Imagine that you have a treasure map: it details where a treasure is and what roads you need to take to get there. Without the map, there’s no way you’ll find that chest filled with gems and coins.
There’s no denying the importance of that map, right?
But when it comes to businesses… you’re not really looking for a treasure chest, you’re want to achieve success and help your company grow. Every business, no matter what type, size, or location, needs to know where it’s going and how it’s getting there.
The way to achieve this is not through a map. But through a business plan.
If you have a construction company, a business plan will help you set and accomplish goals for your business. Writing a business plan will help make sure that your business has a clear direction and growth strategy.
Learning how to write a business plan for your construction company is, fortunately, more straightforward than you probably think.
Let’s take a look at why you need a business plan and how you can write one for your construction business.
What is a Business Plan?
A business plan is a document that businesses use to guide their operations. It will help you establish goals for your construction company and plans to achieve those goals.
A standard business plan for a construction company typically includes sections such as:
- Executive Summary
- Company Description
- Market Research
The details in these sections will help ensure that you can effectively manage your construction company so that you may continue to grow and thrive in the competitive construction industry.
Why Do You Need a Business Plan for Your Construction Company?
Every construction company needs a solid business plan for a variety of reasons, including:
- 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.
These are just a few of the primary reasons why every construction business needs a business plan, but they aren’t the only ones.
From establishing a management structure to creating a marketing strategy, your construction company will rely on your business plan for many things.
How to Write a Business Plan for Your Construction Company
Learning how to write a business plan for your construction company is not that complicated. First, you just need to research your market and your target audience. This will give you a clear picture of what information your business plan is going to have.
Next, you need to start writing. Any respectable business plan needs to have these sections:
1. Executive Summary
Most business plans start with an executive summary.
This is where you introduce your construction company, the company’s owners, and where you should give a brief overview of your company.
This section should include:
- 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
Keep this section brief. You’ll go into more detail in the later sections of your business plan.
2. Company Description
Your company description is essentially a more detailed version of your executive summary.
- What are your major expenses?
- Who are your competitors?
- What is your specialty (i.e., commercial or residential construction)?
This section is your opportunity to explain what your company is and why you expect it to be successful.
3. Market and Competition
You need to perform thorough market research to complete this section of your business plan.
This section should include items such as:
- 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
You should create a list of services that your construction company provides and how much you charge for your services.
Services could include:
- Commercial building
- Design work
- And more
It’s vital to assess your market to determine what services you can offer to maintain constant work throughout the year.
Every business, no matter what type, relies on a successful marketing strategy. This strategy should be explained in your business plan.
This can include:
- Marketing budget
- Social media
- Your website
- And more
In this section, you should detail the management structure of your construction company.
You should be sure to explain:
- Who your management is
- What each person’s role is
- How much each person is paid
- Why each person is valuable to your business
This section will likely be shorter than other sections but is very important.
One of the most critical sections of your business plan is the finances section.
This is where you should include items such as:
- Operating costs
- Employee wages
- Expected sales
- Expected profits
- Business expenses
- Financial projections
- And more
Potential investors and lenders will need a clear picture of your construction company’s finances before making a decision.
This section will also help you create an adequate budget for your construction company.
Along with your finances section, you can include a part for financing.
From increasing cash flow to purchasing equipment, most construction companies require funding at some point.
In this section, you can include:
- 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
This section will make it much easier for your construction company to find the financing you need in the future.
Lastly, you can include an appendix, which should contain any documents or information that didn’t fit into any other sections.
This section is your chance to convey any information that you think will help investors or lenders better understand your construction company’s goals and intentions.
By following these steps and completing all the sections described above, you can get started on a comprehensive business plan for your construction company today.
If you need any help getting started, check out this excellent construction company business plan template from Bplans.
Consider a Business Loan to Grow Your Construction Company
Construction companies, like any other business, rely on business loans for several things, from purchasing equipment to hiring employees.
When writing the ‘funding’ section of your business plan, you should be able to determine how much financing you need and what you need it for.
Once you’ve done this, it might be time to consider applying for a business loan to increase your working capital and invest in the growth of your company.
At Camino Financial, we offer small business loans with favorable terms. Our fast approval times makes us one of the top choices for construction business owners like you, who usually have to wait longer than any other industry to receive payments from clients. Therefore, they need a quick solution that fills in the gap in cash flow.
With Camino, you could receive your funds directly deposited in your account in as little as two days!