Construction Business Plan Template
Construction business plan.
You’ve come to the right place to create your construction business plan.
We have helped over 100,000 entrepreneurs and business owners create business plans and many have used them to start or grow their construction companies.
Sample Construction Business Plan Outline
Below is a construction business plan example to help you create each section of your own construction business plan:
VB Residential Construction Company is a startup construction company located in Milwaukee, Wisconsin. The company is founded by two cousins, Victor Martinez and Ben Schmidt. Together they have over 20 years of experience in constructing homes from design concept, remodeling and renovating homes. They are highly skilled in all aspects of construction and have garnered a positive reputation in the local construction community for their ethical practices and competitive skill set. Now that Victor and Ben have an extensive network of clients and contacts, they have decided to begin their own residential construction company.
The following are the services that VB Residential Construction Company will provide:
- Custom home building/design build
- Home remodeling and renovation
- Project Management
- Kitchen and bath construction
VB Residential Construction Company will target those individuals and industry professionals requiring home construction services in Milwaukee, Wisconsin. Those individuals are landowners looking to develop homes on their lots, architects who have clients needing homes built, developers who have the vision but need a company to make it a reality, and households needing home remodeling services.
VB Residential Construction Company will be led by Victor Martinez and Ben Schmidt. Together they have over twenty years of construction experience, primarily in residential builds, remodeling, and renovation. They both started at a young age working and learning from their fathers. When they graduated from high school, their fathers got them jobs at the construction company they were employed at. The four family members worked together for ten years at the construction company. The fathers recently decided they were going to retire from the industry which prompted Victor and Ben to branch out on their own and start their own residential construction company.
VB Residential Construction Company will be able to achieve success by offering the following competitive advantages:
- Friendly and knowledgeable contractors who are able to take any project from concept to reality.
- Unbeatable pricing – Clients will receive the best pricing in town for services on any project while maintaining the best quality and customer satisfaction.
VB Residential Construction Company is seeking $200,000 in debt financing to launch its construction business. The funding will be dedicated towards securing a small office space, purchasing two trucks, and purchasing all the construction equipment and supplies. Funding will also be dedicated towards the advertising agency and three months of overhead costs to include payroll of the staff, rent, working capital, and monthly fees to the accounting and human resources firm. The breakout of the funding is below:
- Trucks: $40,000
- Construction equipment, supplies, and materials: $100,000
- Advertising agency in charge of promotions: $10,000
- Three months of overhead expenses (rent, payroll, HR and accounting firms): $40,000
- Working capital: $10,000
Who is vb residential construction company.
VB Residential Construction Company is a newly established contracting company located in Milwaukee, Wisconsin. Founded by cousins, Victor Martinez and Ben Schmidt, they have over 20 years experience in the construction industry. VB specializes in residential remodeling, kitchen and bath construction, as well as custom home building. VB Residential Construction Company also offers residential design, construction, and project management services. VB prides itself in delivering a level of expert craftsmanship to fulfill the vision for the client while exceeding expectations at exceptional value.
VB comes from the initials of the owners, Victor Martinez and Ben Schmidt, two cousins who have been working in the construction industry most of their lives. Both of their fathers spent decades as contractors and raised their sons working and learning the construction trade. The four have been working for another residential contractor in Milwaukee and have built and remodeled numerous homes for multiple builders and clients. Now that both of their fathers are retiring from the construction industry, Victor and Ben have decided to start their own residential construction company and use their years of experience, expertise, and contacts to be an independent residential contractor.
Since incorporation, VB Residential Construction Company has achieved the following milestones:
- Registered VB Residential Construction Company, LLC to transact business in the state of Wisconsin.
- Located a small office space to have a physical address for the company as well as a receptionist.
- Reached out to their numerous contacts to include real estate agents, developers, architects, and landowners to advise them on their upcoming construction company in order to start getting construction contracts.
- Began pricing out costs for trucks and necessary construction equipment.
- Began recruiting a team of contractors that cover different areas of construction to include mechanical, plumbing, electricians, and roofing.
The following will be the services VB Residential Construction Company will provide:
Revenue for the Construction industry is expected to continue growing over the five years as demand for new housing expands. Revenues are expected to reach $107 billion.
Relatively low interest rates, coupled with rising per capita disposable income, is expected to support individual investment in new homes, providing an opportunity for industry revenue growth over the next five years.
Per capita disposable income is expected to rise steadily over the next five years, while concurrently, unemployment will drop, proving favorable conditions for industry growth.
Housing starts are expected to rise an annualized 2.9% and this growth is projected to stem partly from forward-looking consumers that choose to purchase homes while interest rates are low. Relatively low housing stock and relatively low interest rates are expected to lead demand for industry services to increase over the next five years.
Demographic profile of target market.
The precise demographics for Milwaukee, Wisconsin are:
VB Residential Construction Company will primarily target the following customer profiles:
- Households in search of home remodeling services
- Landowners who would like to build homes on their lots
- Architects who have clients that need home building or remodeling services
- Developers who have already partnered with landowners and/or architects and are in search of a residential contractor
Direct and indirect competitors.
VB Residential Construction Company will face competition from other companies with similar business profiles. A description of each competitor company is below.
JM Remodeling has been in business in Milwaukee, Wisconsin since 1990. They are a full-service design and build company. JM Remodeling specializes in residential and commercial restoration and renovation including custom carpentry, kitchens, bathrooms, roofing, siding, dormers, additions, home gyms, home offices, porches and decks, and mechanical services. JM Remodeling carries a staff of plumbers, electricians, journeymen carpenters, restoration specialists, roofers, siders, sheet metal workers, and expert estimators. JM Remodeling also has an apprenticeship program to train employees within the company. They are licensed, bonded and insured and also part of the National Association of Remodeling Industry (NARI). JM Remodeling also provides warranties on all their services. The work is guaranteed by labor warranties, factory warranties, and extended warranties.
Cream City Construction
Cream City Construction has more than 50 years experience in home design, remodeling and renovation in the Greater Milwaukee area and Southeastern Wisconsin. The home remodeling services they provide are additions, whole house remodeling, kitchens, bathrooms, lower levels, master suites and historic renovations. Cream City Construction is a design build company that works with the client to create the design plans, generate project costs, and build the project.
Cream City Construction is owned and managed by Todd Badovski and Jim Grote. Together they have decades of experience and have spent years refining the skills required to run a high end, quality driven remodeling company. The majority of their projects come from repeat business or referrals from clients delighted with their previous service. Cream City Construction is also a member of the National Association of Remodeling Industry (NARI) as well as the Historic Milwaukee Incorporated.
Sazama Design Build Remodel, LLC
Former restaurant owner Don Sazama established Sazama Design Build Remodel, LLC in 1987 after becoming a Master Carpenter. He wanted to merge his passions of business and design and expand his skills in carpentry and architecture. Don’s firm has completed over 700 homes and won 11 awards from the Milwaukee Home and Living magazine. Sazama Design Build Remodel builds homes that are modern and luxurious and have completed many large remodels of bathroom and kitchen renovations. Sazama likes to collaborate with firms such as Ivy Interiors and an award-winning landscape designer, Gingko Leaf Studio. Sazama Design Build Remodel can build and design all aspects of a home – from a home office, outdoor entertaining area, serene spas, and inviting kitchens. The team at Sazama is able to do a historic renovation, build or renovate into something modern and posh, or keep it traditional.
VB Residential Construction Company will be able to offer the following advantages over their competition:
Brand & value proposition.
VB Residential Construction Company will offer the unique value proposition to its clientele:
- Highly trusted and professional contractors with over 20 years of experience remodeling, renovating, and building homes.
- Unbeatable pricing to its clients – VB Residential Construction Company does not mark up its services at a large percentage. They will offer the lowest prices in town.
The promotions strategy for VB Residential Construction Company is as follows:
Word of Mouth/Referrals
Victor and Ben have built up an extensive list of contacts over the years providing home construction services for numerous highly satisfied clients. Most of the clients are repeat customers and have also referred them to other associates for home projects. These referrals and repeat customers are very likely to use VB Residential Construction Company instead of the previous construction company Victor and Ben were employed at.
Professional Associations and Networking
VB Residential Construction Company will become a member of construction and professional associations such as the National Association of Remodeling Industry (NARI) and the Milwaukee Chamber of Commerce. VB will also become a member in associations where other builders, developers, and architects are a part of. They will focus their networking efforts on expanding their client network.
VB Residential Construction Company will invest in professionally designed print ads to display in programs or flyers at industry networking events. They will also invest in two billboards to display in highly trafficked areas of town.
VB Residential Construction Company will utilize the same advertising company that designed their print ads and billboards to also design their website. The website will be well organized, informative, and list all their services that VB is able to provide. The website will also list their contact information and a gallery of pictures that show their previous projects. The advertising company will also manage VB’s website presence with SEO marketing tactics so that anytime someone types in the Google or Bing search engine “Milwaukee residential contractor”, “contractor near me”, or “residential contractor near me”, VB Residential Construction Company will be listed at the top of the search results.
The pricing of VB Residential Construction Company will be moderate and on par with competitors so customers feel they receive value when purchasing their services.
The following will be the operations plan for VB Residential Construction Company.
- Victor Martinez and Ben Schmidt will be the owners and managers of the company. They will oversee all staff, contractors, and subcontractors. They will also act as project managers for every job they receive and handle all pricing and bids to the client.
- Victor and Ben will employ a team of contractors under them that will have an array of skill sets. The contractors will be trained and experienced either in plumbing, mechanical, electrical, roofing, or siding. Not all contractors need to be certified in all trades, but they need to be certified in at least one of the trades.
- Office manager/assistant to be located at the small office. This person will handle all incoming calls, assist with visiting clients, bookkeeping and maintain files.
- Victor and Ben will utilize a third-party human resources company to handle all hiring, onboarding, payroll, and benefits for the staff. The HR company will also handle all employee issues.
- Victor and Ben will also pay a third-party accounting firm to manage all the high level accounting and tax payments.
VB Residential Construction Company will have the following milestones complete in the next six months.
3/1/202X – Finalize contract to lease small office space
3/15/202X – Execute advertising agency contract 4/1/202X – Begin networking and placing bids for construction jobs
5/1/202X – Begin recruiting and hiring team of contractors
5/15/202X – Purchase all necessary construction equipment, supplies, and trucks
6/1/202X – Start on first official job as VB Residential Construction Company
Victor and Ben are highly skilled at project management and residential construction. They are also both certified in plumbing, electrical, and mechanical. In the next few years, they will be certified as Master Carpenters.
Key revenue & costs.
The revenue drivers for VB Residential Construction Company are the upcharge they will charge to the clients for their services. VB will purchase or subcontract a service at cost and will charge a 15% markup in order to obtain the markup fee. 15% is below the normal 25%-30% that other competing residential contractors charge.
The cost drivers will be the overhead costs required in order to maintain a construction company. The expenses will be the costs to purchase and maintain construction equipment and trucks, payroll and overhead costs for the staff, and rent and utilities. Other expenses will be the cost for the advertising agency, accounting firm, human resources firm, and membership association fees.
Funding Requirements and Use of Funds
VB Residential Construction Company is seeking $200,000 in debt financing to launch its construction business. The funding will be dedicated towards securing a small office space, purchasing two trucks, and purchasing all the construction equipment and supplies. Funding will also be dedicated towards the advertising agency and three months of overhead costs to include payroll of the staff, rent, and monthly fees to the accounting and human resources firm. The breakout of the funding is below:
The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and in order to pay off the startup business loan.
- Initial Monthly Average Contract Amount: $20,000
- Growth in Average Monthly Contracts: 10%
Income statement, balance sheet, cash flow statement, construction business plan faqs, what is a construction business plan.
A construction business plan is a plan to start and/or grow your construction business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.
You can easily complete your construction business plan using our Construction Business Plan Template here .
What Are the Main Types of Construction Companies?
Construction companies can be classified according to the type of constructions that they perform. Some are small renovation contractors, others are new home builders and others are commercial construction companies.
What Are the Main Sources of Revenues and Expenses for a Construction Company?
Construction companies get their primary source of revenue from individual contracts for new homes, remodeling projects or commercial projects.
The key expenses for construction companies are office space rent, salaries and wages, and equipment costs.
How Do You Get Funding for Your Construction Business Plan?
There are many options for financing a construction company like SBA loans, commercial loans, personal loans, or line of credit. There are also equipment funding opportunities that cover expenses associated with necessary tools, machinery and other equipment. Personal savings, credit card financing and angel investors are also popular forms of funding.
What are the Steps To Start a Construction Business?
Starting a construction business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.
1. Develop A Construction Business Plan - The first step in starting a business is to create a detailed construction business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast.
2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your construction business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your construction business is in compliance with local laws.
3. Register Your Construction Business - Once you have chosen a legal structure, the next step is to register your construction business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws.
4. Identify Financing Options - It’s likely that you’ll need some capital to start your construction business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms.
5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations.
6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events.
7. Acquire Necessary Construction Equipment & Supplies - In order to start your construction business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation.
8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your construction business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising.
Learn more about how to start a successful construction business:
- How to Start a Construction Business
Where Can I Get a Construction Business Plan PDF?
You can download our free construction business plan template PDF here . This is a sample construction business plan template you can use in PDF format.
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Construction Company Business Plan
Growing a construction company is much more difficult and taxing than completing projects.
From acquiring a new project to meeting deadlines, managing the budget, and many more things in between- you will find yourself drowning in responsibilities when you start a construction company.
A construction business plan can come to your rescue in such burdensome situations. If prepared well, it can become a reference point for your company as it continues to grow.
Confused about how to write a business plan?
Well, this article will serve you perfectly. It will help you understand the contents of the business plan and offer a sample template for your construction company.
So let’s build a solid construction company business plan with this detailed guide.
Let’s dive right in.
- Venture into the market by conducting thorough industry and market analysis.
- Widen the scope of your service offerings to cater varying needs of your target audience.
- Create a detailed operations plan to get thorough guidance in your business operations.
- Conduct a SWOT analysis to identify your competitive edge over the competitors.
- Determine your marketing strategies to launch your business and get it popular amongst your target market.
- Define your business objectives, goals, and mission values to create a foundation for essential business policies.
- Account for various project costs, operating costs, and office expenses to form realistic cash-flow projections.
Why do you need a construction company business plan?
Apart from the fact that investors and banks would ask for a business plan when you seek funding, here are a few more reasons you need a business plan.
- A business plan offers a roadmap to your business. It acts as a guiding block that has answers to all your how, when, where, and what.
- It helps in determining the exact target market for your business and formulating strategies to cater accordingly.
- There are millions of construction companies competing in the industry. You can identify your strengths through a business plan and design a competitive edge to stand apart.
- A well-rounded plan prepares you for emergencies that may arise in your business by making a plan for every situation.
- A whole lot of business processes repeat every day. A business plan helps bring consistency by establishing SOPs for various business activities.
And of course, you get your desired funding with a solid business plan that vouches for the potential of your construction company.
Key components of a construction business plan
Writing a business plan gets much easier with a structurally defined flow. Well, let’s have a look at key components that a construction company business plan must have.
A brief summary of an entire business plan that will encourage the readers to read further.
A brief company description including every detail from company structure to its mission statement and future goals.
A thorough analysis of the construction industry and your target market. It also includes sections for competitor analysis, future market trends, and scope of growth.
Outline the construction services that your company will offer. Highlight any additional services that will make you a distinct player.
Marketing and Sales Strategy
It includes a strategic plan to achieve success through marketing and sales. Determine the best course of action for your business.
Introduce key personnel in managerial and leadership roles. Discuss their roles, qualifications, experience, and expertise.
A detailed plan that streamlines the everyday operations right from construction methods to hiring employees.
A financial plan highlights the prominent figures and key reports of your construction company by making necessary financial projections.
Let’s dive further into these topics and get a detailed understanding of writing your business plan.
Related Construction Company Resources
- Construction Company Marketing Plan
- Key Stats for the Construction Sector
- Start-up Cost For Construction Company
A step-by-step guide to creating a construction company business plan
A poorly written plan serves no purpose. However, with this step-by-step guide, you will uncover every detail that goes into making a fantastic and purpose-serving business plan.
1. Get a business plan template
Writing a comprehensive business plan is taxing and time-consuming. But if you do it well, you will have a guidebook for running your construction company.
Now, there is a lot that needs to be considered, planned, and accounted for as you start writing the plan. Even if you closely follow a construction business plan outline, there are higher chances of you losing track or getting stuck at certain sections.
This is why you need a business plan template to give a solid structure to your business idea. With industry-relevant examples and a guide, the Upmetrics business plan template is easy to edit and customize.
Whether you own a general contracting firm or specialize in residential construction or specialty trades- we have plenty of construction-related templates for you to choose from.
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2. Write an executive summary
The executive summary is a concise yet insightful description of your entire business plan.
This one-page document summarizes the most important questions that a reader might have and offers a peek into what they are about to uncover. Investors take a brief glance at your executive summary before deciding whether to proceed further or not.
An executive summary must outline the following details of your construction business in persuasive consecutive paragraphs.
- The exact business opportunity
- The target market
- The problem and the solution to it
- Products and services offered by you
- Market size and growth potential
- Financial highlights
- Management team
Maintain a personal storytelling tone while writing this section and encapsulate every minute detail that can make a difference.
But wait, don’t start writing yet. Write your executive summary only after you are done writing an entire plan. This will help you summarize effectively.
3. Prepare a company overview section
This section of a business plan will focus entirely on the details of your construction company.
From the type of construction company to the construction company’s goals- everything in this section is about your company description.
To begin with, highlight the type of construction business you will start. For instance, a residential construction company, general contracting company, industrial construction company, or specialty trade construction.
Clarify, if this will be a new business or an extension of existing business. If the business is already operating, offer a brief description of the business history.
After that, highlight the business structure of your construction company. Are you going to be a sole trader or start a limited liability company (LLC) or a limited partnership firm? The business structure you choose will decide how the finances and taxes will work in your business.
Now, this section is your chance to weave magical stories around your construction company. Present the mission statement, company’s objectives, and future goals over here.
Mission statement : Syncore aims to become a trusted name for sustainable residential construction projects in Arizona by 2028. With our commitment to the highest quality standards, we will penetrate the market with our premium budgeted solutions.
Business goals :
- Onboarding and signing 15 construction projects in a span of 6 months.
- Generating revenue of $2 million by 2025.
Like this, you will write this entire section in parts by offering a brief overview of your construction business.
4. Conduct a competitive and market analysis
In this section of a business plan, you begin with industry analysis and then narrow it down to your particular market segment. This is important to show your potential investors that there are promising opportunities in this market.
Using market research practices determine the target market for your construction business. Create a buyer persona to identify what your ideal customer will look like.
Further, highlight your competitors in this competitive construction industry. Using SWOT analysis and PESTEL, determine the strengths and weaknesses of competing construction companies. In this section, you will also highlight your strengths to gain a competitive edge over existing players.
Don’t limit your market study to merely understanding the current scenarios. Extend the research and identify future trends and growth possibilities in your targeted market.
If you are a residential construction company focused on sustainable building practices, you must include the following details in your market analysis section.
- How large is the construction industry?
- What segment of the construction market will you capture?
- Who will avail of the construction services?
- What is the spending capacity of your target customers?
- Who are the top competing construction companies?
- What are the emerging trends in the industry and how will you leverage those?
- What is the growth potential of your target market?
Focus on quality market research as this will form the base of your further projections and strategies.
This screenshot of the construction business plan example highlights only the market size for HDFL construction. You can also include details like competitors analysis, growth potential, and market trends here.
5. Describe your construction service offerings
What construction services will you offer your potential clients?
Offer a detailed answer to this question, as you write a business plan section for service offerings.
Overall, this section should highlight every service offering that will bring you money. This could include services like,
- General contracting services
- Design and Engineering
- Renovation and remodeling
- Project management
- Specialty services i.e. concrete work, HVAC installation, Roofing services
- Maintenance and repairs
Offer a brief understanding of these service offerings and highlight construction jobs you will specialize in. For instance, remodeling of kitchen and bathroom.
Now, will your construction company sell any construction materials for profit? If so, include details for that as well.
It’s important to consider the breadth of your service offerings to keep the customers coming back.
Overall, this section is your chance to prove to potential investors that your services can stand solid in the competitive construction industry.
6. Propose marketing and sales strategies
According to the IBIS world report , there are more than 3,787,470 construction businesses in the USA. Starting a construction company will add one more to this list, but hey- How do you wish to make a brand that your target audience can recall easily?
All the market assessment and understanding of your potential clients will come in handy at this stage as you make your marketing plan and sales strategies.
Take an opportunity to lay out your sales plan in this section. If you have existing customers, explain how you plan to retain them.
After you are done making your sales strategies, touch the marketing aspect.
Firstly, identify the way you want your brand to be recognized- as an ordinary construction firm, a luxury construction company, a sustainable solutions firm, or an affordable construction company. This will help you make a marketing plan.
Your marketing strategy should answer the following questions:
- Which marketing channels will you use- Online, offline, or a mix of both?
- How will you generate more leads?
- Online marketing methods- search engines, social media, Email marketing, content marketing, etc.
- If you are going to be utilizing social media platforms- which ones?
- How much will you budget for paid ads?
- Will you use billboards, pamphlets, and newspaper advertisements to market your business?
Keep in mind the marketing channels where you can find your potential customers. For instance, you are more likely to find conversions through Email campaigns than social media campaigns, if you are finding clients for commercial construction.
All in all, in this section you have to draw potential investors’ attention with your sales and marketing strategy.
7. Introduce your management team
Everyone is aware of the cutthroat competition in the construction industry. Knowing that you need an able team to transform your business plan into a successful venture.
After laying out your marketing strategy, it’s time to introduce the key management and leadership team to your business plan.
It’s okay to brag about the talented individuals you have in your company. From construction heads to project managers, highlight the achievements, experience, and expertise of these people and prove their asset-worthiness for your company.
Also, draw the hierarchical map to give potential investors an idea of your organizational structure.
This is your time to prove that you have both the means and manpower to run a successful company.
8. Outline your operational plan
You may know construction, but do you know how to run a construction business?
As someone said, “ Seamless operations are the silent engine of extraordinary business achievements”
Before even taking the first project, it’s important to define operations and SOPs for different business activities. Make it so thorough that it can act as a guidebook whenever a problem arises in your construction company.
As you write a business plan for this section, focus on answering the following questions:
- What construction materials will you use?
- What will be the supply chain process in your construction company?
- Who will oversee the project management on site?
- What will be the timeline for completing projects?
- What will be health and safety protocols for construction workers?
- What will be the process of construction work?
- How will the communication flow within an organization?
- What technologies and equipment will you use?
- How will you ensure quality work?
- How will you hire employees?
- What accounting software will you use?
This is just a general gist of questions that can help you prepare this section. Consider it as a living document that will undergo various changes as the business commences and grows.
A thorough operations plan will lay a clear groundwork for running a company. Moreover, it will instill investors’ faith in your ability to run a construction company.
9. Create a financial plan
Writing a sound financial plan is a challenge but nothing that your determined mind can’t handle.
Whether you plan to raise funds or get bank loans, you need a sound financial plan. Investors will analyze this section and only if they find your business financially viable, will they invest.
In this section, you will make financial projections and estimates for your construction company. This includes forecasting sales, estimating startup costs , projecting overhead costs, and making a pricing plan.
Using the startup costs projection, determine how much funding is essential to start your own construction company.
Also, prepare different reports like income statements, cash flow statements, balance sheets, and break-even analyses using the projections made earlier.
To make a financial plan more relevant, consider various progressive and aggressive situations.
Lastly, prepare graphs, charts, and diagrams to make this section visually appealing and easy to grasp.
Now, stop. Don’t start writing a financial plan yet. You need a financial forecasting tool from Upmetrics to help you with projections and calculations of cash flow, sales, revenue, and everything else. Simply enter the data and it will make detailed and precise calculations for you.
Trust us, you don’t want to scratch your heads writing the entire plan from ground level.
And that’s it! With all this information you pretty much know everything that a construction business plan must have.
Construction Industry Highlights 2023
Now that you are almost set to open a construction company, here are a few industry statistics that might interest you.
- Market size : The US construction market sector was valued at 1.8 trillion US dollars in 2022.
- Growth of the virtual construction market : The global BIM market is 7.9 billion US dollars . North America is projected to be a market leader capturing 30% of this market.
- Rise in prefabrication and modular construction : Healthcare facilities followed by hotels/motels and educational institutions are most likely to avail of modular construction facilities.
- Major concerns : The leading concerns encircling the construction industry are inflation and supply chain disruptions faced by nearly 90% of constructors.
- Sustainable and green building : There is a continuous increase in demand for sustainable and green building solutions. As for 2021, the green building market in the USA was reported to be approximately 83 billion dollars .
- Growing investment in smart cities : According to IDC, the investment in smart cities is expected to grow to 203 billion dollars by 2024.
From sustainability to tech-centric processes, the construction industry is making huge shifts in trends. Both, small businesses and large have to evolve according to changing times to keep themselves relevant.
Download a sample construction business plan
Facing difficulty writing a business plan? Well, we have a perfect resource for you.
Download the Upmetrics sample business plan template. Our template offers step-by-step instructions and prompts to ease the entire plan writing process. It’s designed to meet modern market needs and is perfectly detailed with construction-relevant examples.
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Upmetrics is an intuitively designed business planning app with more than 400+ sample business plans . Our business planning tool features AI assistance that will transform your business writing process. Not only that, it allows you to design, collaborate, and share your business plan in real-time with your team.
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Frequently asked questions, what kind of market research should i include in my construction business plan.
The market research for your construction business plan must include the following details:
- The market size of your targeted market, i.e. commercial construction, residential construction, etc.
- The target audience of your services and their buyers’ persona
- Top competing firms and companies offering similar services
- Emerging trends in your market
- Growth potential for your firm
Is a SWOT analysis necessary for a construction company business plan?
Absolutely yes. There are more than a billion construction companies in the USA itself. Starting another business won’t guarantee success unless you have a business that can withstand the dynamic competitive environment. SWOT analysis will make you aware of the company’s strengths, weaknesses, and the opportunities it can avail
What are the initial startup costs for a construction company?
It is possible to start a construction company with as little as $10,000. However, if you plan to set up a mid-sized construction company, expect to spend anywhere around $50,000-$250,000 on getting a basic setup. This includes accounting for licenses, insurance, office setup, construction materials, and payroll for the initial months.
Can I get government grants for a construction business?
Yes, you can apply for government grants to start your construction business. Check the local, federal, and state regulations to see which grants are applicable to your business. Check the eligibility and apply accordingly.
How often should I update my construction business plan?
A business plan is a living document that can guide you toward success if mapped properly. Ideally, you should update your business plan every 4-6 months to make it relevant. Set aside time to do so as a renewed plan will offer deep and meaningful insight into your business goals.
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Upmetrics is the #1 business planning software that helps entrepreneurs and business owners create investment-ready business plans using AI. We regularly share business planning insights on our blog. Check out the Upmetrics blog for such interesting reads. Read more
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How to Write a Construction Company Business Plan
Learn how to create a successful business plan for your construction company, from defining your goals to analyzing the industry and crafting effective strategies.
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Start Your Construction Business!
Are you planning to start your own construction company? Having a well-crafted business plan is essential for success. A construction business plan outlines your goals, strategies, and financial projections, serving as a roadmap for your company’s future. In this article, we’ll guide you through the process of creating a construction business plan, step by step. Let’s dive in and get your construction company off to a strong start.
What is a construction company business plan?
A construction company business plan is a robust document that outlines the goals, strategies, and financial projections of your construction business. It serves as a blueprint to plan your company’s operations and helps you make informed decisions. A well-written business plan provides clarity, identifies potential challenges, and sets a clear path to success.
No two businesses will have the same business plan, and construction companies are no exception. When creating your business plan, you’ll need to customize everything to your needs. That said, there are a few basic steps you can build from. Let’s walk through those.
Create a branded cover page
To start your construction business plan, create a professional and branded cover page. This page should include your construction company name , logo , and contact information. By presenting a visually appealing cover page, you create a positive first impression and set the tone for the rest of your plan.
The executive summary is a brief overview of your construction company and its objectives. This section should capture the reader’s attention and highlight the key points of your business plan. Include information about your company’s mission, vision, target market, and competitive advantage. Keep it concise, engaging, and persuasive.
Provide a detailed description of your construction company. Discuss its legal structure, ownership, history, and location. Explain your company’s values, goals, and the types of construction projects you specialize in. Highlight any unique selling propositions that differentiate your company from competitors. Paint a clear picture of who you are and what you bring to the construction industry.
When writing the company overview section of your construction business plan, it’s important to provide a full picture of your company. Start by discussing the legal structure of your construction business, whether it’s a sole proprietorship , partnership , limited liability company (LLC), or corporation . Explain the ownership structure and provide background information about the founders and key team members.
You can also highlight other features that make you unique, including your expertise in the field, your specialties, your goals, and so on. This section should ultimately give readers a clear look at your company’s background and aspirations.
Conduct a thorough analysis of the construction industry to identify opportunities and challenges. Research and analyze your target market , including the demographics and needs of your potential customers. Assess the local construction market and study the competition. Highlight what sets your company apart from others in the industry, such as specialized expertise, innovative approaches, or exceptional customer service.
Since the construction industry is dynamic and competitive, making a thorough industry analysis is crucial for success. Start by researching and understanding your target market. Identify the demographics, characteristics, and preferences of your potential customers. Consider factors such as age, income, location, and specific construction needs they may have. This analysis will help you tailor your services and marketing strategies to meet their requirements effectively.
Next, assess the local construction market. Study the current trends, growth patterns, and market demand in your area. Identify any niche markets or underserved segments that present opportunities for your construction business. Determine the size and scope of the market and project future growth prospects based on economic indicators and construction forecasts. Identify your key competitors and strategize how you’ll set yourself apart from them to set yourself up for success.
Outline the services your construction company offers. Describe the different types of construction projects you plan to undertake, such as residential, commercial, or industrial. Emphasize your expertise and the value you provide to clients. Explain how your services meet the needs of your target market. Showcase any unique or niche services that give you a competitive edge.
The services offered section of your construction business plan is where you highlight the range of construction projects your company handles. By clearly outlining your construction services, showcasing your expertise, and emphasizing the value you offer, you’ll instill confidence in potential clients and set the foundation for successful project acquisition.
We can help!
Writing a construction business plan may seem daunting, but with ZenBusiness, it’s easier than ever. Our business plan template provides a structured framework to guide you through the process, and you can customize it to fit your construction business. Additionally, our LLC formation service or corporation formation service can help you get started with your business quickly and efficiently. We offer robust support down the road, too, such as getting an EIN number and maintaining a registered agent . Our expertise can help you hit the ground running, allowing you to focus on growing your construction company.
Disclaimer: The content on this page is for information purposes only and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.
Construction Business Plan FAQs
How do i start a construction business plan.
To start a construction business plan, begin by clearly defining your company’s goals, target market, and unique value proposition. Conduct thorough research on the construction industry, including market trends, competition, and customer needs. Outline the key sections of your business plan, such as the executive summary, company overview, industry analysis, services offered, marketing plan, operations plan, and financial analysis. Gather relevant data and information to support your plan, and make sure that your goals and strategies are realistic and achievable.
What should a construction business plan include?
A construction business plan should include essential sections that provide a clear roadmap for your company’s success. These sections typically include an executive summary, company overview, industry analysis, services offered, marketing plan, operations plan, and financial analysis. The specifics in each section will vary from one construction company to another, but the basic components are the same.
What type of construction business is most profitable?
The profitability of a construction business depends on various factors, including market demand, location, competition, and specialization. However, certain types of construction businesses tend to be more lucrative. For example, commercial construction, such as office buildings, shopping centers, and hotels, can be highly profitable due to the larger scale and higher project budgets. Specialized niches, such as green or sustainable construction, luxury residential projects, or infrastructure development, can also offer higher profit margins.
Ultimately, identifying and capitalizing on market opportunities, differentiating your business with unique expertise or services, and delivering exceptional value to clients are key factors in achieving profitability in the construction industry.
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How to Write a Construction Company Business Plan (12 Steps)
You are starting a construction business. You own a construction company. Do either of those statements sound like you? If so, you need a construction company business plan. Building a construction company is hard work, but you don’t reach success on hard work alone. You also need strategic planning, an in-depth understanding of the competition, and a way to finance your business. These are all things that construction business plans address. In this post, we take a deep dive into how to write a business plan for a construction company. Read on to learn everything you need to know.
Why Do You Need a Business Plan for Your Construction Company?
Before you get too deep into “how” to write a home-building business plan, it’s helpful to understand “why” you should write one. There are three main considerations here: competition, growth, and financing.
The 50 U.S. construction companies with the highest annual revenue all made more than $1.5 billion in 2020 , with the highest-grossing company topping $14.4 billion. This is the level thousands of construction companies in the U.S. and around the world are trying to reach, and the fight to get there is fierce. With that in mind, you need to understand your competition. This is a primary purpose of a construction company business plan. You probably already know who your competitors are, but you need to do market research and write it all down. A construction or general contractor business plan will force you to do that.
Like it or not, if you’re not growing, you’re more than likely dying in the construction industry. And your financial backers will want to see that you intend to grow. That means you need to have a plan for growth — how to achieve it and how to manage it when it happens.
How are you going to fund the expansion of your business? How will you get the initial capital to buy equipment? There are plenty of questions related to finances when you’re building a construction company. And any large or small construction company business plan will answer them and help you get the financing you need in the process.
Two Types of Information to Include in a Construction Business Plan
The information you include in your commercial or residential construction business plan will fall into two categories: industry information and general business information. Both are important to your business for different reasons. Perhaps the most important reason to include thorough information in your business plan is that it demonstrates your knowledge of the industry and business in general to the investors and banks who will read the plan when considering you for a loan. See below to learn more.
What do you know about the construction industry that others don’t? In other words, what makes your approach to your construction business different from the rest? This is what investors in your business will want to know as they try to gauge your chance of success. Don’t rely on empty buzzwords here — words like friendly, service, reliable, and the like. These are fine words, but you need to be more specific. How does what you know about the construction industry make you capable of running a successful construction business? Make sure those points are clear in your construction company business plan.
General business information:
In addition to your expertise in home building, you need to demonstrate some knowledge of general business practices. That means construction business plans need to have detailed information on the basic running of the business, the plan to get construction jobs, cash flow, corporate taxes, and similar items.
How to write a construction business plan
A business plan for a construction company is not a single page of text. It’s a complex, multi-part document that requires a lot of information. While not all construction company business plans are the same, most of them have a similar format. They include 12 key sections, which we explore in more detail below.
Your executive summary is your introduction. It needs to summarize the rest of the document but not go into too much detail. Try to limit the executive summary section to a single page if at all possible, and cover topics like the following:
- The reason you are starting a construction company
- Your goals for the business
- Where you plan to operate and offer residential construction services
- Your estimated business expenses and profits
- How your home building business will fit into the existing market
Again, don’t go into too much detail here. The details will come later in the business plan. Just hit the high points.
The second part of your construction business plan will echo some of the points you raised in the executive summary, but it will go into deeper detail. In the company description section, the takeaway point for a reader should be why you think your business will be successful. To that end, you need to describe any specialties you or your business partners have, any special positioning you can achieve within the market, and any revenue streams or reduced expenses that can make you more competitive. You will also need to describe the existing competition here. Who are your competitors, how successful are they and why do you expect to outperform them? These are all questions your company description should answer.
You will get into even more detail in this section. But instead of focusing on who you are and what your business will be, you will use the operational plan section to describe how your business is going to run day in and day out. You’ll need to cover a few key areas: Technology: List and describe the pieces of technology and equipment you will use in the operation of your construction business. This can include initial construction equipment purchases and office technology like computers, programs, and even home design software .
Bidding processes: How do you plan to bid on residential construction jobs? This is an important part of generating revenue for your construction company, so it needs to be described in detail in your business plan.
Production schedules: When you get a home-building job, you are instantaneously on a tight schedule. As you know, it takes a lot to take a home from paper to real life, and the logistics behind that process are complex and unforgiving. So, make sure your business plan demonstrates your knowledge of production schedules and, more specifically, how you plan to structure your company’s production schedules.
Inventory partners: Being willing to build homes is one thing, but having the right partnerships in place to get the job done is entirely another. Which vendors and suppliers will you work with? Why? Do you have any existing relationships that could prove beneficial to your business? Answer these and any related questions in your operational plan.
Market and Competition
You’re probably not going to be the first construction company in town. Who else is already established in your intended service area? How successful are they? Your construction company’s business plan needs to contain an in-depth analysis of the competition you’re going to face, as well as the market for residential construction services in the place you plan to operate. The reason why is simple. You need to know who your competitors are so you can see what they’re doing and look for ways to grab some market share from them. And you need to know whether people want the service you are going to provide. This section will cover all of that — for both your knowledge and that of your financial backers.
Construction is a service, but it contains within it multiple related services that you can choose to offer or not offer to your customers. This is going to be an important part of your business plan — starting a construction business without a list of services you will provide is like opening a store without knowing what you’re going to sell inside it. So, make a list. Here are some of the construction-related services you may want to consider:
- Residential construction
- Commercial construction
- Home design
- Landscape work
Sales & Marketing
You may not be a marketer at heart, but you’re going to have to have a plan to market your construction business and bring in home-building jobs. The sales and marketing plan you write in your business plan should be as detailed as possible. Include information on the following subtopics:
- Your marketing budget
- Your company’s marketing assets, such as a website
- Advertising plans (such as billboards, newspaper ads, and search engine advertising)
- Whether and how you plan to leverage social media
- Loss leader plans, such as offering free home design consultations
- How you will measure the success of your marketing efforts
In addition to marketing, this section of your construction company business plan will need detailed information on your sales processes. Will you have dedicated salespeople? How will your sales team get leads? Will salespeople be paid on commission? Answer these questions and more.
Managers can make or break a construction business. These are the leaders of your company — the ones who will define the path your business follows and bear the responsibility for the successes and failures you have along the way. That’s why this is an essential part of your home-building business plan. Management may shift over time, but at the start, you need to have a good idea of who’s going to be in charge of what. You will also need to include an explanation of why you have chosen these people, who they answer to, and what you are planning to pay them.
For financial backers, this is going to be one of the most important sections of your business plan. They want to know how you plan to manage the money they may give you so they have an idea of whether this is a sound investment. Give them as much detail as possible. Cover everything from your revenue projections and operational costs to employee wages and the price of your services. Wherever possible, you need to include exact figures based on hard data and research instead of soft estimates based on your own beliefs. Remember — lenders and investors have a head for numbers, so they will immediately notice if you’ve left something important out.
The funding section of a business plan for a construction company is an extension of the finance section, but it’s not the same thing. This is where you describe how you plan to obtain the money you need to start, run, and expand the business. The audience reading your business plan will hopefully play a part in the funding — that’s the whole idea, anyway — but you need to convince them that you will be able to use their funds wisely to generate revenue. Be specific about how much startup funding you’re going to need and why. Go into detail about how you will repay a loan or generate returns for investors. Describe how initial funding will be used in your business — to buy equipment, hire talented employees, market your business, and so on. With these bases covered, you will set yourself up to receive the funding you need to get this business off the ground.
You’re hoping for a bright future for your new construction company. That’s a given. But you need to show that bright future with the financial projections in your business plan. Include projections for revenue, expenses, and profits for five years out from your starting date. Don’t just say you plan to bring in $100 million by the fourth quarter of year three — show the numbers behind how you’ll get there. You will be able to reference the information from the other sections of your business plan to support your projections.
If you need investments or a loan to start your construction business, you need to include in your business plan a specific funding request. This is where you ask for the money you need. Here again, you need to provide some detail:
- How much money do you currently have for the business?
- How much are you contributing alongside the investment or loan you are seeking?
- What assets do you already own, and what assets do you still need to acquire?
Many of the facts and claims you have made in other sections of your construction company business plan will have supporting information or related documents that won’t quite fit. The appendix is where you include those references. Any extra information that could help financial backers understand your proposed business should be included here. And don’t worry — this section will not likely be read in its entirety, so you can include everything. In general, more information in a business plan is better than less.
Writing a construction company business plan is a big task, but if you break it down into small steps, you can get it done. From the executive summary to the appendix, your business plan needs to demonstrate your ability to achieve success in the residential construction industry. With your business plan written and your company started, you’ll need to get home-building jobs and please your clients. Cedreo can help with that. Our home building software can help you quickly create 3D home designs to help clients visualize the project and make them much more likely to close the deal with you. Interested? Learn more about our home building software here, or contact us for more information.
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How to Write a Business Plan for Your Construction Company
What is a Business Plan?
- Executive Summary
- Company Description
- Market Research
Why Do You Need a Business Plan for Your Construction Company?
- Competition: The construction industry is very competitive. A business plan will help you research and compete against other construction companies in your area.
- Growth: A solid business plan will help you avoid stagnation by establishing clear milestones.
- Financing: Running a construction company is expensive . Every construction company will need to access funding at some point. A business plan will help you be approved for the financing you need to grow your business in the future.
1. Executive Summary
- Why you started your construction company
- What your goals are
- How your construction company fits into the market
- Where your plan to offer your services
- Projected profits and expenses
2. Company Description
- What are your major expenses?
- Who are your competitors?
- What is your specialty (i.e., commercial or residential construction)?
3. Market and Competition
- Who your competition is (similar construction companies to yours in your area)
- How you can compete with them
- Where the best location for your company is
- Who your target customers are
- How you meet your customers’ needs
- Commercial building
- Design work
- Marketing budget
- Social media
- Your website
- Who your management is
- What each person’s role is
- How much each person is paid
- Why each person is valuable to your business
- Operating costs
- Employee wages
- Expected sales
- Expected profits
- Business expenses
- Financial projections
- How much funding you need
- What you need funding for
- How you can repay your loan
- How much funding you expect to need in the future
- How this funding will generate revenue for your construction company
Consider a Business Loan to Grow Your Construction Company
How to get a business loan for your construction company
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How to Write a Successful Construction Business Plan That Sets You Up for Success
by: Daniel Quindemil
What if I told you there was a “copy and paste” formula that any construction business can follow and be successful?
Seriously…. there is…
Before I started I AM Builders, I helped grow a Commercial Construction Company from a $0 to $7,000,000 per year company.
I initially started I AM Builders to be an estimating firm. But as time went on I realized there was a big problem in the construction industry…. Contractors know how to build, but no one teaches them how to grow a company.
As a side a note: we specialize in estimating projects for busy contractors . If you ever need help estimating projects, we can prepare your entire estimate and bid for you and we can walk you through all strategies to help you close. Learn more about our estimating service for Contractors and Subcontractors .
Every entrepreneur wants to write a business plan. And yes, in most businesses you need a business plan to get financing, venture capital money, etc.
But construction is the only industry where you can start a business with zero financing become a million-dollar business almost overnight.
And guess what….. it doesn’t take a fancy business plan.
When I walked into Caroni, they were a drywall labor company and had just starting getting their first GC jobs. We didn’t know how to grow a construction business .
We started trying out different ways to get leads, estimating strategies, negotiations strategies….
We tried it all….
And after all was said and done, the secret to growing a construction business can be summarized in these three steps.
This is your business plan.
5 Pillars of a Contractor Business Plan
1. develop a system to get a ton of potential projects and client leads, 2. develop an estimating team that can bid jobs fast, 3. develop a follow-up system to negotiate and close sales.
4. Set Up Project Management Systems to Keep Everything Running Smoothly
5. Build Your Field Team and Perform an Outstanding Job on Every Single Project
Before you start… do this.
Here are some questions to ask yourself:
- What do you want your reputation to be?
- How do you want to handle your bidding process?
- How much time do you have for your construction company?
Next, it’s time to get some specific goals.
Too many contractors are only caught up with their jobs and the busyness of their daily schedules that they never sit down and think, “ what am I working toward ?”
This is why it’s important to get into the specifics and have clear goals on what to achieve.
For more info on how to prepare detailed goals and targets read this post: Grow Your Construction Business in 3 Months .
After helping over 1200 contractors grow their company, we’ve concluded that there are 5 steps to creating an effective business plan.
Let’s get into each one.
1. Determine Your Lead Generation Strategy
How are you getting your leads?
Before doing any work on the field, before estimating the job, before even getting the job , you need to capture the lead for the job.
That’s why it’s the first step in this list.
So the question is, how do you capture leads? Well, the first thing you should probably do is educate yourself deeply on this specific topic alone. Lucky for you, we have an article on how to get more jobs for you to dive into.
Next, you need to sign up for lead generation services like iSqft and Bluebook to consistently get the opportunity to bid on jobs. They both serve as the lead generation tool and the bidding tool as well, so it’s a 2-in-1 deal.
If you want more details on these lead gen services and a few other ones, check out this article .
After investing in these lead gen services you’ll have potential jobs coming in guaranteed, but there’s also another strategy you can take to get more leads.
It involves building a Select 12 Cluster (S12C). An S12C is essentially a list of 12 potential clients that you handpick and focus on that will provide you with a steady stream of business.
For example, if you’re a general contractor you would do a quick Google search for developers in your area,
Then you would pick 12 of them and either send out personalized emails, give them all a call, or visit their offices.
But you’re not just going to introduce yourself, remember that goal is to let them know you exist. Not any other contractor… but you . Stand out from other contractors, display authority and give value by helping them with their jobs, or by giving potential clients advice. This goes a long way in developing a relationship with everyone in your S12C.
The main idea with the S12C is to put your horse blinders on and laser focus on 12 ideal clients and develop relationships with them so they can start using you as the go-to when they need work with your trade.
So just to recap:
- Invest in lead generation services
- Set up and develop a S12C
After securing leads consistently and reliably, it’s time to have a specific plan to bid and estimate those jobs.
2. Establish Your Bidding and Estimating Process
The second step after getting leads is to have a system that bids and estimates those jobs for you at lightning speed so you can focus most of your time on selling the job.
There’s 3 options for you to consider:
- Hire an in-house estimator to work full-time.
- Hire an estimating service to handle each individual project.
- Do the whole thing yourself.
If you choose to do it yourself, it will prove to be really tough to expand your business when you’re so deep in it all day. Plus, imagine working for 1 and a half days straight to estimate a project, only to find out your potential client just used you for better pricing (they really do this). Successful contractors are ones that know how to build a team , how to lead them , and how to sell jobs to bring in business.
In other words, delegate as much as possible so you can focus on the thing that really brings in revenue, selling jobs.
So if you’re estimating jobs yourself as a one-man show, then delegate that task as soon as possible, otherwise, you won’t ever be able to effectively grow.
Let’s say you finally decide to hire an estimator to work in your office. The average salary of an estimator is $81,219/Yr, according to Indeed . Then after payroll taxes and insurance (26%), you’re looking at over $102,000 a year!
Which translates to about $8,500/Mn and $2125/Wk. If you want to bid 10 average-sized projects a month, that means you’re paying your estimator $850 per project!
To save money, time, and effort to manage an extra employee(s), the best option is to outsource your estimating to a reliable firm that can produce accurate pricing and only work on a per-project basis, so you only pay when there’s a project to bid, instead of having to pay an estimator full-time whether they’re hard at work or not.
3. Create a Sales Team that Closes Jobs
After you have leads coming in and you’re bidding those jobs at lightning speed without doing the tedious work, it’s time to dedicate most of your time to sell the job.
There are many strategies to closing jobs, but as a whole, it involves investing in the client .
Investing in a client means giving , being patient, and then asking when the time is right. You can give to the client through automatic follow-up or manual follow-up.
Automatic follow-up means using a Customer Relations Manager (CRM) to systematically contact specific people at specific times. It’s a software you can also use it to send mass emails with similar pitches to different clients in your area.
Manual follow-up involves a lot of calling and talking to people. This is on your own time, that’s why it’s called “manual” follow-up.
Before bidding a project, be sure to meet your potential client in person to:
- See if they’re someone you want to work with
- Get them to know who you are and what you bring to the table
If someone knows who you are, gets calls from you now and then where you genuinely help them out with any problems or ask how they’re doing…
Who do you think they’re most likely to pick for the job?
This is why it’s critical for contractors to have a S12C where they focus on 12 specific clients and get 80% of their work from them.
It’s ideal for the owner of the construction company to be the main salesperson but if there’s just not enough time in the day (we understand), then hire 1-2 Account Managers who’s entire job consists of talking to potential clients, following up with previous ones, and being the main form of communication between your company and the outside.
4. Set Up Project Management Systems
At this point you’ll have leads pouring in, you’ll be estimating those jobs on autopilot, and you’ll be selling the projects. It’s only a matter of time before you suddenly have a couple projects to work on, and the hard work really begins. This is where you need to understand how to manage subcontractors .
As stated above, the owner of a construction company, or any company for that matter, should focus on leading teams and selling. That’s it. Being on the job site all day stressing and pulling your hair out is not going to bring in new business. Unless you truly love being on the field, you need to delegate everything to seasoned professionals.
But before you go running around and delegating everything, you need to set up a system to manage all your projects so your contracting business can be a coordinated, smooth-oiled machine that pumps out only quality work.
You’re going to need 3-4 software to help you manage your fieldwork:
Bid Management Software
This is what you’re going to use to bid out jobs and keep track of your bids. It’s quick, it’s easy, and it’s a whole lot better than handing people estimates all day and having to remember due dates off the top of your head. If you want to check out some bidding software go take a look at SmartBid and Quick Bid .
Project Management Software
This is software for people on the field to be in constant communication with one another. One of the first steps in professionalizing a construction company is to get a project management software that helps all the workers, supervisors, project managers, and superintendents all be on the same page all the time. Some great P.M.S are CoConstruct , Buildertrend , and Procore .
It always helps to have all your finances done automatically and as hands-off as possible. Let an accounting software manage all your finances so you can focus most of your effort on bringing in revenue by selling jobs. QuickBooks is the cream of the crop here but Zipbooks and Stripe are also great alternatives.
This is optional because if you outsource your estimating to qualified estimating firms, then spending money on estimating software won’t be necessary. But if you want to hire estimators in-house or want to do a mix of in-house and out-house estimating, then you’re without a doubt going to need a takeoff and estimating software that can help you be as accurate and as quick as possible. We use Planswift in our office but Bluebeam is also great as well.
You can find software packages that include all-in-one packages like Procore, Corecon, or Buildertrend that include everything you need to professionalize your construction business. The pricing will reflect that, but it’s a necessary investment for your construction company.
5. Found a Field Operations Team
Now that you have project management systems set up, it’s time to create a field operations team. Keep in mind this is only for people in the field , not in the office.
Every construction company is different, some may choose to subcontract work instead of hiring workers and training them, and then others may lease workers from other companies.
So first understand how you want your company to operate, then the next step is to understand the roles of a steamrolling field operations team and how to find the right people for the job.
This is the main field operations manager. He/she is the one overseeing all the projects a company is currently working on. A general superintendent needs to be comfortable under pressure, an effective leader that gets people to work, and able to raise their voice from time to time.
There are the overseers of single projects. They put all their attention on a single job to make sure it runs well. They need to have a deep understanding of construction, their workers, and be on top of their game even when under pressure.
This is the next subdivision in the field. Larger jobs typically get broken up into multiple sections and while they’re all being managed by the project superintendent, the foreman is the one managing specific sections or trades.
Skilled laborers are the true engine behind the construction job. These are the people on the field doing the actual work. Hiring workers is relatively simple but be sure not to fall in the trap of hiring cheaper labor to save money because the reality is all the mistakes they make end up costing more than if you would have hired workers a bit more expensive.
Hire people, train them, and let them train other workers.
We’re not going to have a project manager on the list because they’re not typically on the field but a good project manager will be in the field often to help the superintendent run the job.
That’s how you set up a strategical business plan that set’s you up for success.
Construction can be a tough industry, but a great plan on how you’re going to run your business and even better execution on that plan can make your life a lot easier.
We hope you enjoyed this piece and got some real value from it. Feel free to comment below your $0.02.
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Writing Your Construction Business Plan: The Definitive Guide
A construction business plan is an important document that showcases your company’s objectives and your strategies for growth.
Whether your construction business is a startup or a more established enterprise, you may find yourself in a situation where you need to develop and present a construction business plan.
If you’ve never written one before, you’re probably confused on where to start. Even if you have created a construction business plan in the past, it’s helpful to catch up with modern expectations and trends. Here’s what you need to know about writing your construction business plan—and if you’re creating one to obtain financing, why you might not always need one.
What Is a Construction Business Plan?
A construction business plan is a formal description of your business goals and how you plan on achieving those objections. It’s essentially an overview of your entire business and a roadmap of the strategies you’ll implement to achieve the next level of growth.
A construction business plan can be used to strategize and think through the next phases of growth. You may also be required to present a business plan in order to secure funding from a bank.
When You Might Need a Construction Business Plan
Many construction businesses will create a business plan for one of two reasons – either you want to strategize the next phases of growth, or you’re looking to secure financing.
In many ways, a construction business plan is like a blueprint—it allows you to assess your situation, define your next moves, and think through ideas before initiating them. It also helps you evaluate the feasibility of different decisions and test their outcomes.
By walking through possible scenarios, you’ll gain insight into your goals and avoid possible pitfalls. Ultimately, a construction business plan can help you execute your next steps with confidence.
Construction companies will also create a business plan when they are applying for financing . Many lenders, especially banks, require a formal construction business plan as part of the application process.
Lenders want to know that their money will be put to good use and that any activities your business pursues will be profitable. By reviewing your construction business plan, among other factors such as your credit score, company history, financials, and more, lenders are able to mitigate their risk.
Not all lenders will make you draw up and submit a formal construction business plan. While this is a common requirement for traditional lenders and banks, online lenders are much more accommodating.
What to Include in a Construction Business Plan
If you’re applying for financing with a traditional lender or bank, know that your chances of approval will rely heavily on your construction business plan. That’s why it’s incredibly important to include all the information lenders will be looking for. Make sure you have the following:
- Executive summary: This easily skimmable section should be at the top of your construction business plan. It should contain a brief summary of your business plan and your overall objective.
- Company overview: You want to give lenders a short history and description of your business. Mention your main clients, construction services, and any accomplishments you’re proud of.
- Market analysis: Discuss your target market’s demographics, key elements of the construction industry, as well as an overview of your top competitors. Be sure to include specific information about your location.
- Business goals and strategy: Outline your business objectives and how you plan on achieving your goals. Make sure to include how you plan to incorporate the lender’s funds for your next stage of growth. Include details about your marketing strategy, costs, pricing, sales projections, and more.
- Internal organization and management: Make sure to include information about your construction company’s international organization and management structure. Mention key employees, partners, and outside advisors. Financials: Traditional lenders won’t approve your business for financing if you don’t have sound financials. Incorporate your company’s income statements, balance sheets, cash flow statements, expenditures, and potential earnings over the next few years.
How to Write Your Business Plan
If you’ve never written a construction business plan before, the process may seem daunting. It helps if you consult team members or other business advisors before you send it in.
You may also want to double check information with your accountants, legal team, or other relevant staff members. As you work to write your business plan, make sure to define the following:
- Construction services: Do you focus on residential, commercial, or industrial enterprises? Pinpoint your exact offerings.
- Business goals: Do you hope to secure an upcoming project? Are you looking to upgrade your equipment? Or maybe, you want to branch out into new markets or offer new services. Outline exactly what your business goals are.
- How you plan to use the lender’s funds: Clearly outline how you plan to use the money you receive from the lender. Will you upgrade your equipment? Put the funds towards a bid and hire additional workers?
- Funding request: You’ll also have to detail how much money you’ll need, terms you’re hoping for, and how you plan to pay back the funds you’re borrowing.
- Project requirements: Make sure to include how much labor, equipment, and materials you will need to complete your project and reach your goal. Incorporate costs, completion timelines, permits, licenses, and other relevant information.
- Profitability indicators: How do you know your business objectives will be profitable? Have your competitors had similar ventures and been successful? Do you have an advantage over others within the construction industry? Are there positive market trends you have the opportunity to take advantage of? Discuss these factors in detail.
Don’t Stress About Your Construction Business Plan
A construction business plan can prove invaluable if you’re charting the course of your company’s growth. But if you’re only creating one to check a box on a loan application, remember that not all lenders will require you to take on the monumental task of creating a formal proposal—especially as your business rapidly grows.
Writing up a construction business plan can be time-consuming and tedious. If you’d prefer to direct your attention towards more pressing business activities, make sure to consult with National.
National Business Capital helps businesses secure financing by giving them access to a platform of online lenders – and doesn’t require a business plan . Even better, our Business Financing Advisors can help you obtain the funds you need based on qualifications and terms that work for you.
Getting started is as easy as filling out this 1 minute application. Apply now!
Would you like to continue your funding application? We saved your place. You can pick up where you left off.
How to create a business plan for your construction business, share this story.
Whether you are starting up a new construction business or already have one in place, a solid business plan is always a good idea.
A business plan is essentially a map of what you plan to do and how you plan to do it, acting as a reference point to keep your construction business headed in the right direction.
Start by defining what your business is now and how you envision your business down the road, then – depending on your specific needs – move forward with either a succinct lean startup plan or a more comprehensive traditional business plan.
Establish Business Goals and Identity
The benefit of planning your business is knowing what your business is and what it aspires to be.
Planning your business can help you identify your:
Vision statement: a description of how you see the future of your construction business. Mission statement: a definition of your construction business’ values and objectives.
Once you’ve identified your goals and established your company identity, it’s time to get down to the business of planning your business.
Choose the Right Business Plan
There are two different ways you can approach a business plan for your construction business. Go lean with a short and simple plan, or get in-depth with a more traditional plan.
Lean Startup Plan
Perhaps you have all of your funding in place and need to establish an outline that will act as a map for you once business is underway. If so, you don’t need to write a complicated business plan, but, instead, can keep it short and sweet. A lean business plan can be a one-page document that includes this basic information:
Overview What type of construction will you specialize in? Who will your ideal client be? Clearly define the type of work you will be doing and who you will be doing it for.
Earning What will you charge clients and how will you receive payments? How will you make money during the slow season? Be sure your construction business will be able to stay afloat year-round.
Marketing How will customers learn about your contractor business? How will you encourage client referrals? Clearly define your marketing plan and use that plan as a map to guide you in your day-to-day marketing endeavors.
Success Decide which metrics you will use to measure success (i.e. number of clients, annual net income) and what it is that will make determine that your business is a success.
Challenges/ Questions Write out a list of specific challenges your business may face and a proposed solution for each, as well as any questions you may have about your business along with the answers you have found.
Most businesses that are just getting started need of startup capital. If you’re going to apply for a loan, a lender will typically want more information about your contractor business plan then a lean startup plan can provide.
Traditional Business Plan
Executive Summary What is your company and why will it be successful? This summary should include information about your service as well as some basic information about your location, employees, and leadership team. When asking for financing you should also include financial information and high-level growth plans.
Company Description This section should delve into details about the problems that your contractor business will solve, being specific about the clients, organizations, or businesses that you will serve.
How will your contractor business have the competitive advantage? Perhaps your location or experts on your team will give you the competitive edge. Consider this a bragging section but keep it honest. Don’t boast about promises that you can’t come through on.
Market Analysis Be sure that you have a thorough understanding of both the industry outlook and your target market through competitive research that shows what other construction companies are doing and where their strength lies.
What are your most successful competitors doing, why does it work, and how can you do it better? Ask and answer these essential questions in order to prove that you will be a contender in your chosen market.
Organization and Management How will your contractor business be structures and who’s going to run it? What is the legal structure of your business?
This section will detail if your company will be a sole proprietorship, a general or limited partnership, or a C or S corporation.
Include a chart that shows who is in charge of the different aspects of your construction business, highlighting how each individual's experience contributes to the success of your business. Including a resume or CV for the key member of your team can add authenticity by showcasing the value that their experience will bring to your business.
Service or Product Line What services will you be providing and how will it benefit clients? Detail what the lifecycle of your services will look like.
Explain in detail any research or development work you’ve done for the service you’ll be providing.
Marketing and Sales How will you attract clients? How will you earn their referrals?
A marketing strategy strategy isn’t universal or fixed, but rather something that evolves and changes between markets and over time.
This section should detail your complete sales and marketing strategies so thoroughly that you will be able to easily refer to it when you’re making financial projections down the road.
Funding Request How much funding will be needed over the next five years? What will you use it for?
Clearly detail how much you need, why, and the specifics of the financing you’re seeking.
Specify if you want equity or debt, which terms you’d like applied, and the amount of time your request will cover.
Be clear about how you’ll use the funds. Will you be using them to pay for:
- bills (until generating revenue)
Describe your strategic financial plans that include paying off debt or selling your business.
Financial Projections Provide financial projections that will justify your funding request by proving that your business will be financially successful.
For a contractor business that is already established, be sure to include the following from the past five years:
- balance sheets
- income statements
- cash flow statements
Be sure to list any other collateral you could put against a loan.
If your business is new, provide a thorough projected financial outlook for the next five years that includes forecasted:
- cash flow statement
- capital expenditure budgets
Be even more specific with first year projections, including quarterly or monthly forecasts.
It’s essential that you both clearly explain your projections and make it clear how they match up to your funding requests. Charts and graphs that outline financial forecasts can be very instrumental in illustrating the story of your contractor business.
Appendix This section is where you will provide supporting documents or other materials are specifically requested.
Common items you’ll want in this section include:
- credit histories
- photos of completed projects
- letters of reference
- legal documents
- other contracts
Running a contractor business isn’t just about how well you know your trade, but also how well you can manage financials, marketing, and operations. A well laid plan will help your construction business take its first step and help keep it on track well into the future.
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- Business plans
Construction Company Business Plan
Used 4,997 times
The objectives and tactics of a construction company are described in a business plan for a construction company. For the creation of your business plan, use this Construction Company Business Plan Template.
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This business plan is for a construction company that will offer a wide range of services to residential, commercial, and industrial clients. The company will be owned and operated by [Sender.FirstName] [Sender.LastName] , who has (insert number) years of experience in the construction industry.
[Sender.Company] will be located in [Sender.City] , [Sender.State] and will serve the surrounding area. The company will be registered as a(n) (LLC/Corporation) and will have (insert number) employees at the start, including the owner. The company will offer a range of services, including new construction, renovations, and repairs for residential, commercial, and industrial clients. The company will also offer project management and design services.
The construction industry is expected to grow at a rate of (percentage) over the next five years. The demand for construction services is driven by population growth, economic development, and the need to update and improve existing buildings. [Sender.Company] will target residential, commercial, and industrial clients in the [Sender.City] area, focusing on high-quality workmanship and customer satisfaction.
[Sender.Company] will use a combination of traditional and digital marketing techniques to reach potential clients. This will include advertising in local newspapers and industry publications, as well as utilizing social media platforms and email marketing to promote services and specials. The company will also rely on word-of-mouth referrals from satisfied customers.
[Sender.Company] will have a team of skilled contractors and tradespeople who will be responsible for completing projects promptly and professionally. The company will have a project manager who will oversee all projects and ensure that they are completed to the highest standards. The company will maintain a well-stocked warehouse with a variety of construction materials and equipment to ensure that projects can be completed efficiently.
[Sender.Company] will generate revenue through the sale of construction services to residential, commercial, and industrial clients. The company will also generate revenue through the sale of construction materials and equipment. The company will have operating expenses, including payroll, rent, utilities, and insurance. The company expects to generate (Amount) in revenue in the first year, with a projected growth rate of (Percentage) per year.
[Sender.Company] is well-positioned to take advantage of the growing demand for construction services in the [Sender.City] area. With a team of experienced contractors, a focus on high-quality workmanship, and a commitment to customer satisfaction, the company is confident that it will be successful in the competitive construction market.
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How to create a construction business plan
- Jeremy Greenbaum
When it comes to starting a construction business, a strong foundation is everything. Just like laying the groundwork for a sturdy building, creating a business plan acts as the bedrock for your business's future success.
A construction business plan is a document that outlines the goals, objectives, strategies and operational details for a construction company. It serves as a roadmap to guide you and your stakeholders through the process of starting a business in the construction industry.
By systematically detailing the elements of your business, a construction business plan provides a clear and organized framework for achieving success in the competitive construction market.
Need a way to get your construction business online? Make your website with Wix’s website builder .
Crafting a thorough construction business plan is crucial for establishing a clear path and securing the success of your venture. Here are the six key components of a construction business plan:
Business name and domain name
Market analysis and research
Operations plan, marketing and advertising plan, financial plan, 01. executive summary.
The executive summary is a concise overview of your entire construction business plan. It provides readers with a snapshot of your company's goals, strategies, market positioning and financial projections. While placed at the beginning of the plan, it's often written after the rest of the plan has been developed. A clear executive summary should capture the essence of your construction business and pique the reader's interest, encouraging them to delve deeper into the plan.
Example of an executive summary for a construction business: "Construction Innovators Inc. is a forward-thinking construction company specializing in sustainable building solutions. With a commitment to quality, innovation and customer satisfaction, we aim to revolutionize the construction landscape. Our expertise ranges from residential developments to commercial spaces, offering eco-friendly designs that meet modern demands. By leveraging cutting-edge technology and a skilled workforce, we're positioned to drive industry advancements while achieving substantial growth. Through strategic partnerships and a customer-centric approach, Construction Innovators Inc. is poised to create a lasting impact in the construction sector."
02. Business name and domain name
Selecting the right business name is crucial for establishing a strong brand identity in the construction industry. A memorable and relevant name can build trust and recognition. Similarly, choosing an appropriate domain name for your business website is essential for online visibility. To generate name ideas, consider using business name generators , incorporating industry-related terms or creative words that reflect your company's values.
Be inspired: Construction business name ideas , Contractor business name ideas
When choosing a domain name , ensure it's easy to spell, memorable and closely related to your company name. Check for its availability and avoid using hyphens or complicated spellings. A well-chosen domain name contributes to your online credibility and enhances discoverability.
Once you’ve landed on a name, take the proper steps to register your business .
03. Market analysis and research
Incorporating a market analysis within your construction business plan is pivotal to understanding your target market, competitors and industry trends. Comprehensive market research helps identify gaps in the market, customer preferences and potential challenges. This knowledge forms the foundation of a robust business strategy that positions your construction company effectively.
04. Operations plan
The operations plan outlines the practical aspects of running your construction business. This section details the physical location, facilities, equipment and staffing requirements. For instance, specifying the type of projects you'll undertake, the scale of operations and the necessary tools and machinery highlights the resources needed to deliver quality services.
05. Marketing and advertising plan
A well-defined marketing and advertising plan is essential for promoting your construction business. Consider strategies like digital marketing, social media engagement, content marketing and attending industry events to showcase your expertise. Tailor your campaigns to showcase your projects, expertise and commitment to customer satisfaction. Building a positive online reputation and leveraging word-of-mouth referrals are key components of marketing a construction business.
Remember that no matter how you choose to promote your business, you’ll want to maintain a consistent brand image. Think about what steps you need to take to build up your visual identity; check out these construction logo ideas and try a logo maker .
06. Financial plan
The financial plan outlines the monetary aspects of your construction business. It includes details about how you plan on raising money for your business , projected revenues, expenses and profitability timelines. Make sure to define how your construction company will be initially funded, whether through personal investment, loans or investors. Accurate financial projections demonstrate your understanding of the industry and reassure stakeholders about the viability of your business.
A well-structured construction business plan like the one detailed above will provide you with a comprehensive roadmap for launching and growing your construction business successfully. Each section is necessary and contributes to your holistic understanding of your business's vision, strategies and potential for success.
Construction business plan examples: InnovativeBuild Solutions Inc.
InnovativeBuild Solutions Inc. is a dynamic construction company poised to transform the industry through cutting-edge technologies and sustainable practices. Our mission is to redefine construction by delivering innovative, eco-friendly solutions that meet modern demands. With a team of seasoned professionals and a commitment to excellence, we're confident in our ability to leave a lasting mark on the construction landscape. From residential projects to commercial spaces, InnovativeBuild Solutions Inc. is dedicated to shaping a more sustainable future.
Company name and domain name
Company name: InnovativeBuild Solutions Inc.
Domain name: www.innovativebuildsolutions.com
Market analysis: Through thorough research, we've identified a growing demand for environmentally-conscious construction solutions. Our target market includes forward-thinking homeowners, businesses seeking sustainable spaces and local governments promoting eco-friendly infrastructure.
Competitive analysis: We've assessed key competitors in our region, analyzing their strengths and weaknesses. This research allows us to identify gaps in the market and opportunities to differentiate ourselves.
Location: InnovativeBuild Solutions Inc. will be headquartered in a strategic urban location that offers easy access to construction sites and client meetings.
Premises: Our office space will be designed with sustainability in mind, incorporating energy-efficient features and eco-friendly materials.
Equipment: We'll invest in state-of-the-art construction equipment to ensure efficient project execution and maintain high standards of quality.
Staffing: Our team will consist of experienced architects, engineers, project managers and skilled laborers who share our passion for innovation and sustainability.
Digital marketing: We'll leverage digital platforms to showcase our projects, share industry insights and engage with our target audience. Social media, content marketing and email campaigns will be integral to our strategy.
Networking: Participating in industry events and local networking opportunities will help us establish connections and build relationships within the construction community.
Project showcase: Our website will feature a portfolio of completed projects, highlighting our expertise and the value we bring to clients.
Initial funding: We will secure a combination of personal investments and a small business loan to cover startup expenses, equipment purchase and initial project costs.
Year 1: $800,000
Year 2: $1,200,000
Year 3: $1,800,000
Expenses: Operating expenses, employee salaries, material costs and marketing investments have been carefully estimated based on industry standards.
Profitability: We aim to achieve profitability by the end of Year 2, driven by increased project volume and strong client relationships.
Benefits of creating a construction business plan
Creating a comprehensive and clear construction business plan is of paramount importance when starting a business. This plan acts as a foundation upon which all activities and decisions are built, fostering a focused and well-structured approach. It offers several key benefits:
Clear vision: A well-defined business plan will help you clarify your vision for your company. It outlines the company's mission, goals and values, providing a cohesive and unified direction for the entire team.
Strategic decision-making: The plan serves as a strategic tool that assists in making informed decisions. It allows you to anticipate challenges, assess risks and identify opportunities within the construction industry.
Resource allocation: A comprehensive plan provides insights into the required resources, both financial and human. This helps in budgeting, estimating costs and allocating resources efficiently.
Target market: Through market research and analysis, the plan outlines the ideal target market and customers. This understanding enables tailored marketing efforts, leading to better customer acquisition.
Competitive edge: A thorough analysis of competitors and the market landscape allows you to identify gaps and opportunities that can be exploited for a competitive advantage.
Funding: When seeking funding from investors or lenders, a well-structured business plan demonstrates the viability and profitability of the construction business. It instills confidence and attracts potential financial support.
Long-term growth: By outlining strategies for business growth, the plan provides a roadmap for expansion, diversification and adapting to evolving industry trends.
Regardless of what type of business you’re starting, it’s essential to incorporate a business website into your plan. A website acts as a virtual storefront, showcasing your company's portfolio, services and testimonials. It enhances brand credibility and accessibility, allowing potential clients to learn about your business and contact you easily.
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Construction Business Plan Template
Construction company analysis.
In your company analysis, you will detail the type of construction business you are operating.
For example, you might operate one of the following types:
- Commercial Building Construction. This segment includes construction work (including maintenance and repairs) on office, retail, hotel, agricultural and entertainment buildings.
- Single Unit Residential Housing Development
- Multi Unit Residential Housing Development
- Municipal Building Construction
- Road & Highway Construction
- Electrician business
- Plumbing business
In addition to explaining the type of construction business you operate, the Company Analysis section of your business plan needs to provide background on the business.
Include answers to question such as:
- When and why did you start the business?
- What milestones have you achieved to date? Milestones could include sales goals you’ve reached, construction projects completed, etc.
- Your legal structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.
CONSTRUCTION BUSINESS PLAN OUTLINE
- Construction Business Plan Home
- 1. Executive Summary
- 2. Company Overview
- 3. Industry Analysis
- 4. Customer Analysis
- 5. Competitive Analysis
- 6. Marketing Plan
- 7. Operations Plan
- 8. Management Team
- 9. Financial Plan
- 10. Appendix
- Construction Business Plan Summary
Other Helpful Business Plan Articles & Templates
Developing a Great Construction Business Strategy + Strategic Plan Template
If you’re an entrepreneur looking to start a construction business, you’ll need to develop an excellent construction business strategy. A well-crafted construction business strategy will help you identify and capitalize on opportunities in the industry and set realistic goals and objectives for your new business.
This article will discuss why you need a good construction business strategy, how to develop a construction business strategy, and provide a construction business strategic plan template.
Why You Need a Good Construction Business Strategy
The construction industry is highly competitive, and construction businesses that don’t have a well-defined strategy are at a disadvantage. A good construction business strategy will help you:
- Understand the construction industry landscape
- Identify opportunities for growth
- Set realistic goals and objectives
- Develop a plan for marketing and sales
- Secure funding from investors
How to Develop a Great Construction Business Strategy
There are a few key steps you’ll need to take when developing your construction business strategy.
Create a Mission Statement
The first step is to create a mission statement. Your mission statement should briefly describe what your construction business does, who it serves, and what sets it apart from the competition.
For example, here’s a potential mission statement for a construction business:
“XYZ Construction is a leading provider of construction services in the XYZ region. We serve commercial and residential clients, and our team is dedicated to providing the highest quality of workmanship possible.”
Conduct a SWOT Analysis
Once you’ve crafted your mission statement, you’ll need to conduct a SWOT analysis. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. This analysis will help you identify your construction business’s key strengths and weaknesses, as well as any opportunities or threats in the marketplace.
Some questions you may want to consider during your SWOT analysis include:
- What are our construction company’s core strengths?
- What do we do better than our competitors?
- What are our construction company’s weaknesses?
- Are there any areas where we can improve?
- What opportunities exist in the construction industry landscape?
- What trends are happening in the construction industry that we can capitalize on?
- Are there any threats to our construction business that we need to be aware of?
Develop Your Goals and Objectives
After you’ve conducted your SWOT analysis, you’ll need to develop goals and objectives for your construction business. Your goals should be specific, measurable, achievable, relevant, and time-bound. In other words, they should describe what you want to achieve and when you want to achieve it.
Some examples of goals for a construction business include:
- Increase revenue by 10% in the first year of operation
- Acquire 50 new clients in the first year of operation
- Expand into new markets within the first five years of operation
Your objectives should support your goals and help you achieve them. They should be specific, measurable, achievable, relevant, and time-bound like your goals.
Some examples of objectives for a construction business include:
- Develop a marketing plan to acquire 50 new clients in the first year of operation
- Research construction trends in new markets and develop a plan to expand into those markets within the first five years of operation
- Implement cost-saving measures to increase revenue by 10% in the first year of operation
Create a Marketing Plan
Once you’ve developed your construction business goals and objectives, you’ll need to create a marketing plan. Your marketing plan should include strategies for promoting your construction business and acquiring new clients.
Some marketing ideas for a construction business include:
- Creating a website and blog
- Developing an SEO strategy
- Creating social media profiles
- Creating marketing collateral (e.g., brochures, flyers, etc.)
- Advertising in construction trade publications
- Sponsoring construction industry events
Develop a Sales Plan
In addition to your marketing plan, you’ll also need to develop a sales plan. Your sales plan should include strategies for selling your construction services and closing new deals.
- Some sales ideas for a construction business include:
- Creating a process for qualifying leads
- Developing scripts for sales calls
- Training employees on the sales process
- Creating a system for tracking sales progress
- Setting sales targets and incentives
Create A Financial Plan
Last but not least, you’ll need to create a financial plan. Your financial plan should include your construction business’s operating budget and strategies for funding your construction projects.
Some financial planning tips for a construction business include:
- Creating a construction project budget
- Developing a system for tracking construction costs
- Identifying sources of construction funding
- Securing construction loans
- Negotiating payment terms with clients
- Managing construction project cash flow
Develop an Implementation Plan
After you’ve developed your construction business strategy, you’ll need to create an implementation plan. This plan will outline the steps you need to take to put your construction business strategy into action.
Some things to consider when creating an implementation plan for a construction business include:
- Assigning roles and responsibilities
- Setting timelines
- Establishing milestones
- Creating a system for tracking progress
- Allocating resources
Evaluation and Adjustment
Once you’ve implemented your construction business strategy, you’ll need to evaluate its performance and make adjustments as necessary. This evaluation should be ongoing to ensure that your construction business strategy remains relevant and effective. Some things to consider when evaluating and adjusting your construction business strategy include:
- Reviewing financial performance
- Conducting customer surveys
- Analyzing website traffic
- Studying construction industry trends
Construction Business Strategic Plan Template
Now that you know how to develop a construction business strategy, you can use our strategic plan template. This template will help you organize your thoughts and create a roadmap for your construction business.
Business Strategic Plan Template
What is the purpose of your construction business? What do you hope to achieve?
What does your construction business look like in the future? What are your long-term goals?
Goals and Objectives:
What are your construction business goals? What are your objectives? How will you achieve them?
How will you promote your construction business and acquire new clients?
How will you sell your construction services and close new deals?
What is your construction business’s budget? How will you fund your construction projects?
How will you implement your construction business strategy? Who is responsible for each task? When will each task be completed?
Evaluation and Adjustment Plan:
How will you evaluate the results of your construction business strategy? What adjustments will you make if necessary?
Now that you have a construction business strategy template, you’re ready to start developing your construction business strategy. Use the template as a guide, but don’t be afraid to get creative and think outside the box.
The most important thing is that your construction business strategy is tailored to your specific construction business and its unique needs.
Other Helpful Articles
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9 steps to create a construction company business plan.
I played a lot of touch football when I was around 10 years old. Eight of us neighborhood boys would gather at our local park and choose teams. Then, the two teams would line up across from each other, agree on the rules and get ready to start the game. After a coin toss, one team would kick off to the opponent. The receiving team would have the fastest player catch the ball and run down the field as far as he could without being tackled.
Then, the offensive team huddled to decide their play for the next down. The quarterback usually called the plays, even though he wasn't always the smartest player on the team. He was usually the one who was the tallest, fastest or had the best arm. Obviously, there wasn't a playbook, nor did the teams have time to practice their game plan. Before each down, the inexperienced quarterback gathered his team in a huddle and called plays based on what he thought would work and would surprise the opponent. The players were also loosely told what position to play, who would run which way, whose job it was to block and where they were to go—not a very good strategy for a winning outcome.
Are You Smarter than a 10-Year-Old?
Think about starting your construction company. Is your business strategy better than a neighborhood football game? Do you huddle up before every decision? Do you tell your players what to do before every project? Do they know what to do based on written systems and strategies from your company playbook? A professional football team is a good model to copy for small business owners. Professional teams have written strategies for every season and each game. They also have written plays designed to work in every situation they encounter. Do you?
Unless you want to run your company like a young, inexperienced quarterback, you need a winning playbook to follow. When starting a construction company, what needs to be in your business plan?
- Overall company mission, vision and values
- Coaching and staff assignments and responsibilities
- List of players and their strengths and weaknesses
- Training program
- Equipment inventory management
- Offensive plays and strategy
- Defensive plays and strategy
- Business development plays
- Financial plays and strategy
- Draft Your Business Playbook
A professional team must have all the bases covered to put a winning team on the field and make as much money as possible. Where should you start to draft a winning game plan?
1. Determine Your Overall Company Mission, Vision & Values
Sit down with your key managers and take time to discuss why you are in this business and why you own your own company. This exercise will get you focused on the real reason you go to work everyday. I often ask business owners why they are in business. Their typical answer is to make money doing whatever they do, such as plumbing or construction.
You are not in business to do plumbing or construction. You are in business to maximize your resources of time, energy and money so you can get the biggest return in whatever manner you desire.
For example, a construction company is a great start to achieve what you want. It is very rewarding, but demanding, work. But, it is limited in net profit margin potential, as it is very cyclical with thin margins. In my opinion, owning a construction company creates an excellent chance to seek wealth-building opportunities versus just building for others. Building for customers allows you to make some money. When you build for your own company, it allows for passive income, freedom and equity growth. What is your overall company mission, vision and values?
2. Assign Coaching Staff Assignments & Responsibilities
When a professional sports team is not winning many games, what happens? They don't fire the players — they fire the head coach. And most of the coaching staff gets let go as well. In order to build a winning team, you must surround yourself with the best managers possible. Excellent managers require high pay to keep them. I recently spoke at a national association of material distributors where a successful business owner approached me and stated his goal was to double his company to $30 million in sales over the next 5 years. He loved selling and wanted to try to find someone who could run the operations side of his company. I asked how much he was willing to pay to give himself more free time, double his company and make more profit. He said he was willing to pay $50,000 to $75,000 per year to find a vice president of operations. I smiled and said, "Good luck!" In my opinion, to find the right person would cost him around $100,000 to $150,000 per year.
The problem with small thinkers (and entrepreneurs) is that they try to hire cheap and think they can fill in the gaps themselves with a weak (cheap) manager. When you hire cheap and you fill in the gaps, you don't make any money, and your business doesn't grow. Make a list of the top five positions you need filled with the best possible people you can find at whatever it will cost:
Next, decide which will benefit your company the most. Go out and hire at least one top professional to help your company grow. Then, look to the future and do it again and again until your company is growing and maximizing the bottom line.
3. List Your Players, Their Strengths & Weaknesses
Professional sports teams have many people assigned to scouting and managing their players. They realize that winning games requires the right players. Most small business owners don't spend a lot of time managing their employees and working to help them become the best they can be. Small businesses hire people to do a job and then hope they perform. When they don't, they get frustrated and complain they can't find any good help.
To solve this problem, sit down and make a list of all the positions needed to operate your company. Next to each position, list what accountabilities and responsibilities are required to achieve the results you want. Then, look at who you have assigned to each position. You'll find that several positions are filled with the wrong people. This almost never happens on a professional sports team. The manager of player personnel is always looking to fill each position with the best player possible, even if it means trading away a player for another. And guess what else? The bad players who don't achieve the expected results are benched or cut from the team quickly. How are you doing as the manager of your players?
4. Design Your Offensive Plays & Strategy
To win more games than you lose is simple—just score more points than your opponents. In business, what plays will guarantee you to win, provide excellent service and provide superior quality? My recent visit to the dentist office is a good example of excellent organization and preparation. I noted while waiting in my chair that all of the tools and supplies for my procedure were laid out in the exact order of when the dentist would need them. And, my new crowns were sitting in a small box ready to be installed. Prior to my arrival, a technician had prepared the room for my dental work. I am sure they must have used a checklist to get ready. What kind of preparation and checklists do you use to ensure your offensive plays work?
Think about where you can lose the most money the fastest. For example, a carpenter forgets to block a wall for a future fixture installation. A slab is poured with the wrong concrete design mix, sub-base material or expansion joint spacing. A foreman proceeds to install extra work without a signed change order. Or a project manager runs a meeting without a standard agenda and forgets to review some urgent approvals in a timely manner. Where have you lost money? Make a list of the plays you need to write out, and make them a company standard.
5. Design Your Defensive Plays & Strategy
Without a good defense, you can't win many games. Defensive business strategies are those that ensure you don't get sued or need to sue to earn your money. We use a checklist on our construction contracts to list how many days notice is required for things like approvals, changes, notices, changes, etc. We also have a general contract checklist to make sure we don't miss a clause that we wouldn't want to agree to. We also have a collection policy we follow that includes how we invoice, what we do when not paid and how to file a lien. What system do you follow when you want to protect your rights or when things aren't going your way?
6. Implement a Training Program
Professional sports teams spend a great amount of their time practicing and training. Football players attend a long spring training camp and then practice and train five or six days a week during the season. They only play games once a week. In business, most companies don't train or practice very often, if at all. They just hire people and throw them into the game and hope for great results. It takes a concentrated effort and a priority to implement a comprehensive training plan with exercises and drills to improve people's skills.
To start a simple and effective companywide training program, make a list of the top five things each position must do well to win your games. For example, a project manager must be able to organize, manage and lead meetings. A concrete foreman must be able to ensure all the embedded steel is in the right place before each pour. A bookkeeper must be sure a subcontractor's invoice is correct and any change orders have been fully executed prior to payment and funded by the customer. Estimators must be sure they have read the project specifications to ensure they have included the correct insurance requirements in their bids. While all of these seem simple, each of them will cost you lots of cash if they are not done properly.
Make training a priority by implementing a weekly twenty minute training session for each department or crew. Pick one or two areas to review with the teams. Then, have them practice doing the task on their own with input and coaching. Remember—no pain, no gain!
7. Develop an Equipment Inventory Management System
Imagine being an equipment manager for a professional football team and not keeping an updated list of what you have, what needs to be fixed and what equipment you'll need in the future. Without a good equipment inventory management system, your team would eventually show up without enough helmets or uniforms for the next game. In your business, employees rely on trucks, skill saws, backhoes, generators, extension cords and screw guns to get their jobs done. With outdated, broken or missing tools and equipment, it's impossible to get the job done efficiently
Start by making a complete list of all your tools and equipment. Next to each piece, write out the condition, maintenance schedule and rental value. Then, assign someone in your company to be in charge of managing the process for you. The ultimate goal is to keep your crews working efficiently so you can make as much money as possible.
8. Initiate Business Development Plays
The key to success in any business is customers and lots of them. Even in professional sports, an empty stadium won't keep a team on the field very long. Is your sales system to sell the most tickets and fill all your seats to the top? Do you regularly contact your repeat and loyal customers and thank them for their business? Do you have an ongoing program to reach out to potential customers and lure them into buying from you? Professional sports teams have an entire department focused 100 percent on selling tickets and taking care of their fans. Without a fan appreciation and attraction program, your company will not reach its bottom line potential.
9. Track Your Financial Plays & Strategy
Did your team win or lose? Without a prominent scoreboard, sports are irrelevant. In your business, the score is of utmost importance. What numbers will you keep score of? I suggest you spend time every week getting to know your numbers—sales, gross profit, net profit, job costs, employee costs, equipment costs, receivables, payables, bid-hit ratio and markup trends. Without a clear knowledge of your financial score, you can't judge how well your team is playing the game.
Play Business Like a Sport
Business is more fun when you manage like a professional sports team owner or head coach. Every day, ask yourself what decisions you need to make and how a coach would go about making the right decision. In order to win, you've got to be operating on all nine cylinders described above. Without any of these chapters in your playbook, you will eventually lose more games than you will win.
George Hedley, CSP, CPBC, is a professional construction BIZCOACH and industry speaker. He helps contractors build management teams and get their businesses to work for them. He is the bestselling author of “Get Your Construction Business To Always Make A Profit!,” available on amazon.com. Email Hedley at [email protected]
To sign up for his free e-newsletter, start a BIZCOACH program, attend a Wealthy Contractor BIZ-BUILDER Boot Camp or get a discount at hardhatbizschool.com online university for contractors. Visit hardhatpresentations.com for more information.
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Don't bother with copy and paste.
Get this complete sample business plan as a free text document.
Construction Business Plan
Start your own construction business plan
Fosse Commercial Contractors LLC
Ownership & structure.
Fosse is a Limited Liability Company registered in the state of Texas. Fosse Commercial Contractors, LLC is exclusively owned by Mr. Robert Fosse (50%) and his partner, Michael West (50%). The company is expecting to alter to a Class C corporation chartered in Texas. This will create greater investment opportunities through the acquisition of investment capital from a limited number of shareholders.
Fosse Commercial Contractors, LLC began in the Houston area when Mr. Robert Fosse, who had worked in the residental construction business for ten years began his own company, Fosse Painting and General Construction in the Houston area. For the next eight years the company grew slowly, working mostly on small scale residential projects while gaining a reputation for quality services and reliability. Then the original company was merged with another small-scale local company, West General Contractors and the company began to bid successfully for larger projects. The company maintains a General Contractor’s license in the state of Texas.
The company’s management came to the conclusion that the firm had grown sufficiently to alter its primary target market from the residential construction segment to the higher margin office and commercial construction segment. The company plans to implement this change by the middle of 2004.
Fosse’s management consists of Mr. Robert Fosse and Mr. David West. Mr. Fosse will concentrate on client contacts and bidding along with overall management of the company. Mr. West will be the company’s General Project Manager, coordinating all project management and concentrating on cost controls, suppliers, day-to-day project supervision, labor relations, etc. Mrs. Janet Fosse will be our office manager, handling client satisfaction,invoicing, permitting, and general book keeping. Most of our labor needs will be met through Contractor-Temps a nationwide temporary labor company.
The company is planning to expand it personnel to add a number of job superintendents as soon as the number of projects increases. These superintendents will have the following duties:
- Direct supervision of all work at the job site.
- Quality control.
- Scheduling subcontractors and material deliveries.
- Verifying and insuring that all work is done in accordance with plans.
- Insuring that all work is performed in accordance with all OSHA guidelines.
In addition, as business increases, we will hire additional job superintendents and project managers as needed.
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Construction Company Business Plan Template
Construction Company Business Plan for Starting Your Own Building Firm
The construction industry is immensely profitable and a large number of people are trying their hand at it. However, merely entering the business plan of a construction company and starting a company is not enough. You have to create a formidable business plan of a construction company in order to have direction and a proper plan. Not doing so could lead to unfavorable circumstances, resulting in massive losses.
Are you looking to start your very own construction company? If the answer is yes, continue reading this article, as it discusses everything you need to know about creating a well thought out construction company business plan.
Quite a lot of people ask “how to start a construction business?” Well, starting with a detailed construction company startup plan would be the best idea. The first thing to include in your plan should be the executive summary. For those who don’t know, the executive summary provides a concise look at your intent behind starting a business plan of a construction company (in this case, a construction company.)
This portion will essentially show potential investors what they can expect from your proposal, ensuring they become acquainted with the business plan of a construction company overall material. Use the executive summary to discuss how you plan to manage your upcoming construction company, your potential customers, and your target. It is an excellent way to show readers that you did your research and are motivated to get your business plan of a construction company up and running the right way.
Whenever someone shows you an example of a business plan for a construction company, it will include a detailed company summary after the executive summary. This portion of your proposal will highlight your brand and how you plan to market and promote it. You should also consider discussing how you plan to improve your construction business’s web presence, making sure you show potential investors that you are serious about generating profits.
The company summary section should also provide answers to important questions like why you started a company, who the owner is, and how they started the business plan of a construction company .
Owning your own construction company is a big deal and every investor wants to know about the services you offer. Therefore, you should pay special attention to this portion, as it could make or break your construction company business plan. Fortunately, this part will be quite straightforward as construction companies quite limited when it comes to the range of services they offer. Nevertheless, you should still mention the services provide, convincing investors that you know what you are doing.
Marketing Analysis of Construction Company
When jotting down construction business concepts in your proposal, you should create a separate section for marketing analysis. This portion of your business plan of a construction company will provide readers a detailed layout about the construction industry’s market trends and segmentation. You should also mention your target market and explain the reasons behind targeting specific audiences.
What’s more, the marketing analysis must include a well thought out pricing strategy as investors want to know how much you plan to charge for your services or products. Consider studying your target market and analyzing prices to make sure you have enough data to justify your prices, increasing your chances of getting adequate funding to start your construction company.
As mentioned earlier, running a successful business plan of a construction company is not as easy as most people think. There are a lot of complications involved in it, which could lead to losses and may even cause you to close shop. Therefore, it is essential to show your potential investors why you are competent enough to run a construction company that generates excellent profits.
The best way to prove that you are worthy of getting investments is by creating a detailed marketing strategy containing stats and data to support your claims. If you take a close look at any marketing plan for business plan of a construction company , you will notice they discus monthly and yearly sales, profit forecasts, and competitive analysis.
Some proposals also have diagrams, charts, and tables to indicate your construction businesses expected trajectory, showing people that you have a clear strategy to make money.
Investors, especially if they have years of experience, are quite vigilant when it comes to helping out up-and-coming businessmen. Letting them know who will work in your construction company and what their roles will be could make them more relaxed. You can do this by creating a section named “Personnel Plan”. It is an important section when writing a plan of a business for a construction company as it highlights your company’s staff and the average salary of your potential employees.
This portion should also mention the roles of your company’s staff members and their overall contribution. It would be best if you make a thorough, detailed personnel plan and provide an estimate of your workers’ annual salaries. Once again, you should do a fair amount of research to make sure you get the correct facts and figures as your investment for business depends on it.
Many people create a business plan for a construction company, but very few succeed. Why? Because the ones who fail often provide a lackluster financial plan and in some cases, people don’t even bother mentioning it. The financial plan is arguably the most important part of your construction company business plan. It should be stat heavy and discuss how you intend to manage your business’s finances.
Every successful business plan of a construction company proposal includes a brake-even analysis, monthly and yearly profit business plan of a construction company , business ratios, projected profits and losses, and other critical elements. Remember, business proposals without financial plans are a deal breaker for most investors and will significantly reduce your chances of getting funded.
The appendix will be the last section of your construction company’s business plan and will contain detailed information regarding its essential talking points. Adding some extra documents, charts, and tables, pertinent to your upcoming business is a great way to get people’s attention, showing that you are serious about starting a construction company.
Download Construction Company Business Plan Template in pdf`
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Whether you’re a seasoned business owner or a new entrepreneur, a business plan is crucial to the success and growth of your business, but it can feel like an overwhelming task.
A business plan should act as a “compass,” according to Danielle Langton, a business strategist and coach based in Austin, Texas. It can help you maintain focus as you navigate the market, silence internal and external distractions, and secure business financing .
A well-written business plan will also create confidence, clarity, direction and alignment for a business owner and their team. To help you navigate the process, two business advisors share their best tips for writing a business plan.
1. Think big picture
Rather than diving into a 60-page business plan template, start by conceptualizing your business, recommends Oren Shani, a certified business advisor at Accion Opportunity Fund, a nonprofit community development financial institution based in California.
For new businesses, that means thinking about what differentiating value you bring to the market and how to turn that value into revenue, says Shani. For operating businesses, Langton says, it means understanding what worked the previous year and what didn’t.
Once you have this “bird’s-eye view,” you can more easily narrow down your action steps, which will vary based on your business, says Shani. “A lot of businesses find that they don’t need that 60-pager,” he says, noting that some businesses really only need a one-page mini-plan, or “lean plan.”
2. Factor in your lifestyle
Langton’s main advice to her clients is to prioritize the balance between business and their personal lives. Understanding and outlining your priorities outside of the business gives you clarity on how you can spend time with your business, which can ultimately make you a more efficient and effective business owner. “As you are creating a living,” she asks her clients, “are you actually also enjoying the life that it is providing, or are you just so focused on the revenue?”
To create this clarity, she recommends starting with your “nonnegotiables,” or things that you aren’t willing to sacrifice in your daily life to run your business. From there, you can build what your ideal week looks like and work your business schedule around that.
3. Make the time
As for actually sitting down to write your business plan , consider both your schedule and how you work best. For those who prefer to focus on one task at a time, Langton suggests setting aside a week, even blocking the time on your calendar if you’re having trouble making it a priority. Consider a change of scenery to clear any mental blocks or provide extra inspiration.
However, if feeling overwhelmed has kept you from starting in the first place, Shani advises against compartmentalizing. Getting something on paper, even if it’s just a bulleted list to start, is more effective than waiting for a free day with no distractions, he says. Plus, working on your business plan while running your business can provide benefits too, as real-time analysis can enhance your strategy as you go.
Langton adds that perfectionism and business plans don’t go hand in hand, especially for new business owners.
4. Embrace the living business plan
Whether you’re a new business owner or 20-year veteran, a business plan is never truly done, according to both Shani and Langton. As your understanding of your business, the market, and your customer base changes and adapts, so should your business plan.
The lengthiest part of the business plan process is the learning, rather than actually getting it on paper, says Shani. Every time a sale is made or not made, for instance, a business owner should seek to understand why or why not. This will help them identify their customers’ purchasing behaviors and how their customers engage with the business’s brand and products.
For some business owners, a monthly or quarterly cadence to check in, reprioritize and shed the things that aren’t working may make the most sense. Others may find it more useful to revisit their plan when there are new insights or significant changes to the market, such as new regulations, nearby real estate developments or fresh competitors, says Shani.
5. Leverage your busy season
For business owners expecting an upcoming holiday rush , this can be good news for your business plan, in addition to your bottom line. Leaning in during your busy season can be one of the best ways to collect data about your business, and capitalizing on that information at the end of the year can set you up well for the next, says Langton.
Not everything has to be buttoned up by the first of the year, but making observations and mental notes now will set you up to make meaningful updates to your business plan in January, she says.
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