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Many entrepreneurs know how to build a house or an office, but not all know how to build a business and grow it. More and more entrepreneurs are becoming aware of this and need financing from the right people to develop their business.
To do this, you need a solid business plan that investors can support. The document should contain the basic elements of a business plan, such as the executive summary, identity, and revenue projection.
However, the elements that will set it apart are the specificities of the construction industry. Creating a business plan helps you see the direction of your business and identify long-term goals.
How long should your business plan be?
Experts say a good business plan should be 15-20 pages. However, some insist on going 30-50 pages while others less than 15 pages. Experts agree that the duration of the business plan is likely to change depending on the target audience.
Remember that lenders and investors often need more details to make an informed decision. On the other hand, smaller business plans are easy to modify and update to fit various businesses.
Standard Business Plan Elements to Include
Business plan basics that you should never ignore, including for construction companies, include:
- Summary: This section describes the business plan, specifying its objective. The executive summary may also include the mission statement, a single statement that describes the purpose of the business.
- Corporate Identity: It contains the name, address, contact details, management, employees and information about the company’s operations.
- Products and services: You must include the company’s products and services. Detail the building services and products you will offer your consumers. Include the price, effectiveness and reliability of these products and services. You can also mention any special equipment or techniques you have that set you apart from your competition.
- Market analysis: This section will give an overview of the construction industry and the standard consumer profile. It should indicate whether you will serve residential or commercial customers, as well as large organizations. You can also include whether you plan to work with a developer in a residential development or provide custom solutions to rural landlords.
- Competition: Who are your main competitors locally and on a larger scale? You should also mention the unique characteristics that you have compared to your competitors.
- Marketing Strategy: The marketing strategy describes how to advertise, promote and sell your products and services. Be sure to include detailed designs for specific audiences, as well as the channels you’ll be using.
- Finance: Describe in detail the financing you need and your plans to operate the business until it can be self-financing. Include projected cash flow projection. Also, mention your budget, which covers running costs such as material acquisition, labor, marketing, and other related expenses.
- The partners: Who will supply the raw materials for your business? Which suppliers and partners will guarantee the success of your business?
- Goal roadmap: And finally, include your goals and targets with specific timelines.
Elements specific to a construction business plan
- Licence: All construction companies need a specific license for operations. Indicate the certifications that allow you to sell construction products and services.
- Building permit: Describe how you will acquire building permits from government and other regulatory agencies prior to any construction project.
- Insurance: Describe how you will arrange insurance for on-site workers in accordance with building laws.
- Equipment: Describe the types and number of equipment you have, and their capabilities. Describe how you plan to acquire the equipment you need but don’t have. Are you going to rent, rent or buy?
One-time or live business plans
Single-use business plans are best for a single purpose, like obtaining funding for your business. You then keep the plan and never use it again. However, live business plans remain in use, updated several times a year.
Depending on your goals and growth, you can have both for your construction business. However, it’s better to tailor a business plan to one specific purpose instead of using it for multiple purposes.
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