How to start a concrete business? - From studying the basics of marketing and logistics of ready-mixed concrete
If an entrepreneur has decided to engage in commercial activities in the production of a certain product, then it is best to consider a business plan for opening a concrete plant. These are raw materials for which there will always be demand, which means that there are enough prospects for such a business. It is best to launch such a project in early May, when the active construction season begins. The only caveat is that by this time the entrepreneur must secure a certain customer base, which means that the marketing campaign must be launched approximately from the beginning of spring. If the season is successful, then starting from November it is possible to prepare the expansion of production for the next season.
Competition in the concrete production market
When developing a business plan for opening a concrete plant, it is necessary to study in detail the market of competition and demand in this area of activity. The most important clients for the owners of such factories will be construction companies. The ratio of supply and demand growth in this market is 0.9.
It is important to take into account that a concrete plant should be opened near active construction, but no further than 50 km. For this, it is necessary to assess all the possibilities for the development of the concrete business in a certain region. It is unlikely that it will be possible to apply methods of price competition here. The success of the business will depend solely on the availability of demand from the builders.
Business registration and choice of taxation system
If an unforeseen situation occurs, all founders of the organization are solely responsible within the limits of their initial contribution.
When submitting an application for registration of an LLC, you must attach a package of the following documents:
- Copies of constituent documents and articles of association of the enterprise.
- Copies of the passport and TIN of the representative, as well as a notarized authorization to represent the organization by him.
- State fee payment receipt.
When drawing up an application for registration of an LLC, you must select OKVED, OKVED is suitable for this form of activity; 26. 3 - "Production of ready-mixed concrete".
Next, you need to choose a taxation system. For this, you can consider a general taxation system or a simplified one.
If the organization plans to receive income of less than 60 million rubles, then it is better to choose ONS. Such a system will free the entrepreneur from the need to pay VAT, income tax and property tax.
To organize the technological process in such a production, you need to know the following GOSTs:
- 27006-86 - “Concrete. Squad selection rules ".
- 10181-2021 - "Concrete mixtures - test methods."
- 0-95 - "Methods for determining frost resistance".
- 26633-91 - “Concrete is heavy and fine-grained. TU ".
- 18105-86 - "Concrete - strength control rules".
Starting a business in the construction industry is a costly but very profitable business for an entrepreneur. Despite some difficulties with seasonality, the income from the organization of even a small business can exceed even the most ambitious expectations! When choosing a line of business, pay attention to the production of concrete. According to experts, this niche may not be that expensive. In addition, the concrete production technology is not very complicated - even a beginner will master it. At the same time, it becomes possible to open a home production if you are constrained in finances. And the high demand for products will make the enterprise break even.
Concrete is a building material in demand on the market. This is the main raw material for the construction and repair of structures, the manufacture of other building materials. Concrete is used by both private traders and large companies - the only difference is in the volume of purchases.
For newcomers in business, it is better to open a mini concrete production plant - the risks of losing investment are minimized. And then the enterprise can be expanded by purchasing more powerful equipment and expanding the range.
Prepare a business plan for the production of concrete. And this even if you are planning a small home business - it is important to calculate the costs and outline a development plan! How is the production and sale of concrete profitable as a business? How to set up a profitable plant so that it will pay off in the shortest possible time?
Initial investments - from 10,000,000 rubles.
Market saturation - medium.
Difficulty starting a business - 7/10.
Concrete business prospects and risks
The concrete production market in Russia cannot be called overcrowded - there are not very many large producers. If you take a strong position in this area, then you can easily create healthy competition for the giants of the market! There is one reason for this. Large enterprises are focused more on wholesale buyers - for example, construction companies. But if you launch a mini-shop, then it becomes possible to deliver products in small wholesale lots - and this is an impressive sales market (hardware stores and markets, individuals, various institutions). The profitability of an enterprise in the small business segment can be quite high if you take care of the quality of the manufactured goods and constantly expand the client base.
The only significant challenge that both small and large enterprises face is seasonality. In the "non-construction" season, the demand for concrete falls noticeably, which naturally affects the income received. However, this tendency is observed at all factories producing building materials. But this does not mean that the shop will be idle! The problem can be solved by setting up the production of ready-mixed concrete in bags - in the form of a dry mix. In autumn and winter, it is possible to replenish the “stocks” of finished products in warehouses in order to start selling them in summer and spring.
Considering the specifics of the "concrete" business, reflect the options for solving the problem of seasonality in the draft of the future enterprise.
Will Home Business Survive?
Modern concrete production as a business is very promising, but based on the need to use serious equipment, which requires the preliminary preparation of a competent and full-fledged business plan. Plants for the production of concrete can be represented by independent enterprises or be a link in the chain of the construction process.
A less costly form of organizing such a business is the opening of a mini-plant, which allows not only to reduce the time and money costs, but also to get the most automated production controlled by one person. In addition, an easy change of modules contributes to a quick changeover of the plant for the production of concrete of a different brand.
Registration and Tax
The first step is to register the premises. There is no need for licensing of this type of individual activity, and almost any legal entity can open such a business. Before starting a mini-production of concrete business, you should choose the most preferable organizational and legal form. It is advisable to register and open an account for an organization in the form of an LLC. The average cost of this procedure is about 15 thousand rubles.
The legal form of an LLC is more secure and provides significant opportunities in doing this business. In case of failure, all the risks of the founders fall only on the authorized capital.
If income is less than 60 million rubles, taxation should be formalized in the form of simplified taxation system, which will exempt production from taxes on profits, property and VAT. With a more significant amount of income, taxation is required according to the OSNO with the full volume of accounting and payment of all general taxes.
When registering organizational and legal documents, it is necessary to indicate the OKVED code 26.3, which is due to the production of ready-mixed concrete.
If the production area is represented by a rented space, then it should be noted that the minimum footage cannot be less than 400 m², and in addition, the production technology is based on the use of water. If there is no centralized water supply system, then additional expenses will be due to the need to drill your own well. In addition, electricity and sewerage are required for stable operation.
The most difficult and costly stage, which should be reflected in the business plan for the production of concrete, is represented by the acquisition of the main blocks-modules. A standard set of such blocks, as well as the installation of all production equipment, will cost several million rubles, which implies a significant initial capital investment.
The required equipment is presented in blocks:
- module-dispenser ;
- module-hopper for cement, water base and inert fillers;
- module-storage for cement;
- screw feeder module;
- automatic module equipped with a control system;
- steam and water supply module.
Ready-mix concrete is a versatile building material that is equally in demand in private housing construction, industrial and civil construction, laying runways of airfields or laying autobahns. The relatively simple concrete production technology and proven investment schemes for the purchase of concrete mixing equipment encourage many enterprising entrepreneurs to launch the production of ready-mixed concrete at their own concrete plant.
Pitfalls of concrete business plans
The vast majority of start-up manufacturers of concrete products start preparing for a "concrete" business based on business plans, which detail the revenue and expenditure of the project. By comparing income and expenses, the estimated payback period of the investment is determined, which gives the entrepreneur hope for a quick return of credit loans and the "promotion" of an operating enterprise.
The formula for calculating the return on investment is quite simple:
- Т - the value of the payback period, expressed in years;
- Vinv - the amount of invested investment funds;
- P net - net profit, calculated over a period of 1 year.
Depending on the quality class (premium, economy, used) and the cost of the purchased concrete mixing equipment, the estimated production volumes and the type of concrete products (ready-mixed concrete, reinforced concrete products, small-piece products, etc.) plans estimate the return period for funds spent from six months to two years.
Despite the conscientiousness and meticulousness of the developers of business plans, who are trying to take into account all non-production costs and provide real data on assessing the profitability of the newly created enterprise, they do not consider two main issues that directly affect the efficiency of the newly created enterprise:
- Marketing issues related to gaining a competitive advantage in your region.
- Issues of the logistics of the produced concrete related to the preservation of the commercial qualities of concrete until the moment of its use.
Surely the developers of business plans are firmly convinced that these questions do not pose any problems for the owner of the BSU. However, practice has shown that ignoring these factors by entrepreneurs negatively affects the results of the new production. This is due to the special property of concrete - concrete is a fast-hardening product that must be unloaded from a vehicle before it hardens.
Hence all the nuances of successful concrete production and its implementation, which simply cannot be reflected in business plans. Let us note some circumstances that an entrepreneur must work out even before he pays for the purchase of a concrete plant and makes an advance payment for renting a production area for a batching plant.
Concrete is used in construction works and in various industries. Initially, concrete differed only in moisture resistance and was made from ASG and cement immediately before construction, either independently or at large enterprises. Modern manufacturers offer more than five types of concrete, making each of which you can earn good money. The business idea for the manufacture of concrete is interesting not only for large entrepreneurs, but also for beginners, since the manufacture of some types does not require significant investments, and only a few workers are involved in the manufacturing process. How to open a concrete plant from scratch and where to start, we will talk in more detail below.
First Steps to Success
Before starting a business project, you need to choose what type of concrete do you plan to produce? The list of purchased equipment for the opening, the necessary components for manufacturing, the size of the room, etc., will depend on this. there are several common types of concrete:
- Heavy. It is used for construction work.
- Lightweight. It is used for the manufacture of building materials, decorative elements.
- Cellular. Foamed mixture used to make building blocks.
- Silicate. Possesses increased fire and moisture resistance.
- Decorative. It is used for finishing works, for the manufacture of decorative elements.
The main buyers of concrete are construction companies, private traders. When registering an LLC, the owner of the production can participate in bidding for a state tender and receive a solid and constant income.
When choosing this type of business, it is worth considering that the production of concrete has its pros and cons:
- Sales subject to seasonality. In winter, when the number of construction projects is minimal, sales will fall by 65-75%. The company will receive its main income during the warm season.
- It is difficult to get a large order, as reputable construction companies prefer to cooperate with trusted suppliers.
- It is unprofitable to engage in production in small regional centers, where there are more than two large competitors in the niche.
- It is difficult to compete on prices with large concrete producers, as suppliers provide them with raw materials in large quantities at more reasonable prices.
- If there are many construction projects and private households in the region, then in the warm season concrete will be in demand.
- Business pays off quickly and does not require huge investments.
A concrete batching plant can be part of a large production chain or function as an independent line. And if you equip the line yourself with modern equipment, you only need to hire 3-4 workers, which will reduce personnel costs. Is it profitable to start a small business in a particular region, we can say only after analyzing the market and competitors.
Documentation and Registration
To register a small concrete plant, it is enough to open an IP and start working. But if you plan to cooperate with large construction companies and participate in tenders from the state, then you need to register an LLC. To get started, an individual entrepreneur is enough, for the opening of which documents are collected: