Do you want to start a ready-mix concrete supply business? Find here, a detailed business plan guide for your ready reference.
Concrete is the most vital material in modern construction. Actually, the latest technological developments have made it possible to use it in intricate and architecturally complex structures, requiring a high degree of performance and aesthetic appearance.
Actually, the increasing number of benefits of ready-mix concrete is the major reason for growing the demand for this product. Additionally, the increasing construction activity is another reason for increasing the demand for ready-mix concrete on the project site.
Read: Profitable Business Ideas for Civil Engineers
Starting a ready-mix concrete supply business demands strategic planning and moderate capital investment. And definitely, the business ensures lucrative revenue return on investment.
Is Ready Mix Concrete Supply Business Profitable?
Some of the major global markets are India, China, the US, Indonesia, and UAE. Actually, there are several reasons for the growing demand for ready-mix concrete. The list includes the superior and consistent quality of concrete, strict selection of raw materials during production, etc. Other reasons are customizability for specific requirements and quantity and testing the physical and mechanical strength of concrete.
Also, the application of ready-mix concrete results in low wastage ensures streamlined workflow, eliminates the need for storage spaces and other raw materials at the construction site, reduces the time and workforce required, and reduces noise and dust production.
Some of the major advantages of this technology include low labor costs, fast construction, increased complexity or accuracy, less waste production, and greater integration of function.
Generally, the global ready-mix concrete market for non-residential applications accounts for the majority market share. And there are several factors that are responsible for the growth. The list includes rapid industrialization, population growth, urbanization, favorable government policies, availability of cheap resources and skilled workforce, and low operational and labor costs. So, according to the present market scenario, starting a ready-mix concrete supply business is highly lucrative for entrepreneurs.
8 Steps to Start Ready Mix Concrete Supply Business
1. Learn the Different Types of Ready Mix Concrete
In starting this business, you need to understand first the different types of concretes and their advantages and uses. Broadly, there are four different segments of the ready-mix concrete industry.
a. Performance-based Concrete
Generally, performance-based concretes are used in projects where high effectiveness is needed. This item is perfect for RCC members with intricate and complicated shapes and sizes. Additionally, it helps to avoid defects such as segregation and honeycombing. Also, it ensures a superior surface finish enabling faster construction and lower manpower requirements. It increases resistance to sulfates, reduces chloride-ion penetration, and improves resistance to aggressive environments.
b. Usage-based Concrete
Generally, architects and engineers prefer this type of concrete for big and delicate projects. Basically, it is an enhanced crack-resistant and relatively ductile concrete, produced by using different types of fibers like polyester, polypropylene, glass & steel, etc. It minimizes the problems of plastic shrinkage cracks of the concrete in the green stage and substantially improves its static and dynamic properties like flexural impact and tensile strength.
c. Decorative Concrete
Generally, the decorative segment consists of two different types of concretes. These are color concretes and stamped concrete. As the name defines, this concrete is used for decoration purposes only. Color concrete comes with quality UV-resistant pigments that help in retaining the true color/shades for a longer duration. Basically, decorative concretes are ideal for driveways, patios, walkways, swimming pool decks, car parks, industrial floors, and exterior walls.
d. Green Concrete
Basically, green concrete comes with a high porosity used for concrete flatwork applications. Actually, it allows water from precipitation or other sources to pass through, thereby reducing the runoff and ensuring the recharge of groundwater. Hence, it offers numerous environmental, structural, and economic benefits and is an excellent alternative to expensive stormwater management methods.
2. Write a Business Plan
First of all, crafting a business plan is a must. Basically, this is a small and medium-scale business. You need to put a lot of thought into capital investment. And for crafting the plan, you must research the local market first. You will need to identify the demand for the specific type of concrete in your locality.
In addition to that, identify the existing concrete suppliers, their products, and pricing. It will help you to price your product in a much better way.
In your business plan, include your business objective, mission, and vision. Determine the management pattern of your business. Finally, calculate the startup cost. Actually, you will need to calculate both the fixed and working capital costs.
Generally, the fixed cost includes the plant, machinery, and other pre-operative expenses. On the other hand, the working capital cost includes raw materials, utility, and other operational expenses. Calculate an expected ROI and break even.
Have a clear marketing strategy. Have a plan and capital both for promoting your ready-mix concrete supply business. Additionally, have an expansion plan too.
3. Arrange the Finance
Arranging finance is one of the most important aspects of starting this business. Actually, it is advisable to start this type of business with bank finance. Also, you can apply for venture capital funding. And here, your business plan will help you in getting the investor’s confidence.
4. Business Registration & Licensing
According to the Federal law of your state, you must register your business. Also, consider the financial participation at the time of company formation. Additionally, check the licensing issues if there are any. Generally, this type of business doesn’t demand any type of NOC from the Pollution Control Board. However, it is better to check before initiating the plant.
5. Establish the ReadyMix Concrete Warehouse Unit
In establishing the unit, the primary requirement is vacant land. You must secure land with a covered shade area for operating the unit. Check the availability of adequate electricity and water supply. Get the floor plan from the machinery supplier and set up the unit accordingly. Your unit must have a wide entry space for easygoing of your delivery vehicles. An administrative office setup is a must. You can set up the office with the unit or at other commercial spaces.
6. Procure the Machinery & Equipment
Basically, machinery, equipment, and vehicles demand major investments in this type of business. And you must select the specific machinery according to your specific requirements. It is better to install a customized plant. Additionally, the cost of the plant majorly depends on the capacity.
Generally, an RMC plant comprises a bucket elevator, screen, sand dryer, burning furnace, storage silo, screw conveyor, weighing system, and other advanced process control systems for easier handling. Finally, you will need to procure a specific type of concrete delivery vehicle.
7. Make an Operational Plan
Starting a ready-mix concrete supply business consists of so many operational aspects. And you will need to determine these before offering the products to your clients. First of all, you will need to employ human resources. Broadly, you will need manpower for production, marketing, and administrative work. In addition to that, you will need to have a logistics team also.
Prepare the entire process of getting an order, scheduling delivery, and accepting payments. Open a business bank account in your nearby bank. For accounting, billing generation, and stock maintenance, you may need an accounting software solution.
8. Promote the Ready Mix Concrete Supply Business
Any business as such can never be successful without sufficient promotion. So, you must promote your business both offline and online. And you must create a website for your company. Mention there your contact info and product details. Additionally, you must put your effort into ensuring institutional clients.
A small ready-mix concrete supply business will get the desired success when you can ensure the local clients first. However, you must think about expansion after getting initial success in this business.
About the Author: 99businessideas.com led by Rupak Chakrabarty is committed to helping beginners, entrepreneurs, and small business owners in starting, managing, and growing their business. Our aim is to educate the entrepreneur on the various stages of entrepreneurship.