A strong foundation is essential for a construction job—and starting a construction business. And how do you do that? By setting up your business for success with a solid construction business plan.
Read on to learn about why you need a construction business plan, how to create one in six easy steps, and a free template to get you started.
What’s a business plan for a construction company?
A business plan is a document that outlines a company’s business activities, goals, and how its activities will help achieve its objectives. It documents a business’s market research, financial projections, mission statement, and offerings.
Every construction business can benefit from a business plan, whether you’re established or just starting. A construction business plan can help you secure funding, document your business model, forecast future business demands, and function as a guiding light for you and your team.
The benefits of having a construction business plan
Most businesses start with a business plan—it’s a natural way to get your thoughts onto paper and organize them into actionable steps. Business plans can take a lot of time, but when done right, your business plan can function as your manual to move your business forward.
If you’re still unsure whether your construction business needs a business plan, these four benefits might help you decide.
Apply for funding
You’ll need a business plan if you’re looking for a business loan or planning to apply for business grants. Most financial lenders won’t even consider giving you a business loan without a well-thought-out business plan. A business plan is a way for lenders to gauge the risk level they’re taking if they lend your business money.
Your business plan should show lenders how to use their money and how to pay it back. It also allows you to build confidence in your ability to run a business from an organizational standpoint.
Attract top talent
Hiring the right people is important for any business, but it can make or break a construction business. Giving potential hires a complete understanding of your vision for your construction company can be the difference between finding the right employees versus the right now employees.
Creating a business plan will give you a clear vision for your company that you’ll easily be able to communicate to any potential hires.
Understand your competition
Industry and competitor research and analysis are a big part of creating a business plan. You might start your business plan thinking you know exactly what makes you stand out, but then again, you might not. Researching who your competitors are and what they do helps you solidify how your business can be differentiated from your peers.
Finding what’s unique to your business is a huge factor in outbooking other local construction businesses.
Gives you clarity
Trying to get your business off the ground can feel like you get lost in the weeds of it all. Creating a business plan can help you clarify key elements of your company. A business plan gives you the big picture and lets you identify the priorities and milestones you need to focus on for your business.
How to write a business plan for a construction company
Writing a business plan for your construction company is essential in building your business. Whether you’re looking for funding or you’re looking for clarity, a business plan can help set you on the right path. Here are six key components of a successful construction business plan.
1. Executive summary
An executive summary is an overview of your construction business plan. Think of it as the CliffsNotes version of your business plan—it gives readers the basics of your business’s goals, financial projections, strategies, and more. This should be the first section of your business plan, but it’s usually the last thing you write because your plan informs it.
An excellent executive summary reflects your construction business and should excite the reader about your company and its potential.
2. Company description
The company overview and description section is the second section in your construction business plan. This section outlines vital details about your company, like your location, the size of the business, what you do, and what you hope to do in the future.
When writing your company description, try to include the following information:
- The official company name
- Type of business structure (sole proprietorship, LLC, corporation, etc.)
- Names of the owners/management team
- The business location
- A company history that outlines when the business started, why you created it, and what it does
- Mission and vision statements
3. Market analysis
A robust market analysis gives you the foundation to create a strong construction business plan with the best chance at success. Market research is the best way to test whether your business will succeed. It can help you mitigate risks, give insights into customer preferences, and even help you decide on location and pricing.
There are two main types of market research: primary and secondary. Primary research is gathered directly from consumers—think surveys, interviews, and focus groups you administer. Secondary research is compiled from external sources—think government census data, polling results, and research conducted by third parties.
Both primary and secondary are great on their own; together, they’ll give you a fuller picture.
4. Operations plan
There are a lot of moving parts that go into running a construction business. The operations plan lets you lay out all those parts and explain how you’ll run your company. This includes everything from your physical location, facilities, staffing needs, and equipment you’ll require. You can outline the types of projects your construction business will undertake, how many projects you’ll take on at once, and what resources you’ll need to deliver quality service at that scale.
5. Marketing and advertising strategies
Use the marketing and advertising strategies section of your construction business plan to highlight how you plan to promote your business. This section can outline all of the strategies you plan to use and can include a rough budget of what you plan to spend on marketing and advertising. Consider social media, digital marketing, content marketing, SEO, and local marketing strategies.
6. Financial projections
The financial projections section includes details about how you’re funding your business, projected revenues and expenses, and profitability projections. Accurate financial projections give potential lenders and investors confidence in your understanding of the industry and the viability of your business.
Quick tips for writing a construction business plan
Now that you’ve got everything needed to start writing your business plan, here are five quick tips to help your writing process. These are big-picture ideas that you can use to get the most out of your construction business plan:
- Get to the point: Use clear, concise language to get your point across. Skip the jargon and ensure someone outside the construction industry understands what you write.
- Use data when you can: It’s great to have supporting data points to back you up when you’re talking about the industry and market.
- Write for your audience: Who are you writing for? Investors? Employees? Shareholders? Lenders? When you clearly define your audience, you can write in a way that resonates.
- Research, and then research some more: What you have to say about your industry is important, but having facts backed by research is even more powerful and convincing.
- Use it: Don’t let your business plan just be another PDF collecting metaphorical dust on your desktop. Use it to inform your decisions and guide you and your team through the years. And update it when needed!
Free construction business plan template
Ready to get started on your construction business plan? Our free construction business plan template can help you write a business plan with all the elements needed for success.
Download your free construction business plan template now
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