Merit Painting Busin..

Figure 3
:

Job safety Analysis


13


Business/
Marketing Plan

Michael McAnulty


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Table of Contents

Executive Summary

................................
................................
.......................

3

Target Market

................................
................................
................................

4

Short Term Marketing Plan

................................
................................
..............

5

Long term Marketing plan

................................
................................
...............

6

Onli
ne Plan Long Term

................................
................................
....................

6

Key Benefits Offered to Target Market

................................
..............................

6

Marketing Tools List

................................
................................
.......................

7

Marketing Budget

................................
................................
...........................

7

Advertising waves

................................
................................
..........................

8

Qualificatio
n Process
................................
................................
.......................

9

Qualifying the Homeowner

................................
................................
..............

9

Qualifying the Project

................................
................................
...................

10

Contracts

................................
................................
................................
....

11

Primary contract types

................................
................................
..................

11

Price
and Payment terms

................................
................................
..............

11

Payment Schedule

................................
................................
.......................

11

Roles and Relationships

................................
................................
................

12

Define scope of work

................................
................................
....................

12

Changes in work

................................
................................
..........................

12

Subcontracts

................................
................................
...............................

13

Client & Key Stakeholder Relations

................................
................................
.

13

Projected Cash Flow

................................
................................
.....................

19

Procedures to Improve Cash Flow

................................
................................
..

19

Risk Management and Insurance

................................
................................
....

20

Insurance

................................
................................
................................
...

20

Ethics

................................
................................
................................
.........

20

Outside Advisors

................................
................................
..........................

20

Contract Agreement for Residential Painting Work

................................
............

21



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E
xecutive Summary

Merit Painting
is a residential painting specialty contractor

serving
the
Washington and Clackamas County.

S
ervices will include
interior/
exterior
painting, gutter
cleaning, as well as

pressure washing and sealing
concrete,
brick,

and decks
. Our specific target area will be homes in the Portland,
Beaverton,
Hillsboro,
Tigard,
West Linn and Lake Oswego area rang
ing in
value from $350,000 to $
1
,000,000.
Our primary tar
get market

is
affluent
homeowners
over
people over the age of 50

living in homes that are at least
2000 square feet
.
Our secondary target market consists of private

retirement communities

for those 55 and over.

In order t
o create a great

reputation
, Merit
Painting

will perform quality and affordable work in a
professional and sincere manner.

We will begin with a concentrated marketing effort
directed toward
our
secondary target market
.

These retirement neighborhoods are Charbonneau
and Summerfield.

Each ne
ighborhood will start with a
pressure
washing/interior painting wave.

Advertising will consist of
mailer brochures,
door hangers, single page brochures
deployed within a

10 mile radius of our
targeted zip codes.










1.

Purpose

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To

seal, protect, and improve the look of our client’s home using high
-
quality local products applied with great care and attention

by those that
enjoy a job well done.

Our quality control processes assure
great work

through the

use of

rigorous training, edu
cated management,
accurate
estimat
es using statistical process control

and

encouragement to do great
work

in an ethical and sustainable manner
-
from the top down.

2.

M
ission
:

To

paint, protect, and improve the look of
northwest
homes
using the
best methods and materials available.

3.

Marketing Plan

Goal:

to target our selected market through the various methods and
techniques listed in this section. By following the plan below,
Merit
Painting
will generate the volume of leads necessary
to qualify the
homeowner and the project. This will allow us to choose projects that
are more likely to be profitable. As a result, our company will grow
happily and successfully as a team
.

Target Market



Primary

target
market

will be homes in Portland, Hi
llsboro,
West
Linn and Lake Oswego area ranging in value from
$
350,000
-

$
1
,00
0,000.



Our secondary
target
market

will be

upper scale

retirement
communities in the metro area.





Those who are
in need of affordable, quality house painting and
pressure was
hing.

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

Ages 5
0+


Short Term Marketing Plan

Here is a list of our short term marketing activities:



Create websites
.



Create lawn sign
s
.



Create half
-
page brochure
.



Create Business Cards
.



Magnets
.



Google Adwords
.



Bing Adword
.



Create website
, including a mobile
website
.



Advertise on Craigslist
.



Join Angie’s list
.



Advertise of Facebook
.



Embroider a logo on a dress shirt and T
-
shirt
.



Develop a letter of introduction
.



Five

sales presentations per week
.



Get a separate cell phone for business
.



Have a design company
create full length viny
l auto graphic
design with logo
to cover the sides of a van.



Go out in the community and perform charity work. Carry
cards and wear company logo
.



Join AGC
,
and

BBB

organizations
.

Note:

After getting a job, it’s important to send a pa
inting flyer to the same
neighborhood. Also, when working on a project, it’s imperative that we send
someone to the neighbor’s homes to explain our presence.

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Long term Marketing plan



Before placing advertisement brochures in a neighborhood, drive
around th
e neighborhood in the company advertised vehicle
during the times that homeowners are arriving home from work
for example 5
-
6pm. That way the locals recall our name prior to
reading our advertisement.



Mail single page pressure washing brochures to 500 hom
es in
the target area
.



Mail 500 painting brochures to
target

neighborhoods
.



Advertise in Oregon Homes magazine
.



Make 20
-
30 cold
-
calls per week
.

Online Plan Long Term

Search engine

optimization and full site indexing from Google and
Bing. Also, we will film tutorial videos and post them on Facebook and
Youtube. Views and like will significantly improve our SEO along with
other methods such as mobile websites and code configurations t
hat
improve visibility. We also want at least 600 words on all of the service
overview pages.

Key Benefits Offered to Target Market

We will offer better quality through more experienced workers
combined with superior project management and supervision that
surpasses the competition.
Our low
-
cost concentrated marketing
efforts will keep costs low, thus allowing us to be more competitive

than the larger, more established companies.

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Marketing Tools List



Business Cards



Embroider work attire



Lawn signs



Automobile

magnets



Website



Half
-

page brochure



Door hangers



Mailers



Google Adwords



Bing Adwords



Craigslist



Facebook



Angie’s List

Marketing B
udget

The initial
estimated marketing budget is $
486
.

Type of Advertising

Quantity

Cost

Business Cards

250X2

$40

Magnets

2

$37

Calendar Magnets


100

$75

Lawn signs

2

$38

Door Hangers

500

$91

Half
-
page
brochures

500

$205

Total



$486


Table1
:

Marketing Budget for wave#1


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Advertising waves

Our first wave of advertisement will focus on the two retirement
neighborhoods Charbonneau and Summerfield.

March 10, 2013:

The first wave of advertising in early March will consist of
interior painting and pressure washing. These brochures will be mailed
and/or attached to the doors in the Charbonneau and Summerfield
neighborhood. Also in this wave, we hand deliver flyers to
the Rock Creek
neighborhood. Google Adwords keywords for interior painting and pr
essure
washing will also begin on a very small scale to gather click through rates.

May 10,

2013:
Begin Google Adwords and Bing Adwords advertising for
exterior keywords. This

wave will include a combination of mailing brochures
to the Charbonneau and Summerfield neighborhood as well as Lake Oswego,
and West Linn.

The other waves throughout the year are available in table 2. Details are not
yet available since we will need fee
dback on our first wave in order to
strategize the following waves.

Note:

All year we will advertise on Craigslist and social media.





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4.

Sales Plan

Qualification Process

Create a survey of questions
designed to qualify the home owner
and project.


Qualifying the Homeowner



Review the client’s finances and check to see whether or
not they have an adeq
uate or
contingency fund.



Interview the home owner to determine if they seem
reasonable. Ask questions a
nd determine if they have any
experience in construction. What’s their occupation?



Determine whether the remodel creates a return on
investment



Can we satisfy the owner’s expectations?

Table 2
:

Advertising Wave


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Qualifying the Project




Bid work (Preferred)



Determine if we
have the resources are available
.



Predetermine a price for the area and use it in on the
single page brochure
.



Determine whether a lot of people are bidding on the
project or not
.



Fill out the survey to determine the feasibility of the
location and price
.



Does the project incorporate any new materials or
methods we are unfamiliar with?



Determine the completeness of the plans
.



Prices expire in 30 days
.


Negotiated Work



Identify targeted client
.



Perform presentation
.



Determine the completeness of the plan
s
.



Does the project incorporate any new materials or
methods we are unfamiliar with?



Work with the client to develop a budget and schedule

when applicable
.



Provide an estimate
.


5.

Operations

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Contracts



All
contracts will be drafted and

thoroughly analyzed and
by

Michael

McAnulty



Contracts drafted by

owners and valued over $50,000
will
require a professional evaluation by a licensed construction
lawyer



Primary contract types



Lump sum



Cost plus a Fee of
3
0
%

for overhead and profit. (Bid

=
Cost / .
70
)



Price

and Payment terms



Predetermined price



Upfront deposit

of 10%
: When the amount of materials
needed exceed $2000



Progress payments: When a project exceeds the duration
of a month



Penalty for late payments: Payments delayed by more
than

15 days will result in interest of 8.25% compounded
d
aily



Payments will also be made to suppliers on a thirty
-
day
basis

Payment Schedule



Schedule of payments: for cos
t plus contracts,
Merit
Painting

will request payments to be made biweekly

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

Lump

sum

contracts

on large projects will require

payments to be made 4 times during a project.

These
progressive payments will be based on percentage of
completion. The percentage of completion will be
determined by our
project manager. Progressive payments
will
be made when 25%, 50%, 75%, and 100%
of the
project
are completed.



Roles and Relationships

Permits will be applied for by the owner unless specified

in the
contract.

Define scope of work



Scope of work must be defined
by the estimate, plans,
and/or
specifications



Scope must be analyzed and agreed upon by both parties
as well as other key members of the team



Hold everyone accountable to keep the scope from
creeping beyond the original plan

Changes in work

A standard form will be created and used for
handling
change orders. Change orders will be drafted by the
project manager and signed by an approved authorized
signer as specified in the contract

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Subcontracts



Subcontracts will include a provision that the subcontractor
is not entitled to payment for c
hange order work unless
authorized in writing by our project manager.



Lien waivers will be given
by

all subcontractors
to
their
suppliers.



A retainage of
10%

will be incorporated in many
subcontracts
.



Subcontractors

must submit a signed certificate of
insu
rance to
Merit Painting

prior
to commencing on the
job.



Allocatio
n of Risk.



We will i
nsist th
at

owner sign a consequential damages
waiver
.



Delays caused by acts of god or the owner will be defined
in the contract
.



We will not indemnify the owner.



Proof of

insurance will be required from the homeowner
,



Dispute resolution
.



Disputes will be resolved through negotiation to satisfy
both parties’ interests
.



Mediation is the next option if negotiation fails
.



Disputes should not go beyond arbitration
.

Client & Key

Stakeholder Relations

Client

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

Communicate regularly with the client via e
-
mail,
telephone, and meetings. Take notes on the information
discussed
.



Keep the client informed.



Respect their property
.



Don’t start work before 8am
.



Supply the client with an up to

date schedule
.



Confirm materials such as tile prior to installation
.



Maintain a clean working environment. This includes their
yard and street



Be punctual
.



No smoking on the property
.



Everyone must abide by the personal hygiene policy.

Subcontractors



Buil
d a strong alliance with subcontractors that perform
high quality work on time
.



Pay subs on time
.



Inform each subcontractor on who they will be working
with and introduce each party to one another
.



Don’t schedule too many subcontractors

at once
.



Supply the
m with drinks on hot days
.

Suppliers



Pay within payment terms
.



If savings incentives are given take advantage of them
.



Build a professional and respectful relationship with
management
.



Create purchase orders using
QuickBooks

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

Earn financial trust with
vendors in order to increase credit
levels

Realtors



Provide quality work at an affordable price
.



Provide realtors with a schedule
.



Complete the job on time
.



Maintain a clean and smoke
-
free working environment
.



Be punctual
.

Neighbors



Give neighbors a flyer
informing them of our presence
.



Post a lawn sign
.



Don’t make loud noise before 9am
.



Avoid parking in front of their house
.



Keep the street clean
.



Keep

the music
off
.



Avoid creating too much traffic at once
.



Don’t allow noisy work to be performed on weekend
s
.

Job Organization

Our job organization
is illustrated in figure 2.

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Labor Relations:

Merit Painting intends to hire only non
-
union subcontractors to perform
every aspect of work except light demolition, window installation, and
electrical.
All design work will be done by a design professional

hired by us.
Our goal is to build a good workin
g relationship with at least two design
firms. We will refer their services to clients with the intention of building a
mutual referral system.

Direct communication between subcontractors and designers

will be
conducted by the
Michael McAnulty. Michael
will relay all pertinent
Project Superintendent

Michael McAnulty

Job #1

Robert McAnulty

1 to 3 employees

Job #2

Ryan McAnulty

1 to 3 employees

Client #1

Client #2

Figure 2
:

Job
Organization


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information t
o our foreman. Our crew foreman
will be the main
communicator and leader of our employees.


6.

Safety

A job safety analysis
(in figure
3
)
will be conducted at the beginning of each
job to discuss the potential hazards on

the project. A job safety analysis
worksheet (JSA) will be filled out by our project manager with the help of
our employees.
Merit
Painting will

provide a 3
-
ring binder with MSDS’s
will
be l
ocated in the company vehicles along with our hazard communicatio
n
program.
Furthermore, s
ubcontractors must also keep their MSDS in the
central location.
Merit
Painting will

provide all
employees with a
hazard communication
program/
safety manual and a

four

hour training
session covering:


Ladders



Ladder Rules



Scaffol
ds



Ladder jack scaffolds

Personal Protective Equipment



Gloves



Goggles



Respirators

Power tool safety



GFCI plugs

Fall Protection



Personal Fall Arresting System


Figure 3
:

JSA


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Employee safety competency will be tested using surveys that are
administered on our website through Google Docs
. Training will be
conducted on the job and in the office using PowerPoint and simulation. After
the assessment, a report will be generated to identify which questions
were
missed by each employee accompanied
by to
uch
-
up training
when needed.

Enforcement of our safety measures will be executed in the three strikes
you’re out method. To avoid a third strike, after the second strike the
employee must retake t
he training sessions over again and receive a 90% or
th
ey are fired.

Project Management Procedures:



Conduct a job cost analysis in order to keep the project within budget.



Take pictures of jobs and use a job diary to report daily work
completed
.



Creation and execution of projects schedules
.



Manage cash flow
.



Manage subcontractors
.



Draft and manage change orders
.



Produce neat, accurate, and complete paperwork including engineering
block printing of correspondence
.



Track production and quality using an information system created in
Microsoft Access and tied to t
he company database. Forms will be filled
out by supervisors on a tablet.



Manage schedules, paperwork, quizzes and other correspondences in
the cloud using Google Docs.

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Projected Cash F
low

Merit Painting will

initiate

project
cash flow

by requesting an adequate
down payment for materials on projects
. Also, we will
create
a
progressive

payment schedule.

Merit Painting will

also
open accounts with suppliers in order to
increase cash flow
.

P
rocedures to I
m
prove Cash F
low

Conduct a cash fl
ow analysis of each project using our specially
designed Excel spreadsheet.

When cash short comings are detected in the analysis, create a
payment schedule that compensates by overbilling during times of
need.

Determine an accurate percentage of completion

and over bill when
necessary.

Create a change order system that speeds up processing times by:



Manage all your documents electronically.



Use project pre
-
planning to identify changes before you
start.



Get to know everyone involved in approving your
chang
e
requests out exactly what

the specified change processing
time is.



Make pricing change orders a top priority in the company.



Build your change request format to match the customer’s.



Attach all supporting documents to your change request in
one PD
F.



Complete the punch list quickly to avoid a long retention
holding.



Don’t wait until the end: create our own punch list every
few hundred man
-
hours.


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Risk Management and Insurance

Through contractual agreement,
Merit
Painting will

pass on liability to
its subcontractors whenever applicable. We will require subs to
complete of a Certificate of Liability Form
.

Insurance

Merit
Painting will

carry $500,000

dollar general liability coverage and
comprehensive automobile insurance. Also,

when it comes time to hire
employees, we will
pay for

workers’ compensation insurance
.

7. Other

Ethics

To attractive quality clients,
Merit Painting will

conduct our business in an
ethical manner at all times. This means we will not bid shop. In addition,

we
will be honest to our clients and suppliers in order to build a good reputation
with all key stakeholders’.

Outside Advisors

Merit Painting will

acquire the advice and guidance from the following
professionals:



CPA



Legalzoom.com to form

the

LLC
.



Lawyer w/construction knowledge.



Marketing consultant
.



Insurance agent
.


7.

Appendix 1: Contract

A copy of our contract is on the following page.

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Contract Agreement for Residential Painting Work


This is a contract for construction work to be performed by Mer
it Painting,
LLC (“MERIT”) for ____________________________ (“HOMEOWNER”)
made this __________ day of _________.


Information

1.

Merit is a painting contractor licensed by the Construction Contractors
Board under license number No. 999900.

2.

Merit is located a
t 6950 SW Briarcliff Cir., Beaverton, Oregon 97008.
Merit’s phone number is (503)555
-
5555.

3.

HOMEOWNER’s name and address are:

[Insert name, address and phone number]


4.

The work site is located at:

[Insert address or location of job site]

Scope of Work

Merit
Painting, LLC shall perform the following work for HOMEOWNER:

[Insert description of the work to be performed, who is paying for the
materials, material specification if any, who is responsible for obtaining
permits, a reference to contract drawings if any

and any terms that
define the scope of work.]

Payment Terms

HOMEOWNER shall pay for the work on the following schedule:


[Insert the payment schedule]

Summary of Required Consumer Notices

Oregon law requires construction contractors to give homeowners certain
notices before and during a construction project. This summary explains
what they mean. It is important to read and understand these forms.

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1.

Consumer Protection Notice

–

This informati
on explains contractor
licensing standards, bond and insurance requirements, steps
consumers can take for a successful construction project and what to
do if problems occur.

2.

Information Notice to Owner About Construction Liens
–

Contractors must give home
owners this notice anytime the contract
price is more than $1,000. It is given at the time a written contract is
signed, or if a verbal contract agreed upon, the notice is due within
five working days. The notice explains the construction lien law. It
incl
udes steps homeowners can take to protect their property from a
construction lien.

3.

Notice of Procedure
–

The notice explains what a homeowner must
do before beginning an arbitration or court action against a contractor
for construction defects. (This proc
edure is separate from the
Construction Contractor Board (CCB) Dispute Resolution Process).

These forms are attached to and made part of this contract.

Explanation of HOMEOWNER’s Rights

1.

Consumers have the right to receive the products and services agreed
upon in the contract.

2.

Consumers have the right to resolve disputes through the means
outlined in the contract.

3.

Consumers have the right to file a complaint with the CCB. Any
arbitration or mediation clauses in the contract may need to be
complied with duri
ng the resolution of the CCB complaint.

Explanation of Mediation or Arbitration Clause

An “arbitration or mediation clause” is a written portion of a contract
designed to settle how the parties will solve disputes that may arise during, r
after the c
onstruction project. Arbitration clauses are very important. They
may limit a consumer’s ability to have their dispute resolved by the Oregon
court system or the Oregon Construction Contractors Board.



This contract contains an arbitration or
mediation clause



This contract DOES NOT contain an arbitration or mediation
clause







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The Oregon Construction Contractors Board urges consumers to read and
understand the entire contract
–

including any arbitration clause before
signing a construction con
tract. Consumers are not obligated to accept the
contract terms proposed by the contractor, including arbitration provisions.
These may be negotiated to the satisfaction of both parties.




Homeowner



Date


Mic
hael McAnulty, Owner
Date








Merit Painting, LLC