Construction Business Planning: If you fail to plan, then plan to fail

Construction Business Planning: If you fail to plan, then plan to fail

Just as you wouldn’t start a contracting job without a set of plans or blueprints to guide you, you shouldn’t operate your business without a plan to follow. If you’ve been putting off creating a Business Plan, don’t procrastinate any longer. If you ever apply for a small business loan or are looking for start-up funding, most lenders will require that you have such a plan in place. But even if you don’t need a Business Plan for this purpose, it’s wise to have one to keep your company on track.

So now that you know the importance of having a Business Plan, how do you go about creating one? What should you include in a Business Plan? While plan contents can vary depending on the nature of the business, some of the basic Business Plan components for contracting companies include:

Description of Your Business
This is where you include information on company ownership and key executives, a description of your business structure, an explanation of what your company does or what service it provides, and a brief company history. While short, this section should provide a complete snapshot of your company.

SWOT Analysis
This section is where you start to analyze your company from the inside out by looking at its strengths, weaknesses, opportunities and threats. And as you list these items, start thinking of ways you can play up your strengths and take advantage of opportunities while playing down weaknesses and avoiding or minimizing the threats. Consider your customers and what they think of your company and the work it does. During this analysis, also give consideration to your competition. Who are your competitors and how can you differentiate your company from them? Through this analysis you can start to identify your company’s niche, or what sets it apart from other similar companies so you can start to play up your strengths to potential clients.

Once you’ve done a thorough analysis of your company including the work it does, the clients it serves and the environment in which it operates, it’s time to start setting goals. The most important thing to consider here is to make sure the goals are realistic and attainable. While achieving an annual net gain of $500 million might be a good goal to have, it might not be something every company can do. Make your goals challenging enough to keep your company progressing but not so challenging that you feel like a failure for not achieving them.

Examples of the types of goals you might set for 2011 include:
• Expand business by identifying new clients
• Focus on customer service provided to clients
• Instill safe work operations amongst all employees
• Emphasize quality workmanship

To follow-up the goals you’ve set, establish measurable objectives to use in achieving the goals. By measurable, it means these objectives should be something you can quantify in a specific time frame. Using the above goals, some measurable objectives you might establish for 2011 could include:
• Target at least 50 new customers during the first quarter
• Perform at least $10,000 in work with repeat customers
• Achieve safety incident rate of 1.0 or less
• Minimize rework costs by at least $25,000

Tactics to Achieve Objectives
Once you’ve identified the objectives, the next step is to list all the things you need to do to achieve them. This should include a list of the resources and materials that might be needed to accomplish them. Again using the above objectives, your related tactics might include:
• Canvass at least 5,000 homes with door-to-door flyers
• Conduct follow-up phone surveys and interviews with at least 50 customers
• Establish safety mentorship program with all new hires
• Identify top five quality issues and conduct training sessions

Operations Plan
This section of the Business Plan should include an overview of your operations and everything it takes to function day-to-day. For contracting companies, this could include:
1. A list of your employees, their roles and responsibilities and their experience
2. An inventory of all the equipment, materials and supplies used by your company
3. An overview of the employee recruiting, training and development program
4. A copy of your company’s Safety Plan
5. A copy of your company’s Quality Plan

Financial Plan/Budget
This portion of the Business Plan includes an analysis of all your company’s assets and liabilities. This could include salaries, insurance, taxes, equipment rental costs, material costs, estimated income, value of equipment owned, equipment fleet value and any other financial aspect of your operation.

Tracking Measures
This final component of your Business Plan includes a way to evaluate the success of the measures you’re implementing. These tracking measures could include comment cards for customers to assess their satisfaction, an analysis of Website hits to determine its effectiveness, tracking of repeat customers to gauge customer service standards and follow-up surveys with project owners to determine their thoughts on your company’s performance. Make sure you use any positive feedback gathered during this phase in your marketing materials.

While it’s important to first and foremost develop your Business Plan if you haven’t already done so, it’s equally important to make sure you implement the plan, track it, and make adjustments whenever necessary. Just like your Safety Plan is ineffective if it sits on a shelf, a Business Plan does no good if it’s never used.

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Posted on Sep 09, 2010 by admin | Posted in Construction Business Plans, Starting a Construction Business, Uncategorized

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