Make a Small Construction Business Plan
Writing a business plan is a necessary step in securing funding and is recommended for making sure your business is viable and well conceived. The primary audience for your business plan will determine how you write it and what you focus on. If you are presenting it to lenders and investors to raise capital, focus on the market opportunity and the financial sections. If you need to create a deep understanding of how your business will work, focus on operations and marketing.
Instructions
1. Outline your plan. Include sections describing the business and its operations and detailing the competitive environment and state of the local industry. Also outline plans for growth and establish a marketing campaign and target market, in addition to providing a historical financial statement--if you are an existing business--or pro forma statements if you are just starting.
2. Assemble your financial section. Focus on your total Cost of Goods Sold (COGS), including all construction material, equipment and labor costs--including both contractors and employees--professional and liability insurance and sales, including advertising expenses and sales staff. Then calculate the revenue you can earn from each project and subtract COGS, arriving at your profit margin. Investigate your competition to determine the realistic number of projects and revenues to expect. Then describe how you'll reinvest your revenue into growing your company.
3. Identify your target market. If you are a specialty construction company focusing on plumbing or decorative concrete, your market will be larger construction companies that do new construction for homes and offices. Describe your market in terms of the number of potential customers, how much they spend on your type of services and what their specific needs are. If your area has very strict zoning regulations, for example, your all-inclusive permitting and construction service may be a boon to customers.
4. Examine the competitive and regulatory environment. Your plan should list each of your major competitors and describe what their businesses offer, how successful they are, who their customers are and what your business offers that theirs does not. Perhaps the market is dominated by large construction firms that specialize in major developments but won't bid on a project for a single custom home. Then detail the laws and regulations, such as bonding and licensing requirements, that you must work through.
5. Include operational plans. These should details the process of your work, from the first sales call through invoicing after you've finished a project. List your suppliers and any discounts you get. If you have a staff, include an organizational chart describing the roles of the foreman and each team member.
6. Attach an executive summary if your business plan is for investors or lenders. This is not so much a summary as a short pitch designed to entice them into reading further.
Tags: your business, business plan, Construction Business, Construction Business Plan, Make Small