The construction sector in Canada is expected to grow by 4% in 2018. The star performer of the industry is the non-building construction segment reflecting a 7% projected growth. This segment includes infrastructure, public works, and transportation.
The non-residential construction and the residential construction are expected to reflect a growth of 6% and 2% respectively in 2018.
Capitalizing on the above trend, Mr. XXXXX, a seasoned entrepreneur with more than a decade’s experience in the real estate development industry intends to set-up XXXXX, a start-up construction supplies trading business in Bedford, Nova Scotia.
Mr. XXXXX will fully own the business and invest CAD 200,000 towards leasehold improvements, delivery vehicle, permits and licenses, inventory and other initial costs to set-up the business, the store and the online website to start trading.
Nova Scotia has numerous construction projects in the pipeline like highway construction, bridge construction etc.
As per Nova Scotia's five year Highway Improvement Plan, the Government intends to repair and maintain the province's 23,000 kms of roads and highways and 4,100 bridges
In addition to this, according to the Five Year Highway Improvement Plan 2018-19 edition, a budget of CAD 285 million has been set. The plan outlines major highway and road projects, repaving, major bridge replacements, capital maintenance and infrastructure work the province plans to pursue year by year, over the next five years.
ConstructioninNovaScotia
A few of the projects include expansion of twinned highways, gravel road program, pavement preservation etc. Projects in and around Bedford are as below:
• Construction of the four-lane Burnside connector between Burnside and Bedford in suburban Halifax.
• Trunk 7: Bedford Bypass East Bound Lane–from HRM boundary at Dartmouth Road to HRM boundary at Windmill Road–2.8 km
• Trunk 33: Bedford Bypass East Bound Lane–from Highway 101 at overpass (HFX237) easterly to Trunk 7–3.4 km
• Highway 107: Burnside to Bedford Phase 1 (Multiple Year Project)
• Trunk 7: Bedford Bypass West Wound Lane- from HRM boundary at Windmill Road to HRM boundary at Dartmouth Road–2.8 km
• Trunk 33: Bedford Bypass West Bound Lane–from exit for Dartmouth Road to Highway 101 at overpass (HFX254)–3.8 km
Source: https://novascotia.ca/tran/highways/5yearplan/highways-5-year-plan-2018-19.pdf
The Canadian residential construction sector has experienced moderate growth in recent years. Strong growth is expected to continue over the forecast period. The Canadian residential construction sector had total revenues of $46.0bn in 2017, representing a compound annual growth rate (CAGR) of 5.4% between 2013 and 2017.
The sector grew moderately as a result of high demand for housing because of an increasing population, but there was not enough supply to keep up with the demand and there is still a housing shortage in the main cities.
Residential permits rose 8% nationally in 2017, as the province of Ontario saw a 15.7% jump in construction plans for single-family homes. It is estimated that the sector contributes over 1 million jobs in new home construction, renovation and repair, and continues to be one of the largest employers in Canada.
One of every 18 workers in Canada is employed, directly or indirectly, in residential construction, highlighting its importance in the Canadian economy. The Government of Canada, through CMHC, works with provincial and territorial partners to improve access to affordable housing. Since 2011, new federal funding for affordable housing has been provided through the Investment in Affordable Housing (IAH), which has helped contribute to the new supply and renovation of residential properties.
The performance of the sector is forecast to accelerate, with an anticipated CAGR of 7.6% for the five-year period 2017 - 2022, which is expected to drive the sector to a value of $66.3bn by the end of 2022.
After a surge in 2017 due to an increase in building permits, the sector will become more subdued, but growth will still be boosted by increasing investment into housing. Source: MarketLine
The Canadian sector grew 15.6% in 2017, following two consecutive years of decline. Growth in the forecast period is expected to strengthen overall but will not equal 2017’s growth.
The Canadian non-residential construction sector had total revenues of $27.4bn in 2017, representing a compound annual growth rate (CAGR) of 2.3% between 2013 and 2017. In comparison, the US and Mexican sectors grew with CAGRs of 5.5% and 0.1% respectively, over the same period, to reach respective values of $714.3bn and $10.2bn in 2017.
Having suffered in the global recession, a lack of infrastructure investment by the government has been slowing this sector's development.
Limited labor supply and skills shortages are also limiting factors on growth, particularly in the resource and energy sectors.
Steps taken to remedy this, such as incentivizing apprenticeships via removal of credit restrictions, are helping to reverse the worker shortage and 2017 saw very strong growth as a result.
The performance of the sector is forecast to accelerate, with an anticipated CAGR of 2.9% for the fiveyear period 2017 - 2022, which is expected to drive the sector to a value of $31.6bn by the end of 2022.
The number of new non-residential building permits increased by 15% across Canada in 2017, suggesting that new projects in the pipeline will help the sector grow. Source: MarketLine
As Canada has a large and primarily undeveloped land area, this has had a significant negative effect on the value of the non-residential construction sector.
The Canadian residential construction sector grew by 8.3% in 2017 to reach a value of $46,022.5 million. The compound annual growth rate of the sector in the period 2013–17 was 5.4%.
The Canadian non-residential construction sector grew by 15.6% in 2017 to reach a value of $27,421 million. The compound annual growth rate of the sector in the period 2013–17 was 2.3%.
Canada accounts for 7.4% of the Americas residential construction sector value. The United States accounts for a further 85.4% of the Americas sector.
Canada accounts for 3.5% of the Americas non-residential construction sector value. The United States accounts for a further 91.4% of the Americas sector.
In 2022, the Canadian residential construction sector is forecast to have a value of $66,284.5 million, an increase of 44% since 2017. The compound annual growth rate of the sector in the period 2017–22 is predicted to be 7.6%.
In 2022, the Canadian non-residential construction sector is forecast to have a value of $31,602.9 million, an increase of 15.3% since 2017. The compound annual growth rate of the sector in the period 2017–22 is predicted to be 2.9%
The market for construction materials in Canada is growing since 2015. This is driven by the growth in construction activity in both residential as well as non-residential segments.
Source: MarketLine
Construction Supplies Trading Business have the following market segments as their customers.
• Real Estate Development Companies:
• Construction Companies:
• Professional Contractors:
• Renovation Companies:
• Interior Designers:
• Home owners:
A few of the prospective customers in the region are as below:
• Enqore Developments
• Ariana Development Ltd.
• Erika Proctor Real Estate
• Redden Brothers Development
• D&M Construction Ltd.
• Bird Construction Company
• Dexter Construction Co. Ltd.
• Ramar Construction Ltd.
• Lapierre Renovations
• Jason Roy Home Renovations Ltd.
• Dalzell Renovations & Construction
• N C Designs
• Dorothy Fendley Interiors
• Tower Interiors Ltd.
• Emerald Interiors
Suppliers to XXXXX include wholesalers of specific product segments like lumber and wood product suppliers, stone and gravel product suppliers, roofing & siding product suppliers, electrical suppliers, metal suppliers etc.
XXXXX will shortlist quality supplier of ecofriendly and sustainable products. The company will look to source primarily from suppliers in the same region to reduce transportation cost as well as contribute to the local economy.
XXXXX will tie-up with reputed as well as new wholesalers in the region to source quality products. A few of the suppliers in the region that the company will consider are:
• LumberMart Clearance Centers Ltd.
• Wood Chuckers Ltd.
• McInnis Cement
• BedFord ReadyMix Ltd.
• Colter Electric Ltd.
• Wolseley Plumbing & HVAC/R
Kent Building Supplies is Atlantic Canada's leading chain of home improvement stores with 49 convenient retail locations and 8 truss plants across New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland & Labrador. The store offers a wide range of products and products segments like building materials, electrical, flooring, furniture, home décor, heating, cooling and air quality, kitchen, lighting, paint, plumbing, windows & doors etc. The brand has five stores in Nova Scotia with the stores in Halifax, Dartmouth and Lower Sackville being the closest to Bedford. In addition to this, the company also has a website for online shopping. In addition to sales of products, the company provides services like installation and contractor services; consulting, blueprint estimation, competitive pricing, delivery and in-house account.
RONA is a Home and Garden Store in Bedford
Place Mall. The product segments include building supplies, doors and windows, electrical lighting, flooring and ceramic tile, hardware, heating, cooling and ventilation, kitchen, outdoor, bathroom, plumbing etc. The store offers installation services and a contractor program. It also offers expert support and advice to its retail and pro customers for their building and renovation projects.
Created in 1939, RONA is a banner of Lowe’s Canada, one of Canada’s leading home improvement company whose head office is located in Boucherville, Quebec.
In addition to these competitors there are a few more companies that do not provide such a wide range of products but are suppliers of specific product categories like cement and masonry or wood products or gravel etc. A few examples of such companies in the region are McInnis Cement, Dulux Paints, E_Z Wood Products, etc.
Location
XXXXX will set-up shop in Bedord, Nova Scotia, a suburban community of Halifax.
Bedford has quite a few prospective customers and is an apt place to start a business in this industry. A few such businesses that will create the demand for construction supplies in the region are:
• Dexter Construction Company Ltd.
• RCS Construction Inc.
• Rooftight Construction
• Ramar Construction Ltd.
• Bowers Construction
• Sawlor Built Homes
• Cresco
• Provident
• Bird Construction Company
• Stonewater Homes
• Harbour Foundations
XXXXX will sell a wide range of construction and building materials like the following:
• Cement
• Concrete
• Drywall
• Lumber and Composites
• Electrical
• Siding
• Roofing & Gutters
• Fencing and Gates
• Molding & Millwork
• Plumbing
• Ventilation & Ductwork
• Hardware
• Flooring
• Insulation
Value Proposition
The company will source materials from quality and eco-friendly suppliers that use sustainable materials. It will also source alternative building materials to improve indoor air quality with minimal environmental impact. The materials will be non-toxic, durable, and made from natural and renewable resources.
Competitive Edge
• Add-on services like installation and advisory.
• Eco-friendly products
• Delivery to site
• Sourcing of customized products
The company will sell construction supplies through its brick-and-mortar store as well as through its website. The two primary distribution channels of the company will be Direct Sales to Customers and Sales through Middlemen.
Customers like project coordinators, building contractors, real estate developers, construction companies etc. can directly purchase construction materials from the company by ordering through its website or by visiting the store.
The company will also tie-up with such customers for periodic supply of the construction materials for the various projects that they work on.
Being new to the region, Mr. XXXXX will engage the professional services of advisors in the relevant fields for entity formation, visa application, obtaining permits and licenses and brokers for leasing an apt location for the store.
In the future, professional advisors will be engaged on a requirement basis.
XXXXX will strive to comply with all the environmental laws and regulations in the province of Nova Scotia. The Company will obtain all relevant approvals in this regard like environmental compliance approval. The company will also walk to extra mile to source eco-friendly and sustainable building materials from quality suppliers.
XXXXX will lease premises for setting up the store and trading in construction materials. Prior to leasing any premises, Mr. XXXXX will ensure that the owner of the premises proposed to be leased has complied with the municipal zoning requirements as per the Halifax Regional Municipality and has the necessary building permits. Further, the company will also ensure that the permits and licenses and all relevant documents are renewed periodically.
XXXXX will follow all labour rules and regulations applicable to the business. It will ensure that its employees have a safe and healthy working environment at the store. The company will ensure that the employees receive wages above the minimum wage rates for the province of Nova Scotia. The company will ensure that the employees are not over worked by following the regulations regarding working hours. Other regulations regarding pay, leave, immigrant workers etc. will also be strictly complied with.
XXXXX will take a general liability insurance from a reputed insurance provider in the province.
This insurance will protect the company from any liability by covering injury to clients or employees on the store premises.
This is essential for a business in this industry, since the products dealt with are heavy and can cause injury while being transported.
Based on his experience in the real estate development industry, Mr. XXXXX will analyse the risks in the business and devise appropriate mitigation strategies for the same.
Theft
To protect the store from incidents like theft, Mr. XXXXX will install adequate theft detection mechanisms like alarm systems, CCTV monitoring, lockers for cash etc.
Inventory Obsolescence
Mr. XXXXX will use his experience in the industry to analyse the fast moving items and stock a combination of inventory to ensure there is no obsolescence and at the same time the products in demand are available at the store.
Competition
Being new to the market, the company will have to face competition from reputed players in the industry. To overcome competition and carve a niche for itself in the industry, the company will use the expertise and experience of Mr. XXXXX in the industry, create strategic partnerships, reduce costs, invest in marketing and increase sales.
Staff unavailability
Unavailability of staff due to resignation, leave, illness, accident etc. will be a big hurdle in the smooth running of the business. Mr. XXXXX will ensure that the company is well-informed regarding the foreseen unavailability of staff and at the same time make arrangements for unforeseen ones by networking within the industry and arranging for part-time workers.
Increase in supplier costs
A risk of an unavoidable increase in supplier cost will be mitigated by showcasing and promoting such products to reflect its unique features and offering other low priced products as a “Combo” offer.
Actions Timeline
Complete the visa process
Initiate company formation process
Obtain licenses and permits
Identify and analyse suppliers
Negotiate with suppliers
Create formal contracts with suppliers
Network within the industry
Lease premises
Refurbish premises
Build a website
Identify vehicle and equipment suppliers
Purchase equipment
Purchase inventory
Initiate marketing
Recruit staff
Open the store
Acquire customers and clients
Generate revenues
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Mr. XXXXX is a motivated and experienced entrepreneur with 15 years of experience in business operations.
He is commercially aware and highly successful in driving businesses forward whilst delivering high standards, through increasing sales performance and business development.
He possesses outstanding relationship building skills, strong communication abilities and an exceptional emotional intelligence that excel in matrix and hierarchical structures.
He consistently walks that extra mile to ensure that any assignment undertaken has been accomplished to the satisfaction of the client.
He has hands on experience and expertise in negotiating and closing the deal.
He is a proven leader with outstanding relationship building skills, strong communication abilities & exceptional emotional intelligence that excels in matrix and hierarchical structures.
He is a seasoned entrepreneur with more than a decade’s experience in the real estate development and construction industry. He has been a Partner at Shiv Developers (India), a real estate development company since 2007. He has managed Development and Sales at Lalji Industries, as a Partner since 2016. He has also been a Partner at Shree Ganesh Developers (India) since 2016.
In addition to the above, he has been a Partner at many more businesses in India, managing the Business Development, Purchase, Sales and Administration functions of such multiple businesses.
Mr. XXXXX is an upbeat leader with a passion to deliver extensive managerial skills and the natural ability to identify and capitalize upon opportunities for maximizing revenue and optimizing company benefits.
He has specialized in functions like Sales and Marketing, Business Development and Strategic Planning.
Over the course of his career, Mr. XXXXX has acquired the following skillsets:
• Business Operations
• Financial Services
• Business Development
• Dealer Management
• Risk Management & assessment
• Advisory Services
• Financial Operations
• Client Relationship Management
• Team Management
XXXXX is a start-up Limited Liability Company that will trade in construction materials outside Halifax, in the province of Nova Scotia, Canada. The Company will be fully owned and operated by Mr. XXXXX who has more than a decade’s experience in the construction, real estate and development industry. He has been a Partner in a Real Estate Developing Business since 2004. By setting up this business in Nova Scotia, Mr. XXXXX intends to capitalize on the construction projects in the pipeline for the province of Nova Scotia; like highway construction, bridge construction etc.
As per Nova Scotia's five year Highway Improvement Plan, the Government intends to repair and maintain the province's 23,000 kms of roads and highways and 4,100 bridges. This may generate a lot of business for the companies in the construction material trading industry. In addition to this, there is the usual building construction as well.
Mr. XXXXX will bring in CAD 200,000 as investment to fund the initial costs of setting up the business which primarily include capital costs like leasehold improvements, purchase of delivery van, costs to acquire license and permits etc.
Amounts in CAD