Excavation Company Business Plan
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Executive Summary
Business Overview
Precision Excavation is a startup excavation company located in Billings, Montana. The company is founded by Jay Anderson and Max Anderson, brothers who have amassed a lengthy and distinguished career in excavation services during their past employment. Now, with the expertise of their combined years of business acumen, the brothers have determined that they can confidently start and effectively grow a successful excavation company together. They will jointly oversee the vision for the company and will split the execution of their vision into areas where they each excel. They believe their experience of strategic growth, marketing skills, financial capabilities, and wide and deep knowledge of excavation practices will provide everything needed for long-term growth and profitability.
Precision Excavation will provide a comprehensive array of excavation services for a wide variety of industrial clients. Precision Excavation will provide machinery, equipment and operators for all client needs, as indicated within timely and satisfactory agreements. Precision Excavation will be the ultimate choice in Billings for clients to ensure that every need of the property and the excavation of that property are fully and completely met.
Product Offering
The following are the services that Precision Excavation will provide:
- Precise and safe execution of all services
- Adherence to all safety regulations and safety requirements
- Environmental stewardship of the ground and surrounding environments
- Sensitive and timely Infrastructure development
- Site preparation, land grading and trenching
- Foundation excavation
- Debris removal and land clearing
- Utility excavation
- EIR gold standard rating in excavation practices
- Day to day project management and oversight
Customer Focus
Precision Excavation will target all industrial and commercial entities within the Billings, Montana area, including the surrounding ranch land, farms and outlying areas of potential growth. They will target owners of the properties. They will also target federal, state and city properties already targeted for growth or containing plans to be built within the decade. They will target property owners who have small holdings and require specialty equipment and services in addition to larger project developers who require extensive excavation services.
Management Team
Precision Excavation will be owned and operated by Jay Anderson and Max Anderson. Jay Anderson has recruited his former executive assistant, Allison Sommers, to be the Office Manager and Max Anderson has recruited his former accountant, Troy Didian, to be the company accountant. Jay and Max Anderson recruited Cary Rogers to be the Director of Operational Services, negotiating and overseeing all projects, in addition to assigning staff to complete each project.
Jay Anderson has over twenty years of excavation experience, beginning with his initial introduction as an apprentice in a small company that garnered land clearing contracts. He quickly rose through the rank and file to become the Operational Manager and then the Executive Director of the company, enjoying long and fulfilling relationships with several clients. Some of those clients have already agreed to follow Jay to his new company.
Max Anderson has fifteen years of excavation experience, working as a bookkeeper for an excavation company that focused primarily on specialty services for utility companies. He became an accountant after graduating from the University of Montana and joined a large company outside Billings, where he joined a larger excavation firm.
Cary Rogers has over ten years of operational experience and leadership in excavating. As the Director of Operational Services, he will oversee large projects involving multi-million dollar projects. His experience began when he first operated excavational equipment at the age of eighteen, working his way through all types of equipment and then managing the projects from start to finish.
Success Factors
Precision Excavation will be able to achieve success by offering the following competitive advantages:
- Friendly, knowledgeable, and highly-qualified team at Precision Excavation
- Comprehensive menu of services and a high degree of commitment to quality.
- Environmental and landscape protections and awareness within each project
- Precision Excavation will provide unique, customized solutions for each client and project, ensuring the equipment used, the methods employed and the results obtained present the best and most satisfactory completion for each client.
- Precision Excavation offers the best pricing in town. Their pricing structure is the most cost effective compared to the competition.
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Financial Highlights
Precision Excavation is seeking $200,000 in debt financing to launch Precision Excavation. The funding will be dedicated toward securing the office space and purchasing office equipment and supplies. Funding will also be dedicated toward three months of overhead costs to include payroll of the staff, rent, and marketing costs for the print ads and marketing costs. The breakout of the funding is below:
- Office space build-out: $20,000
- Office equipment, supplies, and materials: $10,000
- Three months of overhead expenses (payroll, rent, utilities): $150,000
- Marketing costs: $10,000
- Working capital: $10,000
The following graph outlines the financial projections for Precision Excavation.
Company Overview
Who is Precision Excavation?
Precision Excavation is a newly established, full-service excavation company in Billings, Montana. Precision Excavation will be the most reliable, cost-effective, and efficient choice for industrial and commercial clients in Billings and the surrounding communities. Precision Excavation will provide a comprehensive menu of excavation services for any company to utilize. Their full-service approach includes a comprehensive array of equipment, personnel, project management tools and oversight team members to fulfill every client expectation and need.
Precision Excavation will be able to offer the services of the trained professionals within their firm to help execute needed plans, accommodate changes to those plans, and complete each project on time every time. The team of professionals are highly qualified and experienced in excavation. Precision Excavation removes all headaches and issues of the land clearing and land preparation for building and ensures all issues are taken care of expeditiously while delivering the best customer service.
Precision Excavation History
Precision Excavation is owned by Jay Anderson and Max Anderson, two brothers who are highly-skilled and experienced excavation executives. Jay has been on the operational side of excavation and the managerial oversight of the industry, while Max has been on the administrative and financial side of the industry. Together they offer over thirty years of experience in excavation projects successfully completed.
Since incorporation, Precision Excavation has achieved the following milestones:
- Registered Precision Excavation, LLC to transact business in the state of Montana.
- Has a contract in place for a 10,000 square foot office at one of the commercial buildings
- Reached out to numerous contacts to include Precision Excavation on their client list.
- Began recruiting a staff of two assistants and three office personnel to work at Precision Excavation
Precision Excavation Services
The following will be the services Precision Excavation will provide:
- Precise and safe execution of all services
- Adherence to all safety regulations and safety requirements
- Environmental stewardship of the ground and surrounding environments
- Sensitive and timely Infrastructure development
- Site preparation, land grading and trenching
- Foundation excavation
- Debris removal and land clearing
- Utility excavation
- EIR gold standard rating in excavation practices
- Day to day project management and oversight
Industry Analysis
The excavation industry is expected to grow during the next five years to over $7951M.
The growth will be driven by a steady rise in the need for a well-maintained fleet of excavators, bulldozers, and trucks, along with experienced operators to handle them.
The growth will also be driven by increased startups in the housing and commercial building projects that will require sewer, utility, land-clearing and excavation of large boulders, trees and other obstacles that are detected.
Costs will likely be reduced as raw materials and newly-created sustainable materials become available for builders who determine the time is right for building. Costs will also be reduced as more operational decisions will be conducted via industry software dedicated to cost-saving implementation of processes. Costs will also be reduced by the efficiency of new equipment and excavation materials that utilize robotics and other sources of human-assisted services to create successful projects.
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Customer Analysis
Demographic Profile of Target Market
Precision Excavation will target Precision Excavation will target all industrial and commercial entities within the Billings, Montana area, including the surrounding ranch land, farms and outlying areas of potential growth. They will target private owners of large properties. They will also target federal, state and city properties already targeted for growth or containing plans to be built within the decade. They will target property owners who have small holdings and require specialty equipment and services in addition to larger project developers who require extensive excavation services.
The precise demographics for Precision Excavation are:
| Total | Percent | |
|---|---|---|
| Total population | 1,680,988 | 100% |
| Male | 838,675 | 49.9% |
| Female | 842,313 | 50.1% |
| 20 to 24 years | 114,872 | 6.8% |
| 25 to 34 years | 273,588 | 16.3% |
| 35 to 44 years | 235,946 | 14.0% |
| 45 to 54 years | 210,256 | 12.5% |
| 55 to 59 years | 105,057 | 6.2% |
| 60 to 64 years | 87,484 | 5.2% |
| 65 to 74 years | 116,878 | 7.0% |
| 75 to 84 years | 52,524 | 3.1% |
Customer Segmentation
Precision Excavation will primarily target the following customer profiles:
- Industrial and commercial entities
- Landowners, such as those holding ranch land, farms, and outlying areas of potential growth
- Federal, state and city properties already targeted for growth
- Properties containing plans to be developed within the decade
- Landowners requiring specialty excavator equipment
- Land developers requiring large excavator earth movers
Competitive Analysis
Direct and Indirect Competitors
Precision Excavation will face competition from other companies with similar business profiles. A description of each competitor company is below.
Advance Excavation Services
Advance Excavation Services, started in 1985, is a Billings, Montana based excavation company owned by Trevor Goodwin. Mr. Goodwin has a lengthy history of excavation service, including his years in the military operating excavators to build runways in the South Pacific. The company has ten employees and two office staff who primarily provide excavation for the outlying areas surrounding Billings. Clients range from farm owners who may need wells dug or ponds prepared to small industrial or commercial clients who want to develop small lots of land in various ways.
Advance Excavation is known for the useful employment of specialty equipment that can be utilized in small spaces, under property signage, around fencing and other obstacles, making the equipment utilized in the company specifically beneficial to ranchers and farmers in the greater Billings area.
Stanley Maren, Inc.
Stanley Maren, Inc. is a joint partnership excavation company formed by Derrick Stanley and Rodney Maren. The co-owners, former account executives for a large, nationally-known excavation equipment company, pooled their resources after ten years of marketing the equipment to form their own corporate partnership in 2015. They recruited two former assistants, Peter Marker, and Jane Cooley, to join their new partnership as the Manager and Office Manager collectively. Stanley Maren, Inc. specializes in government contracts and regularly submits proposals for projects within the tri-state area. Their projects are formed around a minimum of 2-5M in general revenue as a starting base.
iExcavate Equipment Rental
The owner of iExcavate Equipment Rental, Danny Monzana offers a wide variety of excavation equipment, including bulldozers, excavators and trucks, for rentals to those who are excavating small projects. The company was formed in 2001 and has three personnel, including Danny Monzana, who rotate renting equipment, answering calls and conducting various office chores. The company is well-established with Billings residents, who often rent excavation equipment or trucks for personal residence clearings, pools that are built, and sewer or wells that need excavation.
iExcavate has an online platform that allows customers to quickly assess the company offerings, choose the equipment needed, and book the dates required. The ease of use has increased the business by thirty percent in the last few years, which has inspired Danny Monzana to add additional software applications and online ease-of-use features to the website.
Download the Excavation Company business plan template (including a customizable financial model) to your computer here <–
Competitive Advantage
Precision Excavation will be able to offer the following advantages over their competition:
- Friendly, knowledgeable, and highly-qualified team at Precision Excavation
- Comprehensive menu of services, including large-scope projects
- Debris removal and land clearing
- Utility excavation
- EIR gold standard rating in excavation practices
- Precision Excavation offers the best pricing in town. Their pricing structure is the most cost effective compared to the competition.
Marketing Plan
Brand & Value Proposition
Precision Excavation will offer the unique value proposition to its clientele:
- Highly-qualified team of skilled employees who are able to provide a comprehensive set of excavation equipment and qualified personnel to accomplish the customer goals.
- Sensitivity to the sustainable practices of land-clearing and respect for the landscape in general.
- EIR gold standard rating in excavation practices
- Debris removal practices that elevate saving the land rather than removing land
- Unbeatable pricing for clients; they will offer the lowest pricing in the city.
Promotions Strategy
The promotions strategy for Precision Excavation is as follows:
Word of Mouth/Referrals
Precision Excavation has built up an extensive list of contacts over the years by providing exceptional service and expertise to former clients. The contacts and clients will follow them to their new company and help spread the word of Precision Excavation.
Professional Associations and Networking
Precision Excavation will join industrial and professional networking associations and trade groups, both locally and nationally, and will play a prominent role in encouraging new business during those attendance dates. They will also become active in sustainable excavation, encouraging other company owners to do likewise.
Print Advertising
Precision Excavation will send introductory offers and discounts to every commercial and industrial entity within the greater Billings area upon startup and again at the one-year anniversary of the company. Special discounts will be offered to former clients who become clients of the new company.
Website/SEO Marketing
Precision Excavation will fully utilize their website. The website will be well organized, informative, and list all the services that Precision Excavation provides. The website will also list their contact information and list their inventory of specialty equipment. The website will engage in SEO marketing tactics so that anytime someone types in the Google or Bing search engine “excavation company” or “excavation company near me,” Precision Excavation will be listed at the top of the search results.
Pricing
The pricing of Precision Excavation will be moderate and on par with competitors so customers feel they receive excellent value when purchasing their services.
Operations Plan
The following will be the operations plan for Precision Excavation.
Operation Functions:
- Jay Anderson will be the owner and President of the company. He will oversee all staff and manage client relations. He has spent the past year recruiting Allison Sommers.
- Allison Sommers, the new Office Manager, will manage the office administration, client files, and accounts payable.
- Max Anderson will be the Vice President and oversee all financials and regulatory requirements for the equipment and services.
- Cary Rogers will be the Director of Operational Services, carrying out all operational plans and executing project oversight.
Download the Excavation Company business plan template (including a customizable financial model) to your computer here <–
Milestones:
Precision Excavation will have the following milestones completed in the next six months.
- 5/1/202X – Finalize contract to lease office space
- 5/15/202X – Finalize personnel and staff employment contracts for the Precision Excavation
- 6/1/202X – Finalize contracts for Precision Excavation clients
- 6/15/202X – Begin networking at industry events
- 6/22/202X – Begin moving into Precision Excavation office
- 7/1/202X – Precision Excavation opens its doors for business
Management Team
Precision Excavation will be owned and operated by Jay Anderson and Max Anderson. Jay Anderson has recruited his former executive assistant, Allison Sommers, to be the Office Manager and Max Anderson has recruited his former accountant, Troy Didian, to be the company accountant. Jay and Max Anderson recruited Cary Rogers to be the Director of Operational Services, negotiating and overseeing all projects, in addition to assigning staff to complete each project.
Jay Anderson has over twenty years of excavation experience, beginning with his initial introduction as an apprentice in a small company that garnered land clearing contracts. He quickly rose through the rank and file to become the Operational Manager and then the Executive Director of the company, enjoying long and fulfilling relationships with several clients. Some of those clients have already agreed to follow Jay to his new company.
Max Anderson has fifteen years of excavation experience, working as a bookkeeper for an excavation company that focused primarily on specialty services for utility companies. He became an accountant after graduating from the University of Montana and joined a large company outside Billings, where he joined a larger excavation firm.
Cary Rogers has over ten years of operational experience and leadership in excavating. As the Director of Operational Services, he will oversee large projects involving multi-million dollar projects. His experience began when he first operated excavational equipment at the age of eighteen, working his way through all types of equipment and then managing the projects from start to finish.
Financial Plan
Key Revenue & Costs
The revenue drivers for Precision Excavation are the fees they will charge to industrial and commercial clients for their services. .
The cost drivers will be the overhead costs required in order to staff Precision Excavation. The expenses will be the payroll cost, rent, utilities, office supplies, and marketing materials.
Funding Requirements and Use of Funds
Precision Excavation is seeking $200,000 in debt financing to launch its excavation company. The funding will be dedicated toward securing the office space and purchasing office equipment and supplies. Funding will also be dedicated toward three months of overhead costs to include payroll of the staff, rent, and marketing costs for the print ads and association memberships. The breakout of the funding is below:
- Office space build-out: $20,000
- Office equipment, supplies, and materials: $10,000
- Three months of overhead expenses (payroll, rent, utilities): $150,000
- Marketing costs: $10,000
- Working capital: $10,000
Download the Excavation Company business plan template (including a customizable financial model) to your computer here <–
Key Assumptions
The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and in order to pay off the startup business loan.
- Number of clients Per Month: 5
- Average revenue per Month: $100,000
- Office Lease per Year: $100,000
Financial Projections
Income Statement
| FY 1 | FY 2 | FY 3 | FY 4 | FY 5 | ||
|---|---|---|---|---|---|---|
| Revenues | ||||||
| Total Revenues | $360,000 | $793,728 | $875,006 | $964,606 | $1,063,382 | |
| Expenses & Costs | ||||||
| Cost of goods sold | $64,800 | $142,871 | $157,501 | $173,629 | $191,409 | |
| Lease | $50,000 | $51,250 | $52,531 | $53,845 | $55,191 | |
| Marketing | $10,000 | $8,000 | $8,000 | $8,000 | $8,000 | |
| Salaries | $157,015 | $214,030 | $235,968 | $247,766 | $260,155 | |
| Initial expenditure | $10,000 | $0 | $0 | $0 | $0 | |
| Total Expenses & Costs | $291,815 | $416,151 | $454,000 | $483,240 | $514,754 | |
| EBITDA | $68,185 | $377,577 | $421,005 | $481,366 | $548,628 | |
| Depreciation | $27,160 | $27,160 | $27,160 | $27,160 | $27,160 | |
| EBIT | $41,025 | $350,417 | $393,845 | $454,206 | $521,468 | |
| Interest | $23,462 | $20,529 | $17,596 | $14,664 | $11,731 | |
| PRETAX INCOME | $17,563 | $329,888 | $376,249 | $439,543 | $509,737 | |
| Net Operating Loss | $0 | $0 | $0 | $0 | $0 | |
| Use of Net Operating Loss | $0 | $0 | $0 | $0 | $0 | |
| Taxable Income | $17,563 | $329,888 | $376,249 | $439,543 | $509,737 | |
| Income Tax Expense | $6,147 | $115,461 | $131,687 | $153,840 | $178,408 | |
| NET INCOME | $11,416 | $214,427 | $244,562 | $285,703 | $331,329 |
Balance Sheet
| FY 1 | FY 2 | FY 3 | FY 4 | FY 5 | ||
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Cash | $154,257 | $348,760 | $573,195 | $838,550 | $1,149,286 | |
| Accounts receivable | $0 | $0 | $0 | $0 | $0 | |
| Inventory | $30,000 | $33,072 | $36,459 | $40,192 | $44,308 | |
| Total Current Assets | $184,257 | $381,832 | $609,654 | $878,742 | $1,193,594 | |
| Fixed assets | $180,950 | $180,950 | $180,950 | $180,950 | $180,950 | |
| Depreciation | $27,160 | $54,320 | $81,480 | $108,640 | $135,800 | |
| Net fixed assets | $153,790 | $126,630 | $99,470 | $72,310 | $45,150 | |
| TOTAL ASSETS | $338,047 | $508,462 | $709,124 | $951,052 | $1,238,744 | |
| LIABILITIES & EQUITY | ||||||
| Debt | $315,831 | $270,713 | $225,594 | $180,475 | $135,356 | |
| Accounts payable | $10,800 | $11,906 | $13,125 | $14,469 | $15,951 | |
| Total Liability | $326,631 | $282,618 | $238,719 | $194,944 | $151,307 | |
| Share Capital | $0 | $0 | $0 | $0 | $0 | |
| Retained earnings | $11,416 | $225,843 | $470,405 | $756,108 | $1,087,437 | |
| Total Equity | $11,416 | $225,843 | $470,405 | $756,108 | $1,087,437 | |
| TOTAL LIABILITIES & EQUITY | $338,047 | $508,462 | $709,124 | $951,052 | $1,238,744 |
Cash Flow Statement
| FY 1 | FY 2 | FY 3 | FY 4 | FY 5 | ||
|---|---|---|---|---|---|---|
| CASH FLOW FROM OPERATIONS | ||||||
| Net Income (Loss) | $11,416 | $214,427 | $244,562 | $285,703 | $331,329 | |
| Change in working capital | ($19,200) | ($1,966) | ($2,167) | ($2,389) | ($2,634) | |
| Depreciation | $27,160 | $27,160 | $27,160 | $27,160 | $27,160 | |
| Net Cash Flow from Operations | $19,376 | $239,621 | $269,554 | $310,473 | $355,855 | |
| CASH FLOW FROM INVESTMENTS | ||||||
| Investment | ($180,950) | $0 | $0 | $0 | $0 | |
| Net Cash Flow from Investments | ($180,950) | $0 | $0 | $0 | $0 | |
| CASH FLOW FROM FINANCING | ||||||
| Cash from equity | $0 | $0 | $0 | $0 | $0 | |
| Cash from debt | $315,831 | ($45,119) | ($45,119) | ($45,119) | ($45,119) | |
| Net Cash Flow from Financing | $315,831 | ($45,119) | ($45,119) | ($45,119) | ($45,119) | |
| Net Cash Flow | $154,257 | $194,502 | $224,436 | $265,355 | $310,736 | |
| Cash at Beginning of Period | $0 | $154,257 | $348,760 | $573,195 | $838,550 | |
| Cash at End of Period | $154,257 | $348,760 | $573,195 | $838,550 | $1,149,286 |
Excavation Company Business Plan FAQs
What Is an Excavation Company Business Plan?
An excavation company business plan is a plan to start and/or grow your excavation company business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.
You can easily complete your Excavation Company business plan using our Excavation Company Business Plan Template here.
What are the Main Types of Excavation Businesses?
There are a number of different kinds of excavation company businesses, some examples include: Drainage excavation, Excavation and concrete, Foundation and basement excavation, and Pool excavation.
How Do You Get Funding for Your Excavation Company Business Plan?
Excavation Company businesses are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding.
What are the Steps To Start an Excavation Company Business?
Starting an excavation company business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.
1. Develop An Excavation Company Business Plan - The first step in starting a business is to create a detailed excavation company business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast.
2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your excavation company business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your excavation company business is in compliance with local laws.
3. Register Your Excavation Company Business - Once you have chosen a legal structure, the next step is to register your excavation company business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws.
4. Identify Financing Options - It’s likely that you’ll need some capital to start your excavation company business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms.
5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations.
6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events.
7. Acquire Necessary Excavation Company Equipment & Supplies - In order to start your excavation company business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation.
8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your excavation company business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising.