Construction, Contractor, Financial Model

10-year Financial Projections, 5-year Financial Projections, Accounting, Accounts Receivable, Business Valuation, Cap Table, Cash Flow Analysis, Cash Flow Projections, Cash on Cash Yield, Cash-on-Cash Multiple, CFO, Cost Projections, Crew Planning, DCF Model, Debt Service Coverage, Discount Rate, Excel, Financial Analysis, Financial Feasibility, Financial Model, Financial Modeling, Financial Projections, Financial Statements, Forecasting, Income Statement, Investment Multiple, Investor Cash Flows, Investors, IRR (Internal Rate of Return), Know-How, NPV (Net Present Value), Private Equity, Pro-Forma, Profitability Analysis, Return on Investment (ROI), Revenue Projections, Scenario Analysis, Sensitivity Analysis, Startup Financial Models, Terminal Value, Three Statement Model | Three Financial Statements, Venture Capital

Video Overview:

The model is really good at two things. Planning out the economics of a large-scale contractor business and getting the cash flows correctly. Dynamic assumptions make it easy to configure up to three general job types your construction business does and see the resulting unit economics and pro forma. You will be able to test various pricing strategies / costs and see what kind of profitability and feasibility exist.

For each job type, the user can define the following:
– Number of jobs started per month
– Average contract value
– Monthly timeline to define the percentage of the job that gets done per month on average (drives earned revenue and labor wages)
– Monthly timeline to define the percentage of the total contract value that is collected per month (resulting in receivables or unrecognized revenue line item on the balance sheet if different from job completion percentage
– Schedule for average material costs and expected equipment rental costs of the job
– Monthly timeline to define the percentage of material costs / equipment that are paid (likely based on % completion, but you can adjust independently)
– Worker configuration (up to 10 worker type slots defined by overtime vs regular hours module, average hours worked per a given job, and payroll taxes/benefits) These assumptions apply to a single job. Hence, as the jobs scale, so does the workforce. This could be sub-contracts, laborer employees, or a combination.

The Excel template also includes assumptions for capital asset purchases if you are going to buy equipment rather than rent, other one-time startup costs, fixed expenses defined by the total monthly cost in each of the 10 years and the start month, and an option to fund some of the initial costs through a traditional bank loan, owner and/or investor equity.

Output Reports:
– Monthly and Annual Financial Statements (Income Statement, Balance Sheet, Cash Flow Statement)
– DCF Analysis with IRR and NPV on a project level and per investor pool (owner vs. outside investors)
– Cap Table
– Monthly and Annual Pro Forma detail (shows how all the assumptions come together and drive cash flow per period)
– Lots of Visualizations

There is a sanity check on the total labor hours an average worker slot is working per day over each month, and that runs off the job completion / hour count above.

An exit month and option for the inclusion of an exit value were built in for a more accurate DCF Analysis, and it is driven by a trailing 12-month EBITDA multiple.

Included in the industry-specific variety bundle and the all-models bundle.