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Executive Summary

Your executive summary is the first part of your business plan, but you usually write it last because it is a summary of all the important parts.

Your Executive Summary should get the reader’s attention quickly. Tell them what kind of construction business you have and where it is. For example, are you just starting out? Or, do you want your construction business to grow? Next, give an overview of every part of your plan that comes after this one. For example, in a few words, describe the construction industry. Talk about what kind of building company you run. Detail your direct competitors. Give an overview of the people you’d like to buy from you. Give a quick summary of your plan for marketing. Find out who on your team is the most important. And explain how you plan to deal with your money.

Company Analysis

In your business analysis, you will explain what kind of construction business you run.

For example, you might be responsible for one of the following:

  1. Putting up buildings for businesses. In this segment, maintenance and repairs are done on office, retail, hotel, agricultural, and entertainment buildings.
  1. Development of single-family housing units
  1. Putting up multiple homes
  1. Construction of municipal buildings
  1. Making roads and highways
  1. Electricians have work.
  1. Plumbing business

In the section of your business plan called “Company Analysis,” you need to explain what kind of construction business you run and give some history about it.

Be sure to answer questions like:

  • When and why did you start your business?
  • What big steps have you taken so far? Milestones could be things like reaching your sales goal, finishing a construction project, etc.
  • Your legal structure. Do you have an S-Corp set up for your business? An LLC? A one-person company? Tell us about your justice system.

Industry Analysis

In your industry analysis, you need to give an overview of the building business.

This may seem like it doesn’t do anything, but it does.

First of all, learning about how things are made gives you knowledge. It helps you understand the market you’re in better.

Second, market research can help you make a better plan, especially if it shows you how the market is changing. For example, if there was a trend toward drinking decaffeinated coffee in the construction business, it would be helpful to make sure that your plan includes a lot of decaffeinated options.

Doing market research is also a good way to show your readers that you know what you’re talking about. This is what you do when you do your research and write it down in your plan.

In the industry analysis part of your construction business plan, you should answer the following:

  • How much money does the business of building make every year?
  • Is the market getting smaller or bigger?
  • Who do you compete with the most in the market?
  • Who are the most important suppliers to the market?
  • What new things are happening in the world of business?
  • How do you think the industry will change in the next 5–10 years?
  • What size should the market be? That is, how big is the market for your construction business? You can get such a number by figuring out how big the market is in the whole country and then applying that number to how big the market is in your area.

In the building business, it’s important to keep in mind that trends are very important. A lot of the investment activity that leads to construction, like building homes, businesses, roads, bridges, and tunnels, is driven by economic trends, like the boom and bust cycle of the country, region, or place you are in. So, make sure you look into trends and include them in your business plan.

Customer Analysis

In the customer analysis section of your construction business plan, you should explain who you serve and/or who you hope to serve.

Your customers will be very different depending on what kind of construction business you run. For example, companies that build commercial buildings have a very different clientele than companies that build single-family homes.

Try to figure out who your ideal customers are by looking at their demographics and how they think and feel. In terms of demographics, talk about the ages, genders, locations, and income levels of the residential customers you want to serve. For commercial customers, talk about the type of business, function, and seniority.

Psychographic profiles can tell you what your customers want and need. If you can understand and describe these needs well, it will be easier to find new customers and keep the ones you already have.

Competitive Analysis

Your competitive analysis should list the businesses that directly compete with yours. There are other construction companies that compete directly with us.

In your plan, you should list the other construction companies that you will be competing with. Most likely, the construction companies that are closest to you will be your biggest competitors.

Give an overview of each of their businesses and a list of their strengths and weaknesses. You won’t know everything about your competitors unless you have worked for one of them. But you should be able to learn important facts about them, like:

  • What kind of clients do they work with?
  • What kind of goods and services do they sell?
  • What is the price range (high, low, etc.)?
  • What are their strengths?
  • What do they not do well?

Try to answer the last two questions from the point of view of your customers. And don’t be afraid to ask people who have bought from your competitors before what they liked and what they didn’t like.

The last part of your competitive analysis is to list the ways in which you are better than your competitors. As an example:

  • Will you provide superior construction services?
  • Will you offer building services that your rivals don’t?
  • Will you make it easier or faster for people to get your services?
  • Will you have better prices?

In this part of your plan, think of ways you can do better than your competitors and write them down.

Marketing Plan

Usually, a marketing plan has four parts: the product, its price, where it will be sold, and how it will be promoted. In your construction business marketing plan, you should do the following:

Product: In the product section, you should write about the type of construction business you talked about in your Company Analysis. Then, describe in detail the services you will be offering.

Price: List your prices and how they compare to those of your competitors. In the product and price sections of your marketing plan, you list the services you offer and how much they cost.

Place is the name of where your construction business is. Write down where you are and how your position will affect your success. For example, is your construction business in a big city that’s growing quickly?

This is the last part of your plan to market your construction business. Here, you’ll list how you’ll bring customers to your business (s). Here are some ideas for how to promote your business:

  • Using social media and snail mail to market
  • Putting ads in local newspapers and magazines
  • Trying to get in touch with local blogs and sites
  • Flyers
  • Local radio advertising
  • Banner ads at local venues

Operations Plan

You wrote about your goals in other parts of your business plan. In the operations plan, you talk about how you’ll reach those goals. There should be two different parts to your operations plan.

Everyday short-term processes include everything you need to do to run your construction business, like building, getting supplies, hiring workers, etc.

Long-term goals are the steps you plan to take to get there. Some of these dates could be when you hope to serve your 100th customer or make X dollars in sales. It could also be when you want to hire your Xth employee or start a new service.

Management Team

To prove that your construction business can work as a business, you need a strong management team. Show the backgrounds of your key players, with a focus on the skills and experiences that prove they can help a company grow.

You or a member of your team should have worked in the construction business before. If so, talk about what you’ve learned and what you’ve done. But you should also talk about any business experience you have that you think will help your business do well.

If you don’t have a strong enough team, you might want to put together an advisory board. A board of advisors could have anywhere from 2 to 8 members. These people would help you with your business as mentors. They would answer questions and give planning tips. If you need to, look for people who have run successful construction businesses or businesses in general to join your advisory board.

Financial Plan

Your 5-year financial plan should include your 5-year financial statement. For the first year, it should be broken down monthly or quarterly, and after that, it should be done annually. Your financial statements include your income statement, your balance sheet, and your cash flow statement.

Most people call an income statement a P&L, which stands for a profit and loss statement. It shows how much money you made and how much it cost you, so you can see if you made a profit.

Income statement: You have to make some assumptions. For example, will you have 10 or 20 customers in the first year? How much will sales increase each year? 2% or 10%? As you might expect, the assumptions you make will have a big impact on your business’s financial projections. Do as much research as you can to try to find facts that support what you think.

Balance Sheets: Balance sheets have a lot of information on them, but the most important thing to know is that they list your assets and your debts. For instance, you won’t make money right away if you spend $100,000 on a new office for your construction business. Instead, it’s an asset that you hope will bring in money for years to come. In the same way, you don’t have to pay back a $100,000 check right away. You’ll have to pay that back over time instead.

Cash Flow Statement: Your cash flow statement will help you figure out how much money you need to start or grow your business and make sure you don’t run out of money. Most business owners and entrepreneurs don’t know that you can make money and still go bankrupt if you run out of cash. Say a client came to you with a $100,000 job that would cost you $50,000 to do. Well, in most cases, you’d have to pay that $50,000 now for things like supplies, equipment rentals, employee salaries, etc. But imagine that it took the company 180 days to pay you. During that period of 180 days, you may run out of money.

Make sure to include some of the most important costs of starting or growing a construction business on your Income Statement and Balance Sheet.

  • Staff salaries or wages make up 27% of a typical construction company’s costs.
  • Commercial insurance
  • Bills and the rent
  • Fees and permits
  • Legal expenses