EV Forms was established three weeks ago to fill an open opportunity in the form rental business, positioning us as one of only two form rental companies in the state of Oklahoma. One previous company, which was acquired by a private equity firm has now closed Oklahoma operations and moving everything to Houston. EV Forms will be the sole Oklahoma form rental company that provides installation services with its rentals.
In addition to rentals and sales we have partnered with OCM Inc., a manufacturer, to be a distributor of their concrete and form supplies. One owner/partner of EV Forms has extensive experience form rental industry, having worked in the business for 19 years and having established a substantial customer base and contacts from previous employers. This partner also possesses extensive knowledge of all aspects of the business, including sales, estimating, drafting drawings as needed. The other owner/partner has owned a construction company for nearly nine years and been involved in the construction industry for 18 years.
We are seeking additional capital beyond our bank financing and personal contributions to purchase a larger inventory, cover advertising expenses, and support operational costs. Inventory rentals are priced at approximately 1/7 of the purchase price, with rental terms commencing at a minimum of 28 days and invoicing at the beginning of rental period. Rentals are anticipated to generate sufficient revenue to cover the purchase within seven to eight months of rental payments.
The installation revenue presents a significant opportunity, as EV Forms will be the sole form rental installation company in the state. Profit margins on installation are projected to exceed 30%. Sales of form supplies are expected to range from 15%-25%.
During the initial month of operations, we engaged in negotiations with the appropriate manufacturer to establish a partnership, met with local banks to secure initial financing to facilitate business commencement (approximately $235,000), and identified the necessary software for inventory management and rentals. All necessary arrangements have been made, and we are currently reaching out to customers for quotes. However, we are concerned that our current capital may not be sufficient to purchase the required quantity of supplies to meet the anticipated rental demand.
Our objective is to generate rental revenue of $150,000 to $200,000 per month, which would equivalent to the rental revenue generated by the first partner's previous employment which has since closed locally.
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