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5-STAR Building Solutions, LLC provides turnkey Framing services for lumber companies entering the installed sales market. Using time proven medthods we create whole house material takeoffs using wall and truss design information from the component manufacturer. 5-STAR manages all job site activity using local framing contractors. We train the crews for each job to ensure the materials and components are installed properly and as intended.

Business Need

Installed Services are currently provided nationally to building companies by Lumber Dealers. Although not every geographic market employs this practice, there is an established need for building companies to sub-contract the labor trades to reliable and stable businesses.

Lumber Dealers continue to compete for every possible sale by increasing their offering of services within each of their markets. Installed Services has become an industry comprised of mostly large labor contractors that manufacture components, commercial contractors and Lumber Dealers.

In wood frame residential construction the supply channel customarily places the Builder with the Lumber Dealer to transact the material portion of the job. It is only logical that in order to generate more business, Lumber Dealers began offering labor to satisfy the Turn-Key need of the Builders.

The problem arose for the Lumber Dealers once they began to “buy and sell labor” they were left with “cost to complete”. This is sometimes caused by transient labor contractors that do not return to finish the job and sometimes caused by plans or component designs that require unplanned materials to be added to the job.

For most Lumber Dealers, the marketing strategy of Installed Services has resulted in margin erosion and acquisition of unprofitable sales once completed and collected.

Executive Summary

5-STAR Building Solutions, LLC, is a wholesale business that incorporates building modeling with material supply and turn key framing services.

5-STAR is owned and operated by Mike Colcombe. Mike brings a solid 21 years of truss industry and material supply experience with over 12 years of concurrent experience in turn-key framing, eight of which were with Lumber Dealers at a national level followed by the past 4 years for a regional builder who builds 400 homes/year in the Atlanta, GA area.

5-STAR integrates the component package supplied by Lumber Dealers to jobsites with the material and labor that 5-STAR provides, to completely frame structures.

Lumber Dealers sell a Turn-Key package to their customers based on a “guaranteed” material list provided by 5-STAR and sell the specified material items to 5-STAR, resulting in 10% added sales to the Lumber Dealer. The guaranteed material list eliminates the added “cost to complete” for the framing, resulting in margin erosion to the traditional Lumber Dealer Turn-Key sale.

Lumber Dealers determine the sales price to the Customer for the materials, components and the labor. The materials are ordered from 5-STAR as a single line item special order, at 90% of the original sales price (material portion only). 5-STAR orders material by individual item and grouped by delivery requirement, at 80% of the original sales price.

Lumber Dealers realize an eight percent reduction on loose material margin to gain the
estimated two percent of overall cost spent for “cost to complete” in the traditional Turn-Key
sale, resulting in 12% more margin.

Component Runner, LLC provides a building model to 5-STAR. 5-STAR provides guaranteed material list and labor cost with the building model to the Lumber Dealer. The Lumber Dealer manufactures components and delivers the components and the material to the jobsite.