervous system.

The paint and coatings industry is projected to grow from 22.1 billion in 2011 to 30 billion by 2021 in the United States. New products such as "VOC-free" and allergy-sensitive products are helping to grow the industry in the new eco-friendly environment. According to Sherwin-Williams, the other big trends in the industry include expanding services and marketing.

The U.S. Bureau of Labor Statistics projects the employed painting and wall-covering contractors to increase by 3.85 percent annually. They also estimated overall residential construction to increase by 34.0 percent from 2010 to 2020. U.S. painting and wall-covering companies are estimated at 31,000 establishments with a combined revenue of $21 billion. The NAICS code is 23832 and the corresponding SIC code is 1721.

Expanding services means moving beyond painting walls, trim, and exterior surfaces. Companies should train employees or hire to include faux painting, staining, sealing (decks, sideways, or other stone surfaces), and waterproofing concrete. A homeowner likes working with one source for as many projects as possible. They are extremely open to this when you have a relationship based on honesty, thoroughness, and dependability. The more you have to offer the more the customer will consume.

Marketing is a big opportunity for painting contractors. Often painters will provide services to a customer and never contact that customer again. This is a significant missed opportunity. Painting contractors should maintain a customer contact list and keep in touch through it, even with something as simple as a holiday card or a postcard offering new services. Repeat business is averaged to be approximately $1,000 per year for a residential painting contractor, making 100 repeat customers worth $100,000 of additional business. The marketing terminology for this activity is to become more of a "farmer" than a "hunter."

of 46

Customers

Customer Demographics

Boca Raton Demographics

Population in 2013 - 89,407

Males - 50.3%, Females - 49.7%

Age - 46.7 years

Median Household Income - $71,050

Median Home Value - $364,100

Delray Beach Demographics



Age - 47.6 years



Highland Beach Demographics



Age - 65.2 years



Deerfield Beach Demographics



Age - 43.2 years



Pompano Beach Demographics



Age - 42.1 years



Fort Lauderdale Demographics



Age - 43.2 years



Overall County Info for Broward County

Population in 2012 - 1,815,137


Age - 39 years

of 46



County owner-occupied house and condo - 454,625

Customer Attributes

Households in suburbs of Broward County area of Florida

Homeowners between the ages of 35 and 80, educated with a college degree, with earnings greater than $45,000

Homeowners looking for a painting company that offers home care services, meaning inside and outside paint, stain and sealant solutions, as well as the maintenance of these surfaces

Build relationships with local building contractors to become a part of their construction teams

Develop collaborative relationships with local interior designers by offering them discounted pricing and getting discounts for customers to assist them in the paint and surface selection process.

PwC wants to build relationships in the community by collaborating with builders and interior designers as well as working directly with customers. This approach to the business will allow us to grow the business quickly by partnering. Potentially, PwC will be able to share in marketing expenses with the other business entities. Business networking is a solid business approach because it gives the business references and starts word-of-mouth marketing immediately.

Customer

Paint with Care Customer Bid process thru Annual Maintenance program

Gerald, the bid manager of PwC, pulls up to the house in Delray Beach Florida in his white pickup truck, dressed in his stark white painter's pants, and pressed white collared dress shirt. Gerald received the call earlier that morning while scheduling his day. Thankfully, he had an opening in his schedule. The gentlemen had told Gerald that he had been referred to PwC through the title company and his realtor.

Gerald scans for a place to park alongside the road in order to avoid parking in the homeowner's driveway. Out of courtesy, company policy is to avoid parking in a driveway if there is space elsewhere. Gerald prefers to avoid issues with family members needing access to the house and potential damage to the driveway from tire marks or oil leakage. After parking in the median down the street, he walks to the address written on his paperwork. Gerald rings the doorbell hoping that his five-minute early arrival will be welcomed as a sign of things to come.

The homeowner, Mr. Sanchez, opens the door. "Well, hello. Gerald is it?" he says with a smile and welcoming handshake.

"Yes, sir, so nice to meet you. Thank you for calling Paint with Care," Gerald replies.

"My pleasure! Good grief, son, call me Bill. Please excuse the mess. We are in the process of moving in and my wife is trying to figure out what to unpack, what to get rid of, and where the furniture should finally reside. So as you can see, it is a bit of a work in progress."

"No problem. Comes with the territory in my line of work. You had indicated that you had a number of jobs for me to bid for you. I was wondering if it was okay with you if you would show me the projects and then we can review them together and make a prioritized list."

of 46

"Sounds like a plan!" Bill answers, leading him through the house to start the tour.

After about a half hour of discussing the various projects, Gerald takes his list of work and scans it to be sure he has not missed anything vital. After further clarification, Gerald and Bill sit down at the kitchen table, review the list, and assign the work priorities. Gerald then asks if Bill prefers the jobs to be bid based on scope or time and materials. They discuss the differences and decide that it would be better for PwC to bid the project based on a scope of services with detail on the materials included.

"Well, thank you, sir, for this opportunity!" says Gerald. "Paint with Care is a new company but we are focused on customer satisfaction and a long-term relationship with our customers. We offer continued services and maintenance programs to assure you that your home will be well-maintained and free of issues over the time you live here. I will include a brochure describing these services and program options with my bid. I will e-mail the bid by the end of the day. I know that you are in a hurry to make a decision and get started on this work. I'm sure that you and your family cannot wait to finally be settled in your new home, relax, and enjoy. It is a beautiful place and has great views," Gerald concluded, looking out over the golf and lake through the back windows.

"Thank you, Gerald. It was a pleasure to meet you!" Bill says. "Thanks for taking the time to bid this work. I am looking forward to your e-mail. By the way, thanks for parking on the street. It really irritates my wife when contractors pull in, blocking access in and out of here. You would think they would realize we are moving in and running in and out to get things done last minute. Go figure!"

Bill grimaces as he thinks of all the other times the contractors had blocked the drive, irritating his wife to no end. He walks Gerald out onto the front porch, shaking his hand as they say their final farewells.

That afternoon Gerald sits in the PwC office and reflects on the meeting with Mr. Sanchez as he starts to create the scope of work. Mr. Sanchez is in his mid-fifties with a wife and two teenage boys. Both boys are in high school. They have an older dog that appears to be unhappy with the change to his environment. Mr. Sanchez had shared with Brock that he had been relocated from Michigan and was new to the area. He works for an insurance company and was transferred to an executive position. The company is opening a new division in Boca Raton, and he is in charge of the new office. He seems like a reasonable man, so Gerald is confident he will not run into issues pleasing the Sanchez family. Sara, Gerald's wife, is very pleasant. She seems to have a good grasp on what she wants for colors and textures. This is a relief because uncertainty can create issues during a job. Sara is an organized person, and even her chaos has order to it. This is good for PwC because pleasing the most particular of clients is our specialty.

By 5 o'clock, the bid is complete and Gerald is relieved to be done and excited about the opportunity. It is a fairly large job and includes all the things he loves to do to make a house personal for a new homeowner. Gerald hits send, gets up, and stretches, working out all the knots formed from intense thinking and number crunching. Happy with the results, he departs the office to join friends for a dinner at the local pub.

Brock's next customer interaction is through a builder. In this case, the customer works directly with the builder, and PwC is a subcontractor.

of 46

Paint with Care Builder relationship

I enter the offices of BC Custom Home Builders (BCC Homes) to be greeted by their bubbly, fun- loving receptionist. Lucy was just one year behind me in school and I have known her since grade school.

"Morning, Brock, Sam is expecting you," she says.

"Good morning, Lucy," I reply.

Lucy chirps back at me with a smile and early morning cheeriness I never can muster at the first of any day. "You can go into the conference room," she says. "I have coffee and donuts in there, and the Collins' home plans are on the table for you to start reviewing. Those are your set of plans, so feel free to start marking them up. Sam will be right in."

I walk into the conference room welcomed with the aroma of coffee and pastries. I pour a cup of black joe and set about my business of reviewing the plans. The Collins' home is oceanfront and is an amazing opportunity for PwC. Not only is the initial work a good gig, but the long-term relationship with this client is a real opportunity. Oceanfront homes are problematic for homeowners but revenue generators for PwC. They require a lot of TLC and that is what we built our business model on.

Sam joins me after I have ample time to review the home plans. Sam has owned BCC Homes for over twenty years. He is known for his reliability and quality workmanship. My father has known Sam for years and we see him and his family at church almost every Sunday. His son has joined the business while his daughter is at the University of Florida studying Business Finance. BCC Homes will have a good future if the kids take as good care of it as Sam has.

"So what ya think? Can ya paint that sucker for me?" Sam jokingly asks as he walks in the conference room to join me.

"Sure thing!" I respond eagerly. "Looks like a nice layout. I really like all the windows in this home and the big Nanowall that opens onto the pool deck. Those doors should make for quite a dramatic great room view. You will have to give me more details on what the ceiling treatments will entail. It looks like the architect left us some creative freedom to add architectural elements. What are the clients like? Has someone made all the color selections, staining requirements, and stone selections for sealing?"

"Yup, Candice at Hestia Décor has completed the design and she has gotten sign off from the homeowners, so we are ready to rock-n-roll." Sam says this with a calm airiness to let me know that he has it covered, and I should not worry, just perform the quality work he demands.

Sam and I review the plans in detail. I mark up the plans with clarifications and notes so that I can be sure to give him an accurate bid. The project is pretty straightforward for PwC, and we offer BCC Homes our customary builder-discounted rates. PwC can do this with our builder partners because they take a huge amount of workload and responsibility off our plate. The ultimate goal with these clients is to earn their trust and loyalty. If we can accomplish this, they will give us additional work after the job is complete. Typically, we follow up with deck sealing, garage floor finishing, and annual maintenance programs.

of 46

The third and final customer interaction is with an interior designer. In this instance, the customer contracts with PwC directly but works closely with the interior designer. PwC takes direction from the interior designer, not the customer, during the job.

Paint with Care Interior Designer Relationship

Candice settles into her wingback chair as she scans her storyboards for the Clarence home renovation project. Her office looks more like a living room than a workspace, comfy and cozy. The storyboards are scattered on the floor in front of her, one for the great room, another one for the dining room, and the last one for the combination kitchen/family room space. She has her favorite contractors working on this project with her.

Candice has hired a general contractor who is good at meeting schedules and bringing in quality material. The tilers are dependable and meticulous. The electrician is creative and detail- oriented, making sure the lighting solutions include the latest gadgets. PwC is her painting contractor of choice. PwC always makes the schedule work and meets her projected dates unless the client intervenes with changes to the project. Brock has made her life so much better by doing the simplest of things. He makes sure the crew consists of clean, well-mannered employees who she can put in front of her clients. The workspace is cleaned daily so she can walk the client through the space and not be faced with leftover food wrappers, drinks cups, or other miscellaneous work trash. He also directs the crew to clean the space to a presentable state so it has a more finished appearance even though it is still a work in progress. It always amazes her that a little extra attention to detail goes such a long way for her and her clients.

Paint with Care is really starting to take shape in Brock's mind. He is grateful to be taking this class, attending the PDCA expo, and articulating these details. He looks ahead at the future exercises for his class and realizes that he has a lot more to consider before making his dream a reality. Honestly, it doesn't seem so daunting now that he has found that there are resources at his disposal to assist him with these tasks. He plans to attend all the expo educational classes, knowing these will be invaluable to his high school class as well as his future business opportunities.

of 46

III. Market Analysis

Industry Analysis

Industry Statistics

In 2014, the United States painting contractor industry was composed of approximately 360,500 employees with an average salary of $36,580 per year or $17.59 per hour. The industry requires no formal education or other certifications. The National Association of Home Builders offers a Pre-Apprentice Certification Training (PACT), which includes painting as a trade. Only protective coating specialists are required to hold a certification for employment. Most employees get on-the- job training and 4 out of 10 are self-employed/contractors.

The forecast of job growth over the next 10 years in the painting industry is 7%.

Industry Trends and Influences

These findings are based on an article about current industry trends in Professional Painting Contractor (PPC) magazine. Further research, finds the following trends that should be acknowledged and embraced to become prosperous in the residential painting industry.

1. Expansion of Service - Painting contractors must expand their services beyond traditional exterior siding, interior wall, and trim painting and look at the other surfaces that need protection and treatment. This includes staining (interior and exterior), decorative painting (faux or mural), protective sealing, or waterproofing of surfaces. They suggest that contractors should consider listing these services on bids/quotes so that customers are informed that the services are available. Adding these services to traditional marketing material is also critical. 2. Marketing - During downturns in the economy, many painting contractors cut their marketing budgets. However, this may be a good time to explore added marketing to homeowners who want to make changes to or do upkeep on their home. Painting is one of the most inexpensive ways to make change to a space and should be shared with the public as a cheap, fun way to update a home. Interior designers know that a new painted surface and reconfiguration of furnishings can be a fun low-cost project. Exploit this fact and get the message out! 3. Technology - Find software that will enable you to manage customers, bids and quotes, financials, payroll and time keeping, and reporting. Update your branding so that customers

of 46

recognize you when they see you around town. That means attire, vehicles, and signs at local establishments. Make your brand fun and meaningful. Update your website to leverage the new brand and services you want to offer. 4. Annual Maintenance - The industry needs to offer annual home maintenance services to keep homes beautiful and in good repair. When most homeowners do their spring-cleaning, Brock wants to be there to spruce up the outside. The fall is a good time to do a quick touch up of the interior space in preparation for the cool winter months when people are inside more often.

Technology Transformations

Painting contractors should utilize technology to better manage their customers' data and explore marketing opportunities. Find an inexpensive mobile application that will allow you to track your customers' contact information and preferences, the work you have performed for them, and other relevant data. With this information, you can then market to them by informing them of new offers, maintenance dates, or new products and services. Numerous companies offer email marketing tools that advertise to your customers by sending email messages with nicely formatted ads, coupons, and a means of getting feedback.

Government Regulation

Residential painting contractors do not have any specific certification requirements on either a federal or a local basis. The state of Florida does require that painting contractors obtain a certified general construction license before they open a business. In order to get this license, you must take 14 hours of training to learn about construction codes and administration. After taking these classes, you are required to take the state certification exam. After passing this exam, you then apply for the license with the state of Florida. You are required to be 18 years of age, to have passed the exam within the last 4 years, have a credit report performed, be fingerprinted for a background check, and submit proof of business insurance, as well as pay a license fee. This license allows you to work in the construction industry in the specified counties applied for in the state of Florida.

The Environmental Protection Agency (EPA) issued the Renovation, Repair, and Painting Rule (RRP Rule) in 2010 to protect workers from hazardous lead paint environments. This rule requires that painters working on facilities built prior to 1978 be certified to follow lead-safe practices. The certification process requires the following:

Assignment of a Certified Renovator on each project that has lead

Performance of the services following the work practice standards and recordkeeping requirements in the regulation

Assignment of certified and properly trained employees to perform the work

The Occupational Safety and Health Administration (OSHA) has regulations on the use of paints that contain toxic vehicles or solvents. For workplace and environmental safety, paint product suppliers provide Globally Harmonized System - Safety Data Sheets (GHS-SDS), Material Safety Data Sheets (MSDS), Product Data Sheets (PDS), and Environmental Data Sheets (EDS). These outline technical specifications, specific ingredient composition, health, safety, fire and environmental hazards, first aid and accidental spill measures, handling, storage, protection and

of 46

exposure guidelines, ecological and regulatory information, and disposal considerations for their products.

Some suppliers provide green and low VOC (volatile organic compound) products and certifications for the use and application of these products. Regulations on VOC vary nationally and locally and often change. Florida is an EPA-regulated VOC area.

Demographics Influences

Data found in a publication called CraftJack shows 2011 statistics about homeowners who sought house-painting services. Below is the data found.

Highlights

Total Leads: 24,724 - 12,208 female (60%), 8,047 male (40%)

Top 4 States: California (13%), Texas (7%), Florida (7%), New York (7%)

Most Common Home Market Value: $100k-$500k

Length of Homeownership: 1 to 5 years

Home Ownership: 86%

Marital Status: 54% married, 46% single

of 46

Economic Influences

Seasonality plays a factor in the residential home painting business, when seasons include rain, snow or other extreme conditions that limit the ability of crews to be able to assemble, clean, and manage an outdoor project. During bad weather, painters need to be in the home during prep, clean up, and break times. This is more of an inconvenience to a homeowner, especially if they are home during the work time. In southern Florida, there are no real extreme winter conditions, like snow, but there are rainy periods that interfere with work. This requires that a business juggle projects when there are changes in the weather and get approval from customers to make schedule adjustments. Most painters become accustomed to these weather-based seasonal conditions and adjust business factors such as staffing and workloads to accommodate them.

Economic conditions influence the residential painting business. Homeowners will tighten their belts and become more frugal when the economy experiences hard times. They will postpone home improvement projects and maintenance in order to save money. In order to maintain business during an economic downturn, painting companies need to get creative and make their services less of a luxury item and more of a necessity.

Industry Summary

Brock has completed a thorough Industry Analysis that will allow him to build a comprehensive section in his business plan.

of 46

Competitive Analysis

of 46

SWOT Analysis

Strengths

Experience and family backing

References from former clients

Unique membership for annual maintenance / preferred customer status

Low overhead and lower pricing for customers

Access to employee sharing and leveraging resources across two companies (commercial painting contractor parent)

Weaknesses

New business

Learning curve on business operations

Marketing and brand recognition

Learning systems to support the business

Building a crew that marches to the same drummer

Opportunities

Member of the "painter & Decorating Association"

New home building is on economic upturn

New mobile apps for client tracking

New more durable paint from suppliers

Threats

Making sure business compliant with all federal and local regulations

Obtaining licensing and permits

Purchasing a cohesive suite of technology products to support the business

Hurricanes or other weather disruptions

Weaknesses to Strengths

Being a new business owner has many challenges and a steep learning curve. Having a family member who is in business is helpful, but there is a certain amount of self-sustaining that you want to demonstrate by learning on our own. Brock the business owner, is doing this by taking classes at his high school that will support his new business venture, such as accounting, computer classes, and a business planning class. Next semester he intends to take more accounting, another business course, and a marketing class.

PwC is an active member of the PDCA (Painting and Decorating Contractors of America). The PDCA has an entire educational platform available to members called "Tools to Build your Business" that offers a Contractors College, industry standards education, and networking assistance. The college delivers its curriculum via web-based classes and podcasts. The PwC owner is actively participating in the college classes and podcasts and has found them very beneficial.

of 46

PwC has created a list of potential employees and is massaging the list by detailing each resources' strengths and weaknesses, so we can put them into positions that will make them successful. This exercise allows us to identify missing talent and resources so we can begin to address these discrepancies sooner than later. We are also notating which resources can be shared between PwC and the parent company, so that they might leverage the resource pool more effectively.

PwC is setting up social media sites for the pending business, joining meet-up groups locally for entrepreneurs, and attending conferences related to the business. The owner is a driven and determined young man who realizes hard work and knowledge are two of the keys to success.

Threats to Opportunities

PwC has begun the exploration of technology systems. We are interested in having a tool for managing the customers and their project information, personal preferences, and maintenance programs. We need a solid and proactive accounting system that will manage projects and log work time and material usage. We believe that investing in the right systems will enable us to manage the business and customers better.

In the state of Florida Brock will need to attend a training class to learn the construction codes and administration duties, apply for a certified general construction license, and pass the state general contractor certification exam. Palm Beach County requires that we obtain a business license and a home occupation permit so that we may operate from a residence and not get an office space. We will also need to get a federal EIN (employer identification number) and a state sales tax ID.

Weather in Florida can be warm and wonderful or wet and dangerous. We have lived in the state all our life and we are well aware of Mother Nature's kind-heartedness and her cruelty. Rain would drive us to reschedule work to adjust to interior jobs and reschedule exterior work. A hurricane would stop all work during the event, but afterward we would have lots of immediate client requests to repair damage from the storm.

of 46

IV. Products and Services

Products and Services Description

Products and Services Plan

Steps to creating a full service residential painting business

1. Create relationships with suppliers for various products to provide services

2. Join associations and other trade groups

3. Train employees on different products, services, and company policies/etiquette

4. Get scheduling software to assist with maintenance programs for customers

5. Procure and set up a timekeeping system for tracking projects and employees

6. Set up processes to cover time and materials and scope of work projects

7. Market services and keep track of customers properly to market to

8. Find eco-friendly suppliers (low-VOC paint, stains, etc.) 9. Build out relationships with builders and interior designers in area

Suppliers

Sherwin-Williams

101 W. Prospect Ave., Cleveland, OH 44115; (800)474-3794

Benjamin Moore

101 Paragon Drive, Montvale, NJ 07645; (855) 724-6802; [email protected]

Home Depot / Ace Hardware local stores

(866) 875-5490

HD Supply

10641 Scripps Summit Court, San Diego, CA 92131; (877) 694-4932; [email protected]

Services

Interior Painting (faux, trim, and walls) Exterior (siding, trim, soffits, fencing, stucco, and concrete) Staining (doors and windows, interior and exterior wood accents) Sealed or Painted Concrete

Painted Glass for Backsplashes

Epoxy Seal Garage Floors

Power Wash Exterior (home, structures and roofing) Stone Sealing (pool deck, patios, walkways, floors, walls) Maintenance Programs

Power wash home (including roof, eaves, soffits, windows, stone, screens, screen enclosures, decking, driveways, etc.) Touch up exterior paint, reseal decking or stone

Touch up stain on decking/doors/windows/fence

Wash windows

of 46

Clean out gutters and power wash

Post Construction Touch Up (nail pop outs, trim seam filling, corner board separations, drywall tape lifting, etc.)

Features and Benefits

F - Quality professionals providing services

B - Excellent finishing work (straight cut lines, no roller markings or brush stokes, etc.)

B - Jobs done in a timely manner

B - Superior product knowledge

F - Focus on and nurturing of customer relationships

B - Repeat loyal customers

B - Referrals and positive ratings

F - Job site left clean and crew courteous and well-mannered

B - Customers don't have to clean up after contractors perform services

B - Builders and interior designers can walk through clients and prospects knowing the site will be in a condition that makes them proud

F - Dependable (on time and on budget)

B - Project is manageable and done when you expect completion

B - No overrun on your project costs

Product Pricing and Services Fees

Competitor Pricing Analysis

PwC does an estimation of pricing per hour and per sq. ft. for usage for his business plan. This will allow us to estimate potential revenue based on pricing matrix's that are in line with industry standards and competitive with local residential painters.

Pricing Methodology

Paint with Care is a service-oriented business. It does not inventory or sell products. Therefore, its pricing can be rate-based pricing, project-based pricing, or value-based pricing. Most contractors base their pricing on a combination of these pricing methods. PwC will start by creating an estimate by obtaining the following information:

Location of each area (indoor or outdoor) and notes on obstructions

Who is responsible for the obstructions (removal of furniture, bushes, etc.) Square footage of each area to be painted (Painting Area) Add all the lengths of the walls in the room (Wall 1 + Wall 2 + Wall n = Length) Calculate Area (multiply total Length x Height of room = Total Area) Calculate door and window area (Height x Width = D&W Area) Calculate room square footage (subtract doors and windows area from the total area Total Area - D&W Area = Painting Area)

of 46

Calculate trim, door, or other additional painting surfaces

Current wall texture and customer's desired finished texture

Calculate amount of paint required

Multiply the Area calculated by number of coats you think the room will need

Smooth walls - 1 gallon covers 350 sq. ft. Textured walls - 1 gallon covers 300 sq. ft. Add primer paint if required

Number of colors by room and by job

Estimate consumable materials (brushes, rollers, buckets, tape, cleaning supplies, etc.) Estimate labor Time estimated on a per square foot basis for painting

Add in time for complexity for lots of cutting in around doors, windows, or other special treatments

Add in time for cleaning

Bid and contract cost Add in overhead costs

Operating costs

Travel costs

Additional expenses (rental equipment, permits, subcontractors, etc.) Add on the desired profit

PwC will create a spreadsheet to gather information and assist in calculating the projects. PDCA offers a class and manual for project estimating. There are also software tools that can be purchased to assist with estimating. As the company grows, PwC may decide to invest in tools to make the business more efficient.

After-Sales and Customer Incentive Programs

After-Sales Services

PwC has multiple customer acquisition channels. PwC will have to consider each distribution channel individually when thinking about the after-sales programs, since our customer profile is slightly different in each case.

Builder Distribution Channel

PwC has a few builders lined up that we anticipate working with immediately. Of course, this requires us to bid and be awarded the work, but we fully expect to win at least half of what we bid. We plan on offering discounted pricing to these builders based on the amount of work they award us annually. The more work we receive the greater the discounts we will offer. After a job is complete with a builder, there is a 1-year warranty on the work performed by all the builders' subcontractors, including PwC. These warranties cover any work not performed to the customers' expectations; it does not cover subsequent wall dents and dings from normal household wear and tear. It also covers any product issues that may occur, meaning if a paint, stain, or sealant does not perform to the manufacturer's specifications, than PwC will come back and perform the work again at the manufacturer's expense, as covered under the manufacturer's warranty.

PwC has arrangements with all our builders to offer a 1-year refresh or household touchup service. This service is performed at the same builder hourly rate, and the service arrangement is scheduled

of 46

and paid through the builder. After this 1-year service, PwC will treat these customers as we would our direct customers and price accordingly.

Interior Design Distribution Channel

PwC has the same arrangements with most of our interior designers as we do with our builders. There are a few exceptions where we get a referral from the designer and bid directly with the customer for the job. In these cases, we use one of our project-based pricing methods for bidding based on the project size or complexity. Either way our warranty policy remains the same. The only difference is where the warranty service call originates, from the designer or the customer. After the warranty period, the customer relationship becomes direct with PwC.

Direct-to-Consumer Distribution Channel

PwC will offer traditional pricing to their direct customers. These customers will be offered the 1-year service and product warranties that are available through the other channels of distribution. The only difference is that the customer has a direct relationship with PwC.

All Distribution Channels

PwC intends to offer tips, tools, and tricks on our website through a blog and links to our suppliers. We also are going to encourage customers to call with any questions about the maintenance and care of their home related to our products or services. These advisory calls are free to our customers.

PwC plans to have customer feedback and reviews placed on our website. We will encourage customers to provide company and employee reviews and feedback, so we can be sure both our company and employees are portraying the image and persona by which we wish the company to be known. We also plan on highlighting products, employees, and suppliers on the website. A blog will enable PwC to accomplish this objective.

PwC wants to build an annual maintenance program service for our customers. This program can include an outside power wash of the home exterior, gutter cleaning, screen enclosure cleaning, deck or patio washing, and roof power wash and debris removal from exterior eaves or awnings. (Windows and repair work are not included, but repair suggestions will be noted and reported to the homeowner.) The annual maintenance program can also include inside paint touchup (both trim and walls), stain surfaces, and any resealing of interior or exterior surfaces. The homeowner can also include exterior trim, soffit, and deck painting or stone sealing services. The annual maintenance program will allow the customer to determine the level of service required based on their home's wear and tear and their desired level of maintenance.

Customer Incentive Programs

PwC will not provide any special reward program since the frequency of customer interaction is nominal, but PwC will have special annual maintenance contracts available to our clients who become members of the PwC preferred customer program. The membership will require customers to sign up for a fee. This membership will get the customer discounts on annual refresh/touchup services, normal damage repair or fading-based services. Having a membership also gets them priority in PwC's scheduling.

of 46

V. Marketing Plan

Company Brand

Company Purpose

PwC Purpose - Paint with Care takes the burden off you for your home TLC.

Leave your home to Paint with Care to color it beautiful!

Name - Paint with Care (PwC) - the name is meant to portray that we are a company that cares about our work performance, your home, and the impression we leave.

Brand

Insert Company LOGO

Font - Aharoni

INSERT COMPANY COLORS

0,115,200 192,0,0 120,115,115

Colors - R,G,B or Hex (both preferable)

PwC takes the burden off you for home TLC!

Leave your home to Paint with Care, to color it beautiful!

Employee Attire - PwC will have the estimators dress in white button-down shirts embroidered with the company logo and white dress slacks. The other employees will wear white t-shirts or sweatshirts (based on weather conditions) with the company logo and white painter pants. We will also provide gray ball caps with the company logo.

Distribution Channels

Company Distribution Channels

PwC has decided early on that we will start with three distinct distribution channels for sales of our contractor services. These include the Builder channel, the Interior Designer channel, and the Direct-To-Consumer channel. We have already observed and read about the plans to manage these three channels.

Distribution Channels

Channel Feature Benefit Disadvantage

Direct Direct contact w/customer, estimators being sales reps

Ability to measure customer demand, manage relationship

Limited growth with limited reach, cost to market

Builder 3rd party finding and introducing customers

More exposure, greater reach to new customers, lower cost for marketing

Lack of direct contact with customer

of 46

Interior Designer

3rd party finding and introducing customers

Increased exposure to customers, more marketing

Some customers not direct while others are direct

Marketing Plan

Marketing Plan Basis

Purpose - the reason for which something is done or created; a desired result; a promise

PwC aspires to acquire and retain customers by offering superior services and work ethic coupled with programs focused on the maintenance and well-being of the customers' homes.

Goal - the result toward which effort is directed; achievement of one or more objectives

Create an experience for a client that is focused on taking care of one of their most valued personal asset - their home. (Project and Crew Cleanliness and Maintenance Programs)

Distribution - the path through which goods or services travel to reach the end consumer

Direct sales - work directly with a customer (no third party)

Builder - work through builders on their projects (renovations or new builds)

Interior Design Firms - work with or through a design firm to service a customer

Target market -customers at whom your products or services are aimed

Homeowners who are mostly professional and don't have the time or inclination to do their own home repair or maintenance.

Branding - creation of your differentiated presence; your image; your emotional connection

Clean and white to depict the cleanliness of the crew, along with a bright splash of color in the logo to represent the painting industry.

Objectives

PwC will launch its first marketing campaign with a clear objective to introduce the business services to the local marketplace. Our goal is to begin embedding the company's purpose into the consumer's mind.

Achieve name and brand recognition

Become a valued member in the local construction community

Articulate the company services in a meaningful way to potential customers

We will also nurture the new relationships with the builders and design firms so that they are comfortable with our abilities and responsiveness. Being dependable is critical to these new partners, and we intend to be certain to satisfy their needs. We want them to know that PwC can be counted on, which in turn should grow our interaction and work with them.

Strategy

of 46

PwC will be advertising in the local mailers and handyman magazines. We hope to engage with the local magazines and newspapers to share tidbits of information on the To-Dos of Home Maintenance. Much of this promotional content is available to us through the trade associations, Sherwin-Williams, and Benjamin Moore.

PwC will introduce the company services and home maintenance programs through coupons in the Valuepak mailings. We will also build a website that will allow our customers to login and request a bid/quote appointment online. PwC wants to guarantee a turnaround/response time of 24 hours from submission of the online request.

PwC intends to have a structure in place to capture our prospective clients' contact and project information, and other pertinent data so that we can do follow-up with them whether they do business with PwC or not. Therefore, as leads come in, our company will try and gather as much data as possible.

PwC also intends to be sure to maintain a Customer Relationship tool (CRM) that will help us track our prospects, customers, and marketing campaigns. The system will be integrated into our financials and allow him to keep in touch with his customers, measure his success with marketing efforts, and track our spend versus ROI (return on investment) on our campaigns.

Design

PwC will hire a design firm to assist us with branding, flyers, and all other needed materials for our marketing. We have a preliminary plan/design in mind (see Chapter 10 - Company Brand), but hope to refine and elaborate on this basic concept. The design firm we intend to use is also going to assist us with the website design, build, and delivery. They have provided us with estimates so that we can now build a marketing budget and plan.

Execute

PwC will need to hire a design firm to assist with logo creation, branding, and printing needs. We have hired the firm and we have costing for planning purposes. PwC will use this information for the creation of our marketing campaign budgeting.PwC intends to start the execution of the plan as soon as we receive a business license. The owner, Brock, has begun reading and collecting industry articles for the "To-Do" content. Suppliers and trade associations are great resources for this content in the contractor-based industries.

Measure

Measuring the success will be based on project bid requests. All customers will be asked how they found out about PwC. The CRM app PwC is using to track customers will have fields to gather this information. We will measure this monthly to see they progress of the business marketing efforts.

Optimize

The PwC marketing efforts will be adjusted and fine-tuned based on the monthly reviews. PwC intends to make all the marketing engagements as short-term as possible so that we can add or remove marketing spend in the various marketing engagements.

of 46

VI. Operational Plan

Legal

Legal

PwC intends to use the same attorney that the commercial side of the business has been working with for years. Her name is Sue Fitzgerald, she has been in practice for years, and has extensive experience in the painting contractor industry due to the long-term relationship with the other company. PwC has meet with her and discussed the needs of starting the residential painting contract business and her assisting with the ongoing operations. Ms. Fitzgerald is willing to spread the service fees out over a period-of-time versus an upfront retainer payment. This gives PwC better cash flow management during the initial launch of the business. The attorney has put together an agreement that articulates the start-up services and payment schedule. The services include the following tasks:

Determination of the legal entity of the business (Sole, LLC, or S-corporation) Registration of name with state of Florida

Prepare Articles of Incorporation

Assign registered agent Setup corporate records book

Prepare corporate bylaws

Appoint corporate directors

Issue stock

Assist with the corporate tax regulations and setup (employment, sales, etc.) Obtain business licenses, permits and certifications

Website disclaimers and terms and conditions

Employment contracts, contractor agreement and HR based legal requirements

Customer agreements (fixed-bid contracts, time & material based contracts, maintenance contracts, product and service warranties) Supplier and 3rd party vendor agreements (Sherman-Williams, Benjamin Moore) Vehicle lease agreements

Miscellaneous vendor agreements (as needed for the first 12 months of engagement) Legal advice on trademarking and copyrighting for Brock's branding and marketing content

PwC is comfortable that all the necessary services are covered with this attorney and having the 12-month payment schedule helps with cash flow. A fixed bid alleviates the stress of any extraordinary expenses that could surprise him or change her start-up expense estimates.

Accounting

PwC hires an accountant that has experience with construction contractors and other like service-based companies. Fortunately, PwC has worked with this professional to build this business plan. Having the accountant intimate with the plan and the financials will be helpful for the businesses ongoing bookkeeping, tax planning and accounting requirements.

The accounting firm agrees to setup the company accounting at a fixed price, including the following services:

of 46

Employment tax registration

Obtaining EIN with IRS

Quickbooks training (40 hours) Acquire a sales tax number Unemployment insurance

Acquisition and setup of software for accounting purposes

Assist in the creation of financial projections for the business plan

Recommend and assist with bank setup

Payroll system selection and setup

PwC will add both these professionals to the plan and include company bios as well as their individual professional bios. PwC realizes the importance of having both of these professionals hired. It is essential that they work together for the common goal of properly structuring the business. The good news is that they have worked together before and are familiar with each other's business practices and techniques of delivering service.

Facilities, Location, and Equipment

Facility Requirements

PwC intends to start the residential painting business as a home-based business. This eliminates the need to look for a business location until we have grown large enough to warrant the necessity of an office space. PwC plans to open the office space once we hire a bookkeeper and manager that will assist with the crews and customer quotes and bids.

PwC will need to buy or lease a truck and a van to carry tools, products, and the painting crews. We have thought through these requirements and options in order to determine the best vehicles that will meet our needs.

Vehicle Requirements

The following is a list for vehicle characteristics:

Ford F-150 Truck and Ford E-350 KUV (commercial utility van) Design for hauling large equipment and heavy tools

Transportation of painting tools, ladders, scaffolding, etc. Ability to separate and contain corrosive products

Storage for Cleaning materials and trash removal Capacity for painters (4-6)

Location

Since PwC will be a home-based business, location is not relevant. What is relevant is the location of our employees and having the ability to meet them at a central location. The goal is to minimize traffic and parking issues at a PwC client residence. PwC will manage work schedules so that crews are transported to and from the clients with minimal schedule delays and cost.

Equipment

of 46

PwC has created an equipment list containing painting equipment, tools, and supplies. We have included materials to support the power washing to support the annual maintenance side of the business. We also included technology equipment and software to manage the financials, bidding, and customer service operations of the business. The software will be a cloud based solution, so that we get the services of database backups, accountant access, and free software upgrades.

The major startup expense for PwC is in the purchase of the vehicles. The will be our greatest valued asset on the books. We are going to consult with our accountant to consider whether to lease the vehicles or purchase them.After reviewing the advantages and disadvantages of a lease versus a loan, PwC decided to purchase used vehicles initially and revisit this in a couple years when we have a better sense of our vehicle requirements and usage. We may keep our old vehicles and lease new vehicles as the business grows. This gives PwC of sense of our upfront costs and ongoing expenses to be utilized in our financials projections.

Staffing

Resource Planning

Resource Planning

PwC must account for seasonal and economic fluctuations when creating a resource plan. We intend to use a mixture of full-time contractors and part-time contractors to start the business then we will begin to hire on full-time employees. Having resources start as contractors allows us to minimize our risk and keep accounting and payroll simple. First, having painters start contract allows us the flexibility to remove them from our staff, if they are not performing to our standards, with minimal impact from a HR perspective. Second, it allows us to review and select the best performers and add them on as full-time employees when the business is ready for them.

Paint with Care Resource Planning

PwC will launch the business with four full-time painting contractors. Initially, the owner, Brock, will manage the business and perform all the customer interactions including initial introductions to the business, education on the services offered, and part-time fieldwork. This way Brock can be sure to be intimate with his business processes and making certain they are solid before hiring a bid manager.

Job, Task, Function

Qualification(s) Staffing Type

Additional Skills / Competency

Competency Level

Manager Owner, Quotes/Bids

Full-time Accounting,

HR, Legal

6+ years of experience painting with prior management experience

Painter 1 Painter Contract Cutting 3 - 5 years of experience painting

Painter 2 Painter Contract Staining 3 - 5 years of experience painting

Painter 3 Painter Contract Gen, Painting 3 - 5 years of experience painting

Painter 4 Painter Contract Gen. Painting 3 - 5 years of experience painting

Painter 5 Painter Contract Gen. Painting 3 - 5 years of experience painting

of 46

Intern 1 None Part-time contract

Gen. Painting To be trained

Intern 2 None Part-time contract

Gen. Painting To be trained

Receptionist / Bookkeeper

Prior receptionist experience

Part-time hourly

Phones, scheduling, light accounting

High School

Paint with Care Compensation Plan

The compensation model PwC intends to use is a contract-based model. We will engage resources as either part-time or full-time contract and consider hiring them based on their performance and dependability. Our hope is to have a trusted contractor earn their way into the management role. By promoting a competent painter, PwC knows that we will have a resource that fully understands the field demands and requirements, as well as an individual that has customer service focus.

Brock acknowledges that he is weak around business financials and wants to hire a receptionist / bookkeeper who has the innate skills around financial management and bookkeeping. We have identified a resource that we feel comfortable with who is studying part-time at the local college getting a business degree with a specialty in finance. She plans on assisting us with our business plan financials and they will be working together daily to review and access progress on the business when it is launched. This same resource will provide part-time receptionist services to cover answering the phones, scheduling, and other miscellaneous tasks. She will be compensated with an hourly wage.

Eventually PwC will engage a couple interns to assist with fieldwork. They will be trained to assist with painting tasks, as well as be responsible for the site prep and cleanliness. They must be sure that the site is presentable at all times.

Suppliers and Inventory

Suppliers

Suppliers

PwC is establishing relationships with the two most reputable paint manufacturers and suppliers, Benjamin Moore and Sherwin Williams. Both have excellent contractor programs that offer discounts on tools, equipment and products, as well as warranties and educational benefits. The have generous programs around the management of cash flow, by offering payment terms and reporting tools that log purchases by project.

Grainger is the leading wholesale distributor of maintenance, repair, and operating products (MRO) in North America. Brock's father established a relationship with them for high value equipment and large quantity product purchasing. PwC will leverage the relationship the commercial company has built and will establish our own relationship with the local branch in Pompano Beach. This will allow PwC to purchase equipment like the airless paint sprayer and power washer at more reasonable prices.

of 46

Supplier Name

Address Phone Contact Name

Contact Phone

Terms Delivery Schedule

Products

Sherwin Willaims

455 NE Spanish River Blvd, Boca Raton, FL 33431

561-395-0732

15 days Pickup Paint, Stains, Painters Tools

Benjamin Moore

1369 W Palmetto Park Rd, Boca Raton, FL 33486

561-347-0009

20 days Pickup Paint and Stain, Other mfg products for sealants and special coatings

Grainger 2131 SW 2nd St. Bldg 8, Pompano Beach, FL 33069

800-472-464

30 days Pickup Supplies and Equipment

HD Supply 2007 NW 15th Ave, Pompano Beach, FL 33069

954-979-3030

30 days Pickup Supplies and Equipment

Home Depot

9820 Glades Rd, Boca Raton, FL 33434

561-451-0240

Due Upon Receipt

Pickup Misc Supplies

Lowes 21870 SR 7, Boca Raton, FL 33432

561-883-1215

Due Upon Recipt

Pickup Misc Supplies

Sun Trust Bank

101 E Camino Real, Suite 104, Boca Raton, FL 33432

561-226-2749

Bank

Federated insurance

121 E Park Square, Owatonna, MN 55060

Jack West

800-533-0472

Property & casualty insurance

Workers compensation

Risk management services

Life and disability income insurance

Surety products

Estimate Rocket

222 Merrimac Street, Newburyport, MA 01950

Kathy 978-379-7979

Software (estimating, financials, etc)

of 46

Home Advisor

Halet Gray

303-963-8888

Advertising

Kwekel Garage & Epoxy Flooring

4827 W Country Club Drive, Sarasota, FL 34243

941-893-2442

Garage Floor Systems

Paint with Care Inventory

PwC will not require any inventory since it will operate on a job-by-job basis. It is important that we have a good handle on product requirements per job and that we track our job costs. PwC intends to use an online software to track the costs per customer, per job.

Cash Management

Cash Flow Management

Cash Flow Management

PwC will take deposits from our customers to get jobs scheduled. Once work has commenced we will require milestone payments for large projects and full payment at time of job completion. Having milestones allows us to review progress with our clients and make sure that we is performing as expected. With any luck, this will alleviate any potential payment disputes upon job completion. The sooner we know of an issue the better. This allows us to address it immediately.

The software we have selected supports job creation under each customer, so PwC can create an estimate for the customer's job; apply the deposit against this job; apply milestone payments; and close the job after final payment.

Payment Methods

PwC will take the following payments from our customers.

Cash

Check

Credit Cards

Debt Card

Payment Terms

Payment terms with our customers are net 15 days due after invoicing. An interest rate will be applied to overdue invoices. PwC is considering applying discounts to invoices paid upon receipt. We will apply this to our business practice if AR becomes problematic.

PwC has payment terms with our suppliers and vendors. We receive good terms by leveraging the relationship with the commercial company. We will receive the discounts that that company has built up with their volume purchasing over the years. They should get better pricing with their combined purchases going forward.

of 46

VII. Management and Organization

Company Culture

Values

PwC wants our clients to feel like they are in capable hands to enhance the beauty of their home. We want them to trust PwC with the special place that they call home. PwC should provide services that are thoughtful, caring, and considerate. The customer should have an experience that they want to share with their friends and family.

PwC Values

1. Clean, conscientious, painting experts

2. Quality service delivered in a timely manner 3. Value based services - not cheap but not expensive

4. Long-term relationship

5. Dependable and trustworthy

Purpose

PwC Purpose

1. Treat the clients home with dignity and respect 2. Keep in mind that we are working in someone's home, take care of personal items in the home and be careful 3. Be courteous and respectful in treatment of the clients

4. Cleanliness will be paramount to showing our respect for the home

5. Provide services that are professional and add beauty to a home

Mission Statement

PwC Mission

Full service home improvement for interior and exterior surfaces

Depend on us to keep the value in your home through ongoing care and maintenance

Trust us to with one of your greatest assets, your home, next to the family that lives inside it

PwC wants to be known as the go-to residential painter in the Boca Raton area, due to our ethical business practices, ease of doing business with PwC, and ultimately our quality of services. Our staff will practice cordial work behavior and respectful work practices. PwC knows that this will go a long way with our clients, builders, and the designers.

Organization and Management Team

Management Team

PwC will start with a small crew of contractors and expand the business based on the demand we generates. We plan to promote some of our senior contractors to crew managers. we will also hire interns to be paired with crew members to be mentored and trained. We will promote a resource to be a project manager and project quote creator. This position will require a resource that has

of 46

customer management skills and is well respected by the crews to manage the project through completion. Having a resource part-time managing and reviewing the financials will allow PwC to float and cover open positions, mentor, manage, and create new opportunities for the company.

Paint with Care Workflows

PwC creates a workflow that will give him the basic flow for all the possible customer interactions, including client interactions through:

A builder as the primary contact point A designer as the point of introduction (PwC will either work through the designer or go direct with the customer) Direct interaction with a client (client came to them directly or comes back to them after initial interaction through a builder or a designer.

PwC will start by having the owner manage the customer relations, quotes and bids, and operational functions. We intend to have our attorney manage the legal tasks, our bookkeeper manage the daily accounting tasks and reporting requirements, and our CPA will manage the complex accounting and tax related tasks. With growth, we will add other managers to assist with the site management, customer relations, and project bidding.

Name and/or Role

Ownership Participation

Responsibilities Pre-requisites

Experience level

Compensation and Benefits

Other Expertise

Brock 100% 100% Owner, Manager, Quotes

$49,400 + profit sharing

TBD NA 100% Site Manager Mgmnt Experience

8+ years $40,000 + bonus

TBD NA 100% Bid/Quote Manager

Customer Relations/Project Management

7+ years $40,000 + bonus

Heather NA Contract Bookkeeping Accounting, Acct Software

5+ years Part-time Hourly $14/hr

Receptionist

of 46

PwC Organizational Chart

The organization of PwC will be a flat organizational structure (also known as a horizontal organization) to start with, meaning that there will be no layers of management between PwC (the owner) and our resources. Flat organizations do not engage middle managers and they do not have complex reporting structures. As PwC grows, we intends to add a layer of management so that the company can grow, take on more resources, and acquire more projects.

Professional Advisory Support

Professional Advisory Support

Board of directors (BOD)

Paint with Care will have a board of directors consisting of Brock and his father, Seth Garcia. The corporate officers will be Brock as the President and Seth as the Secretary. Shares will be issued for stock giving Brock 70% ownership and Seth 30% ownership. They are doing this because Seth will be assisting with funding the startup and sharing his business assets. The goal is to transition the entire ownership and business responsibilities to Brock over the first three to five years.

Advisory board

PwC intends to create an advisory board to include the builders, designers, a business mentor, and Seth, the father. This board will assist PwC with vetting through our business practices, the customer relations, and other startup related issues. Having the advisory board work with us will give us the proper perspective to see how we are performing. This advisory board will meet quarterly to review progress and discuss future goals and growth.

Attorney

PwC has retained an attorney to cover all the company formation, contracts, permits, licensing, etc. at a fixed price with payments spread out over a twelve-month period.

Accountant

PwC has hired an accountant to cover all the company start-up tasks, taxes, insurance, etc. with our bookkeeper.

Information Technology

of 46

PwC intends to use an online financials system and Microsoft Office 365 both as cloud-based solutions. This allows us to pay for the systems on a monthly basis and get the applications, upgrades, backups, etc., for the monthly service fee. These systems cover the following functions for the business:

Accounting, purchasing, job costing, quotes, invoicing, etc. in a business application software system

Email, spreadsheets, word documents, etc. Other technology requirements to operate the business

Insurance agent

Federated Insurance will be engaged to provide business liability, key man insurance, disability, and workman's compensation insurance.

Banker

Sun Trust Bank has been selected as the bank to set up checking and savings accounts, payroll services, and credit card processing.

Consultants

Horizon cloud computing solutions will be engaged to meet all of PwC's technology based requirements, including hardware, software, internet, and security.

Mentors and key advisors

PwC has not identified any other individuals to assist or advice, but is keeping an open mind as we grow the business.

of 46

VIII. Start-Up Expenses and Funding

Start-up Expenses

Start-up Expenses

One-time Expenses

After review of the asset schedule and marketing budgets, both of which are the largest start-up expenses. It is decided that getting loans on the vehicles makes the most sense for the business at start-up.

PwC has no rental, build-out, or professional service upfront costs. PwC does not intend to have an office and the attorney and accountant have spread out their corporation start-up costs alleviating initial costs. This makes the brunt of the start-up expenses due to equipment and marketing expenses.

On-Going Expenses (estimate monthly cost)

PwC has estimated our ongoing expenses and most of these expenses are employee salary, vehicle expenses (gas, insurance, and loan payments), marketing, and professional service fees. We used a contingency factor of 10% to cover unrealized ongoing expenses.

Sources of Capital

Brock and his father have decided that the business will be funded by his father, giving him 40% ownership. Brock will purchase back the shares in the company as the business becomes profitable. Eventually Brock will have full ownership. The goal is to accomplish this in the next five years. The business will also be funded with a small bank loan (line of credit) to be used and paid off as a priority.

Brock is a young entrepreneur with no debt, but also with no credit. He has saved $5000 over the years and will be contributing this to the business. He plans to remain on his parent's health insurance policy until such time that he can get a policy under PwC. Other than his basic living expenses, Brock has no expenses, since he is still living at home with his parents. He intends to get a place of his own in the coming months when the business has stable income and he has a stable salary from the business.

Summary Statement

Start-up versus Working Capital

Upon review of the start-up estimates (assets versus liabilities) we are pleased with the outcome.

Start-up Capital = Sources of Capital - Start-up Expenses

$85,000 - $72,441.97 = $12,558.03 in remaining Capital

The capital remaining takes into account a 10% contingency of $6,585.63, along with added asset value of the $35,000 loan for the vehicles and a $10,000 credit card.

of 46

Funding

Funding

Capital Requirements

PwC has estimated that the startup expenses will be around $72k dollars. This amount includes a contingency of 10% or $6.6k.

Personal Financial Health

Brock, the owner, has no personal debt, his car is paid for, and he intends to remain living in his parents' home for another six months, focusing on the business launch. This allows him to keep his expenses low and save for an apartment, furniture, etc., to outfit his first apartment.

Funding Sources

Brock has been saving for the past couple of years and will be contributing $5k towards the start-up funding. Brock banks with SunTrust for his personal savings. He applied for both a business account and credit card with them. SunTrust opened the business account for him depositing his savings and his father's contribution in the account. They gave Brock a business credit card with a credit limit of $10k.

Brock and his father Seth, have visited the bank that his father's business works with to secure the loans for the vehicles. Seth cosigned for Brock so the loan process was fairly simple and straightforward. The vehicles are used as collateral against default of the loan.

Tasks and Documents Required for Funding

1. Financial health - complete and in good standing according to bank. 2. Credit rating - Nonexistent Brocks father is cosigning to secure loans

3. Business Plan - Near completion

4. Loan type - Brock and Seth worked with SunTrust bank to determine the best loan for the business vehicles

5. Collateral -vehicles will be collateral

Documents -

1. Articles of Incorporation - complete by attorney

2. EIN number - to open new account and transfer/deposit funds

3. Business contracts - in progress - relationships agreement between Seth and Brock (funds and transfer of ownership with repayment)

Financial Institutions Contact Info

SunTrust - 101 E Camino Real, Ste. 104, Boca Raton, FL 33432 - (561) 226-2749

of 46

IX. Financial Plan

Sales Forecast

Product Sales Forecast

This spreadsheet reflects no input so it reflects no sales.

Service Sales Forecast

PwC estimated our service items and associated pricing either by the hour or by square footage (see pricing spreadsheet). The descriptions and pricing both carried over into the Service Sales spreadsheet. For ease of calculation, we have used a price per hour to determine projected sales based on the hours of labor resources we have available. We have determined our resources available time on our staffing estimates.

Service Revenue by Item

PwC estimated our first month's service units sold as hours in order to drive the calculated revenue associated with each service item. PwC estimates the first month based on four full time resources at a 93% productivity rate. We increase the hours each month with the addition of more resources. We used a 25% product COG for product being used to deliver the services. The COG covers product like paint, tape, equipment, etc. that is required to provide the services. We used a 10% COS since we know that occasionally we might need to rent equipment or bring in a contractor temporarily.The COG and COS are added together and multiplied by the total units sold to give PwC a total cost per service item. The total cost is deducted from the total revenue to give us a total profit by service item. These are summed up to give us a total profit in month one of $13,013.00.

Monthly Revenue Breakdown for Services

PwC has estimated a growth rate of 10% on the initial six months of business, then tapering off to average an 8% continued growth rate for the business in the years that follow.

Annual Revenue Breakdown for Services

Based on PwC's estimates the Service Sales Forecast shows us an annual revenue breakdown of $561,957 in revenue for year 1, $606,913 in revenue for year 2, $655,466 in revenue for year 3, at a steady growth rate of 74%.

Sales Forecast

Since PwC has no product sales, our Sales Forecast spreadsheet is similar to the Services Sales Forecast spreadsheet.

Monthly Revenue Breakdown

Now that we can revise and tweak these estimates to be certain they look realistic and achievable. PwC's main goal is to be able to measure our progress and revise the financials forecasts annually to set goals for the business by distribution channel. We will measure our sales inside our financials by distribution channel. That way we can see if we are making more sales with our builders versus

of 46

designers or direct. If managed properly we may be able to measure our profitability by distribution channel.

Annual Sales Projections

The annual sales projections show sales for each year for the first three years and the combined total sales for those three years.

Payroll and Operating Expenses

Payroll Expenses

Paint with Care Payroll

PwC determined early on in the planning process that we would have a mixture of employees and contractors. Brock and the receptionist/bookkeeper would be the only employees and all the painters would be contract. This would allow us to pay them a decent hourly rate, based on their skillset and allow us the flexibility to manage the business through the ebbs and flow of the cyclical demands.

PwC created a resource plan and a compensation plan, based on our staffing requirements. These figures populate the "Payroll" spreadsheet automatically.

PwC made the following assumptions for our payroll expenses:

Brock and the Bookkeeper, Heather, will both be full-time employees in all three years. PwC will start with two full-time painters, adding another painter by month three, another in month five, and a final painter in month seven. This will give us five painters in year 1. We will have one full-time intern at the start and add another intern in month seven.

Annual & Monthly Payroll Expenses Variables

The "Annual and Monthly Payroll Expenses" spreadsheet calculates the following:

PwC will have an annual payroll expense of $182,560 and monthly payroll expenses of $20,847 at full capacity.

Monthly Payroll Expense Breakdown

In this table, we estimated our monthly payroll and contractor expenses for the first year. We determined the monthly expense is based on our percentage to use of the resource. We removed the expenses for the months they are not yet needed, leaving us with the following monthly expense breakdown for year 1.

Annual Payroll Expense Breakdown

The annual payroll and contractor expenses are automatically calculated for us giving us the following annual expense breakdown for years 1, 2, and 3.

Operating Expenses

of 46

Paint with Care Operating Expenses

Monthly Expense Breakdown

PwC reviewed this spreadsheet for accuracy and revised our figures in the "Start-up Expense" spreadsheet since this is where they are taken from. We added a line item expenses for "Equipment Leases" for $50/month to cover the addition of a paint sprayer in month seven. The only other exception is the payroll expense line is taken from the "Payroll" spreadsheet. The fixed and variable expenses are all accounted for and a total is calculated for the first year's overhead expenses.

Annual Expense Breakdown

This spreadsheet gives PwC the operating expense breakdown based on an estimated annual expense increase annually. We estimated an annual increase of about 4% giving us an annual expense breakdown for years 1, 2, and 3.

Cash Flow Statement

Cash Flow Statement

Paint with Care Beginning Balance

PwC has a beginning balance of $12,558 that was brought over from the "Start-up Expenses" spreadsheet line item called Start-up Capital. This balance reflects the total of capital infusion into the business from owner's equity, loans, and credit cards minus the expenses for the start-up.

Paint with Care Cash Inflows

PwC has sales revenue derived from the residential painting and home maintenance services sold thru the distribution channels that include direct to consumer, builder subcontracting, and referral and subcontracting with interior designers. We have estimated these sales projections based on the potential resources PwC will have at its disposal. PwC has no receivables due, interest income expected, sales of assets, or loans income coming in for the first year of business.

Paint with Care Cash Outflows

The PwC cash outflows include the COGS and COS for the services that we provide to our customers. The costs include painting supplies, cleaning materials, and paint, as well as the costs associated with the services being provided, such as fuel expenses. PwC included all our resource costs in the payroll section of our financials plan even though they are most likely just going to be contractors. This way we account for the overhead associated with employees and over estimates our possible costs, making our financials projections conservative.

Paint with Care Ending Balance

The ending balance for PwC in the first year shows a marginal cash flow growth rate for the first six months of business. After the initial six months, the growth rate increases and then levels off at between 25% and 30%.

of 46

Income Statement

Income Statement

Gross Profit

Gross Profit Gross Profit (GP) rate of growth (%) = (GP Month 2 - GP Month 1) / GP Month 2 *100

This calculation works for the months that follow respectively as well as calculating the growth rate from year to year. PwC calculated that our gross profit will grow over the first year at an average rate of about 8%. This is also the case for his rate of growth for years two and three both being around 7%.

Operating Income/Loss

PwC starts with a low operating income for the first three months due to the need to build and reinvest in resources and equipment as PwC brings in sales revenue. PwC starts to see some good income generated after the sixth month and steadily grows from there. The first year of business shows an operating income growth rate of 8%, then drops and levels out in years two and three at around 7%.

Net Profit

PwC achieves a steady growth in net profit throughout year one, giving us a nice cushion in cash on hand for unexpected events or issues. We want to retain a cash on hand amount equal to one year of expenses, so we can be sure the business weathers the storms of seasonal fluctuations or events (i.e. hurricanes) or economic recessions.

In summary, PwC is pleased with our income statement and we feel confident that we can make this business viable and healthy if all goes according to plan for at least the first twelve months. We realize that we should and will revisit the plan and financials after the first year to better predict years two and three.

Balance Sheet

Balance Sheet

Total Assets

PwC current assets include only his start-up capital (cash), since he has no inventory, or prepaid expenses. PwC's fixed assets do not include and building, land or property purchases or leasehold improvements, but does include equipment to support our business services.

Total Liabilities

PwC has current liabilities that do not include any accrued payroll or associated taxes. A short-term note payable is for the loans used to purchase the work vehicles. The only long-term note is for the vehicle loans for 35k.

Owners' Equity

PwC owners' equity is equal to $15,440.53 on opening day.

of 46

Break-Even Analysis

Balance Sheet

Total Assets

PwC current assets include only his start-up capital (cash), since he has no inventory, or prepaid expenses. PwC's fixed assets do not include and building, land or property purchases or leasehold improvements, but does include equipment to support our business services.

Total Liabilities

PwC has current liabilities that do not include any accrued payroll or associated taxes. A short-term note payable is for the loans used to purchase the work vehicles. The only long-term note is for the vehicle loans for 35k.

Owners' Equity

PwC owners' equity is equal to $15,440.53 on opening day.