Welding Business Plan Template
If you want to start a welding business or expand your current welding business, you need a business plan.
The following Welding business plan template gives you the key elements to include in a winning Welding business plan.
Welding Business Plan Example
I. Executive Summary
Business Overview
[Company Name] is a new welding business located in [location] that provides custom fabrication and repair services. The company will help both local businesses and individuals with their welding needs. We can weld a variety of materials, including aluminum, steel, cast iron, and more. We aim to be the local friendly welding shop that everyone comes to for their welding needs. Whether it is a major automotive company that needs custom parts or an individual who needs to repair some furniture, we will provide a high-quality service for an affordable rate.
Services
[Company Name] will provide a variety of services, including custom fabrication and repair. The welders at [Company Name] can work with various materials, including aluminum, steel, and cast iron. [Company Name] is open to repairing and fabricating for most industries (as long as we have the staff and availability), including construction, automotive, and smaller home projects.
Customer Focus
[Company Name] will primarily serve the residents and businesses of [location] and surrounding areas. The area is a hub for automotive, construction, and similar businesses that need good welders. These industries will be the primary customer targets. However, [Company Name] will also target individuals who have smaller, more customized welding projects.
Management Team
[Company Name] is headed by [Founder’s Name], who has over [X] years of experience as a professional welder. Throughout his career, he has worked as a welder for local businesses, spending much of that time as a manager and trainer for other employees and apprentices. For the past year, he has worked on additional repair and fabrication projects on the side and is ready to turn his side hustle into a full-on business.
Though he has never run his own welding business, he has worked in the industry long enough to gain an in-depth knowledge of the business, including the operations side (e.g., running day-to-day operations) and the business management side (e.g., staffing, marketing, etc.).
Success Factors
[Company Name] is uniquely qualified to succeed due to the following reasons:
- The company will be providing a valuable service for individuals and businesses in need of welding services for a variety of projects.
- [Founder’s Name] has a track record of success in the welding industry and is a proven expert.
- [Company Name] will provide high-quality repair and fabrication services for a moderate price.
- The local area is currently underserved and has few local welding companies offering quality customer service.
Financial Highlights
[Company Name] is currently seeking $470,000 to launch. Specifically, these funds will be used as follows:
- Store design/build: $200,000
- Equipment and initial supplies: $150,000
- Working capital: $120,000 to pay for marketing, salaries, and lease costs until [Company Name] reaches break-even
Top line projections over the next five years are as follows:
| Financial Summary | FY 1 | FY 2 | FY 3 | FY 4 | FY 5 |
|---|---|---|---|---|---|
| Revenue | $560,401 | $782,152 | $1,069,331 | $1,379,434 | $1,699,644 |
| Total Expenses | $328,233 | $391,429 | $552,149 | $696,577 | $776,687 |
| EBITDA | $232,168 | $390,722 | $517,182 | $682,858 | $922,956 |
| Depreciation | $7,000 | $7,000 | $7,000 | $7,000 | $7,000 |
| EBIT | $225,168 | $383,722 | $510,182 | $675,858 | $915,956 |
| Interest | $6,016 | $5,264 | $4,512 | $3,760 | $3,008 |
| Pre Tax Income | $219,152 | $378,458 | $505,670 | $672,098 | $912,948 |
| Income Tax Expense | $76,703 | $132,460 | $176,985 | $235,234 | $319,532 |
| Net Income | $142,449 | $245,998 | $328,686 | $436,864 | $593,416 |
| Net Profit Margin | 25% | 31% | 31% | 32% | 35% |
II. Company Overview
Who is [Company Name]?
[Company Name] is a new welding business located in [location]. The company aims to be the local neighborhood welding shop that anyone can contact for their welding needs. [Company Name] will service both businesses and individuals with their welding projects, providing both repair services and custom fabrication. But no matter what industry or individual we serve, we always aim to offer the best quality and customer service to satisfy all our clients.
[Founder’s Name] has been a welder in the industry for [X] years. Throughout his career, he worked for various businesses providing welding services to his employers’ customers and clients. However, he saw that there were very few local welding shops that were designed for average residents. That’s when he decided to open a welding business that catered to helping both businesses and individuals with all their welding needs.
[Company Name]’s History
[Founder’s Name] recently began researching what it would take to start his own welding company and thoroughly analyzed the costs, market, demographics, and competition. [Founder’s Name] has compiled enough information to develop his business plan in order to approach investors.
[Founder’s Name] incorporated [Company Name] on [date of incorporation] as an S-Corporation. The business is currently being run out of [Founder’s Name]’s home, but once the lease on [Company Name]’s office location is finalized, all operations will be run from there.
Since incorporation, the company has achieved the following milestones:
- Found a retail space and signed a Letter of Intent to lease it.
- Developed the company’s name, logo, and website located at [website].
- Planned the suite of services to be offered.
- Determined equipment, supplies, and materials needed.
- Begun recruiting key employees and experienced welders.
[Company Name]’s Products/Services
[Company Name] will provide a variety of custom fabrication and repair services to both businesses and individuals. Our welders will have experience working with a variety of materials, including aluminum, steel, cast iron, and alloy.
Some example projects we can help with include:
- Fabricating and repairing custom automotive parts
- Fabricating construction materials
- Repairing and fabricating objects around the home (such as aluminum bats, furniture, and custom gardening tools and supplies)
The costs will be determined by the materials needed and the amount of labor required.
III. Industry Analysis
As long as society depends on metal, there will always be a demand for the welding industry. Therefore, there is no indication that the industry is slowing down. Though there was less growth seen during the pandemic, the current welding industry is expected to see a compound annual growth rate (CAGR) of 4.6% over the next five years.
Currently, there is a welder shortage across the globe. Though some industries have turned to machinery to address the gap, businesses that cannot afford advanced machinery will be clamoring to partner with local welders. Furthermore, individuals who need custom jobs and repairs will always look to local welders for help with their tasks. Therefore, with such a great demand for welders, there is no better time to start a local welding business.
IV. Customer Analysis
Demographic Profile of Target Market
[Company Name] will serve local businesses and the community residents of [location] and its surrounding areas.
The community of [location] has numerous businesses that serve the automotive and construction industries. Therefore, these industries will make up the bulk of our business. However, since we are setting out to be the neighborhood-friendly welder, we also provide custom fabrication and repair services to individuals.
Customer Segmentation
The Company will primarily target the following three customer segments:
- Automotive industry: For decades, [location] has been a hub for automotive production and sales. We expect many local businesses in this industry will have a need to collaborate with a local welding business for repair and fabrication services. Therefore, we expect this industry to make up a major portion of our sales and target it as such.
- Construction industry: Local construction companies also need partner welders to help them with construction projects. We will entice these companies with on-call services that will be better priced than hiring full-time welders.
- Individuals: Everyone needs a welder from time to time. Whether it be a repair job or a custom fabrication, we will always offer our services to individuals who have welding needs. Therefore we will also market ourselves as a friendly neighborhood welder who is always available to help local residents.
V. Competitive Analysis
Direct & Indirect Competitors
The following welding companies do business within a 20-mile radius of [Company Name], thus providing either direct or indirect competition for customers:
Carl Custom Welding
Carl Custom Welding is a welding company in [location]. In business for over 40 years, Carl Custom Welding focuses on providing custom fabrication and repair services to local individuals. They help with all sorts of projects, from automotive to furniture.
Carl Custom Welding’s services are generally for customers at the upper end of the market who are looking to customize their expensive cars, furniture, and other objects. As a result, the company’s prices are quite high and are not realistic for the average middle-class resident. We will price our services more moderately, attracting the customers who are priced out by Carl Custom Welding’s services.
Welding Skills Inc.
Welding Skills Inc. is a welding contractor that primarily serves the local construction industry. Established in 1997, the company offers a wide range of welding fabrication services, including iron and steel. They do not serve individuals nor specialize in repair services.
Though we expect Welding Skills, Inc. to continue to thrive, we plan to price our services more moderately, making us an active competitor with the company. Our management team also has better relationships with the industry and experience that will make [Company Name] a more appealing option.
Raise The Bar Welding Co.
Raise The Bar Welding Co. is a local welding company that provides a variety of Welding services for local businesses. They primarily work on construction projects but help out businesses in other industries as well. Raise The Bar is known for its well-priced services and high-quality fabrications.
While Raise The Bar Welding Co. will continue to thrive in the local community, it does not offer any services to individuals. Furthermore, our management team has strong relationships with local businesses that will make our welding services more appealing than our competitor.
Competitive Advantage
[Company Name] enjoys several advantages over its competitors. Those advantages include:
- Customer-Focus: [Company Name] contractors provide the highest quality customer service focused on transparency, communication, and responsiveness throughout the welding process, from the initial inquiry to the follow-up once the project is completed.
- Management: [Founder’s Name] has been extremely successful working in the welding industry and will be able to use his previous experience to help clients with whatever they need. His unique qualifications will serve customers in a much more sophisticated manner than many of [Company Name]’s competitors.
- Relationships: Having lived in the community for 25 years, [Founder’s Name] knows many of the local leaders, real estate developers, and business owners. These relationships will help the company build a significant customer base.
- Affordability: Even though local businesses will make up most of our sales, [Company Name] still strives to be an affordable option for local individuals as well. We strive to be the best neighborhood welding business that can help individuals with all their welding needs for an affordable price.
VI. Marketing Plan
[Company Name] seeks to position itself as a high-quality, durable welding business. Clients can expect to receive the best welding services from skilled contractors and professionals in [location] using the highest quality materials.
The [Company Name] Brand
The [Company Name] brand will focus on the company’s unique value proposition:
- Client-focused welding and repair services, where the company’s interests are aligned with the customer.
- Service is built on long-term relationships and personal attention.
- Professional industrial experience in a small business setting.
Promotions Strategy
[Company Name] expects its target market to be individuals and businesses within a 30-mile radius of its location. [Company Name]’s promotion strategy to reach these potential customers includes:
Targeted Cold Calls
[Company Name] will initially invest significant time and energy into contacting potential clients via telephone and email. In order to improve the effectiveness of this phase of the marketing strategy, a highly-focused call list will be used, targeting local businesses primarily in the construction and automotive industries. As this is a very time-consuming process, it will primarily be used during the startup phase to build an initial client base. However, what may make the process easier is [Founder’s Name]’s ongoing relationships with leaders in both industries.
Referrals
[Company Name] understands that the best promotion comes from satisfied customers. The company will encourage its clients to refer other individuals and businesses by providing discounts on future services for every new client produced. This strategy will increase in effectiveness after the business has already been established.
Broadcast & Streaming Media Advertising
[Company Name] will invest in professionally produced commercials to run on broadcast networks, radio stations, streaming platforms, and podcasts.
Website/SEO
[Company Name] will invest in developing a professional website that displays all of the services offered by the welding company. It will also invest in SEO so that the company’s website will appear at the top of search engine results.
Social Media
[Company Name] will create the company’s social media accounts and invest in ads on all social media platforms. It will use targeted marketing to appeal to the target demographic.
Publications
[Company Name] will advertise its services in key local publications, including newspapers and area magazines. Additionally, the company will print brochures and place them in specific locations frequented by target individuals, such as automotive production companies and construction firms.
Direct Mail
[Company Name] will blanket neighborhoods in the area with direct mail pieces. These pieces will provide general information on [Company Name], its services, and promotional discounts.
Pricing Strategy
[Company Name]’s pricing will be estimated on a project basis drawing on [Founder’s Name]’s deep expertise in welding. The pricing will be determined by the materials needed and the amount of labor required to finish the job. Pricing will be moderate and less expensive than our competitors, but more expensive than lower-quality, efficiency-driven welding businesses.
VII. Operations Plan
Functional Roles
[Company Name] will need to fulfill the following functional roles to execute its business plan and ensure the company’s success:
Welding Functions
- Custom fabrication
- Repair services
- Customer service
- Quoting and invoice creation
Administrative Functions
- Social media management
- Website management
- Bookkeeping
- Marketing
- Hiring and training staff
- Maintenance functions
- Other general administrative functions
Milestones
The following are a series of steps that lead to our vision of long-term success. [Company Name] expects to achieve the following milestones in the following [xyz] months:
| Date | Milestone |
|---|---|
| [Date 1] | Finalize lease agreement |
| [Date 2] | Design and build out [Company Name] |
| [Date 3] | Hire and train initial staff |
| [Date 4] | Kickoff of promotional campaign |
| [Date 5] | Launch [Company Name] |
| [Date 6] | Reach break-even |
VIII. Management Team
Management Team Members
[Company Name] is headed by [Founder’s Name], who has over [X] years of experience as a professional welder and holds an associate’s degree in Welding Technology. Throughout his career, he has worked as a welder for local businesses, spending much of that time as a manager and trainer for other employees and apprentices. For the past year, he has worked on additional repair and fabrication projects on the side and is ready to turn his side hustle into a full-on business.
Though he has never run his own welding business, he has worked in the industry long enough to gain an in-depth knowledge of the business, including the operations side (e.g., running day-to-day operations) and the business management side (e.g., staffing, marketing, etc.).
Hiring Plan
[Founder’s Name] will serve as the Owner and Manager of [Company Name]. In order to launch, he needs to hire the following personnel:
- Assistant Managers (1 to start)
- Administrative Staff (1 to start)
- Welders (2 to start)
IX. Financial Plan
Revenue and Cost Drivers
[Company Name]’s revenue will primarily come from providing fabrication and repair services to local businesses and individuals. Pricing will be determined by the materials and labor required.
The main cost drivers for [Company Name] will be labor expenses, marketing, and lease for the retail space.
Capital Requirements and Use of Funds
[Company Name] is currently seeking $470,000 to launch. The funds will be used for capital expenditures, office build-out, hiring initial employees, marketing expenses, and working capital.
Specifically, these funds will be used as follows:
- Store design/build: $200,000
- Equipment and initial supplies: $150,000
- Working capital: $120,000 to pay for marketing, salaries, and lease costs until [Company Name] reaches break-even
Key Assumptions
The following table reflects the key revenue and cost assumptions made in the financial model:
| Number of Clients | Average |
|---|---|
| FY 1 | 100 |
| FY 2 | 120 |
| FY 3 | 150 |
| FY 4 | 200 |
| FY 5 | 225 |
5 Year Annual Income Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| Revenues | ||||||
| Product/Service A | $151,200 | $333,396 | $367,569 | $405,245 | $446,783 | |
| Product/Service B | $100,800 | $222,264 | $245,046 | $270,163 | $297,855 | |
| Total Revenues | $252,000 | $555,660 | $612,615 | $675,408 | $744,638 | |
| Expenses & Costs | ||||||
| Cost of goods sold | $57,960 | $122,245 | $122,523 | $128,328 | $134,035 | |
| Lease | $60,000 | $61,500 | $63,038 | $64,613 | $66,229 | |
| Marketing | $20,000 | $25,000 | $25,000 | $25,000 | $25,000 | |
| Salaries | $133,890 | $204,030 | $224,943 | $236,190 | $248,000 | |
| Other Expenses | $3,500 | $4,000 | $4,500 | $5,000 | $5,500 | |
| Total Expenses & Costs | $271,850 | $412,775 | $435,504 | $454,131 | $473,263 | |
| EBITDA | ($19,850) | $142,885 | $177,112 | $221,277 | $271,374 | |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 | |
| EBIT | ($56,810) | $105,925 | $140,152 | $184,317 | $234,414 | |
| Interest | $23,621 | $20,668 | $17,716 | $14,763 | $11,810 | |
| PRETAX INCOME | ($80,431) | $85,257 | $122,436 | $169,554 | $222,604 | |
| Net Operating Loss | ($80,431) | ($80,431) | $0 | $0 | $0 | |
| Income Tax Expense | $0 | $1,689 | $42,853 | $59,344 | $77,911 | |
| NET INCOME | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 | |
| Net Profit Margin (%) | - | 15.00% | 13.00% | 16.30% | 19.40% |
5 Year Annual Balance Sheet
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Cash | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 | |
| Accounts receivable | $0 | $0 | $0 | $0 | $0 | |
| Inventory | $21,000 | $23,153 | $25,526 | $28,142 | $31,027 | |
| Total Current Assets | $37,710 | $113,340 | $184,482 | $286,712 | $423,416 | |
| Fixed assets | $246,450 | $246,450 | $246,450 | $246,450 | $246,450 | |
| Depreciation | $36,960 | $73,920 | $110,880 | $147,840 | $184,800 | |
| Net fixed assets | $209,490 | $172,530 | $135,570 | $98,610 | $61,650 | |
| TOTAL ASSETS | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 | |
| LIABILITIES & EQUITY | ||||||
| Debt | $317,971 | $272,546 | $227,122 | $181,698 | $136,273 | |
| Accounts payable | $9,660 | $10,187 | $10,210 | $10,694 | $11,170 | |
| Total Liabilities | $327,631 | $282,733 | $237,332 | $192,391 | $147,443 | |
| Share Capital | $0 | $0 | $0 | $0 | $0 | |
| Retained earnings | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| Total Equity | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| TOTAL LIABILITIES & EQUITY | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 |
5 Year Annual Cash Flow Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| CASH FLOW FROM OPERATIONS | |||||
| Net Income (Loss) | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 |
| Change in working capital | ($11,340) | ($1,625) | ($2,350) | ($2,133) | ($2,409) |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 |
| Net Cash Flow from Operations | ($54,811) | $118,902 | $114,193 | $145,037 | $179,244 |
| CASH FLOW FROM INVESTMENTS | |||||
| Investment | ($246,450) | $0 | $0 | $0 | $0 |
| Net Cash Flow from Investments | ($246,450) | $0 | $0 | $0 | $0 |
| CASH FLOW FROM FINANCING | |||||
| Cash from equity | $0 | $0 | $0 | $0 | $0 |
| Cash from debt | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| Net Cash Flow from Financing | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| SUMMARY | |||||
| Net Cash Flow | $16,710 | $73,478 | $68,769 | $99,613 | $133,819 |
| Cash at Beginning of Period | $0 | $16,710 | $90,188 | $158,957 | $258,570 |
| Cash at End of Period | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 |
