This carpentry business plan sample provides a way to capitalize on a growing housing market. Remember this is only a business plan sample. For optimal results you must create a plan that is customized to your business.
1.0 Executive Summary
“Sandheart Construction Corp.” operating as “Sandheart Construction” (The Company), was incorporated on September 1, 2019, in the province of British Columbia by Founder Mr. John Wosk. The Company is changing the perception of carpentry by providing a more customer-centric process of ordering custom carpentry products and organizing solutions for homes.
As British Columbians spent more time at home during the pandemic, they became more aware of their home’s aesthetic and functional faults. However, now that the economy is on a path to recovery, homeowners have more disposable income to improve the look and function of their homes with custom carpentry solutions.
Sandheart Construction manufactures and installs custom buildings (using woodwork and carpentry), walk-in closets, pantries, customer shelving, custom barn doors, and other custom interior carpentry jobs from start to finish. The average job for Sandheart Construction is $3,000, and with no deposits required before starting a job, the Company makes it easy for homeowners to start new projects right away.
To find these customers, word-of-mouth advertising will be essential. Sandheart Construction will pay a 5% referral fee for all successful referrals. In addition, the Company is establishing an online presence to increase visibility and provide new channels for customers to see the Company’s solutions and contact the owner.ccMr. Wosk has ten years of experience in the construction and carpentry industry, starting as a labourer and working his way up to supervisor. Through this, he learned how to make custom blueprints and more about the business side of carpentry.
Sandheart Construction is currently seeking a $65,000 loan through the Canada Small Financing Program for equipment and tools including hand tools, a saw, table saws, small trailer; and a $60,000 loan through Futurpreneur’s Black Entrepreneurship Startup Program to create a website, training program and help with other start-up costs.
2.0 Business Overview
Sandheart Construction is an British Columbian carpentry business that builds custom home storage solutions and functional pieces for homeowners across the province. The Company is built on the skills of its team and a customer-centric approach to doing business and creating relationships with its customers.
Customers trust Sandheart Construction for custom buildings (using woodwork and carpentry), walk-in closets, pantries, customer shelving, custom barn doors, and other custom interior carpentry jobs from start to finish. Customers receive discounts for larger projects, and referrers are paid 5% upon successful referrals.
The Company serves the Victoria, British Columbia area but can do projects throughout the province. The additions created by Mr. Wosk increase the value of a home and its resale value. They also transform the lives of the homeowners by providing organization where there was none and creating pieces that are functional and aesthetically pleasing.
Customers speak highly of Mr. Wosk’s work:
- “It was a stress-free and pleasant experience”
- “The work was well-done, great price, and completed within a timely manner, and he was very professional”
- “Way beyond my expectations. He is very talented, and I love my new closet”
All projects will be prepared in Mr. Wosk’s workshop at his home and then transported to the customer’s home for final assembly and finishing.
2.1 Industry Overview
Carpenters are the largest group of skilled trade workers in Canada. Safety is the top priority for all skilled trades, especially carpentry. To ensure workers have not only the technical skills they need in this career but are also aware of and practice industry-standard safety procedures, carpenters go through an apprenticeship program to hone their skills.
Full certification in carpentry takes about four years, but in many provinces, it is merely recommended, not a requirement for employment in the industry.
In British Columbia, there are approximately 7,200 carpenters currently employed by companies or themselves. Of these, 32% are self-employed.
2.2 Mission & Vision Statement
Our Mission is to help our customers live more comfortably in their homes with quality carpentry that is both stylish and functional.
Our Vision is to create a world where people can fall in love with their homes again because they are better organized and aesthetically beautiful.
2.3 Core Values
Sandheart Construction has several core values that guide business growth and day-to-day operations:
- Quality: Quality work is how repeat business is earned. Every project is completed with the best raw materials within budget and assembled with quality workmanship.
- Integrity: All decisions are made with the highest moral principles and honesty.
- Professionalism: Customers expect professional quality work. Company staff go above and beyond to ensure all finished products meet that standard and that all interactions with customers are friendly and professional at all times.
- Detail Oriented: The nature of custom carpentry requires deep attention to detail. No detail will be overlooked. It’s better to ask too many questions than to ask too few and miss a critical element of the project.
- Collaboration: Collaboration with our customers is key to the Company’s business model. Working in silos is not productive. The Company’s representatives work collaboratively and include the customer in the process so they can ask questions and make customizations when needed.
2.4 Goals and Objectives
The Company’s objective is to build a loyal customer base who will refer new projects to Royal Woods. The business is built on referrals, so we go above and beyond so each customer is 110% satisfied with their experience.
Sandheart Construction is also working towards the following one-year operational goals:
- To receive start-up funding to take the business forward
- To hire at least one general labourer
- To earn $120,000 revenue
The Company plans to double revenue for years two ($240,000) and three ($480,000).
2.5 Key Success Factors
There are several external (economic) and internal factors that will be key to Royal Woods’ success:
The carpentry and millwork industries are dependent on several external drivers:
- New housing starts: New Housing starts increased 4.4% in 2020, despite industry expectations. Lower interest rates will encourage new construction, and IBIS World predicts new housing starts to decrease slightly as the world recovers from the pandemic but will remain range bound. As Sandheart Construction diversifies its’ contracts between new construction and existing home and property owners, the Company is not tied to a possible slow down in new housing starts for business success.
- Canadian effective exchange rate (CEER) index: Like many economic indicators, the CEER fell 0.6% in 2020 due to the pandemic. This rate of growth is expected to appreciate by 6.9% in 2021. This effective exchange rate is dependent on many factors and can be hard to predict.
- Residential renovation expenditure: As the unemployment rate rose in 2020, residential renovation spend dropped with it. As the economy recovers over the next few years, employment is expected to increase, leading to more people starting new renovation projects. In 2021, residential renovations spend will increase 3.3%.
- Per capita disposable income: As the economy begins to bounce back, the unemployment rate will decrease. This will create a situation where families have increased disposable income to spend on home improvement projects.
- Value of nonresidential construction: Investment in non-residential construction is expected to rebound 8.1% in 2022 and continue climbing. This presents an opportunity for carpentry businesses to create custom pieces for non-residential properties in addition to residential.
INTERNAL SUCCESS FACTORS
Additionally, the success of Sandheart Construction as a profitable company is dependent on:
- Maintaining a high quality of work and craftsmanship
- Constantly sourcing the best materials possible within budget
- Earning new business by paying 5% for referrals.
In the first year of business, Mr. Wosk will be the primary carpenter. An additional general labourer may be hired to help during busy times. In the second and third year of business, the Company will hire two additional staff, including a general labourer, and a Foreman. Staff hires will be linked to increased customer demand for company services.
2.7 Management Team
The single management team member will be Mr. Wosk. His summarized resume is below:
Production Supervisor/ Safety – Concrete Inc
As a seasoned production supervisor with a safety background familiar with industry operations and best practices, Mr.Wosk can lead and motivate workers to meet challenging targets while maintaining strict quality standards. He is knowledgeable about safety practices, preventing waste, maximizing safety, and keeping employee satisfaction high.
March 2017 to December 2020
- Batch, Pour and performed rough levelling of concrete by interpreting blueprints to establish correct grade.
- Executed a new training initiative to improve skills and develop leaders from within.
- Write daily production report and calculate direct and indirect labour of man-hours and present it during daily production meetings
- Give updates on 3 different departments of ongoing production.
- Conducted yearly internal Safety Audit.
- Conduct investigation when there is an incident or near miss to identify the root cause and implement appropriate measures to eliminate and communicate it to employees.
- Conducted weekly inventory of materials to make sure there is enough in stock.
- Addressed employee and production issues to implement optimal resolutions, preventing wasted resources and maintaining schedules.
- Assisted in external safety Audits.
- Monitored employee performance and safety, conducting retraining to correct problems and optimize productivity.
- Coordinated with internal departments to maximize operational efficiency across production and administrative areas.
- Train newly hired employees on overhead crane, loader, setting up custom forms (Box Culvert, Concrete Tank, Commercial Stairs, headwalls, trench drain, wall panels concrete batching, forklift, Zoom boom, bobcat and created training manuals to use as a reference guide.
- Accessed employees strengths and delegated tasks based upon expertise and knowledge, which increased workflow.
- Established solid working relationships with peers, workers and management through effective communication and coaching skills.
- Recommended and implemented weekly toolbox meetings and quality control measures to improve production methods and the quality of products.
- Monitor equipment efficiency, checked materials supplies and coordinated manpower requirements to meet expected demand.
- Maintained a high level of morale teamwork on the production floor through frequent communication with employees.
- Increased safety awareness to the maximum.
September 2014 to January 2015
- Plan, monitor, and appraise job result
- Interpreted technical drawings
- Maintain quality and safety standards
- Maintain stock supplies
- Built, erected and aligned forms for various concrete structures
- Poured and performed rough levelling of concrete by interpreting blueprints to establish correct grades.
3.0 Products & Services
Sandheart Construction will create custom carpentry products for homeowners throughout British Columbia. As most work will be custom, the Company does not have a standard product price list. Pricing for products will be custom quoted based on current raw material costs and labour requirements.
Sample projects the Company can build include but are not limited to:
- custom buildings (using woodwork and carpentry)
- walk-in closets
- kitchen pantries
- customer shelving
- custom barn doors
- built-in shoe racks
- other custom interior carpentry jobs
Pricing for products will evolve as market prices for materials like wood change, so similar projects done only a month or two apart may have different quotes.
Standard working hours for Sandheart Construction will be 7 AM to 5 PM Monday through Sunday. The Company is based from the founders home workshop.
Some specialized equipment is necessary to manufacture the customer’s projects. The Company will purchase the following equipment:
- Cargo trailer for tools and materials
- Delta Unisaw
- 12-inch mitre saw
- Spray painting machine
As all carpentry work is custom-created, inventory will not be held on the premises. However, raw materials will be kept in the Founder’s home garage/shop, which has been converted into the Company workshop.
4.3 Health and Safety
In any construction-related industry, the health and safety of employees and contractors are always critical. Proper safety and protective gear will be worn by all contractors while on-site or doing any carpentry work. Should it be required, Sandheart Construction will follow all current and future public health guidelines.
In addition, Mr. Wosk has obtained the following certifications and licences:
- Health and Safety Administration (present)
- Auditor Training Program Recertification (ATPR) (since August 2019)
- British Columbia OHS Legislation Awareness (since July 2019)
- Principles of Health and Safety Management (since July 2018)
- Hazard Management (since July 2018)
- Effective Claims Management (since July 2018)
- Communication and ethics for safety leader (since May 2018)
- Worksite investigation basics (since May 2018)
- Standard First Aid with CPR-C-AED (SFA) (April 2018 to April 2021)
- Basic Instructional Techniques (since April 2018)
- Workplace Hazardous Materials Information System 2015 Train the Trainer (WHMIS) (March 2018)
- Construction Safety Training System (January 2018
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5.0 Market Overview
Like many markets, the construction and millwork industry saw a decrease in 2020. In 2021, the industry is starting to rebound, and growth is expected.
Millwork in Canada is a $5.7 billion industry expected to have an annual growth rate of 0.4% (2021-2026). In Canada, over 1,600 millwork-specific businesses employ over 21,000 people and output $1.2 billion in wages every year. According to IBIS World, the industry is likely to be dominated by small employers in the coming years, and they will thrive in residential projects as new housing starts to rise.
There are few barriers to entry into this market, aside from the potentially substantial costs to purchase professional-grade equipment and tools. This also means that innovators have an opportunity to penetrate the local markets. Any business that can stand out from the competition in terms of innovation or service has a higher likelihood of success.
Market Trends in British Columbia
Canada-wide, 87.9% of carpentry businesses are profitable, earning an average revenue of $278.4 thousand (in 2019). British Columbia is home to 8% of all millwork operators in Canada. The province has a unique advantage as there is a large amount of harvestable forest land within the region, meaning timber and wood suppliers can be purchased from nearby sawmills, reducing transportation costs.
In the province, carpentry wages range from $19 per hour (low) to $28 per hour (median) to a high of $38 per hour. This is slightly higher than the national average. In addition, 92% of workers in this industry are full-time, and just over half (53%) work in the business year-round.
● Internationally well-known in the home design community
● “Corporate” feel may scare some homeowners off
● To buy out other complementary home organization businesses
● Local home organization manufacturers and carpenters
Closets by Design, Victoria
● 30-year established franchise business model
● Franchisees must follow company branding and portfolio
● To grow their franchises around North America
● New, locally-owned competitors entering the market
Victoria Custom Closets
● 4.9/5 stars, as rated by customers on Google Reviews
● Website design and function doesn’t look professional
● Turn business into a franchise to expand the business nationally.
● Other businesses with a larger carpentry team
5.2 Competitive Advantage
Sandheart Construction has many small, local competitors, but the Company always goes above and beyond their competitors to provide quality, custom carpentry.
The key differentiators between the Company and its competitors include:
- Timelines – The Company always meets promised deadlines.
- Quality – Every custom project is handled with utmost care and attention to detail.
- Free Estimates – The Company always provides free estimates and consults to understand customers’ needs better.
- Customer-centric – All custom jobs provide the results the customer expects.
- No deposits – The customer never has to put any money down as a deposit before starting the project. Full payment is requested upon completion of the project.
Other carpentry businesses lack several vital practices that Royal Wood excels at:
- Other competitors don’t build to ceiling height. This makes the job look incomplete. Sandheart Construction always builds to ceiling height to maximize storage space.
- Other competitors build and assemble from stock designs. To fully customize a project, Sandheart Construction builds every project on-site and includes the customer in the process so they can make minor changes or amendments to get the perfect end product they’ve been dreaming of.
- Other competitors use cheap materials: To keep costs down, competitors often choose cheaper materials. Sandheart Construction will always select the best possible materials for customer projects, including birch plywood for an excellent finish.
- Other competitors are not collaborative: The competitors generally do the build and never follow up. The Sandheart Construction team believes in building relationships with customers, so customer follow-ups are done within 2-3 months to ensure satisfaction.
- Other competitors’ warranties are not as comprehensive: Unlike the competitors, the Company offers 3-year warranties covering everything, including screws and paint.
5.3 Risk Analysis
Risk: Not attracting enough high-value customers
There is always a risk that Sandheart Construction won’t attract enough high-value customers to be profitable. The most significant profits will come from customers who contract the Company for more extensive or multiple projects.
To mitigate this risk, the Company will provide discounts and incentives for customers to book services for more than one room. This up-sell strategy is predicted to attract higher profit projects.
Risk: Customers cancelling projects
Sandheart Construction is not asking for deposits or upfront payments until each job is completed. If a customer cancels the job before it’s been completed, the Company will lose revenue as any custom work already performed likely can’t be applied to another customer project.
To mitigate this risk, most new business will be from referrals. Referrals are often the best, most reliable form of business. Also, because the Company has a transparent build process and involves the customer at every step, the likelihood of a cancelled project after work has begun is low.
6.0 Sales & Marketing Plan
Referrals will be the most significant source of leads for Royal Woods. The Company offers a 5% finders fee for referrals that lead to a contract.
As a business, it’s more cost-effective to work on multiple projects for the same homeowner at once. That is why Sandheart Construction offers a 5% discount when customers choose projects for multiple rooms.
To further encourage customers to book larger projects, for every three or more rooms they book, they receive a custom built-in, 2-shelf shoe rack in addition to the 5% discount. With four or more rooms the customer earns a 7% discount.
Other short-term promotions and offers may be included in the future to encourage larger orders, repeat business, or referrals.
6.1 Target Customer
Sandheart Construction has a wide range of target customers. These customers generally own their own home or apartment, and while they love their home, it doesn’t have enough storage space. They’re not willing to sell their home right now, so they’re looking for organizing solutions that will help them fall in love with their home again and increase its resale value when they sell in the future. What they don’t want is out-of-the-box closet organizers and are looking for something custom to match their unique space and needs.
They’ve also been spending more time in their homes over the pandemic and are starting to be more acutely aware of its flaws. Now that the economy is beginning to recover, they can afford to update the style and function of their home.
These customers are also loyal to brands and businesses the like. They’re likely to post pictures of the build and completed project on their social media channels and tell their friends about Royal Woods.
Sandheart Construction customers are willing to pay for quality custom carpentry. They want a piece that blends expertly into their home, one they are proud to show off to friends and family, and that will make their everyday lives easier and more organized. They may be seeking custom walk-in closets, barn doors, mudroom storage solutions, built-in shoe racks, pantry organizers, or custom shelving.
6.2 Key Channels
Sandheart Construction will be using a combination of online and offline marketing to attract customers and build awareness of the business in the community.
Social media ads and marketing will be subcontracted to Bruha Marketing.
- Company Website: The website will be a hub for the online presence of the Company. It will contain information about the business and its services and provide contact information.
- Instagram and Facebook: Social media will be a crucial channel to build brand awareness and share project pictures. Customers enjoy seeing pictures of finished products and before/after collages because it helps them begin to visualize what a similar custom project would look like in the home. The primary goal of the Company’s social media channels will be to build awareness of the Company and its skills while acting as a critical channel for customers to connect with and order a custom solution from the Company.
- Website Google Ads: For more specific targeting of ideal customers, Bruha Marketing will create and run Google ads campaigns.
- Referrals: This will be Royal Wood’s primary source of new customers. As such, the Company will always go above and beyond to impress customers to earn their referrals. Referrers get a 5% finders fee when they refer successful customers to the business.
- Marketing Flyers: The Company will occasionally print and distribute flyers in the local community to increase awareness and share special promotions.
- Truck Signage: The Company truck will be outfitted with the Sandheart Construction logo and website URL.
6.3 SWOT Analysis
● Personalized attention to detail
● Customer-centric business practices
● Focus on using quality products, not just the cheapest
● No deposits: Could lose revenue if the customer cancels the project or doesn’t pay.
● High capital requirements
● The increasing cost of raw materials (such as wood)
● Increase in customer disposable income
● Projected high revenue growth in the industry
● Increasing customer spending on home renovations
● Low barrier to entry in the industry
● Larger companies offering cheaper products may steal market share
● Competition may increase in coming years
7.0 Financial Plan
7.1 Income Statement – Year 1
7.2 Cash Flow Statement
7.3 Balance Sheet