First thing to remember is that the concrete is being purchased mostly for buildings, as well as by state and local governments. It must be remembered that if we want to do investigation on the market, altogether with the demand of the concrete truck’s services in a particular area we can do it by the help of the Indirect Inference Conditional Choice Profitability Algorithm.
To emphasize and clarify that it is almost impossible that the ready mix market can affect to the demand from the construction sector. It can be clearly demonstrated by The Bureau of Labor Statistics by the fact that there is a correlation of 0.9 in regards of the employment growth rates in the construction business.
As has been noted the average fluctuation in the construction industry is around 30% on a yearly basis. Still from year to year there are large changes in regards of the demand in the construction industry.
As a perishable product- the concrete can be only delivered within an hour maximum, so the plants should be located near the local geographic markets- and that means that if the demand in that area is increasing constantly, straight proportionally to that will increase the profit too.
I firmly believe that the location of the plant can be used as a strategy, because if you locate your plant in an area where there is a high demand for construction, money will flow your way for sure.
Still, not only that the profit depends from the demand of the customers, but also it depends in a large scale from the rival firms. Sometimes some firms use lowering of their prices as a strategy to attract more clients.
Hence, if your firm is experiencing marginal cost constantly, and if at the same price the demand curve of your firm is expanding, straight proportionally to that it is not recommendable that you adjust the prices of the concrete.
First thing first: We all know that in reality the elasticity of the demand and the price of a particular product-in this case the concrete, and its marginal cost are never constant.
That is the main reason why you should check and make sure whether the price that you are offering is optimal, if you see that it is not-you should change and adjust the price in order for your company to achieve the maximum profit in every situation, that is to say with every operation.
Given these points, the most important rule for maintaining a successful firm in a competitive market is that you keep the price equal to the marginal cost, and even-though sometimes it is better for the firm to use more labor- that is to say more employees can lead to better generation of revenue, that they can bring cost to the firm.
Good Spots For Concrete Truck Business
Plant location as a strategy can be of a great importance, because not all spots are good for incorporating your concrete truck business. Being an expensive investment- the opening of a concrete plant demands a detail research and realistic approach about the location of your startup business.
Starting a plant location on a good spot for concrete truck business will bring you success without a doubt – in that case you won’t have to struggle to sell the cement that you are going to produce.
In the long run, on the spots where the construction business is well-established and is expanding constantly there will be for sure a demand of ready mixed concrete, actually according to the latest research around 90% of the ready concrete comes in a ready mixed state.
If we take a closer look, and at the same time if we do a good research for good spots for starting a concrete truck business in America we can see that one of the best locations for this business are in the area of New York, Chicago, Toronto, and Los Angeles, since these cities are constantly expanding.
In the final analysis it is crystal clear that the concrete plants that are located near the areas where the construction is growing the fastest are the ones that are the most successful in this business.
Having a highly specialized concrete plant on a good spot for incorporating a concrete truck business will bring you huge incomes, yet we must remember that finding the perfect plant location is only one crucial point that can affect your business, we shouldn’t forget to pay attention to the precast concrete business plan.
Having a precast concrete business plan for your concrete plant can save you as well it can bring you a lot of money, and why is that so?
It is like that because if you have a clear picture of the areas, and the businesses that your plant and concrete trucks are going to serve to, it would be way easier for you to define the expected income altogether with the needed storage and logistic needs.
One more thing that comes straight proportionally with the concrete plant plan is the-plant business calculator. Therefore, the plant business calculator will help your way, and now you must be asking yourself how it can help you?
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It like this, if you have already chosen the best location for your plant- the next step that you need to take is to start using a concrete plant business calculator in order to keep in track with:
- The Estimated Annual Profit;
- The Estimated Annual Gross Sales;
- The Estimated Profit;
- The Estimated Years to Recover the Startup Cost;
To enumerate the concrete plant location should be located in area where it can meet all concrete requirements, as well as concrete applications in a fast- time-efficient manner.
Be Prepared For Huge Income Oscillations
The concrete truck business is known by the huge income oscillations, and that is so because the demands for concrete are changing periodically over time. Although the oscillations in the concrete truck business are periodic they tend to be repetitive and each concrete truck driver is experiencing them from time to time.