Are you searching for a Construction Business Plan? Look no further – our free and fully editable construction business plan is right what you need.
We’ve developed this Construction Business Plan as a guide for aspiring entrepreneurs and engineers aiming to start their own construction business. The sample plan contains the necessary sections to facilitate the drafting of your own plan. All you need is to tailor it based on the specific requirements of your business.
We have developed the plan in a PowerPoint format, which is all you need to present your business concept to financial institutions, venture capitalist or potential partners. The slide deck can serve as your outline should you need to prepare a more comprehensive plan. Each slide was carefully developed to align with the design concepts of big 4 management consulting firms and top construction consulting companies giving you a professional looking presentation.
General Guide to Establishing Your Construction Company
With the growing demand for public infrastructure, energy, and housing facilities globally, there is a compelling business case for establishing a construction company. Oxford Economics reported that global construction market will grow by over US$4.2 trillion over the next 15 years driven by the US, China and India markets. Despite its lucrative potential, however, a construction business is highly complex, involving numerous decision areas.
7 questions to ponder before starting your own construction business.
- How much capital do I need?
- What services should I offer? Will I focus on engineering and design, specialize in one construction segment, or provide full-scale EPC service?
- What market should I venture in? Energy, building/residential construction, or public infrastructure?
- Should I engage with subcontractors for equipment and manpower or keep it inhouse?
- How big should my business development and estimation team be, considering the services that I offer?
- How can I prequalify to participate in public tenders?
- What should be the structure of my company?
There are also other elements necessary for your operations, such as health and safety, project controls and quality assurance and control programs. These variables involve costs and specialized skills, thus, should be integrated in your business plan.
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Table of Contents
Construction Business Plan Contents
Company Overview
About the Company
This section provides a summary of your company. Who are the top executives and what are their background? What are your specializations and the services that you offer? What are your commitments as a construction company? The section can also include company’s ethos which frames the values and principles shaping your company’s culture and behavior.
Company Statements
This section presents the mission and vision of your company. Including company statements is crucial to provide a clear overview of the business’ purpose. It also offers insights on the strategic direction your business aims to pursue.
Company Values
With the construction industry tainted by cost overruns, scope creep, and delayed implementation, it always pays to emphasize your company’s values. There are values that I always look at in a construction company such as integrity and commitment to safety and quality. Your ability to build trust with your clients and ensure seamless operations depend heavily on these values thus, you should consider including them in your own.
Services
The services section provides the core offerings of your company. Your services should correspond with your capabilities thus, this section should link to your organization chart and management team. The key here is you should be able to delineate the services that you intend to self perform or subcontract in case your prospective investor or client raises concern.
Marketing and Sales Strategy
Target Market and Brand Positioning
In your business plan, it is necessary to identify your target market segment and determine how you provide value and build your brand within that segment. You should discuss your value propositions and how you deliver them to your clients. Our free editable construction business plan has samples that can guide you on how to position your brand for your target market.
Competitive Landscape and Key Differentiations
A key component of any business plan is an analysis of market competitiveness. In this section, you should be able to highlight your core differentiators against your main competitors. You can differentiate in terms of pricing, operational efficiency, HSE and and QAQC programs and/or the capabilities of your team. Smaller startup construction companies usually have advantages in agility and contractual flexibility against larger multinationals.
SWOT Analysis
This section presents the analysis of your company’s Strengths, Weaknesses, Opportunities, and Threats (SWOT). SWOT analysis helps you identify the strengths that you can leverage as well as the risks facing your business. SWOT is a tool that you can use to set-up the direction and goals of your business.
Marketing Strategies
After analyzing your competitors and undertaking a comprehensive SWOT analysis of your business, you need to develop your marketing strategies. Your marketing strategy should define how you’re going to promote your services, reach the target audience, and differentiate from competitors. In addition, your marketing strategy should cover both digital and traditional ways to promote your brand, advertise your products, and network with customers and potential partners and subcontractors.
Operating Plan
Construction Approaches
This section presents how the company will perform its work and how it differentiates its operations. The prevailing construction trends include adhering to sustainable and eco-friendly practices, as well as integrating advanced technologies to improve operational efficiency, such as Building Information Modeling (BIM) systems. Additionally, it involves the heavy use of prefabricated and modular structures.
Health, Safety and Environment Program
Health and Safety Commitments
Construction projects are generally high risk, thus, health and safety should be given utmost priority in your business. If you’re planning to subcontract work from multinational contractors, one of the things they usually look at to be able to prequalify to bid for a project is having a robust health and safety program. Note that a serious safety incident is detrimental to your reputation and can even result to the cancellation of your company’s license.
A comprehensive safety program covers a wide range of activities that include Safety Policies and Procedures, Risk Assessment and Mitigation Procedures, Employee Training and Education, Personal Protective Equipment Program, Emergency Response Plan, Health and Safety Statistics and Documentary Procedures, Incident Reporting and Investigation, Health and Wellness Program, Regulatory Compliance, Equipment Safety Procedures, etc. At the business planning stage, however, you don’t need to develop all these plans and procedures. You can prepare them once you start your operations to make them site-specific. You just need to present your overarching strategies to show prospective investors, clients or partners your commitment to safety.
Initiatives to Promote Employee Welfare
One of the hallmarks of a good construction company is having a comprehensive program to promote employee welfare. Including it in your business plan demonstrates your commitment to create a positive and supportive work environment for your employees and to follow local labor regulations and international best practices. Your employee welfare program is also a determinant of your ability to hire and retain talent and to maintain satisfactory levels of productivity.
Sustainability and Environmental Commitments
With sustainability increasingly integral to business practices across industries as well as consumer choices, it is imperative that you include your commitments to follow this trend. In this section, describe how your company intends to integrate sustainability in construction operations. Recycling and proper waste disposal, water conservation, and keeping your sites green are among the initiatives you can mention.
Quality Assurance and Quality Control Program
Commitments to Quality
Similar to HSE, your Quality Assurance and Quality Control (QAQC) program will be scrutinized by your potential clients and partners. Therefore, it is necessary to incorporate it in your business plan. The repercussions of poor quality work can be substantial. Unsatisfactory workmanship may require redoing work thus can erode your profit. The construction industry is highly competitive so any unsatisfactory performance impedes your likelihood of securing repeat orders from your clients.
To show your commitment to quality in your business plan, you need to include relevant programs and strategies. You can include your general QAQC program, inspection and test plans, client feedback mechanisms and issue resolution procedures.
Certifications
To enhance your competitive edge, build trust and credibility, you need to include your company’s certificates in your business plan. At the minimum, you should display ISO 9001, 14001, and 45001 certificates to show your company’s adherence to international standards. ISO 9001 signifies dedication to quality management, ISO 14001 for environmental management and ISO 45001 for occupational health and safety. However, if your company still does not have ISO accreditation, provide your overarching quality policy and start availing your certifications.
Financial Plan
Startup Cost Breakdown
The cost for establishing a construction company varies, contingent on factors such as operational model and availability of pre-existing resources such as equipment or office space. The nature and scale of your business, the types of equipment you intend to own or lease and the extent you intend to rely on subcontractors all affect your initial capital outlay required.
The standard cost categories for establishing construction companies include business registration and legal fees, marketing and advertising, personal costs, permits and licensing, PPEs, working capital, legal and accounting fees, equipment and tools, etc. Our business plan startup cost breakdown is comprehensive, and you can tailor it depending on your requirements.
Financial Analysis
The Financial Analysis section of a construction company business plan is not as straightforward as a typical business. This is due to the fact that there is a significant variation project-to-project such as lifecycles (some spanning months while others years), profitability, and contract types (i.e., framework agreements, milestones payments, or lump sum). Additionally, intricate cost estimations and irregular cash flows also add up to complexity. In our free editable construction business plan sample, we included a simplified model with a standard markup of 25% for all types of projects. The sample includes one-year revenue estimates and 5-year cash flow projection.
Company Organization and Management Team
In developing this section, start by outlining your company’s organizational structure, which includes the names and qualifications of your management team and technical personnel (if already in place). As a construction company, consider dividing your organization into an operations and a support team. The operations team may comprise of individuals leading each service category (discipline engineers) as well as your HSE, QAQC and Project Controls Team. The support team can include business development and estimation team, human resources, accounting and finance. The objective is to show your team’s capabilities to deliver the services that you offer.
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