Jensen’s
Roofing Inc.
Mike MacKinnon
Kevin Lee
Evan Conrad
Ryan Kehrig
Olajumoke Oni
Aeisha Caracciolo
Outline

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




Industry Overview
Operating Plan
Marketing Plan
Human Resources Plan
Financial Model & Analysis
Risk Analysis
The Investment Decision
Industry Overview
Jensen Roofing will operate in the
Lethbridge, Alberta market
 Currently a booming residential
construction market
 Shortage of skilled tradesman in
the area
 Competitors are numerous in the
area

The Operating Plan
Jensen Roofing - Start-up
Incorporate
the business at start-up
Owner
managed business -- Robert
has several years experience in the
roofing industry.
Accountant
available to
provide financial and
Management advice
Operations Plan
Business
will be operating out of
Jensen’s home.
Materials
and equipment will be
stored in the garage of his home.
Minimal
working capital
requirements as materials will be
procured on a per- job basis.
Operations Plan
Typical
business day for Robert:
Usually
10 Hour days
Roofing
Administration
Purchasing
Meeting
(e.g. Banking)
materials
with clients
Marketing
Capital Outlay – 1st Year
Equipment
Estimated Cost
($)
Pick-up Truck (1/2
ton)
3 Tonne Dump
Truck
Cherry Picker for
Dump Truck
Office Equipment
15,000
Roofing Nail Guns
1,000
25,000
3,000
3,000
Capital Outlays –1st
Year
Equipment
Roofing Gum Guns
Estimated Cost
($)
50
Safety Equipment
200
Incorporating
Cost
Ladders
Total
1500
200
$49,150
Marketing Plan
SWOT Analysis

Strengths
Locally Based
 Growth in construction industry
 Labour shortage
 Contacts in industry (new homes)


Weaknesses
3-4 large competitors
 No reputation in the market

Marketing Plan
SWOT Analysis

Opportunities
Knowledge & experience
 Low startup costs
 Low risk of failure


Threats
Labour shortage (attract employee)
 Economic downturn

Market Analysis Residential Roofing
(New Homes)
Current Economic &
Competitive Environment



Three general contractors in
Lethbridge
Customers want quality workmanship
& reliable service
Finding skilled labour is difficult

Attracting employees from 100 km radius
Locally based
JENSEN’S ROOFING’S GOAL
 Obtain 11% market share in first year

Sale Pricing Strategy


Pricing
 20% mark up on materials
 70% mark up on foreman wages
 50% mark up on helper wages
Marketing Strategy
 Booming economy provides instant
demand for services
 Provide reliable service & quality
workmanship
Market Analysis Residential Roofing
(Roof Repairs)
Lethbridge Housing Market
Environment
2006: 30,700 dwellings – 23,000
low-sloped roofs
 2007 & 2008 approx 1,400 new
homes built
 2008: 32,100 dwellings – 24,400
low-sloped roofs
 Roofing repairs occur Mid-march
to early November

Repairs Market Breakdown

Composite shingles (asphalt)
95% of roofs
 20-25 year life
 1,000 repair jobs required annually


Wood shingles
5% of roofs
 Unlimited life
 Minimal annual repair jobs annually

Potential Customers
Owners Live in House
Rental Properties
Market Size
72%
28%
Who Are They
Young & mature families
Newlyweds & Retirees
Landlord
Important
Quality workmanship
Reliability/service
Low cost
Quality workmanship
Purchase
Ask friends, Online
Phonebook,
Real estate agent
May know general
contractor
Ask friends, Online
Phonebook
Price Sensitivity
Somewhat
- quality work, fast & reliable
Yes, want it fixed for low
cost
Detailed Breakdown of
Owner Occupied Homes
Couples with
Children
17%
25%
Couples
without
Children
1 Person
Household
27%
31%
Other
Jensen’s Target Market

Couples without
children





Quality
workmanship
Reputation
Reliability/service
Little disruption to
life as possible
Low price
sensitivity

Single person
households




Reputation
Reliability/Service
Little Disruption
to life as possible
Not as price
sensitive
Service Features
Common practice for customers
to complain about contractors
Jensen’s approach to this problem
 Quality workmanship – essential
for every roofing company
 Reliable service (timeliness)
 Hassle free – minimal disruption
to customer

Jensen’s Competitive Position
External Analysis - Strategy Map
Jensen
Roofing
High
Allroof
Roofing
Medium
Kolk's
Roofing
R&C
Roofing
Low
Jones
Roofing &
Insulating
Ltd.
Charlton
and Hill Ltd.
e
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lit
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Q
Pr
ic
e
Gr8 Roof
Corporation
Growth Opportunities
1st Year
Couples with
Children
7%
27%
27%
Couples
without
Children
1 Person
Household


Other
39%

Competitive
prices
5% discount
Attract price
sensitive
consumers
1.65% of total
market
Growth Opportunities
2nd Year

7%
15%
Couples with
Children
Couples
without
Children
1 Person
Household
30%
Other
48%



Competitive
prices
4% discount
Start to lose
price sensitive
consumers
2.39% of total
market
Growth Opportunities
3rd Year
4%
Couples with
Children
4%
Couples
without
Children
1 Person
Household
38%



54%
Other

Competitive
prices
2% discount
Lose price
sensitive
consumers
4.38% of total
market
Growth Opportunities
4th Year

3%
41%
1%
56%
Couples
with
Children

Couples
without

Children
1 Person
Household
Other

Competitive
prices
0% discount
Attract nonprice sensitive
consumers
5.88% of total
market
Growth Opportunities
5th Year

3%
1%
39%
58%
Couples
with
Children
Couples
without
Children
1 Person
Household
Other


Competitive
prices
Attract nonprice sensitive
consumers
7.5% of total
market
Sale Pricing Strategy

Cost of goods or services plus a
markup




20% on materials
70% on foreman
50% on helper wages
Remain competitive – 5% discount of
total price. Will remove discount as
reputation and brand grows
Number of Roofs
Sales Mix Projections
180
160
140
120
100
80 17
60
40 75
20
0
24
78
81
84
87
1
2
3
4
5
44
59
Year
New Homes
Major Repairs
75
Selling The Jensen’s Brand
‘Enhancing the quality of homes for
our neighbours in our community’

Jensen’s Roofing installs piece of
mind over head, in a timely and
hassle free manner
Marketing Plan Budget
2008 2009 2010 2011
2012
Newspaper
ads
720
0
0
0
0
Info
Sessions
480
0
0
0
0
Magnetic
Signs
100
0
0
0
0
6,720
6,922
7,129
7,343
7,563
Referrals
500
500
1,000
1,000
1,000
Brochures
500
1,000
1,000
1,000
1,000
9,020
8,220
8,720
8,720
8,720
Yellow
Pages
Total
Human Resources Plan
Robert Jensen
President - Foreman
Accountant / Financial
Advisor
Roofing Helper
Human Resources Plan
Job Descriptions:
Foreman – Robert Jensen:


Manage every aspect of daily operations
Responsible for marketing, bookkeeping,
scheduling, materials, tools and supplies --Essentially anything that needs done
Roofing Helper:

Performing physical tasks and assisting the
foreman wherever possible

Running for supplies, removing shingles, etc.
Human Resources Plan
$ / hr.
Wage Projections - 5 yrs.
$40
$35
$30
$25
$20
$15
$10
$5
$0
Year 1 Year 2 Year 3 Year 4 Year 5
Foreman
Roofing Helper
Human Resources Plan
Total Wage Cost Breakdown
Training Costs
100%
Pension
80%
60%
40%
$27.18
$13.76
Foreman
$31.63 / hr.
Roofing Helper
$16.87 / hr.
20%
0%
Health &
Wellness
Holidays /
Vacation
Base Wage
Human Resources Plan
Projected Work Hours - 5 yrs.
Work Hours
2500
2000
1500
1000
500
0
Year 1 Year 2 Year 3 Year 4 Year 5
Foreman
Roofing Helper
Human Resources Plan
Availability of Labour Supply:
 Seasonal in nature
 Long summer hours – potential for
high $ for a summer job
 University of Lethbridge
 student
population of 14,000
 steady annual labour supply
Financial Model
& Analysis
Financial Plan

Economic Forecast
Oil economy
 Agricultural commodities boom
 Rising inflation
 Rising interest rates

Financial Plan

Explanation of Financial Model
Financial Plan

Financial Statements

Results & Ratios
Financial Plan

Sensitivity Analysis
Risk Analysis

Critical Risk Variables for Jensen:
Cost of labour
 Availability of labour
 Economic downturn
 Injury liability
 Reputation damage

The Investment Decision



Low risk venture
Very experienced workman
Huge demand for skill set
Q &A
?
Inventory Option
Items
$
Selling Price
22.50
Total sales volume
800 bundles
Total Revenues
17,760
Cost Per bundle
18.50
Cost of Purchase
14,800
Gross Margin
2,960
Initial Capital Outlay
~$105,000
Risks associated with this option
•Inventory obsolescence risk
•Insurance cost on merchandise
•