business plan for a small construction company

Construction Business Plan Template

Written by Dave Lavinsky

Construction Business Plan

You’ve come to the right place to create your construction business plan.

We have helped over 100,000 entrepreneurs and business owners create business plans and many have used them to start or grow their construction companies.

Sample Construction Business Plan Outline

Below is a construction business plan example to help you create each section of your own construction business plan:

Executive Summary

Business overview.

VB Residential Construction Company is a startup construction company located in Milwaukee, Wisconsin. The company is founded by two cousins, Victor Martinez and Ben Schmidt. Together they have over 20 years of experience in constructing homes from design concept, remodeling and renovating homes. They are highly skilled in all aspects of construction and have garnered a positive reputation in the local construction community for their ethical practices and competitive skill set. Now that Victor and Ben have an extensive network of clients and contacts, they have decided to begin their own residential construction company.

Product Offering

The following are the services that VB Residential Construction Company will provide:

• Custom home building/design build
• Home remodeling and renovation
• Project Management
• Kitchen and bath construction

Customer Focus

VB Residential Construction Company will target those individuals and industry professionals requiring home construction services in Milwaukee, Wisconsin. Those individuals are landowners looking to develop homes on their lots, architects who have clients needing homes built, developers who have the vision but need a company to make it a reality, and households needing home remodeling services.

Management Team

VB Residential Construction Company will be led by Victor Martinez and Ben Schmidt. Together they have over twenty years of construction experience, primarily in residential builds, remodeling, and renovation. They both started at a young age working and learning from their fathers. When they graduated from high school, their fathers got them jobs at the construction company they were employed at. The four family members worked together for ten years at the construction company. The fathers recently decided they were going to retire from the industry which prompted Victor and Ben to branch out on their own and start their own residential construction company.

Success Factors

VB Residential Construction Company will be able to achieve success by offering the following competitive advantages:

• Friendly and knowledgeable contractors who are able to take any project from concept to reality.
• Unbeatable pricing – Clients will receive the best pricing in town for services on any project while maintaining the best quality and customer satisfaction.

Financial Highlights

VB Residential Construction Company is seeking $200,000 in debt financing to launch its construction business. The funding will be dedicated towards securing a small office space, purchasing two trucks, and purchasing all the construction equipment and supplies. Funding will also be dedicated towards the advertising agency and three months of overhead costs to include payroll of the staff, rent, working capital, and monthly fees to the accounting and human resources firm. The breakout of the funding is below:

• Trucks: $40,000
• Construction equipment, supplies, and materials: $100,000
• Advertising agency in charge of promotions: $10,000
• Three months of overhead expenses (rent, payroll, HR and accounting firms): $40,000
• Working capital: $10,000

Company Overview

Who is vb residential construction company.

VB Residential Construction Company is a newly established contracting company located in Milwaukee, Wisconsin. Founded by cousins, Victor Martinez and Ben Schmidt, they have over 20 years experience in the construction industry. VB specializes in residential remodeling, kitchen and bath construction, as well as custom home building. VB Residential Construction Company also offers residential design, construction, and project management services. VB prides itself in delivering a level of expert craftsmanship to fulfill the vision for the client while exceeding expectations at exceptional value.

Company History

VB comes from the initials of the owners, Victor Martinez and Ben Schmidt, two cousins who have been working in the construction industry most of their lives. Both of their fathers spent decades as contractors and raised their sons working and learning the construction trade. The four have been working for another residential contractor in Milwaukee and have built and remodeled numerous homes for multiple builders and clients. Now that both of their fathers are retiring from the construction industry, Victor and Ben have decided to start their own residential construction company and use their years of experience, expertise, and contacts to be an independent residential contractor.

Since incorporation, VB Residential Construction Company has achieved the following milestones:

• Registered VB Residential Construction Company, LLC to transact business in the state of Wisconsin.
• Located a small office space to have a physical address for the company as well as a receptionist.
• Reached out to their numerous contacts to include real estate agents, developers, architects, and landowners to advise them on their upcoming construction company in order to start getting construction contracts.
• Began pricing out costs for trucks and necessary construction equipment.
• Began recruiting a team of contractors that cover different areas of construction to include mechanical, plumbing, electricians, and roofing.

The following will be the services VB Residential Construction Company will provide:

Industry Analysis

Revenue for the Construction industry is expected to continue growing over the five years as demand for new housing expands. Revenues are expected to reach $107 billion.

Relatively low interest rates, coupled with rising per capita disposable income, is expected to support individual investment in new homes, providing an opportunity for industry revenue growth over the next five years.

Per capita disposable income is expected to rise steadily over the next five years, while concurrently, unemployment will drop, proving favorable conditions for industry growth.

Housing starts are expected to rise an annualized 2.9% and this growth is projected to stem partly from forward-looking consumers that choose to purchase homes while interest rates are low. Relatively low housing stock and relatively low interest rates are expected to lead demand for industry services to increase over the next five years.

Customer Analysis

Demographic profile of target market.

The precise demographics for Milwaukee, Wisconsin are:

Customer Segmentation

VB Residential Construction Company will primarily target the following customer profiles:

• Households in search of home remodeling services
• Landowners who would like to build homes on their lots
• Architects who have clients that need home building or remodeling services
• Developers who have already partnered with landowners and/or architects and are in search of a residential contractor

Competitive Analysis

Direct and indirect competitors.

VB Residential Construction Company will face competition from other companies with similar business profiles. A description of each competitor company is below.

JM Remodeling

JM Remodeling has been in business in Milwaukee, Wisconsin since 1990. They are a full-service design and build company. JM Remodeling specializes in residential and commercial restoration and renovation including custom carpentry, kitchens, bathrooms, roofing, siding, dormers, additions, home gyms, home offices, porches and decks, and mechanical services. JM Remodeling carries a staff of plumbers, electricians, journeymen carpenters, restoration specialists, roofers, siders, sheet metal workers, and expert estimators. JM Remodeling also has an apprenticeship program to train employees within the company. They are licensed, bonded and insured and also part of the National Association of Remodeling Industry (NARI). JM Remodeling also provides warranties on all their services. The work is guaranteed by labor warranties, factory warranties, and extended warranties.

Cream City Construction

Cream City Construction has more than 50 years experience in home design, remodeling and renovation in the Greater Milwaukee area and Southeastern Wisconsin. The home remodeling services they provide are additions, whole house remodeling, kitchens, bathrooms, lower levels, master suites and historic renovations. Cream City Construction is a design build company that works with the client to create the design plans, generate project costs, and build the project.

Cream City Construction is owned and managed by Todd Badovski and Jim Grote. Together they have decades of experience and have spent years refining the skills required to run a high end, quality driven remodeling company. The majority of their projects come from repeat business or referrals from clients delighted with their previous service. Cream City Construction is also a member of the National Association of Remodeling Industry (NARI) as well as the Historic Milwaukee Incorporated.

Sazama Design Build Remodel, LLC

Former restaurant owner Don Sazama established Sazama Design Build Remodel, LLC in 1987 after becoming a Master Carpenter. He wanted to merge his passions of business and design and expand his skills in carpentry and architecture. Don’s firm has completed over 700 homes and won 11 awards from the Milwaukee Home and Living magazine. Sazama Design Build Remodel builds homes that are modern and luxurious and have completed many large remodels of bathroom and kitchen renovations. Sazama likes to collaborate with firms such as Ivy Interiors and an award-winning landscape designer, Gingko Leaf Studio. Sazama Design Build Remodel can build and design all aspects of a home – from a home office, outdoor entertaining area, serene spas, and inviting kitchens. The team at Sazama is able to do a historic renovation, build or renovate into something modern and posh, or keep it traditional.

Competitive Advantage

VB Residential Construction Company will be able to offer the following advantages over their competition:

Marketing Plan

Brand & value proposition.

VB Residential Construction Company will offer the unique value proposition to its clientele:

• Highly trusted and professional contractors with over 20 years of experience remodeling, renovating, and building homes.
• Unbeatable pricing to its clients – VB Residential Construction Company does not mark up its services at a large percentage. They will offer the lowest prices in town.

Promotions Strategy

The promotions strategy for VB Residential Construction Company is as follows:

Word of Mouth/Referrals

Victor and Ben have built up an extensive list of contacts over the years providing home construction services for numerous highly satisfied clients. Most of the clients are repeat customers and have also referred them to other associates for home projects. These referrals and repeat customers are very likely to use VB Residential Construction Company instead of the previous construction company Victor and Ben were employed at.

Professional Associations and Networking

VB Residential Construction Company will become a member of construction and professional associations such as the National Association of Remodeling Industry (NARI) and the Milwaukee Chamber of Commerce. VB will also become a member in associations where other builders, developers, and architects are a part of. They will focus their networking efforts on expanding their client network.

Print Advertising/Billboard

VB Residential Construction Company will invest in professionally designed print ads to display in programs or flyers at industry networking events. They will also invest in two billboards to display in highly trafficked areas of town.

Website/SEO Marketing

VB Residential Construction Company will utilize the same advertising company that designed their print ads and billboards to also design their website. The website will be well organized, informative, and list all their services that VB is able to provide. The website will also list their contact information and a gallery of pictures that show their previous projects. The advertising company will also manage VB’s website presence with SEO marketing tactics so that anytime someone types in the Google or Bing search engine “Milwaukee residential contractor”, “contractor near me”, or “residential contractor near me”, VB Residential Construction Company will be listed at the top of the search results.

The pricing of VB Residential Construction Company will be moderate and on par with competitors so customers feel they receive value when purchasing their services.

Operations Plan

The following will be the operations plan for VB Residential Construction Company.

Operation Functions:

• Victor Martinez and Ben Schmidt will be the owners and managers of the company. They will oversee all staff, contractors, and subcontractors. They will also act as project managers for every job they receive and handle all pricing and bids to the client.
• Victor and Ben will employ a team of contractors under them that will have an array of skill sets. The contractors will be trained and experienced either in plumbing, mechanical, electrical, roofing, or siding. Not all contractors need to be certified in all trades, but they need to be certified in at least one of the trades.
• Office manager/assistant to be located at the small office. This person will handle all incoming calls, assist with visiting clients, bookkeeping and maintain files.
• Victor and Ben will utilize a third-party human resources company to handle all hiring, onboarding, payroll, and benefits for the staff. The HR company will also handle all employee issues.
• Victor and Ben will also pay a third-party accounting firm to manage all the high level accounting and tax payments.

Milestones:

VB Residential Construction Company will have the following milestones complete in the next six months.

3/1/202X – Finalize contract to lease small office space

3/15/202X – Execute advertising agency contract 4/1/202X – Begin networking and placing bids for construction jobs

5/1/202X – Begin recruiting and hiring team of contractors

5/15/202X – Purchase all necessary construction equipment, supplies, and trucks

6/1/202X – Start on first official job as VB Residential Construction Company

Victor and Ben are highly skilled at project management and residential construction. They are also both certified in plumbing, electrical, and mechanical. In the next few years, they will be certified as Master Carpenters.

Financial Plan

Key revenue & costs.

The revenue drivers for VB Residential Construction Company are the upcharge they will charge to the clients for their services. VB will purchase or subcontract a service at cost and will charge a 15% markup in order to obtain the markup fee. 15% is below the normal 25%-30% that other competing residential contractors charge.

The cost drivers will be the overhead costs required in order to maintain a construction company. The expenses will be the costs to purchase and maintain construction equipment and trucks, payroll and overhead costs for the staff, and rent and utilities. Other expenses will be the cost for the advertising agency, accounting firm, human resources firm, and membership association fees.

Funding Requirements and Use of Funds

VB Residential Construction Company is seeking $200,000 in debt financing to launch its construction business. The funding will be dedicated towards securing a small office space, purchasing two trucks, and purchasing all the construction equipment and supplies. Funding will also be dedicated towards the advertising agency and three months of overhead costs to include payroll of the staff, rent, and monthly fees to the accounting and human resources firm. The breakout of the funding is below:

Key Assumptions

The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and in order to pay off the startup business loan.

• Initial Monthly Average Contract Amount: $20,000
• Growth in Average Monthly Contracts: 10%

Financial Projections

Income statement.

Balance Sheet

Cash Flow Statement

Construction Business Plan FAQs

What is a construction business plan.

A construction business plan is a plan to start and/or grow your construction business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.

You can  easily complete your construction business plan using our Construction Business Plan Template here .

What Are the Main Types of Construction Companies?

Construction companies can be classified according to the type of constructions that they perform. Some are small renovation contractors, others are new home builders and others are commercial construction companies.

What Are the Main Sources of Revenues and Expenses for a Construction Company?

Construction companies get their primary source of revenue from individual contracts for new homes, remodeling projects or commercial projects.

The key expenses for construction companies are office space rent, salaries and wages, and equipment costs. 

How Do You Get Funding for Your Construction Business Plan?

There are many options for financing a construction company like SBA loans, commercial loans, personal loans, or line of credit. There are also equipment funding opportunities that cover expenses associated with necessary tools, machinery and other equipment. Personal savings, credit card financing and angel investors are also popular forms of funding.

What are the Steps To Start a Construction Business?

Starting a construction business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.

1. Develop A Construction Business Plan - The first step in starting a business is to create a detailed construction business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast.  

2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your construction business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your construction business is in compliance with local laws.

3. Register Your Construction Business - Once you have chosen a legal structure, the next step is to register your construction business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws. 

4. Identify Financing Options - It’s likely that you’ll need some capital to start your construction business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms. 

5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations. 

6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events. 

7. Acquire Necessary Construction Equipment & Supplies - In order to start your construction business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation. 

8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your construction business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising. 

Learn more about how to start a successful construction business:

• How to Start a Construction Business

Where Can I Get a Construction Business Plan PDF?

You can download our free construction business plan template PDF here . This is a sample construction business plan template you can use in PDF format.

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Construction Company Business Plan

Growing a construction company is much more difficult and taxing than completing projects.

From acquiring a new project to meeting deadlines, managing the budget, and many more things in between- you will find yourself drowning in responsibilities when you start a construction company.

A construction  business plan can come to your rescue in such burdensome situations. If prepared well, it can become a reference point for your company as it continues to grow.

Confused about how to write a business plan?

Well, this article will serve you perfectly. It will help you understand the contents of the business plan and offer a sample template for your construction company.

So let’s build a solid construction company business plan with this detailed guide.

Let’s dive right in.

Why do you need a construction company business plan?

Apart from the fact that investors and banks would ask for a business plan when you seek funding, here are a few more reasons you need a business plan.

• A business plan offers a roadmap to your business. It acts as a guiding block that has answers to all your how, when, where, and what.
• It helps in determining the exact target market for your business and formulating strategies to cater accordingly.
• There are millions of construction companies competing in the industry. You can identify your strengths through a business plan and design a competitive edge to stand apart.
• A well-rounded plan prepares you for emergencies that may arise in your business by making a plan for every situation.
• A whole lot of business processes repeat every day. A business plan helps bring consistency by establishing SOPs for various business activities.

And of course, you get your desired funding with a solid business plan that vouches for the potential of your construction company.

Key components of a construction business plan

Writing a business plan gets much easier with a structurally defined flow. Well, let’s have a look at key components that a construction company business plan must have.

Executive Summary: A brief summary of an entire business plan that will encourage the readers to read further.

Company Overview: A brief company description including every detail from company structure to its mission statement and future goals.

Market Analysis: A thorough analysis of the construction industry and your target market. It also includes sections for competitor analysis, future market trends, and scope of growth.

Construction Services: Outline the construction services that your company will offer. Highlight any additional services that will make you a distinct player.

Marketing and Sales Strategy: It includes a strategic plan to achieve success through marketing and sales. Determine the best course of action for your business.

Management Team: Introduce key personnel in managerial and leadership roles. Discuss their roles, qualifications, experience, and expertise.

Operations Plan: A detailed plan that streamlines the everyday operations right from construction methods to hiring employees.

Financial Plan: A financial plan highlights the prominent figures and key reports of your construction company by making necessary financial projections.

Let’s dive further into these topics and get a detailed understanding of writing your business plan.

How to create a construction company business plan?

A poorly written plan serves no purpose. However, with this step-by-step guide on writing construction company business plan, you will uncover every detail that goes into making a fantastic and purpose-serving business plan.

1. Write an executive summary

The executive summary is a concise yet insightful description of your entire business plan.

This one-page document summarizes the most important questions that a reader might have and offers a peek into what they are about to uncover. Investors take a brief glance at your executive summary before deciding whether to proceed further or not.

An executive summary must outline the following details of your construction business in persuasive consecutive paragraphs.

• The exact business opportunity
• The target market
• The problem and the solution to it
• Products and services offered by you
• Market size and growth potential
• Financial highlights
• Management team

Maintain a personal storytelling tone while writing this section and encapsulate every minute detail that can make a difference.

But wait, don’t start writing yet. Write your executive summary only after you are done writing an entire plan. This will help you summarize effectively.

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2. Prepare a company overview section

This section of a business plan will focus entirely on the details of your construction company.

From the type of construction company to the construction company’s goals- everything in this section is about your company description.

To begin with, highlight the type of construction business you will start. For instance, a residential construction company, general contracting company, industrial construction company, or specialty trade construction.

Clarify, if this will be a new business or an extension of existing business. If the business is already operating, offer a brief description of the business history.

After that, highlight the business structure of your construction company. Are you going to be a sole trader or start a limited liability company (LLC) or a limited partnership firm? The business structure you choose will decide how the finances and taxes will work in your business.

Now, this section is your chance to weave magical stories around your construction company. Present the mission statement, company’s objectives, and future goals over here.

For instance,

Mission statement : Syncore aims to become a trusted name for sustainable residential construction projects in Arizona by 2028. With our commitment to the highest quality standards, we will penetrate the market with our premium budgeted solutions.

Business goals :

• Onboarding and signing 15 construction projects in a span of 6 months.
• Generating revenue of $2 million by 2025.

Like this, you will write this entire section in parts by offering a brief overview of your construction business.

3. Conduct a competitive and market analysis

In this section of a business plan, you begin with industry analysis and then narrow it down to your particular market segment. This is important to show your potential investors that there are promising opportunities in this market.

Using market research practices determine the target market for your construction business. Create a buyer persona to identify what your ideal customer will look like.

Further, highlight your competitors in this competitive construction industry. Using SWOT analysis and PESTEL, determine the strengths and weaknesses of competing construction companies. In this section, you will also highlight your strengths to gain a competitive edge over existing players.

Don’t limit your market study to merely understanding the current scenarios. Extend the research and identify future trends and growth possibilities in your targeted market.

If you are a residential construction company focused on sustainable building practices, you must include the following details in your market analysis section.

• How large is the construction industry?
• What segment of the construction market will you capture?
• Who will avail of the construction services?
• What is the spending capacity of your target customers?
• Who are the top competing construction companies?
• What are the emerging trends in the industry and how will you leverage those?
• What is the growth potential of your target market?

Focus on quality market research as this will form the base of your further projections and strategies.

This screenshot of the construction business plan example highlights only the market size for HDFL construction. You can also include details like competitors analysis, growth potential, and market trends here.

4. Describe your construction service offerings

What construction services will you offer your potential clients?

Offer a detailed answer to this question, as you write a business plan section for service offerings.

Overall, this section should highlight every service offering that will bring you money. This could include services like,

• General contracting services
• Design and Engineering
• Construction
• Renovation and remodeling
• Project management
• Specialty services i.e. concrete work, HVAC installation, Roofing services
• Maintenance and repairs

Offer a brief understanding of these service offerings and highlight construction jobs you will specialize in. For instance, remodeling of kitchen and bathroom.

Now, will your construction company sell any construction materials for profit? If so, include details for that as well.

It’s important to consider the breadth of your service offerings to keep the customers coming back.

Overall, this section is your chance to prove to potential investors that your services can stand solid in the competitive construction industry.

5. Propose marketing and sales strategies

According to the IBIS world report , there are more than 3,787,470 construction businesses in the USA. Starting a construction company will add one more to this list, but hey- How do you wish to make a brand that your target audience can recall easily?

All the market assessment and understanding of your potential clients will come in handy at this stage as you make your marketing plan and sales strategies.

Take an opportunity to lay out your sales plan in this section. If you have existing customers, explain how you plan to retain them.

After you are done making your sales strategies, touch the marketing aspect.

Firstly, identify the way you want your brand to be recognized- as an ordinary construction firm, a luxury construction company, a sustainable solutions firm, or an affordable construction company. This will help you make a marketing plan.

Your marketing strategy should answer the following questions:

• Which marketing channels will you use-  Online, offline, or a mix of both?
• How will you generate more leads?
• Online marketing methods- search engines, social media, Email marketing, content marketing, etc.
• If you are going to be utilizing social media platforms- which ones?
• How much will you budget for paid ads?
• Will you use billboards, pamphlets, and newspaper advertisements to market your business?

Keep in mind the marketing channels where you can find your potential customers. For instance, you are more likely to find conversions through Email campaigns than social media campaigns, if you are finding clients for commercial construction.

All in all, in this section you have to draw potential investors’ attention with your sales and marketing strategy.

6. Introduce your management team

Everyone is aware of the cutthroat competition in the construction industry. Knowing that you need an able team to transform your business plan into a successful venture.

After laying out your marketing strategy, it’s time to introduce the key management and leadership team to your business plan.

It’s okay to brag about the talented individuals you have in your company. From construction heads to project managers, highlight the achievements, experience, and expertise of these people and prove their asset-worthiness for your company.

Also, draw the hierarchical map to give potential investors an idea of your organizational structure.

This is your time to prove that you have both the means and manpower to run a successful company.

7. Outline your operational plan

You may know construction, but do you know how to run a construction business?

As someone said, “ Seamless operations are the silent engine of extraordinary business achievements”

Before even taking the first project, it’s important to define operations and SOPs for different business activities. Make it so thorough that it can act as a guidebook whenever a problem arises in your construction company.

As you write a business plan for this section, focus on answering the following questions:

• What construction materials will you use?
• What will be the supply chain process in your construction company?
• Who will oversee the project management on site?
• What will be the timeline for completing projects?
• What will be health and safety protocols for construction workers?
• What will be the process of construction work?
• How will the communication flow within an organization?
• What technologies and equipment will you use?
• How will you ensure quality work?
• How will you hire employees?
• What accounting software will you use?

This is just a general gist of questions that can help you prepare this section. Consider it as a living document that will undergo various changes as the business commences and grows.

A thorough operations plan will lay a clear groundwork for running a company. Moreover, it will instill investors’ faith in your ability to run a construction company.

8. Create a financial plan

Writing a sound financial plan is a challenge but nothing that your determined mind can’t handle.

Whether you plan to raise funds or get bank loans, you need a sound financial plan. Investors will analyze this section and only if they find your business financially viable, will they invest.

In this section, you will make financial projections and estimates for your construction company. This includes forecasting sales, estimating startup costs , projecting overhead costs, and making a pricing plan.

Using the startup costs projection, determine how much funding is essential to start your own construction company.

Also, prepare different reports like income statements, cash flow statements, balance sheets, and break-even analyses using the projections made earlier.

To make a financial plan more relevant, consider various progressive and aggressive situations.

Lastly, prepare graphs, charts, and diagrams to make this section visually appealing and easy to grasp.

Now, stop. Don’t start writing a financial plan yet. You need a financial forecasting tool from Upmetrics to help you with projections and calculations of cash flow, sales, revenue, and everything else. Simply enter the data and it will make detailed and precise calculations for you.

Trust us, you don’t want to scratch your heads writing the entire plan from ground level.

And that’s it! With all this information you pretty much know everything that a construction business plan must have.

Construction Industry Highlights 2023

Now that you are almost set to open a construction company, here are a few industry statistics that might interest you.

• Market size : The US construction market sector was valued at 1.8 trillion US dollars in 2022.
• Growth of the virtual construction market : The global BIM market is 7.9 billion US dollars . North America is projected to be a market leader capturing 30% of this market.
• Rise in prefabrication and modular construction : Healthcare facilities followed by hotels/motels and educational institutions are most likely to avail of modular construction facilities.
• Major concerns : The leading concerns encircling the construction industry are inflation and supply chain disruptions faced by nearly 90% of constructors.
• Sustainable and green building : There is a continuous increase in demand for sustainable and green building solutions. As for 2021, the green building market in the USA was reported to be approximately 83 billion dollars .
• Growing investment in smart cities : According to IDC, the investment in smart cities is expected to grow to 203 billion dollars by 2024.

From sustainability to tech-centric processes, the construction industry is making huge shifts in trends. Both, small businesses and large have to evolve according to changing times to keep themselves relevant.

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Frequently asked questions, what kind of market research should i include in my construction business plan.

The market research for your construction business plan must include the following details:

• The market size of your targeted market, i.e. commercial construction, residential construction, etc.
• The target audience of your services and their buyers’ persona
• Top competing firms and companies offering similar services
• Emerging trends in your market
• Growth potential for your firm

Is a SWOT analysis necessary for a construction company business plan?

Absolutely yes. There are more than a billion construction companies in the USA itself. Starting another business won’t guarantee success unless you have a business that can withstand the dynamic competitive environment. SWOT analysis will make you aware of the company’s strengths, weaknesses, and the opportunities it can avail

What are the initial startup costs for a construction company?

It is possible to start a construction company with as little as $10,000. However, if you plan to set up a mid-sized construction company, expect to spend anywhere around $50,000-$250,000 on getting a basic setup. This includes accounting for licenses, insurance, office setup, construction materials, and payroll for the initial months.

Can I get government grants for a construction business?

Yes, you can apply for government grants to start your construction business. Check the local, federal, and state regulations to see which grants are applicable to your business. Check the eligibility and apply accordingly.

How often should I update my construction business plan?

A business plan is a living document that can guide you toward success if mapped properly. Ideally, you should update your business plan every 4-6 months to make it relevant. Set aside time to do so as a renewed plan will offer deep and meaningful insight into your business goals.

About the Author

Upmetrics Team

Upmetrics is the #1 business planning software that helps entrepreneurs and business owners create investment-ready business plans using AI. We regularly share business planning insights on our blog. Check out the Upmetrics blog for such interesting reads. Read more

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Construction Company Business Plan

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The objectives and tactics of a construction company are described in a business plan for a construction company. For the creation of your business plan, use this Construction Company Business Plan Template.

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Created by:

​ [Sender.FirstName] [Sender.LastName] ​

​ [Sender.Company] ​

INTRODUCTION

This business plan is for a construction company that will offer a wide range of services to residential, commercial, and industrial clients. The company will be owned and operated by [Sender.FirstName] [Sender.LastName] , who has (insert number) years of experience in the construction industry.

COMPANY DESCRIPTION

​ [Sender.Company] will be located in [Sender.City] , [Sender.State] and will serve the surrounding area. The company will be registered as a(n) (LLC/Corporation) and will have (insert number) employees at the start, including the owner. The company will offer a range of services, including new construction, renovations, and repairs for residential, commercial, and industrial clients. The company will also offer project management and design services.

MARKET ANALYSIS

The construction industry is expected to grow at a rate of (percentage) over the next five years. The demand for construction services is driven by population growth, economic development, and the need to update and improve existing buildings. [Sender.Company] will target residential, commercial, and industrial clients in the [Sender.City] area, focusing on high-quality workmanship and customer satisfaction.

MARKETING STRATEGY

​ [Sender.Company] will use a combination of traditional and digital marketing techniques to reach potential clients. This will include advertising in local newspapers and industry publications, as well as utilizing social media platforms and email marketing to promote services and specials. The company will also rely on word-of-mouth referrals from satisfied customers.

​ [Sender.Company] will have a team of skilled contractors and tradespeople who will be responsible for completing projects promptly and professionally. The company will have a project manager who will oversee all projects and ensure that they are completed to the highest standards. The company will maintain a well-stocked warehouse with a variety of construction materials and equipment to ensure that projects can be completed efficiently.

FINANCIAL PLAN

​ [Sender.Company] will generate revenue through the sale of construction services to residential, commercial, and industrial clients. The company will also generate revenue through the sale of construction materials and equipment. The company will have operating expenses, including payroll, rent, utilities, and insurance. The company expects to generate (Amount) in revenue in the first year, with a projected growth rate of (Percentage) per year.

​ [Sender.Company] is well-positioned to take advantage of the growing demand for construction services in the [Sender.City] area. With a team of experienced contractors, a focus on high-quality workmanship, and a commitment to customer satisfaction, the company is confident that it will be successful in the competitive construction market.

​ [Client.FirstName] [Client.LastName] ​

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How To Write a Winning Construction Company Business Plan + Template

Creating a business plan is essential for any business, but it can be especially helpful for construction company businesses who want to improve their strategy or raise funding.

A well-crafted business plan not only outlines the vision for your company, but also documents a step-by-step roadmap of how you will accomplish it. To create an effective business plan, you must first understand the components essential to its success.

This article provides an overview of the key elements that every construction company business owner should include in their business plan.

Download the Ultimate Construction Business Plan Template

What is a construction company business plan.

A construction company business plan is a formal written document describing your company’s business strategy and feasibility. It documents the reasons you will succeed, your areas of competitive advantage, and it includes information about your team members. Your business plan is a key document that will convince investors and lenders (if needed) that you are positioned to become a successful venture.

Why Write a Construction Company Business Plan?

A construction company business plan is required for banks and investors. The document is a clear and concise guide of your business idea and the steps you will take to make it profitable.

Entrepreneurs can also use this as a roadmap when starting their new company or venture, especially if they are inexperienced in starting a business.

Writing an Effective Construction Company Business Plan

The following are the key components of a successful construction company business plan:

Executive Summary

The executive summary of a construction company business plan is a one to two page overview of your entire business plan. It should summarize the main points, which will be presented in full in the rest of your business plan.

• Start with a one-line description of your construction company
• Provide a short summary of the key points in each section of your business plan, which includes information about your company’s management team, industry analysis, competitive analysis, and financial forecast among others.

Company Description

This section should include a brief history of your company. Include a short description of how your company started, and provide a timeline of milestones your company has achieved.

If you are just starting your construction business, you may not have a long company history. Instead, you can include information about your professional experience in this industry and how and why you conceived your new venture. If you have worked for a similar company before or have been involved in an entrepreneurial venture before starting your construction firm, mention this.

You will also include information about your chosen construction company business model and how, if applicable, it is different from other companies in your industry.

Industry Analysis

The industry or market analysis is an important component of a construction company business plan. Conduct thorough market research to determine industry trends and document the size of your market. Questions to answer include:

• What part of the construction industry are you targeting?
• How big is the market?
• What trends are happening in the industry right now (and if applicable, how do these trends support the success of your company)?

You should also include sources for the information you provide, such as published research reports and expert opinions.

Customer Analysis

This section should include a list of your target audience(s) with demographic and psychographic profiles (e.g., age, gender, income level, profession, job titles, interests). You will need to provide a profile of each customer segment separately, including their needs and wants.

For example, a construction company business’ customers may include:

• Businesses (e.g., office complexes, restaurants, retail stores)
• General contractors
• Other construction companies

As you conduct your customer analysis, keep in mind that your target customers may not be aware of your company or product right away. You will need to have a marketing strategy to reach them and get them interested.

You can include information about how your customers make the decision to buy from you as well as what keeps them buying from you.

Develop a strategy for targeting those customers who are most likely to buy from you, as well as those that might be influenced to buy your products or construction company services with the right marketing.

Competitive Analysis

The competitive analysis helps you determine how your product or service will be different from competitors, and what your unique selling proposition (USP) might be that will set you apart in this industry.

For each competitor, list their strengths and weaknesses. Next, determine your areas of competitive differentiation and/or advantage; that is, in what ways are you different from and ideally better than your competitors.

Marketing Plan

This part of the business plan is where you determine and document your marketing plan. . Your plan should be clearly laid out, including the following 4 Ps.

• Product/Service : Detail your product/service offerings here. Document their features and benefits.
• Price : Document your pricing strategy here. In addition to stating the prices for your products/services, mention how your pricing compares to your competition.
• Place : Where will your customers find you? What channels of distribution (e.g., partnerships) will you use to reach them if applicable?
• Promotion : How will you reach your target customers? For example, you may use social media, write blog posts, create an email marketing campaign, use pay-per-click advertising, launch a direct mail campaign. Or you may promote your construction company business via word-of-mouth.

Operations Plan

This part of your construction company business plan should include the following information:

• How will you deliver your product/service to customers? For example, will you do it in person or over the phone only?
• What infrastructure, equipment, and resources are needed to operate successfully? How can you meet those requirements within budget constraints?

The operations plan is where you also need to include your company’s business policies. You will want to establish policies related to everything from customer service to pricing, to the overall brand image you are trying to present. Finally, and most importantly, in your Operations Plan, you will lay out the milestones your company hopes to achieve within the next five years. Create a chart that shows the key milestone(s) you hope to achieve each quarter for the next four quarters, and then each year for the following four years. Examples of milestones for a construction company business include reaching $X in sales. Other examples include hiring a certain number of employees, signing up a certain number of customers, or completing a certain number of projects.

Management Team

List your team members here including their names and titles, as well as their expertise and experience relevant to your specific construction industry. Include brief biography sketches for each team member. Particularly if you are seeking funding, the goal of this section is to convince investors and lenders that your team has the expertise and experience to execute on your plan. If you are missing key team members, document the roles and responsibilities you plan to hire for in the future.

Financial Plan

Here you will include a summary of your complete and detailed financial plan (your full financial projections go in the Appendix). This includes the following three financial statements:

Income Statement

Your income statement should include:

• Revenue : how much revenue you generate.
• Cost of Goods Sold : These are your direct costs associated with generating revenue. This includes labor costs, as well as the cost of any equipment and supplies used to deliver the product/service offering.
• Net Income (or loss) : Once expenses and revenue are totaled and deducted from each other, this is the net income or loss.

Sample Income Statement for a Startup Construction Company

Balance Sheet

Include a balance sheet that shows your assets, liabilities, and equity. Your balance sheet should include:

• Assets : All of the things you own (including cash).
• Liabilities : This is what you owe against your company’s assets, such as accounts payable or loans.
• Equity : The worth of your business after all liabilities and assets are totaled and deducted from each other.

Sample Balance Sheet for a Startup Construction Company

Cash Flow Statement Include a cash flow statement showing how much cash comes in, how much cash goes out and a net cash flow for each year. The cash flow statement should include:

• Cash Flow From Operations
• Cash Flow From Investments
• Cash Flow From Financing

Below is a sample of a projected cash flow statement for a startup construction business.

Sample Cash Flow Statement for a Startup Construction Company

Finish with an appendix section which will include:

• Your complete financial projections
• A complete list of your company’s business policies and procedures related to the rest of the business plan (marketing, operations, etc.)
• Any other documentation which supports what you included in the body of your business plan.

Writing a good business plan gives you the advantage of being fully prepared to launch and/or grow your construction company. It not only outlines your business vision but also provides a step-by-step process of how you will accomplish it.

A well-written business plan is an essential tool for any construction company. The tips we’ve provided in this article should help you write a winning business plan for your construction company.  

Finish Your Construction Business Plan in 1 Day!

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Construction Company Business Plan [Sample Template]

By: Author Tony Martins Ajaero

Home » Business ideas » Construction & Engineering Industry » Construction Business

Are you about starting a construction company ? If YES, here’s a complete sample construction business plan template & feasibility report you can use for FREE .

Okay, so we have considered all the requirements for starting a construction business. We also took it further by analyzing and drafting a sample construction marketing plan template backed up by actionable guerrilla marketing ideas for construction businesses. So let’s proceed to the business planning section.

A Sample Construction Company Business Plan Template

1. industry overview.

The construction industry can comfortably boast to be responsible for the infrastructural development of the world. As such, the development of any country or city can be said to be the handiwork of construction companies and other stakeholders.

In other words, all the edifices, bridges, dams, roads, estates, campuses, shopping malls, office complexes, skyscrapers and massive structures that you see around are all products of the construction industry. Starting a construction business is capital intensive simply because of the type of heavy duty equipment that is required to carry out a construction project and also the cost of managing a large workforce.

Despite the fact that the construction industry requires huge start – up capital, the industry is highly profitable, especially if you have the expertise and capacity to deliver quality jobs. The major clients for construction companies are governments and the private sector.

Construction giants all over the world head towards developing countries, because they know that they are going to get juicy construction contracts there. Unlike in advanced economy, in developing countries and undeveloped world, there are loads of construction works to be done.

The fact that they have infrastructure deficit means that the government must be up and doing in terms of road constructions, bridge construction, public facility construction (hospitals, schools, office facilities and estates et al) and dams constructions.

After a war, the construction industry is one of the major stakeholders that contribute in the rebuilding of a country. In so doing, they work with governments in ensuring that basic infrastructures are restored and of course it will always ends up a win – win situation for both parties.

The government gets what they want and the construction company and contractors get good returns for delivering the projects.

Over and above, the success of a construction company to a larger extent depends on their relationship with the biggest clients in the industry; the government of any country. No doubt there is always enough construction contracts to go round as long as a construction company is competent and well positioned. They won’t lack construction contracts from both the government and the private sector.

2. Executive Summary

Shannon Berg Construction Company is an international construction company that has its headquarters in Grand Rapids, Michigan – USA. The fact that we are based in the united states does not in any way restrict our scope of operations to the United States of America.

We are an international construction company and we work for our clients (governments and private sectors) in any part of the world.

Shannon Berg Construction Company will be specialized in the constructions of skyscrapers, bridges, stadiums, roads, dams, Office complex, shopping malls, schools, campuses and estates et al. As a matter of fact, we are going to be known for delivering world class structures all over the globe.

Creativity, excellence and timely completion of construction projects will be our signature. We intend starting our construction business on a small scale in Grand Rapids, Michigan, but we have a bigger picture – to have our presence in any part of the world that our clients wants us to work.  We hope to achieve this feat within the first 10 years of launching the company.

As part of our plans to make our highly esteemed customers our number one priority and to become a global construction brand, we have perfected plans and strategies that will enable us work with our clients in delivering projects that can favorably compete with the best in the industry at an affordable and reasonable price within the stipulated completion date barring any unforeseen circumstance.

Shannon Berg Construction Company is fully aware that starting a construction business requires huge capital base, which is why we have perfected plans for steady flow of cash from private investors who are interested in working with us.

We can confidently say that we have a robust financial standing and we are ready to take on any construction project that comes our way, as long as the project is duly commissioned by the required authority.

Shannon Berg Construction Company will be owned by the principal partner; Engr. Shannon Berg and other partners (Nani David, Lois Scotland and Christopher Parkston). They also have plans in the pipeline to sell the shares of the company in the nearest future to interested investors who would want to be part owners of the company.

Shannon Berg who is the principal partner has well over 25 years of experience in the construction industry. Before starting his own construction company, he was a senior project manager and consultant with one of the world’s largest construction company based in Germany.

Engr. Shannon Berg, Nani David, Lois Scotland and Christopher Parkston will be the major financier of the company. Nonetheless, we have made a concerted decision not to limit the number of investors with similar investment ideology that may want to invest in the business.

This is necessary in order for us to be able to retain financial flexibility. Ideally, our plan is that no investment will be less than $1,000,000, which would purchase a 1 percent equity position. It is our desire that all equity partners be limited partners.

3. Our Products and Services

Shannon Berg Construction Company is a construction company that is set to undertake both small construction projects and massive construction projects for governments, private sectors and for individuals which is why we do not intend to place limitations of the scope of the projects we handle and what we do.

We know that if we are good at what we do, it will make it easier for our brand to grow beyond Grand Rapids, Michigan to other parts of the United States of America and the rest of the world. Our business offering are listed below;

• Road Construction
• Bridge Construction
• Dam construction
• Airports and Helipads Construction
• Seaports Construction
• Skyscrapers construction
• Estate construction
• Public facility construction (hospitals, schools, shopping malls, office complexes and industrial facilities et al)
• Construction of residential facilities
• Property Makeover Services
• Construction Consultancy and Advisory Services

4. Our Mission and Vision Statement

• Our vision is to build a first class construction company that will have active presence in North America, South America, Africa and Asia.
• At Shannon Berg Construction Company, our mission and values are to help governments, the private sector and individuals in the United States of America and throughout the world realize their dreams of building a world class structure that can compete on a global stage with the best in the construction industry.

Our Business Structure

Shannon Berg Construction Company intend starting small from Grand Rapids, Michigan, but with a vision of growing the business to becoming a global construction brand with presence in all the continents of the world. In order to achieve this vision, we just have to position our company for growth and ensure that we hire dedicated and highly competent employees at all levels.

Shannon Berg Construction Company will ensure that we build a team that will work together towards achieving the company’s vision. We will build a business that has the right structures and process in place that can support growth; a business that runs on autopilot.

In view of the above, we have made provisions for the following position in our organization based on the size of the company we intend starting but as the business grows, we will create senior level positions and also create a structure that will support the business growth at every growth and expansion stage;

• Chief Executive Officer (President)

Project Manager

Civil Engineer

• Structural Engineer
• Quantity Surveyor

Land Surveyor

Company’s Lawyer/Secretary

Admin and HR Manager

Business Developer

• Front Desk Officer

5. Job Roles and Responsibilities

Chief Executive Officer – CEO:

• Responsible for providing direction for the business
• Creates, communicates, and implements the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
• Responsible for the day to day running of the business
• Responsible for handling high profile clients and deals
• Responsible for fixing prices and signing business deals
• Responsible for signing checks and documents on behalf of the company
• Evaluates the success of the organization
• Reports to the board
• Responsible for the planning, management and coordinating all projects on behalf of the company
• Supervises projects
• Ensures compliance during project executions
• Provides advice on the management of projects
• Responsible for carrying out risk assessment
• Using IT systems and software to keep track of people and progress of ongoing projects
• Responsible for overseeing the accounting, costing and billing of every project
• Represents the organization’s interest at various stakeholders meetings
• Ensures that project desired result is achieved, the most efficient resources are utilized and different interests involved are satisfied.
• Responsible for preparing bids for tenders, and reporting to clients, public agencies and planning bodies
• Ensures that sites meet legal guidelines, and health and safety requirements
• Assesses the environment impact and risks connected to projects
• Responsible for judging whether projects are workable by assessing materials, costs and time requirements
• Draws up blueprints, using Computer Aided Design (CAD) packages
• Discussing requirements with the client and other professionals (e.g. architects and project managers et al)
• Responsible for managing, directing and monitoring progress during each phase of a project
• Responsible for creating building designs and highly detailed drawings both by using the hands and by using specialist computer – aided design (CAD) software
• Works around constraining factors such as town planning legislation, environmental impact and project budget
• Writes and presents reports, proposals, applications and contracts
• Adapting plans according to circumstances and resolving any problems that may arise during construction
• Works with project team and management to achieve a common goal
• Responsible for applying for planning permission and advice from governmental new building and legal department.
• Responsible for undertaking land surveys/measurements using a variety of specialist technical equipment such as theodolites, laser alignment devices and satellite positioning systems et al.
• Responsible for presenting data to clients
• Responsible for producing and advising about construction plans and drawings
• Responsible for advising about technical matters and whether the construction plans are viable
• Responsible for drawing up contracts and other legal documents for the company
• Consult and handle all corporate legal processes (e.g. intellectual property, mergers & acquisitions, financial/ securities offerings, compliance issues, transactions, agreements, lawsuits and patents et al)
• Develops company policy and position on legal issues
• Researches, anticipate and guard company against legal risks
• Represents company in legal proceedings (administrative boards, court trials et al)
• Plays a part in business deals negotiation and take minutes of meetings
• Responsible for analyzing legal documents on behalf of the company
• Prepares annual reports for the company
• Responsible for overseeing the smooth running of HR and administrative tasks for the organization
• Defines job positions for recruitment and managing interviewing process
• Carries out staff induction for new team members
• Responsible for training, evaluation and assessment of employees
• Responsible for arranging travel, meetings and appointments
• Oversees the smooth running of the daily office activities.
• Identifies, prioritize, and reach out to new partners, and business opportunities et al
• Responsible for supervising implementation, advocate for the customer’s needs, and communicate with clients
• Develops, executes and evaluates new plans for expanding increase sales
• Documents all customer contact and information (manage the company’s CRM system)
• Represents the company in strategic meetings with government agencies, private sectors and contractors
• Helps increase sales and growth for the company
• Responsible for preparing financial reports, budgets, and financial statements for the organization
• Responsible for financial forecasting and risks analysis.
• Responsible for developing and managing financial systems and policies
• Responsible for administering payrolls
• Ensures compliance with taxation legislation
• Handles all financial transactions for the company
• Serves as internal auditor for the company

Front Desk/Customer’s Service Officer

• Receives Visitors/clients on behalf of the organization
• Receives parcels/documents for the company
• Handles enquiries via e-mail and phone calls for the organization
• Distributes mails in the organization
• Handles any other duties as assigned the line manager

6. SWOT Analysis

Surviving in the business world as a construction company requires more than knowing how to deliver standard projects but also how to network with key people that matter; decision makers that can decide who a project is given to and all that.

We know that it will be a bit difficult to compete with already established construction companies in the United States especially because we are new in the industry.

In order to properly position our company for growth and to favorably compete in the construction industry, we engaged the services of a Dr. Joe Whyte, a renowned HR and business consultants in the United States of America to help us run a SWOT analysis.

It is important that we know our strength, our weaknesses, and the opportunities that we can leverage on in the industry and the threats that we are likely going to be confronted with.

With that, we will be able to map out strategies that will not only help us to survive in the industry but also to build a global construction brand. Here is a summary from the result of the SWOT analysis that was conducted on behalf of Shannon Berg Construction Company;

Shannon Berg Construction Company can confidently boast of having a competent and highly experienced management team who are regarded as some of the best hands in Michigan.

Although we are a new construction company, but our president and board of trustee are respectable people in the United States of America who have served the US government in various capacity; we are a construction company that has the right network that is suitable for the kind of business we are into.

Well the fact that we are a new construction company could count as a weakness. It is normal for clients to think twice before awarding construction contracts to newbies in the industry.

Another weakness that can count against us in the industry is the fact that we may not have the financial muscles to drive the business the way we ought to drive it. We require huge financial base to be able to acquire some of the latest heavy duty construction equipment.

• Opportunities:

Our business concept, our mission and vision puts us at an advantage in the industry. We will start small to build trust within Grand Rapids, Michigan and there are loads of opportunities for us there simply because we are well positioned to work with both the state government and the highly organized private sector.

Generally in the construction industry, both the already established construction companies and start – up construction companies are subject to threat from government policies, global economic downturn and unforeseen natural disasters (disasters that may cause setback).

These are the threats that we are likely going to face as a newbie construction company in Grand Rapids, Michigan. Another threat that we are likely going to face is the arrival of a big construction company in the location where our business has strong presence.

7. MARKET ANALYSIS

• Market Trends

The trend in the construction industry is that construction companies are always coming out with processes that will help them achieve more within a short period; construction jobs can be time consuming especially the construction of massive infrastructures.

Most players in the construction industry are fully aware that the government of any country or state is the biggest clients they can get and they do all the lobbying and horse trading to ensure that they get government contracts.

No doubt there are loads of big time investors that have stakes in the construction industry, but one thing is certain, there is room big enough to accommodate both the big construction companies and the small construction companies.

What smaller construction companies need to do to survive in the industry is to concentrate on developing estates, schools, hospitals and hotels et al before bidding for big construction contracts like road construction, bridge construction, dam construction and skyscrapers et al.

Another obvious trend in the construction industry is subletting of contracts. It is now obvious that construction giants leverage on their brands to win contracts and in some cases after they have won the contract.

They will go ahead to sublet the contract to smaller construction company that they trust can deliver to execute the project at an agreed fee that will be good enough for both parties to make profits. Smaller construction companies position themselves to be able to leverage on such opportunities once it present itself.

8. Our Target Market

Our target market cuts across governments at all levels and countries, the organized private sector and people of different class and from all walks of life. We know that our selling points will be our excellent and timely delivery of construction projects using global best practices.

We will start with the local market, people, organizations and the government in Michigan, but we hope to spread our nets to clients from other states in the US and thereafter other countries of the world.

Shannon Berg Construction Company will be known for working with smaller clients (various individuals) as well as working for bigger clients (various governments and organized private sector). Below is a list of the people and organizations that we have specifically designed our services for;

• Organized private sector (Corporate organizations)
• Land Owners
• Businessmen and Businesswomen
• University Campuses
• Foreign investors who are interested in owning properties in the United States of America
• The government of the United States of America (Government contracts)
• The governments of other nations of the world

Our Competitive Advantage

We are quite aware that there are big – time investors and construction companies who are well recognized in the construction industry, and we maybe have to compete with them when it is time to bid for juicy government contracts.

It might be challenging competing as a newbie in the construction industry, especially in a highly organized market like that of the United States of America, which is why we were deliberate in choosing our board members. Our competitive advantage is not limited to the crop of highly experienced professions that are members of our management team but also our board members.

Our board members are highly respected professionals in the United States who have served the government of the United States at various capacities; people who are accomplished business gurus and people who have the right connections and experience to make things happen with little or no struggle. For us, it is indeed part of the competitive advantage that we are bringing to the market.

Another positive for Shannon Berg Construction Company is the fact that our Chief Executive Officer / President is a renowned Civil Engineer, he has robust experience in the construction industry and he has worked extensively as a senior project manager for one of the world’s leading construction companies.

He is sure going to bring is experience, expertise and network (connections) to make Shannon Berg Construction Company one of the leading construction brand in Grand Rapids, Michigan and also active player in the global construction market.

9. SALES AND MARKETING STRATEGY

• Sources of Income

Shannon Berg Construction Company was established with the aim of maximizing profits through delivering quality and standard construction works for our highly esteemed clients. We will ensure that we generate income from every available means within the construction industry. Below are the sources we intend exploring to generate income for Shannon Berg Construction Company;

• Construction of residential apartments

10. Sales Forecast

It is important to state that our sales forecast is based on the data gathered during our feasibility studies and also some of the assumptions readily available on the field.

We have relationship with major stakeholders in the real estate and construction industry in Grand Rapids, Michigan and also in order states in the US and we are sure of getting key construction contracts to kick start of business. Below are the projections that we were able to come up with for the first three years of Shannon Berg Construction Company;

• First Year-: $2,000,000
• Second Year-: $3,500,000
• Third Year-: $5,000,000

N.B : This projection is done based on what is obtainable in the industry and with the assumption that all things that will facilitate easy flow of construction contracts. From our calculations, we are likely going to make a minimum of 30 percent profits after task from executing key construction projects.

• Marketing Strategy and Sales Strategy

We have been able to clearly define our target market and have documented this in our construction marketing plan. We know how to get them to hire our services which is why we have decided to adopt some of the winning formula that construction giants utilize to win major construction contracts.

We know that it will take different marketing and sales strategies to win small clients and bigger clients. For example; there are requirements a construction company would hate to meet before they can be awarded a government contract. We have put all these factors in place before creating a workable marketing and sales strategy for Shannon Berg Construction Company.

Shannon Berg Construction Company is fully aware of the bureaucracy and horse trading that exists in bidding for construction contracts from the government and even the organized private sector, which is why we were able to put protocols in place to hire some of the best business developer to handle our sales and marketing.

No doubt, our sales and marketing team will be recruited based on their vast experience in the construction industry and their ability to fit into our Business model. We are going to pay more emphasis in the training of all our employees so as to give them all they would need to help the company achieve its aim and objectives.

Our goal is to become one of the leading construction companies in Grand Rapids, Michigan and we know we can achieve this by ensuring that our sales and marketing team are delivering on set targets. Shannon Berg Construction Company will adopt the following marketing and sales strategies;

• Introduce our business by sending introductory letters alongside our brochure to all the corporate organizations and government offices in Grand Rapids, Michigan and other States in the US.
• Promptness in bidding for contracts
• Advertise our business in real estate/properties magazines and websites
• List our business on yellow pages
• Promote our business on satellite TV stations and radio stations.
• Attend expos, seminars, and business fairs et al
• Create different packages for different category of clients in order to work with their budgets and still deliver quality housing/property to them
• Leverage on the internet (social media platforms and our official websites) to promote our business

11. Publicity and Advertising Strategy

We have been able to work with our consultants to help us map out publicity and advertising strategies that will help us walk our way into the heart of our target market. First and foremost, we want our brands to be visible and well communicated, which is why our publicity strategy have been well crafted to help us achieve our aims and business objectives.

All our publicity materials and jingles are done by some of the best hands in the industry. Below are the platforms we intend to leverage on to promote and advertise our property development business;

• Place adverts on both print and electronic media platforms
• Sponsor relevant TV shows
• Utilize our company’s website in promoting our business
• Leverage on the internet and social media platforms like; Instagram, Facebook ,Twitter, LinkedIn, Badoo, Google+ et al
• Install our Bill Boards on strategic locations

12. Our Pricing Strategy

Part of business strategy is to ensure that we work within the budget of our clients to deliver excellent and world class construction projects.

We are quite aware that there are major players in the construction industry in the United States of America who are not interested in small business deals and that is why we have positioned Shannon Berg Construction Company to take on such contracts.

Although our prices may not be outrageously lower than what is obtained in the industry, but we are hopefully that whatever price we bill our customer will be amongst the lowest they can get in the industry. The fact that we are going to be billing our clients lower than what is obtainable in the industry does not in any way going to affect the quality of our construction projects.

• Payment Options

Our payment policy in Shannon Berg Construction Company is all inclusive because we are quite aware that different people prefer different payment options as it suits them, but at the same time, we will not accept payment by cash because of the volume of cash that will be involved in most of our transactions. Here are the payment options that we will make available to our clients;

• Payment by via bank transfer
• Payment via online bank transfer
• Payment via check
• Payment via bank draft

In view of the above, we have chosen banking platforms that will help us achieve our plans without any itches.

13. Startup Expenditure (Budget)

• The Total Fee for incorporating the Business in New York: $750.
• The budget for Liability insurance, permits and license: $5,000
• The Amount needed to acquire a suitable Facility with enough space in Grand Rapids, Michigan (Re – Construction of the facility inclusive): $500,000.
• The Cost for equipping the office (computers, printers, fax machines, furniture, telephones, filing cabins, safety gadgets and electronics et al): $15,000
• The cost for acquiring heavy duty construction equipment: $2,000,000
• The Cost of Launching a Website: $600
• Additional Expenditure (Business cards, Signage, Adverts and Promotions et al): $5,000
• Working capital (investment fund): $3,000,000 (3 Million US Dollar)

Going by the report from our research and feasibility studies, we will need about $7,000,000 (7 US Million Dollars) to set up a construction company in Grand Rapids, Michigan. It is important to state that most of the heavy duty construction equipment that we will work with will be leased.

This necessary because some of these equipment are really expensive and it won’t be economical for us to acquire them from the start.

Generating Funding/Startup Capital for Shannon Berg Construction Company

• The Chief Executive Officer/President Engr. Shannon Berg will generate 20 percent of the start – up capital from his personal savings and sale of his stocks
• 30% of the capital will be generated from key partners (Nani David, Lois Scotland and Christopher Parkston)
• 50% of the capital will be sourced from banks

14. Sustainability and Expansion Strategy

Shannon Berg Construction Company was established with the aim of building a company that will outlive the founders and partners; a construction company that will have active presence in major cities in the world. Part of the vision of the company is to handover the baton of the company from one generation to generation; hence we have perfected our plans to put the right structures in place that will aid our succession plan.

In order to position of company for growth, we have been able to create strong partnerships with the government of the United States of America, organized private sector and construction giants. We are optimistic that we will continue to execute construction contracts for our clients.

Our marketing team will continue to get the needed support and encouragement that they need to be able to deliver on set goals and targets for the organization, and we will continue to improve our processes and structure to meet up with the changing trend in the construction industry.

Lastly, we will not relent in taking calculated business risks when it comes to bidding for bigger government contracts and taking on new business challenges and new business frontiers.

Check List/Milestone

• Business Name Availability Check: Completed
• Business Incorporation: Completed
• Opening of Corporate Bank Accounts various banks in the United States: Completed
• Opening Online Payment Platforms: Completed
• Application and Obtaining Tax Payer’s ID: In Progress
• Application for business license and permit: Completed
• Purchase of All form of Insurance for the Business: Completed
• Renting of Office Facility in New York City: Completed
• Conducting Feasibility Studies: Completed
• Generating capital from the CEO and Business Partners: Completed
• Applications for Loan from our Bankers: In Progress
• writing of business plan: Completed
• Drafting of Employee’s Handbook: Completed
• Drafting of Contract Documents (Tenancy Agreements et al), and other relevant Legal Documents: In Progress
• Design of The Company’s Logo: Completed
• Graphic Designs and Printing of Packaging Marketing / Promotional Materials: Completed
• Recruitment of employees: In Progress
• Purchase of the Needed furniture, office equipment, electronic appliances and facility facelift: In progress
• Acquiring of heavy duty construction equipment: In progress
• Creating Official Website for the Company: In Progress
• Creating Awareness for the business (Business PR): In Progress
• Health and Safety and Fire Safety Arrangement: In Progress
• Establishing business relationship with key players in the industry (networking and membership of relevant construction bodies): Completed.

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Construction Contractor Business Plan PDF Example

• May 10, 2024
• Business Plan

Creating a comprehensive business plan is crucial for launching and running a successful construction contractor business. This plan serves as your roadmap, detailing your vision, operational strategies, and financial plan. It helps establish your construction contractor business’s identity, navigate the competitive market, and secure funding for growth.

This article not only breaks down the critical components of a construction contractor business plan, but also provides an example of a business plan to help you craft your own.

Whether you’re an experienced entrepreneur or new to the service industry, this guide, complete with a business plan example, lays the groundwork for turning your construction contractor business concept into reality. Let’s dive in!

Our construction contractor business plan is meticulously structured to include all essential aspects necessary for a robust strategy. It outlines the company’s operations, marketing strategy , market environment, competitors, management team, and financial projections.

• Executive Summary : Presents an overview of your construction contractor business concept, including market analysis , management structure, and financial strategies.
• Company Information: Describes the company’s foundation, areas of expertise in the construction industry, and the operational standards that define the business.
• Services : Details the comprehensive range of construction services offered, from residential building to commercial projects, including any specialized services such as eco-friendly constructions or renovations.
• Target Market : Outlines the specific demographic and geographic segments the company aims to serve, emphasizing any particular needs of these markets like affordability, durability, or luxury finishes.
• Key Stats: Provides statistics on the construction industry’s size and growth trends relevant to your market area.
• Key Trends: Identifies significant trends affecting the construction sector.
• Key Competitors : Evaluates primary competitors in the area and outlines your competitive advantages.
• SWOT : Conducts a Strengths, Weaknesses, Opportunities, and Threats analysis.
• Marketing Plan : Outlines effective strategies for attracting and retaining clients.
• Timeline : Lists key milestones and objectives from the start-up through the initial years of operation.
• Management: Shares information about the management team, detailing who manages the company and their respective roles.
• Financial Plan: Forecasts the company’s 5-year financial performance, including revenue, profits, and significant expenses.

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Construction Contractor Business Plan

Fully editable 30+ slides Powerpoint presentation business plan template.

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Executive Summary

The Executive Summary introduces your construction contractor’s business plan, offering a concise overview of your company and its services. It should detail your market positioning, the range of construction and remodeling services you offer, its location, size, and an outline of day-to-day operations.

This section should also explore how your construction business will integrate into the local market, including the number of direct competitors within the area, identifying who they are, along with your company’s unique selling points that differentiate it from these competitors.

Furthermore, you should include information about the management and co-founding team, detailing their roles and contributions to the company’s success. Additionally, a summary of your financial projections, including revenue and profits over the next five years, should be presented here to provide a clear picture of your construction business’s financial plan.

Make sure to cover here _ Business Overview _ Market Overview _ Management Team _ Financial Plan

Dive deeper into Executive Summary

Business Overview

For a construction contractor, the Business Overview section can be concisely divided into 3 main slides:

Company Information & Location

Our construction company specializes in handling diverse projects, including residential, commercial, and industrial builds. Located strategically near major transport hubs, our headquarters offer easy access to key construction sites, providing logistical benefits and enhanced service delivery to our clientele.

Services & Specialization

We offer a comprehensive range of services from general contracting to specialized projects like energy-efficient constructions. Our expertise in custom designs and turnkey solutions sets us apart in the industry, ensuring high-quality project management and client satisfaction.

Target Market

Our target market includes homeowners, real estate developers, and public sector contracts. We cater to clients seeking reliable, high-quality construction services, with a focus on innovation and efficiency to meet the unique needs of each segment, ensuring we are the go-to contractor for diverse construction demands.

Make sure to cover here _ Company Information & Information _ Services & Specialization _ Target Market

Market Overview

Industry size & growth.

In the Market Overview of your construction contractor business plan, start by examining the size of the construction industry and its growth potential. This analysis is crucial for understanding the market’s scope and identifying expansion opportunities.

Key Market Trends

Proceed to discuss recent market trends , such as the increasing consumer interest in sustainable building practices, energy-efficient homes, and smart technology integration in construction. For example, highlight the demand for green building certifications and the rising popularity of renovations that focus on improving energy efficiency.

Key Competitors

Then, consider the competitive landscape, which includes a range of construction firms from large-scale contractors to local small businesses, as well as the trend toward DIY home improvements. For example, emphasize what makes your company distinctive, whether it’s through advanced project management techniques, specialization in sustainable construction, or exceptional client relations.

Make sure to cover here _ Industry size & growth _ Key competitors _ Key market trends

Dive deeper into Key competitors

First, conduct a SWOT analysis for the construction contractor , highlighting Strengths (such as advanced project management skills and a wide array of building services), Weaknesses (including dependency on the economic cycle and market competition), Opportunities (for example, growing trends in sustainable construction and smart home technologies), and Threats (such as potential economic recessions that may reduce investment in new construction projects).

Marketing Plan

Next, develop a marketing strategy that outlines how to attract and retain clients through targeted advertising, promotional discounts, strong online presence, and community involvement. Focus on showcasing your company’s unique capabilities and successful project completions to build trust and credibility in the market.

Finally, create a detailed timeline that outlines critical milestones for the construction business’s project completions, marketing initiatives, client relationship building, and expansion objectives, ensuring the business progresses with clear direction and purpose.

Make sure to cover here _ SWOT _ Marketing Plan _ Timeline

Dive deeper into SWOT

Dive deeper into Marketing Plan

The Management section focuses on the construction contractor business’s management and their direct roles in daily operations and strategic direction. This part is crucial for understanding who is responsible for making key decisions and driving the construction contractor business toward its financial and operational goals.

For your construction contractor business plan, list the core team members, their specific responsibilities, and how their expertise supports the business.

Financial Plan

The Financial Plan section is a comprehensive analysis of your financial projections for revenue, expenses, and profitability. It lays out your construction contractor business’s approach to securing funding, managing cash flow, and achieving breakeven.

This section typically includes detailed forecasts for the first 5 years of operation, highlighting expected revenue, operating costs and capital expenditures.

For your construction contractor business plan, provide a snapshot of your financial statement (profit and loss, balance sheet, cash flow statement), as well as your key assumptions (e.g. number of customers and prices, expenses, etc.).

Make sure to cover here _ Profit and Loss _ Cash Flow Statement _ Balance Sheet _ Use of Funds

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Construction Business Plan Template

Construction company business plan template.

If you want to start a construction business or expand your current one, you need a business plan.

Over the past 20+ years, we have helped over 10,000 entrepreneurs and business owners create business plans to start and grow all types of construction businesses, including commercial construction, building construction and residential construction.

Construction Business Plan Outline: How To Write a Construction Business Plan

Below are links to each section of a construction business plan:

• Executive Summary – The executive summary is the most important part of your business plan. It’s where you explain what your business is and why it will be successful.
• Company Overview – This section of your construction business plan should include a brief business description, your vision and mission statement, and the company’s core values.
• Industry Analysis – This section of your plan will provide an overview of the construction industry, including market size, growth outlook, major players, and competitive landscape.
• Customer Analysis – In this section of your plan, you will identify and describe your target market(s).
• Competitive Analysis – In this section, you will analyze your competitors and explain how you plan to differentiate your company from them.
• Marketing Plan – Your marketing plan should include an overview of your marketing goals, strategies, and tactics.
• Operations Plan – Your operations plan should describe how you will produce your product or service, as well as the people and resources needed to do so.
• Management Team – In this section, you will introduce the members of your management team and their experience and qualifications.
• Financial Plan – Your financial plan should include your financial statements such as the income statement, balance sheet, and cash flow statement.
• Appendix – The appendix of your plan should include any additional supporting materials, such as market research reports, resumes, licenses and permits.

Next Section: Executive Summary >

Construction Business Plan FAQs

What is the easiest way to complete my construction business plan, where can i find a free construction business plan pdf download, what is a construction business plan, why do you need a business plan for a construction company, what are the sources of funding for construction businesses.

The main sources of funding for a small construction business are bank loans and angel investors. With regards to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to confirm that your financials are reasonable. But they will want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business.

The second most common form of funding for a construction business is angel investors. Angel investors are wealthy individuals who will write you a check. They will either take equity in return for their funding, or, like a bank, they will give you a loan. Venture capitalists will generally not fund a construction business.

How Do You Start a Construction Business?

What are the keys to success for a construction business.

• Vision & Focus: determine the type of construction business you want to operate and stick to that vision.
• Create your business plan: Your plan will help you set goals and outline how to achieve them.
• Get licensed, bonded, and insured: before you can bid on your first job, you need to investigate and meet the requirements for local and state licenses and do what you need to do to secure them, get your worker’s compensation and liability insurance, and find out how much you need to be bonded for.
• Build a winning team: Hire and train a team of employees with the right skills. Remember that since construction is seasonal and cyclical, you must also be willing to downsize if/when the workload decreases.
• Purchase wisely: be careful not to overspend on salaries and equipment. Consider renting equipment when possible.
• Properly price jobs: Keep factors such as overhead and actual production costs (materials, labor, inspections, etc.) in mind when pricing jobs to ensure a healthy profit on all projects.

CONSTRUCTION BUSINESS PLAN OUTLINE

• Construction Business Plan Home
• 1. Executive Summary
• 2. Company Overview
• 3. Industry Analysis
• 4. Customer Analysis
• 5. Competitive Analysis
• 6. Marketing Plan
• 7. Operations Plan
• 8. Management Team
• 9. Financial Plan
• 10. Appendix
• Construction Business Plan Summary

Other Helpful Business Plan Articles & Templates

How to Write a Construction Company Business Plan (12 Steps)

You are starting a construction business. You own a construction company. Do either of those statements sound like you? If so, you need a construction company business plan. Building a construction company is hard work, but you don’t reach success on hard work alone. You also need strategic planning, an in-depth understanding of the competition, and a way to finance your business. These are all things that construction business plans address. In this post, we take a deep dive into how to write a business plan for a construction company. Read on to learn everything you need to know.

Why Do You Need a Business Plan for Your Construction Company?

Before you get too deep into “how” to write a home-building business plan, it’s helpful to understand “why” you should write one. There are three main considerations here: competition, growth, and financing.

Competition

The 50 U.S. construction companies with the highest annual revenue all made more than $1.5 billion in 2020 , with the highest-grossing company topping $14.4 billion. This is the level thousands of construction companies in the U.S. and around the world are trying to reach, and the fight to get there is fierce. With that in mind, you need to understand your competition. This is a primary purpose of a construction company business plan. You probably already know who your competitors are, but you need to do market research and write it all down. A construction or general contractor business plan will force you to do that.

Like it or not, if you’re not growing, you’re more than likely dying in the construction industry. And your financial backers will want to see that you intend to grow. That means you need to have a plan for growth — how to achieve it and how to manage it when it happens.

How are you going to fund the expansion of your business? How will you get the initial capital to buy equipment? There are plenty of questions related to finances when you’re building a construction company. And any large or small construction company business plan will answer them and help you get the financing you need in the process.

Two Types of Information to Include in a Construction Business Plan

The information you include in your commercial or residential construction business plan will fall into two categories: industry information and general business information. Both are important to your business for different reasons. Perhaps the most important reason to include thorough information in your business plan is that it demonstrates your knowledge of the industry and business in general to the investors and banks who will read the plan when considering you for a loan. See below to learn more.

Industry information:

What do you know about the construction industry that others don’t? In other words, what makes your approach to your construction business different from the rest? This is what investors in your business will want to know as they try to gauge your chance of success. Don’t rely on empty buzzwords here — words like friendly, service, reliable, and the like. These are fine words, but you need to be more specific. How does what you know about the construction industry make you capable of running a successful construction business? Make sure those points are clear in your construction company business plan.

General business information:

In addition to your expertise in home building, you need to demonstrate some knowledge of general business practices. That means construction business plans need to have detailed information on the basic running of the business, the plan to get construction jobs, cash flow, corporate taxes, and similar items.

How to write a construction business plan

A business plan for a construction company is not a single page of text. It’s a complex, multi-part document that requires a lot of information. While not all construction company business plans are the same, most of them have a similar format. They include 12 key sections, which we explore in more detail below.

Executive Summary

Your executive summary is your introduction. It needs to summarize the rest of the document but not go into too much detail. Try to limit the executive summary section to a single page if at all possible, and cover topics like the following:

• The reason you are starting a construction company
• Your goals for the business
• Where you plan to operate and offer residential construction services
• Your estimated business expenses and profits
• How your home building business will fit into the existing market

Again, don’t go into too much detail here. The details will come later in the business plan. Just hit the high points.

Company Description

The second part of your construction business plan will echo some of the points you raised in the executive summary, but it will go into deeper detail. In the company description section, the takeaway point for a reader should be why you think your business will be successful. To that end, you need to describe any specialties you or your business partners have, any special positioning you can achieve within the market, and any revenue streams or reduced expenses that can make you more competitive. You will also need to describe the existing competition here. Who are your competitors, how successful are they and why do you expect to outperform them? These are all questions your company description should answer.

Operational Plan

You will get into even more detail in this section. But instead of focusing on who you are and what your business will be, you will use the operational plan section to describe how your business is going to run day in and day out. You’ll need to cover a few key areas: Technology: List and describe the pieces of technology and equipment you will use in the operation of your construction business. This can include initial construction equipment purchases and office technology like computers, programs, and even home design software .

Bidding processes: How do you plan to bid on residential construction jobs? This is an important part of generating revenue for your construction company, so it needs to be described in detail in your business plan.

Production schedules: When you get a home-building job, you are instantaneously on a tight schedule. As you know, it takes a lot to take a home from paper to real life, and the logistics behind that process are complex and unforgiving. So, make sure your business plan demonstrates your knowledge of production schedules and, more specifically, how you plan to structure your company’s production schedules.

Inventory partners: Being willing to build homes is one thing, but having the right partnerships in place to get the job done is entirely another. Which vendors and suppliers will you work with? Why? Do you have any existing relationships that could prove beneficial to your business? Answer these and any related questions in your operational plan.

Market and Competition

You’re probably not going to be the first construction company in town. Who else is already established in your intended service area? How successful are they? Your construction company’s business plan needs to contain an in-depth analysis of the competition you’re going to face, as well as the market for residential construction services in the place you plan to operate. The reason why is simple. You need to know who your competitors are so you can see what they’re doing and look for ways to grab some market share from them. And you need to know whether people want the service you are going to provide. This section will cover all of that — for both your knowledge and that of your financial backers.

Construction is a service, but it contains within it multiple related services that you can choose to offer or not offer to your customers. This is going to be an important part of your business plan — starting a construction business without a list of services you will provide is like opening a store without knowing what you’re going to sell inside it. So, make a list. Here are some of the construction-related services you may want to consider:

• Residential construction
• Commercial construction
• Home design
• Landscape work

Sales & Marketing

You may not be a marketer at heart, but you’re going to have to have a plan to market your construction business and bring in home-building jobs. The sales and marketing plan you write in your business plan should be as detailed as possible. Include information on the following subtopics:

• Your marketing budget
• Your company’s marketing assets, such as a website
• Advertising plans (such as billboards, newspaper ads, and search engine advertising)
• Whether and how you plan to leverage social media
• Loss leader plans, such as offering free home design consultations
• How you will measure the success of your marketing efforts

In addition to marketing, this section of your construction company business plan will need detailed information on your sales processes. Will you have dedicated salespeople? How will your sales team get leads? Will salespeople be paid on commission? Answer these questions and more.

Managers can make or break a construction business. These are the leaders of your company — the ones who will define the path your business follows and bear the responsibility for the successes and failures you have along the way. That’s why this is an essential part of your home-building business plan. Management may shift over time, but at the start, you need to have a good idea of who’s going to be in charge of what. You will also need to include an explanation of why you have chosen these people, who they answer to, and what you are planning to pay them.

For financial backers, this is going to be one of the most important sections of your business plan. They want to know how you plan to manage the money they may give you so they have an idea of whether this is a sound investment. Give them as much detail as possible. Cover everything from your revenue projections and operational costs to employee wages and the price of your services. Wherever possible, you need to include exact figures based on hard data and research instead of soft estimates based on your own beliefs. Remember — lenders and investors have a head for numbers, so they will immediately notice if you’ve left something important out.

The funding section of a business plan for a construction company is an extension of the finance section, but it’s not the same thing. This is where you describe how you plan to obtain the money you need to start, run, and expand the business. The audience reading your business plan will hopefully play a part in the funding — that’s the whole idea, anyway — but you need to convince them that you will be able to use their funds wisely to generate revenue. Be specific about how much startup funding you’re going to need and why. Go into detail about how you will repay a loan or generate returns for investors. Describe how initial funding will be used in your business — to buy equipment, hire talented employees, market your business, and so on. With these bases covered, you will set yourself up to receive the funding you need to get this business off the ground.

Financial Projections

You’re hoping for a bright future for your new construction company. That’s a given. But you need to show that bright future with the financial projections in your business plan. Include projections for revenue, expenses, and profits for five years out from your starting date. Don’t just say you plan to bring in $100 million by the fourth quarter of year three — show the numbers behind how you’ll get there. You will be able to reference the information from the other sections of your business plan to support your projections.

Funding Request

If you need investments or a loan to start your construction business, you need to include in your business plan a specific funding request. This is where you ask for the money you need. Here again, you need to provide some detail:

• How much money do you currently have for the business?
• How much are you contributing alongside the investment or loan you are seeking?
• What assets do you already own, and what assets do you still need to acquire?

Many of the facts and claims you have made in other sections of your construction company business plan will have supporting information or related documents that won’t quite fit. The appendix is where you include those references. Any extra information that could help financial backers understand your proposed business should be included here. And don’t worry — this section will not likely be read in its entirety, so you can include everything. In general, more information in a business plan is better than less.

Final Thoughts

Writing a construction company business plan is a big task, but if you break it down into small steps, you can get it done. From the executive summary to the appendix, your business plan needs to demonstrate your ability to achieve success in the residential construction industry. With your business plan written and your company started, you’ll need to get home-building jobs and please your clients. Cedreo can help with that. Our home building software can help you quickly create 3D home designs to help clients visualize the project and make them much more likely to close the deal with you. Interested? Learn more about our home building software here, or contact us for more information.

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BUSINESS STRATEGIES

How to create a construction business plan

• Jeremy Greenbaum
• Sep 7, 2023

When it comes to starting a construction business, a strong foundation is everything. Just like laying the groundwork for a sturdy building, creating a business plan acts as the bedrock for your business's future success.

A construction business plan is a document that outlines the goals, objectives, strategies and operational details for a construction company. It serves as a roadmap to guide you and your stakeholders through the process of starting a business in the construction industry.

By systematically detailing the elements of your business, a construction business plan provides a clear and organized framework for achieving success in the competitive construction market.

Need a way to get your construction business online? How to make a website with Wix’s website builder .

Crafting a thorough construction business plan is crucial for establishing a clear path and securing the success of your venture. Here are the six key components of a construction business plan:

Executive summary

Business name and domain name

Market analysis and research

Operations plan, marketing and advertising plan, financial plan, 01. executive summary.

The executive summary is a concise overview of your entire construction business plan. It provides readers with a snapshot of your company's goals, strategies, market positioning and financial projections. While placed at the beginning of the plan, it's often written after the rest of the plan has been developed. A clear executive summary should capture the essence of your construction business and pique the reader's interest, encouraging them to delve deeper into the plan.

Example of an executive summary for a construction business: "Construction Innovators Inc. is a forward-thinking construction company specializing in sustainable building solutions. With a commitment to quality, innovation and customer satisfaction, we aim to revolutionize the construction landscape. Our expertise ranges from residential developments to commercial spaces, offering eco-friendly designs that meet modern demands. By leveraging cutting-edge technology and a skilled workforce, we're positioned to drive industry advancements while achieving substantial growth. Through strategic partnerships and a customer-centric approach, Construction Innovators Inc. is poised to create a lasting impact in the construction sector."

02. Business name and domain name

Selecting the right business name is crucial for establishing a strong brand identity in the construction industry. A memorable and relevant name can build trust and recognition. Similarly, choosing an appropriate domain name for your business website is essential for online visibility. To generate name ideas, consider using business name generators , incorporating industry-related terms or creative words that reflect your company's values.

Be inspired: Construction business name ideas , Contractor business name ideas

When choosing a domain name , ensure it's easy to spell, memorable and closely related to your company name. Check for its availability and avoid using hyphens or complicated spellings. A well-chosen domain name contributes to your online credibility and enhances discoverability.

Once you’ve landed on a name, take the proper steps to register your business .

03. Market analysis and research

Incorporating a market analysis within your construction business plan is pivotal to understanding your target market, competitors and industry trends. Comprehensive market research helps identify gaps in the market, customer preferences and potential challenges. This knowledge forms the foundation of a robust business strategy that positions your construction company effectively.

04. Operations plan

The operations plan outlines the practical aspects of running your construction business. This section details the physical location, facilities, equipment and staffing requirements. For instance, specifying the type of projects you'll undertake, the scale of operations and the necessary tools and machinery highlights the resources needed to deliver quality services.

05. Marketing and advertising plan

A well-defined marketing and advertising plan is essential for promoting your construction business. Consider strategies like digital marketing, social media engagement, content marketing and attending industry events to showcase your expertise. Tailor your campaigns to showcase your projects, expertise and commitment to customer satisfaction. Building a positive online reputation and leveraging word-of-mouth referrals are key components of marketing a construction business.

Remember that no matter how you choose to promote your business, you’ll want to maintain a consistent brand image. Think about what steps you need to take to build up your visual identity; check out these construction logo ideas and try a logo maker to make your construction logo and construction slogan .

06. Financial plan

The financial plan outlines the monetary aspects of your construction business. It includes details about how you plan on raising money for your business , projected revenues, expenses and profitability timelines. Make sure to define how your construction company will be initially funded, whether through personal investment, loans or investors. Accurate financial projections demonstrate your understanding of the industry and reassure stakeholders about the viability of your business.

A well-structured construction business plan like the one detailed above will provide you with a comprehensive roadmap for launching and growing your construction business successfully. Each section is necessary and contributes to your holistic understanding of your business's vision, strategies and potential for success.

Construction business plan examples: InnovativeBuild Solutions Inc.

InnovativeBuild Solutions Inc. is a dynamic construction company poised to transform the industry through cutting-edge technologies and sustainable practices. Our mission is to redefine construction by delivering innovative, eco-friendly solutions that meet modern demands. With a team of seasoned professionals and a commitment to excellence, we're confident in our ability to leave a lasting mark on the construction landscape. From residential projects to commercial spaces, InnovativeBuild Solutions Inc. is dedicated to shaping a more sustainable future.

Company name and domain name

Company name: InnovativeBuild Solutions Inc.

Domain name: www.innovativebuildsolutions.com

Market analysis: Through thorough research, we've identified a growing demand for environmentally-conscious construction solutions. Our target market includes forward-thinking homeowners, businesses seeking sustainable spaces and local governments promoting eco-friendly infrastructure.

Competitive analysis: We've assessed key competitors in our region, analyzing their strengths and weaknesses. This research allows us to identify gaps in the market and opportunities to differentiate ourselves.

Location: InnovativeBuild Solutions Inc. will be headquartered in a strategic urban location that offers easy access to construction sites and client meetings.

Premises: Our office space will be designed with sustainability in mind, incorporating energy-efficient features and eco-friendly materials.

Equipment: We'll invest in state-of-the-art construction equipment to ensure efficient project execution and maintain high standards of quality.

Staffing: Our team will consist of experienced architects, engineers, project managers and skilled laborers who share our passion for innovation and sustainability.

Digital marketing: We'll leverage digital platforms to showcase our projects, share industry insights and engage with our target audience. Social media, content marketing and email campaigns will be integral to our strategy.

Networking: Participating in industry events and local networking opportunities will help us establish connections and build relationships within the construction community.

Project showcase: Our website will feature a portfolio of completed projects, highlighting our expertise and the value we bring to clients.

Initial funding: We will secure a combination of personal investments and a small business loan to cover startup expenses, equipment purchase and initial project costs.

Projected revenues:

Year 1: $800,000

Year 2: $1,200,000

Year 3: $1,800,000

Expenses: Operating expenses, employee salaries, material costs and marketing investments have been carefully estimated based on industry standards.

Profitability: We aim to achieve profitability by the end of Year 2, driven by increased project volume and strong client relationships.

Benefits of creating a construction business plan

Creating a comprehensive and clear construction business plan is of paramount importance when starting a business. This plan acts as a foundation upon which all activities and decisions are built, fostering a focused and well-structured approach. It offers several key benefits:

Clear vision: A well-defined business plan will help you clarify your vision for your company. It outlines the company's mission, goals and values, providing a cohesive and unified direction for the entire team.

Strategic decision-making: The plan serves as a strategic tool that assists in making informed decisions. It allows you to anticipate challenges, assess risks and identify opportunities within the construction industry.

Resource allocation: A comprehensive plan provides insights into the required resources, both financial and human. This helps in budgeting, estimating costs and allocating resources efficiently.

Target market: Through market research and analysis, the plan outlines the ideal target market and customers. This understanding enables tailored marketing efforts, leading to better customer acquisition.

Competitive edge: A thorough analysis of competitors and the market landscape allows you to identify gaps and opportunities that can be exploited for a competitive advantage.

Funding: When seeking funding from investors or lenders, a well-structured business plan demonstrates the viability and profitability of the construction business. It instills confidence and attracts potential financial support.

Long-term growth: By outlining strategies for business growth, the plan provides a roadmap for expansion, diversification and adapting to evolving industry trends.

Regardless of what type of business you’re starting, it’s essential to incorporate a business website into your plan. A website acts as a virtual storefront, showcasing your company's portfolio, services and testimonials. It enhances brand credibility and accessibility, allowing potential clients to learn about your business and contact you easily.

Learn more: How to make a construction website

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Construction Business Plan Template [Updated 2024]

Construction Business Plan

If you want to start a new construction company or expand your established business, you need a business plan.

The following construction business plan template gives you the key elements to include in an effective business plan. It can be used to create a commercial construction business plan, a general contractor business plan or business plans for residential construction, building construction or industrial construction.

You can download the Construction business plan template (including a full, customizable financial model) to your computer here.

Sample Business Plan For a Residential Construction Company

Below are links to each of the key sections of a construction company business plan example:

• Executive Summary – The executive summary provides an overview of your business opportunity and summarizes the business plan.
• Company Overview – The company analysis includes information about your business idea, the full service design and construction services you offer, and the business structure.
• Industry Analysis – The industry analysis includes market research that supports your business and provides insights into market trends and the construction industry.
• Customer Analysis – The customer analysis provides an overview of your target market and the demographics and purchasing habits of these target customers.
• Competitive Analysis – The competitive analysis should identify your direct and indirect competitors and highlight your competitive advantage.
• Marketing Plan – The marketing plan includes your overall marketing strategy, pricing strategy and what marketing techniques you will try to attract potential customers (i.e., email marketing, paid advertising, etc.).
• Operations Plan – The Operations Plan includes information on your construction company’s day to day operations, expected operating costs and the bidding process for new construction jobs.
• Management Team – The management team section includes a profile of the business owner and management team including the officer manager and project managers, their experience and responsibilities.
• Financial Plan – The financial plan includes financial projections, including cash flow statements, income statements, and balance sheets for the next 5 years.

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Business Plan Template Construction

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Here is a free business plan sample for a construction company.

If you're poised to lay the foundation of your own construction company but feel uncertain about the initial steps, this is your blueprint for success.

In the content that follows, we will present to you a comprehensive sample business plan tailored for a construction company.

As any seasoned builder knows, a robust business plan is the cornerstone of a thriving enterprise, providing a clear blueprint for your company's structure, objectives, and growth strategies.

To erect a solid plan with precision and speed, you can utilize our construction company business plan template. Our specialists are also on hand to offer a complimentary review and refinement of your plan.

How to draft a great business plan for your construction company?

A good business plan for a construction company must cater to the unique aspects of the construction industry.

Initially, it is crucial to provide a comprehensive overview of the construction market. This includes up-to-date statistics and an analysis of emerging trends within the industry, as illustrated in our construction company business plan template .

Your business plan should articulate your vision clearly, define your target market (such as residential, commercial, or government contracts), and establish your company's distinctive positioning (e.g., specializing in green building, luxury homes, or cost-effective commercial structures).

Market analysis is a vital component. It requires a thorough understanding of the competitive landscape, regional construction demands, and the economic factors influencing the industry.

For a construction company, it is imperative to detail the services you will provide. This could range from design-build services, general contracting, or project management. Explain how these services align with the needs and requirements of your intended client base.

The operational plan is of paramount importance. It should outline the location of your business, the structure of your project management teams, the procurement process for materials, and the approach to managing construction projects.

In construction, it is essential to highlight your commitment to safety standards, quality control measures, and adherence to building codes and regulations.

Address your marketing and sales strategies next. How do you plan to secure contracts and maintain a robust pipeline of projects? Consider your approach to bidding, networking, client relationships, and reputation management.

Embracing digital strategies, such as maintaining an updated website and leveraging construction management software, is also crucial in the modern business environment.

The financial section is a cornerstone of your business plan. It should encompass the initial capital investment, projected cash flow, ongoing operational expenses, and the point at which you expect to break even.

In the construction industry, where project costs can vary significantly, it is vital to have a precise and well-researched financial plan. For assistance, you may refer to our financial forecast for a construction company .

Compared to other business plans, a construction company's plan must pay closer attention to risk management, the acquisition of skilled labor, and the potential for delays due to weather or supply chain disruptions.

A detailed business plan is not only a roadmap for the business owner but also a tool to attract investment or secure loans.

Lenders and investors are looking for comprehensive market analysis, realistic financial projections, and a solid understanding of the operational complexities of a construction business.

By presenting a thorough and substantiated plan, you showcase your professionalism and dedication to the success of your construction company.

To achieve these goals efficiently, consider using our construction company business plan template .

A free example of business plan for a construction company

Here, we will provide a concise and illustrative example of a business plan for a specific project.

This example aims to provide an overview of the essential components of a business plan. It is important to note that this version is only a summary. As it stands, this business plan is not sufficiently developed to support a profitability strategy or convince a bank to provide financing.

To be effective, the business plan should be significantly more detailed, including up-to-date market data, more persuasive arguments, a thorough market study, a three-year action plan, as well as detailed financial tables such as a projected income statement, projected balance sheet, cash flow budget, and break-even analysis.

All these elements have been thoroughly included by our experts in the business plan template they have designed for a construction company .

Here, we will follow the same structure as in our business plan template.

Market Opportunity

Market data and figures.

The construction industry is a cornerstone of the global economy with substantial market size.

Recent estimates place the global construction market at over 10 trillion dollars, and forecasts suggest continued growth driven by urbanization, infrastructure upgrades, and population increases.

In the United States, there are over 700,000 construction companies, contributing to an annual revenue of approximately 1.3 trillion dollars for the construction sector.

These statistics underscore the construction industry's vital role in shaping the built environment and its significant contribution to the national economy.

Emerging trends in the construction industry are indicative of a shift towards innovation, sustainability, and efficiency.

Green building practices are becoming more prevalent, with a focus on energy-efficient materials and sustainable construction methods to minimize environmental impact.

Technological advancements such as Building Information Modeling (BIM), prefabrication, and modular construction are streamlining project workflows and reducing waste.

Smart home technology and automation are increasingly integrated into new construction projects, catering to the demand for connected and intelligent living spaces.

Additionally, the industry is experiencing a surge in the use of drones and robotics for site surveying and monitoring, enhancing safety and precision.

These trends demonstrate the construction industry's commitment to embracing new technologies and sustainable practices to meet the evolving needs of society.

Success Factors

The success of a construction company hinges on several critical factors.

Quality of workmanship is paramount. A construction company that consistently delivers well-constructed, durable projects will build a strong reputation.

Innovation in construction techniques and materials can set a company apart in a crowded market.

Strategic location of operations can influence the ability to secure local projects and tap into regional growth.

Exceptional customer service and project management are essential for client satisfaction and repeat business.

Lastly, effective cost control, adherence to safety standards, and the capacity to adapt to industry trends, such as eco-friendly construction and smart technology integration, are vital for the sustained success of a construction company.

The Project

Project presentation.

Our construction company project is designed to address the increasing need for reliable and high-quality construction services. Situated in a region experiencing growth in residential and commercial development, our company will specialize in constructing modern, energy-efficient, and sustainable buildings. We will offer a comprehensive range of services, from initial design and planning to construction and project management, all tailored to meet the unique requirements of each client.

The emphasis will be on the use of innovative building techniques, materials, and sustainable practices to deliver projects that are not only aesthetically pleasing but also environmentally responsible and cost-effective.

Our construction company aims to set a new standard in the building industry, becoming a trusted partner for clients and a leader in sustainable construction practices.

Value Proposition

The value proposition of our construction company lies in our commitment to delivering high-quality, sustainable, and innovative building solutions. We understand the importance of creating structures that stand the test of time, both in terms of durability and environmental impact.

Our dedication to client satisfaction, attention to detail, and adherence to best practices in sustainable construction sets us apart, ensuring that every project we undertake is completed to the highest standards.

We are committed to fostering long-term relationships with our clients, providing them with peace of mind and confidence in their investment, and contributing to the betterment of our communities through responsible construction practices.

Our construction company is poised to become a cornerstone in the industry, championing the integration of green building techniques and materials to enhance the quality of life for our clients and future generations.

Project Owner

The project owner is a seasoned professional with a wealth of experience in the construction industry.

With a background in civil engineering and a passion for sustainable development, he is dedicated to establishing a construction company that excels in delivering projects that are both innovative and environmentally conscious.

Armed with a strategic vision for growth and a commitment to excellence, he is determined to lead the company to new heights, ensuring that each project not only meets but exceeds client expectations.

His expertise and drive for continuous improvement are the bedrock of the company, inspiring a culture of quality, integrity, and sustainability that will redefine the construction industry.

The Market Study

Market segments.

The market segments for this construction company are diverse and cater to various needs within the construction industry.

Firstly, there are residential clients looking to build or renovate their homes, seeking reliable and quality construction services.

Next, we have commercial clients who require the construction of retail spaces, offices, or other commercial properties, emphasizing timely delivery and adherence to safety standards.

The market also includes real estate developers focused on multi-unit residential or commercial developments, who value scalability and project management expertise.

Lastly, government and institutional clients for public infrastructure projects, such as schools and hospitals, can be a significant segment due to their need for compliance with strict regulations and standards.

SWOT Analysis

A SWOT analysis of this construction company project highlights several factors.

Strengths include a strong track record of completed projects, a skilled workforce, and robust project management capabilities.

Weaknesses might encompass the cyclical nature of the construction industry and the challenges of maintaining a skilled labor force.

Opportunities can be found in the growing demand for sustainable and green construction practices, as well as in technological advancements that can improve efficiency and reduce costs.

Threats may include economic downturns affecting the construction industry, increasing material costs, and the competitive landscape of the construction market.

Competitor Analysis

Competitor analysis in the construction sector indicates a highly competitive environment.

Direct competitors include other local and regional construction firms, as well as national construction companies with a presence in the area.

These competitors vie for projects based on cost, quality, reputation, and the ability to deliver on time.

Potential competitive advantages for our company include a strong reputation for safety, innovative use of technology, and a customer-centric approach to project management.

Understanding the strengths and weaknesses of competitors is crucial for carving out a niche in the market and ensuring client satisfaction.

Competitive Advantages

Our construction company's dedication to safety, quality, and customer satisfaction forms the cornerstone of our competitive edge.

We leverage advanced construction technologies and methodologies to enhance efficiency and deliver projects on schedule and within budget.

Our commitment to sustainability and green building practices not only meets the growing demand for environmentally responsible construction but also provides long-term value to our clients.

Moreover, our transparent communication and personalized service ensure that we understand and meet our clients' specific needs, fostering lasting relationships and repeat business.

You can also read our articles about: - the customer segments of a construction company - the competition study for a construction company

The Strategy

Development plan.

Our three-year development plan for the construction company is designed to establish us as a leader in sustainable and innovative building solutions.

In the first year, we will concentrate on building a strong reputation in the local market by delivering high-quality construction services and exceptional customer service.

The second year will be focused on expanding our services to neighboring regions and investing in advanced construction technologies to enhance efficiency and reduce environmental impact.

In the third year, we aim to diversify our portfolio by entering the commercial construction space and forming strategic alliances with real estate developers and architects to broaden our project scope.

Throughout this period, we will adhere to our core values of sustainability, integrity, and continuous improvement to meet the evolving demands of our clients and stay ahead in the competitive construction industry.

Business Model Canvas

The Business Model Canvas for our construction company targets both residential and commercial clients seeking reliable and eco-friendly construction services.

Our value proposition is centered on delivering sustainable building solutions, timely project completion, and transparent pricing.

We offer our services through direct contracts and partnerships, utilizing our key resources such as skilled labor, modern equipment, and industry expertise.

Key activities include project management, sustainable building practices, and client engagement.

Our revenue streams are generated from construction contracts, while our costs are mainly associated with labor, materials, and equipment maintenance.

Find a complete and editable real Business Model Canvas in our business plan template .

Marketing Strategy

Our marketing strategy is built on showcasing our commitment to sustainability and innovation in construction.

We aim to educate our target market on the benefits of green building and position ourselves as a thought leader in the industry. Our approach includes participation in industry events, content marketing through blogs and case studies, and leveraging client testimonials.

We will also establish partnerships with suppliers of eco-friendly materials to enhance our brand image.

Additionally, we will utilize social media and digital marketing to increase our visibility and engage with potential clients on a more personal level.

Risk Policy

The risk policy for our construction company is designed to mitigate risks associated with project execution, workplace safety, and financial management.

We comply with all construction regulations and safety standards, ensuring that our work sites are secure and our employees are well-trained.

We conduct thorough project planning and risk assessments to prevent delays and cost overruns. Moreover, we maintain a conservative financial strategy to manage cash flow effectively.

We also carry comprehensive insurance to protect against any unforeseen events that could impact our projects or business operations. Our priority is to deliver safe, high-quality construction services while safeguarding the financial stability of our company.

Why Our Project is Viable

We are committed to establishing a construction company that stands out for its dedication to sustainability and modern building practices.

With a growing demand for eco-friendly construction and our focus on quality and customer satisfaction, we are poised for success in this dynamic industry.

We are enthusiastic about the opportunity to contribute to the development of sustainable communities and look forward to the growth and evolution of our construction company.

We remain adaptable to market changes and are eager to embrace the challenges and opportunities that lie ahead in the construction sector.

You can also read our articles about: - the Business Model Canvas of a construction company - the marketing strategy for a construction company

The Financial Plan

Of course, the text presented below is far from sufficient to serve as a solid and credible financial analysis for a bank or potential investor. They expect specific numbers, financial statements, and charts demonstrating the profitability of your project.

All these elements are available in our business plan template for a construction company and our financial plan for a construction company .

Initial expenses for our construction company include acquiring construction equipment, vehicles, and tools necessary for various building projects, obtaining licenses and permits, insuring our operations, and investing in safety training for our workforce. Additionally, costs will be allocated for establishing a strong brand presence and executing targeted marketing strategies to attract potential clients in the residential and commercial sectors.

Our revenue assumptions are based on a thorough market analysis of the local construction industry, taking into account the current demand for new construction and renovation services, as well as the competitive landscape.

We expect a gradual increase in contracts, starting conservatively and expanding as our reputation for quality and reliability grows within the community.

The projected income statement outlines expected revenues from our construction services, direct costs (materials, labor, subcontracting), and operating expenses (office rent, marketing, salaries, equipment maintenance, etc.).

This leads to a forecasted net profit that is essential for assessing the long-term profitability of our construction business.

The projected balance sheet presents assets unique to our company, such as construction machinery, vehicles, and material inventories, alongside liabilities including loans and projected operational costs.

It provides a snapshot of the financial standing of our construction company at the end of each fiscal period.

Our projected cash flow statement details the inflows and outflows of cash, enabling us to predict our financial needs at any point in time. This is crucial for maintaining a healthy cash balance and steering clear of liquidity issues.

The projected financing plan identifies the specific sources of funding we intend to tap into to cover our initial outlays.

The working capital requirement for our construction company will be diligently managed to ensure we have sufficient funds to support day-to-day activities, such as procuring materials, managing inventory, and disbursing wages.

The break-even analysis for our venture will calculate the volume of business we need to achieve to cover all our costs, including the initial investments, and to begin generating profits.

It will signal the point at which our company becomes financially sustainable.

Key performance indicators we will monitor include the profit margin on our construction projects, the current ratio to evaluate our ability to meet short-term obligations, and the return on investment to gauge the efficiency of the capital we have deployed into the business.

These metrics will assist us in assessing the financial health and overall success of our construction company.

If you want to know more about the financial analysis of this type of activity, please read our article about the financial plan for a construction company .

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Construction Business Plan

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Fosse Commercial Contractors LLC

Executive summary executive summary is a brief introduction to your business plan. it describes your business, the problem that it solves, your target market, and financial highlights.">, opportunity.

Customers in the Houston area are in need of beautiful office buildings, warehouses, public works etc. The area is expanding rapidly and they need a company that can provide high quality work and materials to build the spaces that were needed.

Fosse Commercial Contractors (FCC) strives to offer the finest quality design, site preparation, cost estimates, construction, repair, and alteration to clients needing large scale construction services, whether it be office buildings, warehouses, large apartment complexes, public works, etc. Fosse maintains the highest standards of service in the commercial construction industry.

The Houston area is booming at this moment, business has grown in the area for the last few years and is expected to continue for at least the next four years. This makes for a very attractive market for Fosse Commercial Contractors.

We will be concentrating on the customers that will provide us with the greatest margin, in other words those clients desiring office building construction. This is the fastest growing segment of commercial clients requiring our services. The other categories that we will serve include the restaurant segment, the special facilities segment, and all other potential commercial clients.

Competition

Currently we have three major competitors within the Houston area. These are TNT General Contractors, Texas Specialty Construction, and Polanski Construction. Each of these companies targets the same clients as Fosse and each has a fine reputation for customer satisfaction. However, the market in Houston is growing so fast that the demand is currently greater than supply. This is an excellent opportunity to gain market share and a defensible position in the industry.

In the construction industry the primary ways to compete are through low cost or better project management. One of the most important processes for winning a contract is the bid process. Fosse has a unique competitive edge over most of its competitors. Mr. David West, FCC’s General Projects Manager, is the nephew of Charles Nunn, who owns McHoughton’s Lumber, one of the Midwest’s major construction material suppliers. Through this relationship, Fosse has been able to gain a very advantageous supplier contract allowing Fosse to obtain its materials at a significant discount. With this edge the company can underbid its rivals and achieve a low cost leadership role.

Expectations

Fosse has only a small amount of debt and intends to stay that way. We expect to see increased profits from our market shift efforts by the end of Year 2. Over the next three years we expect lower profits as we make inroads into this tough market. We estimate that we will be able to reduce marginal costs and increase overall profitability by Year 3 or Year 4 as we grow and take advantages of economies of scale.

We also think we can grow. For this next year we intend to significantly increase overall revenues to close to $900K, from $572K this past year. We have the market, the people, and the capabilities. It’s time to grow.

However, growth is expensive. We are prepared to inject new capital to support losses for most of this first year. We can turn a profit for years 2 and 3.

Financial Highlights by Year

Problem & solution, problem worth solving, our solution.

Fosse Commercial Contractors LLC is a small construction company formed from the merger of Fosse Painting & General Construction and West General Contractors. The company has successfully operated in the Houston area for the past ten years working on both small and large scale construction, repair, and alteration projects focusing on residential contracting. With the business boom that is occuring in our local area and the desire to improve overall profit margins, the company is planning to shift its target market from residential clients to the larger commercial customers. This business plan will lay out our goals and tasks to make this transition successful and create enough market share to succeed in this highly competitive market.

Target Market

Market size & segments.

Market Segmentation 

At the moment our potential list of clients includes all the various businesses in the Houston area and its suburbs. According to the Texas Small Business Association there are 6,512 firms of all types and sizes in the surrounding area. We will concentrate on the customers that can provide us with the greatest margin, in other words those clients desiring office building construction. This is the fastest growing segment of all the commercial clients requiring our services. The other categories that we will serve include the restaurant segment, the special facilities segment, such as gas stations, and theaters, and a category which we will call "general", encompassing all other potential commercial clients.

Target Market 

Since office building construction has the highest average profit margin, we will focus most of our marketing and servicing toward these customers. Usually these clients require the largest projects in scope, land use, and cost. In addition, they tend to be the most sensitive to completion times. Therefore, we plan to accommodate these clients through a well established and expeditious permitting program, strict cost accounting and supply management, and intensive and comprehensive project management capitalizing on Fosse’s experience in the field.

Current Alternatives

Currently we have three major competitors within the Houston area. These are TNT General Contractors, Texas Specialty Construction, and Polanski Construction. Each of these companies targets the same clients as Fosse and each has a fine reputation for customer satisfaction. However, the market in Houston is growing so fast that the demand is currently greater than supply. This is an excellent opportunity to gain market share and a defensible position in the industry.

One of the greatest limiting factors in this industry is its strong seasonality. During the winter months, contracts and production drop off sharply, increasing the company’s short-term risk of cash flow shortfall.

Our Advantages

In the construction industry the primary ways to compete are through low cost or better project management. One of the most important processes for winning a contract is the bid process. Fosse has a unique competitive edge over most of its competitors. Mr. David West, FCC’s General Projects Manager, is the nephew of Charles Nunn, who owns McHoughton’s Lumber, one of the Midwest’s major construction material suppliers. Through this relationship, Fosse has been able to gain a very advantageous supplier contract allowing Fosse to obtain its materials at a significant discount. With this edge the company can underbid its rivals and achieve a low cost leadership role.

Keys to Success

The local commercial construction market is booming at the moment. In order to achieve a defendable position in this environment, Fosse must concentrate on the following tasks.

• Secure at least five large scale commercial contracts over the next three years.
• Expand our customer base through expansion into other geographic areas to retain a sufficient level of profitability.
• Increase marketing expenditures by 15%.

Marketing & Sales

Marketing plan.

The most critical part of sales is not the marketing, but the bidding process, in which companies offer their designs, services, material quality, project timeline estimates, and costs. The company that offers the best combination of these variables is the most likely to get the contract. Therefore very detailed project planning, including supply agreements, labor needs, subcontractors, presentation, and other factors, is crucial for Fosse in winning contracts. We will be designing a standardized method for doing this with all our contracts, with an emphasis on quality, timeliness, and low cost to outbid our competitors.

Milestones & Metrics

Milestones table.

Key Metrics

Key Metrics 

• The number of large scale contracts per year. 
• New construction – we need over 50% of our business as new construction. 
• #of repairs – we would like to repair other’s work but we need to repair ours too. 

Ownership & Structure

Fosse is a Limited Liability Company registered in the state of Texas. Fosse Commercial Contractors, LLC is exclusively owned by Mr. Robert Fosse (50%) and his partner, Michael West (50%). The company is expecting to alter to a Class C corporation chartered in Texas. This will create greater investment opportunities through the acquisition of investment capital from a limited number of shareholders.

Company History

Fosse Commercial Contractors, LLC began in the Houston area when Mr. Robert Fosse, who had worked in the residental construction business for ten years began his own company, Fosse Painting and General Construction in the Houston area. For the next eight years the company grew slowly, working mostly on small scale residential projects while gaining a reputation for quality services and reliability. Then the original company was merged with another small-scale local company, West General Contractors and the company began to bid successfully for larger projects. The company maintains a General Contractor’s license in the state of Texas.

The company’s management came to the conclusion that the firm had grown sufficiently to alter its primary target market from the residential construction segment to the higher margin office and commercial construction segment. The company plans to implement this change by the middle of 2004.

Past Performance

Management Team

Fosse’s management consists of Mr. Robert Fosse and Mr. David West. Mr. Fosse will concentrate on client contacts and bidding along with overall management of the company. Mr. West will be the company’s General Project Manager, coordinating all project management and concentrating on cost controls, suppliers, day-to-day project supervision, labor relations, etc. Mrs. Janet Fosse will be our office manager, handling client satisfaction,invoicing, permitting, and general book keeping. Most of our labor needs will be met through Contractor-Temps a nationwide temporary labor company.

The company is planning to expand it personnel to add a number of job superintendents as soon as the number of projects increases. These superintendents will have the following duties:

• Direct supervision of all work at the job site.
• Quality control.
• Scheduling subcontractors and material deliveries.
• Verifying and insuring that all work is done in accordance with plans.
• Insuring that all work is performed in accordance with all OSHA guidelines.

In addition, as business increases, we will hire additional job superintendents and project managers as needed.

Personnel Table

Financial Plan investor-ready personnel plan .">

Key assumptions.

 We do not anticipate a significant increase in profits until our 3rd year as we will need time to penetrate our new market. We plan on basing dividend payouts on overall performance and health of the company and may decide to retain such earnings for future growth.

Revenue by Month

Expenses by month, net profit (or loss) by year, use of funds.

We will use the influx of capital to expand into a new market. There is a lot of opportunity to grow and be successful. We need to buy equipment and get experts and do the website to refocus our brand

Sources of Funds

We will be using our sales and cash from our already established business to expand and make our business more profitable. 

Projected Profit & Loss

Projected Balance Sheet

Projected Cash Flow Statement

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The Ins and Outs of Writing a Construction Business Plan (Free Template)

By Homebase Team

A strong foundation is essential for a construction job—and starting a construction business. And how do you do that? By setting up your business for success with a solid construction business plan. 

Read on to learn about why you need a construction business plan, how to create one in six easy steps, and a free template to get you started. 

What’s a business plan for a construction company?

A business plan is a document that outlines a company’s business activities, goals, and how its activities will help achieve its objectives. It documents a business’s market research, financial projections, mission statement, and offerings. 

Every construction business can benefit from a business plan, whether you’re established or just starting. A construction business plan can help you secure funding, document your business model, forecast future business demands, and function as a guiding light for you and your team. 

The benefits of having a construction business plan

Most businesses start with a business plan—it’s a natural way to get your thoughts onto paper and organize them into actionable steps. Business plans can take a lot of time, but when done right, your business plan can function as your manual to move your business forward. 

If you’re still unsure whether your construction business needs a business plan, these four benefits might help you decide. 

Apply for funding

You’ll need a business plan if you’re looking for a business loan or planning to apply for business grants. Most financial lenders won’t even consider giving you a business loan without a well-thought-out business plan. A business plan is a way for lenders to gauge the risk level they’re taking if they lend your business money.

Your business plan should show lenders how to use their money and how to pay it back. It also allows you to build confidence in your ability to run a business from an organizational standpoint.

Attract top talent

Hiring the right people is important for any business, but it can make or break a construction business. Giving potential hires a complete understanding of your vision for your construction company can be the difference between finding the right employees versus the right now employees.

Creating a business plan will give you a clear vision for your company that you’ll easily be able to communicate to any potential hires.

Understand your competition

Industry and competitor research and analysis are a big part of creating a business plan. You might start your business plan thinking you know exactly what makes you stand out, but then again, you might not. Researching who your competitors are and what they do helps you solidify how your business can be differentiated from your peers. 

Finding what’s unique to your business is a huge factor in outbooking other local construction businesses.

Gives you clarity

Trying to get your business off the ground can feel like you get lost in the weeds of it all. Creating a business plan can help you clarify key elements of your company. A business plan gives you the big picture and lets you identify the priorities and milestones you need to focus on for your business.

How to write a business plan for a construction company

Writing a business plan for your construction company is essential in building your business. Whether you’re looking for funding or you’re looking for clarity, a business plan can help set you on the right path. Here are six key components of a successful construction business plan.

1. Executive summary

An executive summary is an overview of your construction business plan. Think of it as the CliffsNotes version of your business plan—it gives readers the basics of your business’s goals, financial projections, strategies, and more. This should be the first section of your business plan, but it’s usually the last thing you write because your plan informs it. 

An excellent executive summary reflects your construction business and should excite the reader about your company and its potential. 

2. Company description

The company overview and description section is the second section in your construction business plan. This section outlines vital details about your company, like your location, the size of the business, what you do, and what you hope to do in the future. 

When writing your company description, try to include the following information:

• The official company name
• Type of business structure (sole proprietorship, LLC, corporation, etc.)
• Names of the owners/management team
• The business location
• A company history that outlines when the business started, why you created it, and what it does
• Mission and vision statements

3. Market analysis

A robust market analysis gives you the foundation to create a strong construction business plan with the best chance at success. Market research is the best way to test whether your business will succeed. It can help you mitigate risks, give insights into customer preferences, and even help you decide on location and pricing. 

There are two main types of market research: primary and secondary. Primary research is gathered directly from consumers—think surveys, interviews, and focus groups you administer. Secondary research is compiled from external sources—think government census data, polling results, and research conducted by third parties. 

Both primary and secondary are great on their own; together, they’ll give you a fuller picture. 

4. Operations plan

There are a lot of moving parts that go into running a construction business. The operations plan lets you lay out all those parts and explain how you’ll run your company. This includes everything from your physical location, facilities, staffing needs, and equipment you’ll require. You can outline the types of projects your construction business will undertake, how many projects you’ll take on at once, and what resources you’ll need to deliver quality service at that scale.

5. Marketing and advertising strategies

Use the marketing and advertising strategies section of your construction business plan to highlight how you plan to promote your business. This section can outline all of the strategies you plan to use and can include a rough budget of what you plan to spend on marketing and advertising. Consider social media , digital marketing, content marketing, SEO, and local marketing strategies.

6. Financial projections

The financial projections section includes details about how you’re funding your business, projected revenues and expenses, and profitability projections. Accurate financial projections give potential lenders and investors confidence in your understanding of the industry and the viability of your business. 

Quick tips for writing a construction business plan

Now that you’ve got everything needed to start writing your business plan, here are five quick tips to help your writing process. These are big-picture ideas that you can use to get the most out of your construction business plan:

• Get to the point: Use clear, concise language to get your point across. Skip the jargon and ensure someone outside the construction industry understands what you write.
• Use data when you can: It’s great to have supporting data points to back you up when you’re talking about the industry and market.
• Write for your audience: Who are you writing for? Investors? Employees? Shareholders? Lenders? When you clearly define your audience, you can write in a way that resonates.
• Research, and then research some more: What you have to say about your industry is important, but having facts backed by research is even more powerful and convincing. 
• Use it: Don’t let your business plan just be another PDF collecting metaphorical dust on your desktop. Use it to inform your decisions and guide you and your team through the years. And update it when needed!

Free construction business plan template

Ready to get started on your construction business plan? Our free construction business plan template can help you write a business plan with all the elements needed for success. 

Download your free construction business plan template now

Build a better business with the right tools

If you know one thing, it’s that the quality of your tools can make or break a project. The same is true for the tools you use in your business. 

With Homebase , you get everything you need to take control of your construction business . Built for teams like yours, Homebase helps you schedule your team , track their hours , and run payroll even if you’re all on different job sites. 

Homebase is the all-in-one management app that simplifies running your construction business. Get started for free .

Construction business plan FAQs

Why should you create a business plan for your construction company even if you aren’t looking for financing.

You should create a business plan for your construction company even if you aren’t looking for financing, because it can help you understand your business and competitors and give potential hires confidence in your business.

What’s the best way to create your construction business plan?

The best way to create a construction business plan is to use a business plan template. You can download your free construction business plan template above.

Remember:  This is not legal advice. If you have questions about your particular situation, please consult a lawyer, CPA, or other appropriate professional advisor or agency.

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How To Write A Construction Business Plan

Create your small construction company business plan using our free construction business plan template. We guide you through the steps of taking your business idea from dream to reality.

Construction Business Plan (Free PDF)

How To Be Successful As A Contractor

Business Plan Template: What You Get

• Create a construction business plan step by step
• Receive support for the creation of all chapters in the business plan
• Outline the objectives of your business, goals set for future growth and profitability as well as strategic planning

This Business Plan Template is Suitable For:

Applicable for founders, freelancers & small business owners

Your Benefits:

• Free of cost: Download the business plan template for free!
• Time-saving: Save time and open your business faster!
• Correct data: Avoid unnecessary mistakes!

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A state with ideal conditions for startups and young companies offers – for example – access to cash, a skilled workforce and affordable office space. In a study, WalletHub compared the 50 states on 27 key indicators of startup success. Find the ideal location for your startup now.

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With a microloan, founders successfully start their own business. Create a business plan with Zandura and prepare perfectly for your bank interview. This is how you get a microcredit from the SBA microloan program.

8 Factors For Choosing The Right Business Loan

A quick loan can be very tempting for small businesses. However, there are a number of things you should look for before making a long-term commitment to a bank and its terms. These eight points are essential when choosing suitable loans and funding:

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How to Write a Successful Construction Business Plan

By Daniel Quindemil

What if I told you there was a “copy and paste” formula that any construction business can follow and be successful?

Seriously…. there is…

Before I started I AM Builders, I helped grow a Commercial Construction Company from a $0 to $7,000,000 per year company.

I initially started I AM Builders to be an estimating firm. But as time went on I realized there was a big problem in the construction industry…. Contractors know how to build, but no one teaches them how to grow a company.

As a side a note: we specialize in estimating projects for busy contractors . If you ever need help estimating projects, we can prepare your entire estimate and bid for you and we can walk you through all strategies to help you close. Learn more about our estimating service for Contractors and Subcontractors .

Every entrepreneur wants to write a business plan. And yes, in most businesses you need a business plan to get financing, venture capital money, etc.

But construction is the only industry where you can start a business with zero financing become a million-dollar business almost overnight.

And guess what….. it doesn’t take a fancy business plan.

When I walked into Caroni, they were a drywall labor company and had just starting getting their first GC jobs. We didn’t know how to grow a construction business .

We started trying out different ways to get leads, estimating strategies, negotiations strategies….

We tried it all….

And after all was said and done, the secret to growing a construction business can be summarized in these three steps.

This is your business plan.

5 Pillars of a Contractor Business Plan

1. develop a system to get a ton of potential projects and client leads, 2. develop an estimating team that can bid jobs fast, 3. develop a follow-up system to negotiate and close sales.

4. Set Up Project Management Systems to Keep Everything Running Smoothly

5. Build Your Field Team and Perform an Outstanding Job on Every Single Project

Before you start… do this.

Here are some questions to ask yourself:

• What do you want your reputation to be?
• How do you want to handle your bidding process?
• How much time do you have for your construction company?

Next, it’s time to get some specific goals.

Too many contractors are only caught up with their jobs and the busyness of their daily schedules that they never sit down and think, “ what am I working toward ?”

This is why it’s important to get into the specifics and have clear goals on what to achieve.

For more info on how to prepare detailed goals and targets read this post: Grow Your Construction Business in 3 Months .

After helping over 1200 contractors grow their company, we’ve concluded that there are 5 steps to creating an effective business plan.

Let’s get into each one.

1. Determine Your Lead Generation Strategy

How are you getting your leads?

Before doing any work on the field, before estimating the job, before even getting the job , you need to capture the lead for the job.

That’s why it’s the first step in this list.

So the question is, how do you capture leads? Well, the first thing you should probably do is educate yourself deeply on this specific topic alone. Lucky for you, we have an article on how to get more jobs for you to dive into.

Next, you need to sign up for lead generation services like iSqft and Bluebook to consistently get the opportunity to bid on jobs. They both serve as the lead generation tool and the bidding tool as well, so it’s a 2-in-1 deal.

If you want more details on these lead gen services and a few other ones, check out this article .

After investing in these lead gen services you’ll have potential jobs coming in guaranteed, but there’s also another strategy you can take to get more leads.

It involves building a Select 12 Cluster (S12C). An S12C is essentially a list of 12 potential clients that you handpick and focus on that will provide you with a steady stream of business.

For example, if you’re a general contractor you would do a quick Google search for developers in your area,

Then you would pick 12 of them and either send out personalized emails, give them all a call, or visit their offices.

But you’re not just going to introduce yourself, remember that goal is to let them know you exist. Not any other contractor… but you . Stand out from other contractors, display authority and give value by helping them with their jobs, or by giving potential clients advice. This goes a long way in developing a relationship with everyone in your S12C.

The main idea with the S12C is to put your horse blinders on and laser focus on 12 ideal clients and develop relationships with them so they can start using you as the go-to when they need work with your trade.

So just to recap:

• Invest in lead generation services
• Set up and develop a S12C

After securing leads consistently and reliably, it’s time to have a specific plan to bid and estimate those jobs.

2. Establish Your Bidding and Estimating Process

The second step after getting leads is to have a system that bids and estimates those jobs for you at lightning speed so you can focus most of your time on selling the job.

There’s 3 options for you to consider:

• Hire an in-house estimator to work full-time.
• Hire an estimating service to handle each individual project.
• Do the whole thing yourself.

If you choose to do it yourself, it will prove to be really tough to expand your business when you’re so deep in it all day. Plus, imagine working for 1 and a half days straight to estimate a project, only to find out your potential client just used you for better pricing (they really do this). Successful contractors are ones that know how to build a team , how to lead them , and how to sell jobs to bring in business.

In other words, delegate as much as possible so you can focus on the thing that really brings in revenue, selling jobs.

So if you’re estimating jobs yourself as a one-man show, then delegate that task as soon as possible, otherwise, you won’t ever be able to effectively grow.

Let’s say you finally decide to hire an estimator to work in your office. The average salary of an estimator is $81,219/Yr, according to Indeed . Then after payroll taxes and insurance (26%), you’re looking at over $102,000 a year!

Which translates to about $8,500/Mn and $2125/Wk. If you want to bid 10 average-sized projects a month, that means you’re paying your estimator $850 per project!

To save money, time, and effort to manage an extra employee(s), the best option is to outsource your estimating to a reliable firm that can produce accurate pricing and only work on a per-project basis, so you only pay when there’s a project to bid, instead of having to pay an estimator full-time whether they’re hard at work or not.

3. Create a Sales Team that Closes Jobs

After you have leads coming in and you’re bidding those jobs at lightning speed without doing the tedious work, it’s time to dedicate most of your time to sell the job.

There are many strategies to closing jobs, but as a whole, it involves investing in the client .

Investing in a client means giving , being patient, and then asking when the time is right. You can give to the client through automatic follow-up or manual follow-up.

Automatic follow-up means using a Customer Relations Manager (CRM) to systematically contact specific people at specific times. It’s a software you can also use it to send mass emails with similar pitches to different clients in your area.

Manual follow-up involves a lot of calling and talking to people. This is on your own time, that’s why it’s called “manual” follow-up.

Before bidding a project, be sure to meet your potential client in person to:

• See if they’re someone you want to work with
• Get them to know who you are and what you bring to the table

If someone knows who you are, gets calls from you now and then where you genuinely help them out with any problems or ask how they’re doing…

Who do you think they’re most likely to pick for the job?

This is why it’s critical for contractors to have a S12C where they focus on 12 specific clients and get 80% of their work from them.

It’s ideal for the owner of the construction company to be the main salesperson but if there’s just not enough time in the day (we understand), then hire 1-2 Account Managers who’s entire job consists of talking to potential clients, following up with previous ones, and being the main form of communication between your company and the outside.

4. Set Up Project Management Systems

At this point you’ll have leads pouring in, you’ll be estimating those jobs on autopilot, and you’ll be selling the projects. It’s only a matter of time before you suddenly have a couple projects to work on, and the hard work really begins. This is where you need to understand how to manage subcontractors .

As stated above, the owner of a construction company, or any company for that matter, should focus on leading teams and selling. That’s it. Being on the job site all day stressing and pulling your hair out is not going to bring in new business. Unless you truly love being on the field, you need to delegate everything to seasoned professionals.

But before you go running around and delegating everything, you need to set up a system to manage all your projects so your contracting business can be a coordinated, smooth-oiled machine that pumps out only quality work.

You’re going to need 3-4 software to help you manage your fieldwork:

Bid Management Software

This is what you’re going to use to bid out jobs and keep track of your bids. It’s quick, it’s easy, and it’s a whole lot better than handing people estimates all day and having to remember due dates off the top of your head. If you want to check out some bidding software go take a look at SmartBid and Quick Bid .

Project Management Software

This is software for people on the field to be in constant communication with one another. One of the first steps in professionalizing a construction company is to get a project management software that helps all the workers, supervisors, project managers, and superintendents all be on the same page all the time. Some great P.M.S are CoConstruct , Buildertrend , and Procore .

Accounting Software

It always helps to have all your finances done automatically and as hands-off as possible. Let an accounting software manage all your finances so you can focus most of your effort on bringing in revenue by selling jobs. QuickBooks is the cream of the crop here but Zipbooks and Stripe are also great alternatives.

Estimating Software

This is optional because if you outsource your estimating to qualified estimating firms, then spending money on estimating software won’t be necessary. But if you want to hire estimators in-house or want to do a mix of in-house and out-house estimating, then you’re without a doubt going to need a takeoff and estimating software that can help you be as accurate and as quick as possible. We use Planswift in our office but Bluebeam is also great as well.

You can find software packages that include all-in-one packages like Procore, Corecon, or Buildertrend that include everything you need to professionalize your construction business. The pricing will reflect that, but it’s a necessary investment for your construction company.

5. Found a Field Operations Team

Now that you have project management systems set up, it’s time to create a field operations team. Keep in mind this is only for people in the field , not in the office.

Every construction company is different, some may choose to subcontract work instead of hiring workers and training them, and then others may lease workers from other companies.

So first understand how you want your company to operate, then the next step is to understand the roles of a steamrolling field operations team and how to find the right people for the job.

General Superintendent

This is the main field operations manager. He/she is the one overseeing all the projects a company is currently working on. A general superintendent needs to be comfortable under pressure, an effective leader that gets people to work, and able to raise their voice from time to time.

Project Superintendent

There are the overseers of single projects. They put all their attention on a single job to make sure it runs well. They need to have a deep understanding of construction, their workers, and be on top of their game even when under pressure.

This is the next subdivision in the field. Larger jobs typically get broken up into multiple sections and while they’re all being managed by the project superintendent, the foreman is the one managing specific sections or trades.

Skilled laborers are the true engine behind the construction job. These are the people on the field doing the actual work. Hiring workers is relatively simple but be sure not to fall in the trap of hiring cheaper labor to save money because the reality is all the mistakes they make end up costing more than if you would have hired workers a bit more expensive.

Hire people, train them, and let them train other workers.

We’re not going to have a project manager on the list because they’re not typically on the field but a good project manager will be in the field often to help the superintendent run the job.

That’s how you set up a strategical business plan that set’s you up for success.

Construction can be a tough industry, but a great plan on how you’re going to run your business and even better execution on that plan can make your life a lot easier.

We hope you enjoyed this piece and got some real value from it. Feel free to comment below your $0.02.

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Plan template bundle, construction business plan template bundle, construction business continuity plan bundle, construction marketing business plan template bundle, construction business development plan template bundle, 32+ construction business plan templates, construction business plan template, free sample construction business plan template, general construction business plan template, sample residential construction business plan template, free simple construction business plan template, small construction business plan template, commercial construction business plan template, building construction business plan template, 5 year construction business plan template, construction and engineering business plan template, construction company business plan template, construction management business plan template, construction start-up business plan template, construction contractor business plan template, construction carpenter business plan template, construction marketing plan template, general contractor business plan with cover page, construction business plan template download, simple real estate business plan template, printable business plan outline template, printable business plan template, sample business plan in word, construction financial business plan template, construction small business plan template, operational construction business plan template, construction startup company business plan, construction management business plan, residential housing business plan template, how to create a construction business strategy plan, construction business plan with executive summary, building project construction business plan, construction business plan final proposal in pdf, create a construction business plan in 6 steps:, step 1: business description, step 2: goals and objectives, step 3: resources needed, step 4: strategies, step 5: financial statements, step 6: review and edit, final thoughts, general faqs, 1. what is a construction business plan, 2. what is the purpose of having a business plan, 3. who needs a construction business plan, 4. what must be included in a business plan, 5. mention the advantages of business plans, plan templates, free 32+ construction business plan templates.

In all the stages involved in getting to choose out mutual partners to accomplish your real estate small business plan , or getting to hire out contractors, a construction business plan might be the savior. It helps you in making the essential steps in mapping out a strategic achievement of construction goals. This is accomplished by incorporating project management plan tools available for users’ disposal.

• Google Docs

• Apple Pages

• A brief history of your construction company
• The customers, suppliers, and needs you have
• A sheet summary of the growth of the company, including financial details
• A brief of your long-term and short-term goals
• Steps on how you will make profits.
• Planning leads to practical and faster achievements in any company
• It foresees the future
• It acts as an added strength to a business action plan for steady growth and prosperity
• It helps one be ready to face any unexpected situation that might crop up.

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Starting Construction Company Business Plan (PDF)

Starting a construction business is an exciting venture that holds immense potential for profit and success. This industry is currently experiencing a significant upswing, with a soaring demand for construction services. As our cities expand and infrastructure projects multiply, the opportunities in construction are more abundant than ever before. In recent years, the world has witnessed a construction boom, driven by the growing need for residential properties, commercial spaces, and vital infrastructure developments. In this article, we will explore the ins and outs of launching a construction enterprise, unraveling the key considerations and steps required to navigate the path towards building a successful and thriving construction business in a market that shows no signs of slowing . Thus this article will outline how to start a construction business, and the construction company business plan (PDF, Word & Excel).

Selecting the right location is a pivotal decision when starting a construction business. The geographical area you choose will significantly impact the clientele you can reach, the types of projects you can undertake, and the level of competition you will face. The key is to strike a balance between proximity to potential clients and access to a skilled workforce and suppliers. Urban areas often offer a steady flow of construction projects, from commercial buildings to residential developments, but they also come with higher costs and stiffer competition. On the other hand, rural or suburban settings might offer lower competition and potentially lower overheads, but you may need to travel farther to access clients and resources.

Conduct thorough market research to identify the locations that align best with your business goals and resources. Moreover, consider the regulatory environment in your chosen location. Construction businesses are subject to various local, state, and federal regulations, and these can vary significantly from one place to another. You’ll need to understand zoning laws, building codes, and permitting requirements, as they can affect project timelines and costs. Additionally, establishing a strong network in your chosen location, with connections to local government offices, suppliers, and industry peers, can be invaluable for navigating these regulatory challenges and finding opportunities for growth. So, whether you decide on the bustling city streets or the tranquil suburbs, making a well-informed decision about your construction business’s location is a crucial step on your path to success.

Premises & Offices

The choice of premises and offices for your construction business is more than just a matter of bricks and mortar; it’s about setting the foundation for your company’s operations and growth. Many construction businesses start small, often from the owner’s home or a leased office space. As your business expands, your premises should be scalable to accommodate your growing team, equipment, and storage needs. Consider the layout of the building, making sure it’s practical for your daily operations and that it complies with safety and zoning regulations. Proximity to project sites and clients can also be a significant factor, as it can save time and costs on transportation.

Investing in a dedicated yard or storage facility can be essential, especially if your construction projects involve large machinery and materials. A well-organized yard can help streamline your operations and ensure that your equipment and materials are secure and easily accessible. Whether you choose to lease or buy, your premises should align with your long-term business goals and be adaptable to future growth. So, whether you’re starting in a small office or managing a sprawling facility, selecting the right premises and buildings is a pivotal step in building a solid foundation for your construction business. The cost of acquiring or leasing the premises should be included in the construction business plan.

In the construction industry, mobility is key, and your choice of vehicles can greatly influence the efficiency and effectiveness of your operations. Whether you’re transporting heavy equipment to job sites or meeting with clients and suppliers, having the right fleet of vehicles is crucial. Consider the specific needs of your business. If your projects involve transporting large machinery and materials, a fleet of trucks, flatbeds, or specialized construction vehicles might be essential. On the other hand, for a smaller operation, a reliable set of work vans or pickup trucks could suffice. Ensure that your vehicles are well-maintained, fully insured, and compliant with safety regulations to protect your team and your investments.

When selecting vehicles for your construction business, factor in fuel efficiency, maintenance costs, and durability. You’ll want vehicles that can withstand the wear and tear of construction work and provide a solid return on investment. Additionally, branding your vehicles with your company logo and contact information can serve as a moving advertisement for your business, enhancing visibility and credibility in your local area. So, from the pickup trucks that transport your crew to the heavy-duty equipment that gets the job done, your choice of vehicles plays a critical role in the success of your construction business. The construction company business plan should cater for the costs of acquiring the vehicles.

Machinery & Equipment

In the construction industry, the right machinery and equipment are the lifeblood of your business. From bulldozers and cranes to concrete mixers and power tools, the tools you use can make or break the success of your projects. Investing in high-quality, well-maintained machinery is not just about efficiency but also safety. Regular maintenance and inspections are essential to keep your equipment running smoothly and to prevent costly downtime. Keep an inventory of your equipment, create a maintenance schedule, and have a contingency plan in case of unexpected breakdowns to ensure that your projects stay on track. Your choice of machinery should also align with the types of projects you plan to undertake.

Different construction specialties require different equipment. For instance, if you’re focused on residential construction, you may need equipment like excavators and skid-steer loaders, while commercial projects may call for larger cranes and specialized tools. You can also consider renting or leasing equipment when needed rather than purchasing everything outright. This flexibility can help you adapt to changing project requirements and manage costs more effectively. So, from the smallest hand tools to the largest earth-moving machines, your selection of machinery and equipment is a critical component of your construction business’s ability to deliver quality work on time and within budget. The cost of purchasing the equipment should be included in the construction company business plan.

The range of services your construction business offers is a defining factor in your identity and success within the industry. The construction sector is incredibly diverse, and you can choose to specialize in various areas based on your team’s expertise and your business goals. Residential construction, for instance, involves building and renovating homes, while commercial construction focuses on commercial buildings like offices, retail spaces, and warehouses. Each sector has its unique demands, regulations, and client expectations. As a construction business owner, you may offer a variety of services, such as general contracting, design and build, renovation, new construction, and specialized services like electrical or plumbing work.

Your niche and expertise will shape your branding and marketing efforts. Consider the needs and demands of your target market, and tailor your services to meet them effectively. It’s essential to strike a balance between offering specialized expertise and diversifying your services to reach a broader audience. Specializations might include environmental construction, focusing on sustainable and eco-friendly building practices, or civil construction, involving infrastructure projects like bridges and roads. Industrial construction centers on factories and manufacturing facilities, while institutional construction pertains to educational and healthcare facilities. As you establish your construction business, it’s vital to carefully define the services you provide and identify the sectors or specializations that align with your skills and market demand. This strategic decision will help you carve out a niche in the industry and attract clients seeking your specific expertise.

Staff & Management

The construction industry thrives on the collective effort and expertise of the people involved, making your choice of staff a critical component of your business’s success. Hiring the right team members, from skilled laborers to project managers, is essential for executing projects efficiently and meeting your clients’ expectations. Seek individuals with the necessary qualifications and experience, as well as a strong work ethic and commitment to safety. Training and ongoing professional development should also be a priority to ensure that your staff remains up-to-date with industry best practices. In addition to hiring, consider the size and structure of your workforce.

For smaller businesses, cross-training employees to handle multiple roles can provide flexibility, while larger operations may benefit from specialized positions to streamline tasks and responsibilities. Moreover, in a dynamic industry like construction, it’s common to employ part-time or project-specific staff, ensuring that you can scale your team up or down as project demands fluctuate. This approach allows for cost-effective flexibility, especially when additional labor is required for specific tasks or phases of construction projects. The salaries for all your employees should be catered for in your construction business plan.

In parallel, strong management is essential to orchestrate all these moving parts. Effective leadership ensures that projects are delivered on time and within budget, and that safety and regulatory compliance are maintained. It involves setting clear expectations, providing guidance, and fostering a culture of accountability. As your construction business grows, consider the need for departmental specialization, from a dedicated HR and accounting team to specialized project management roles. The right blend of staff and effective management creates a symbiotic relationship, leading to successful project outcomes and long-term business sustainability.

The market for construction services is undeniably vast, presenting a plethora of opportunities for your construction business to thrive. From towering skyscrapers to residential homes, the demand for construction projects continues to be robust and varied. The potential customers for your construction business span a wide spectrum, including individual homeowners, property developers, real estate investors, businesses, institutions, and government agencies. Each of these customer segments offers distinct projects and requirements, making it crucial to identify and target those that align best with your expertise and business goals.

For instance, homeowners may seek your services for home renovations or building a new house, while property developers and real estate investors often require your expertise in constructing multi-unit housing or commercial properties. Businesses, including retailers, offices, and warehouses, are potential clients for commercial construction projects, and institutions like schools, hospitals, and government agencies frequently undertake infrastructure and facility improvements. Understanding the diverse range of potential customers in this expansive market empowers you to tailor your approach to meet their specific needs and seize the myriad opportunities that the construction industry offers.

Pre-Written Construction Company Business Plan (PDF, Word And Excel): Comprehensive Version, Short Funding/Bank Loan Version and Automated Financial Statements

For an in-depth analysis of the construction company business, we encourage you to purchase our well-researched and comprehensive construction business plan. We introduced the business plans after discovering that many were venturing into the construction business without enough knowledge and understanding of how to run the business, lack of understanding of the financial side of the business, lack of understanding of : the industry, the risks involved , costs and profitability of the business; which often leads to disastrous losses.

The StartupBiz Global construction company business plan will make it easier for you to launch and run your construction business successfully, fully knowing what you are going into, and what’s needed to succeed in the business. This is a complete business plan for a construction company. It will be easier to plan and budget as you will be aware of all the costs involved in setting up and running the construction business.

Uses of the Construction Business Plan (PDF, Word And Excel)

The construction business plan can be used for many purposes including:

• Raising capital from investors/friends/relatives
• Applying for a bank loan
• Start-up guide to launch your construction business
• As a construction company business proposal
• Assessing profitability of the construction business
• Finding a business partner
• Assessing the initial start-up costs so that you know how much to save
• Manual for current business owners to help in business and strategy formulation

Contents of the Construction Company Business Plan (PDF, Word And Excel)

The business plan for construction includes, but not limited to:

• Marketing Strategy
• Financial Statements (monthly cash flow projections, income statements, cash flow statements, balance sheets, break even analysis, payback period analysis, start-up costs, financial graphs, revenue and expenses, Bank Loan Amortization)
• Industry Analysis
• Market Analysis
• Risk Analysis
• SWOT & PEST Analysis
• Operational Requirements
• Operational Strategy
• Why some people in the construction business fail, so that you can avoid their mistakes
• Ways to raise capital to start your construction business

The construction company business plan package consists of 4 files

• Construction Company Business Plan – PDF file (Comprehensive Version – 97 Pages)
• Construction Company Business Plan – Editable Word File (Comprehensive Version – 97 Pages)
• Construction Company Business Plan Funding/Bank Loan Version- Editable Word File (Short version for applying for a loan/funding – 47 pages)
• Construction Company Business Plan Automated Financial Statements – (Editable Excel File)

The business plan can be used in any country and can be easily edited. The financial statements are automated. This implies that you can change eg the costs, salaries etc, and all the other financial statements will automatically adjust to reflect the change. 

Click below to download the Contents Page of the Construction Company Business Plan (PDF)

Testimonial 3

I was extremely lucky to come across StartupBiz Global. Their business plan exceeded my expectations, and most importantly I was able to secure a loan from my bank. Thank you guys, now my dreams are coming true!

Testimonial 4

The business plan which I purchased from your website saved me TIME and MONEY! The layout of the business plan was excellent. The financial statements were detailed and easy for me to edit. I will come back to purchase another business plan soon.

Testimonial 1

StartupBiz Global provided a very professional and comprehensive business plan which I used for my business. The business plan was easy to edit, and I was able to get the funding which I wanted. I highly recommend their business plans.

Testimonial 8

Just wanted to say I am very happy with the business plan and I will gladly recommend your products, thank you very much and have a great day.

Testimonial 7

I found Startupbiz Global online when I was in desperate need of a business plan. I was overwhelmed by the quality of the business plan, it’s comprehensive and well researched! I did not have to wait to get the business plan, I got it instantly after payment. I highly recommend Startupbiz Global, and would happily use them again in the future.

Testimonial 6

I purchased a business plan from you, and I’m glad to inform you that I was able to get my loan, and I’m starting my poultry farming business on the 1 st of July. This was made possible because of your business plan. Thank you very much, you made my dream come true.

Testimonial 5

I was able to understand the business side of farming because of your business plan. You did extensive research; the business plan was well prepared and fully detailed.  It made everything clear, and I have somewhere to start now. I am confident that I am going to succeed in my business because of the guidance from your business plan.

Testimonial 2

Many thanks for your incredibly efficient service and thorough business plan. I am very impressed with the business plan. Before I bought the business plan, I tried to do my own business plan – it was such a nightmare and it turned out badly, also not to mention the stress it caused me. I wish I knew about your website earlier!

Get the Construction Company Business Plan (PDF, Word And Excel)

Click Buy Now  below to purchase using Paypal, Credit Card, or Debit Card. After you have purchased, you will immediately see the download link for the business plan package on the screen. You will also immediately get an email with the business plan download link. The Pre-written business plan package (PDF, Word, and Excel) costs $30 only!

If you want to purchase multiple business plans at once then click here: Business Plans Store.

The business plan package is a zipped compressed file containing the PDF, Word and Excel documents. To open the package after downloading it, just right click, and select Extract All. If you have any problems in downloading and opening the files, email us on [email protected] and we will assist you.

We wish you the best in your construction business! Check out our collection of business plans  , and more business ideas .

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Construction Business Plan

Whatever construction work you do whether it be commercial construction, landscaping , maintenance or building construction, your services alone won’t be enough to attract investors and clients. With a business plan , companies will be able to attract potential investors to help get their company from the ground up. Construction companies in particular sometimes need investors to get their project up and running. How will they be able to do that? By presenting a construction business plan to them.

15+ Construction Business Plan Examples

1. construction management business plan.

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2. Construction Repair Business Plan

3. Construction Manufacturer Business Plan

4. Construction Business Plan Example

5. Construction Start-up Business Plan

6. Construction Carpenter Business Plan

7. Simple Construction Business Plan

8. Sample Construction Business Plan

9. General Construction Business Plan

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10. Construction Company Business Plan Example

11. Sample Construction Business Plan

Size: 105 KB

12. Sustainable Construction Business Plan

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14. Business Plan For Construction Company

Size: 966 KB

15. Construction Plan for a Startup Business

Size: 710 KB

16. Construction Management Business Plan

Size: 141 KB

What is a Construction Business Plan?

A construction business plan is a blueprint for how a construction company runs their operations. It contains information about the company itself and the construction services it provides. This business plan also contains the goals of the construction company as well as the business strategies used to achieve them. Content of a construction business plan also include safety plans and business procedures. Like all business plans it serves as a guide for the construction company on how to navigate in the world of business.

How to Create a Construction Business Plan?

According to a recent graph by Statista, the total spending of the United States has been going upwards from 2011 onwards. This means a lot of money can go in your company’s way especially once you get a hold of investors through an impressive construction business plan.

1. Create an Introduction to your Business

Everything that is important has to have a proper introduction. To get started with your business plan you need to write an introduction about your construction business first. Similar to a proposal you need to make a formal and a good impression with your readers when presenting the plan to them. Write a summary of your company; how it started, what it does, and where they currently operate. Write about the services your business provides but don’t go into the details just yet. Make it intriguing enough to make your readers want to read on.

2. State The Truth

When you are writing your construction business plan always remember to be truthful. False claims on your business plan may impress your readers at first. But when the truth is uncovered it can result in your business having a bad reputation and that can spell doom for your company . So make sure all your words are facts that can be backed up.

3. Fact Check and Include Documentation

Keeping in line with the previous step, take the time to fact check all your statements . When you are stating things about your company especially when it involves money and confidential information, make sure they are backed up by concrete evidence. Provide documentation as well as further proof when you write about your projects in your business plan so that means including photos and construction blueprints.

4. Include Your Strategies

This step is especially important when you are a startup company. When making your construction business plan write about the strategies that you have in order to reach the goals of your company. You can write about your marketing and financial strategies for a start. Write about the assets you have that enable you to achieve your plans such as the general contractors you have under your employ for example. Making this part allows you readers to know how you plan on bringing your company up and whether you have the means to achieve it.

How long does it take to write a construction business plan?

Creating a well thought out business plan for your construction company can take months depending on the knowledge you have and the detail you dedicate into making it.

How long should a construction business plan be?

A well written construction plan should take about 15 minutes to skim. In that time you should be able to convey everything important about your construction company. If it takes longer to read try to rework your plan by making it less wordy.

Who is the one who creates the construction business plan?

People who have a key position in the construction company are the ones who should be involved in creating the business plan . Somewhat such as the founder or CEO should be the one who usually prepares it but they can also be assisted by consultants with relevant knowledge.

Your construction business plan serves as a written blueprint on how to run your company. Give it a lot of thought when you are writing it down especially when you are going to use it to attract investors . With a well made plan you will be able to get even the most hesitant investors to work with your company. And with their help the clients will also be drawn to the company leading to more business and profit.

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BUSINESS PLAN FOR THE SMALL CONSTRUCTION FIRM Management and Planning Series TABLE OF CONTENTS INTRODUCTION A Note on Using This Publication 1 What's in This for You? 1 Why Are You in Business? 1 What Business Are You In? 1

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How to start a small business

This guide will help you get your business up and running..

Terms apply to American Express benefits and offers. Visit americanexpress.com to learn more.

If you're launching your own business, you have a ton of questions that need to be answered: How do you name your business? How do you register it? Will people think your product is good enough to purchase? And how will you afford to get it off the ground when you still have bills to pay? 

With the help of experts and entrepreneurs, we've created this guide to help you figure out the solutions to the above questions and more. Read on and find out what you need to do to successfully launch your small business.

Already have your business plan ready and just need help legally forming it? These companies can help .

Research your market

Formulate a business plan, the different types of business models, fund your business, pick a business name, create a website for your business, legally form your business, apply for a business license (if you need one), apply for an employer identification number (ein), consider business insurance, open a business bank account, launch your business.

It's great that you have a dream and ambition, but you need to make sure there's a market for whatever product you want to create.

"It's important to do that market research prior to spending any kind of money so you can make sure you have something," says Abby Mercado, a former venture capitalist and founder of Rescripted , a women's health media company.

When done right, market research can reveal your ideal customer's specific needs, as well as the solutions they've tried before, your competitors, the price your customers are willing to pay, and more.

How to use social media and real-life feedback for your market research

Social media can give you an idea of what your potential customers are talking about online. If you're planning to launch a dog food company, for example, searching Reddit or going through the comments on competitors' TikTok and Instagram accounts can yield valuable information about what your customer wants. This approach is often referred to as "social media listening."

But it's also important that you don't limit your research to just searching around online and social media. For example, when Mercado was doing market research for what would eventually become Rescripted, a media company focused on women's reproductive health, she reached out to a fertility clinic she was familiar with and got feedback from a doctor there. According to Mercado, the doctor loved her idea and introduced her to potential customers who gave her even more feedback.

Questions to ask for good feedback

Here are some thought starters around the types of questions that would be useful to ask your target customer: 

• Which brands (in your targeted market) have you purchased from in the last 3 months?
• How satisfied are you with the products/solutions that already exist for this market? 
• What was your reasoning for purchasing from a competitor? 
• Which features are most useful to you? 
• How do you prefer to shop for this product/service? 
• At what price would you be unwilling to purchase this product? 

You can also get more useful feedback if you're able to give people an example of your product. For instance, if you want to open up a bakery, maybe whip up a small batch of cookies and hand them out in your neighborhood in exchange for people answering some questions.

Friends and family can sometimes be a good place to start looking for feedback about your offerings, but make sure you're surveying your ideal customer. This is the person who will most likely compare your business to competitors before deciding to buy. So if you're opening a butcher shop but your mom's a vegan, consider getting feedback from someone else. 

A business plan is a document that includes your business's goals and the framework you'll follow to achieve them. It can be a helpful document regardless of your business's size and whether this is your first business or your tenth. 

One of the most useful functions of a business plan is that it keeps you and your team organized and on the same page. If you're launching your business with a partner or are hiring a senior leader, having a written document everyone agrees on can help smooth over arguments about strategy.

A business plan also provides a roadmap for how you need to market your business and earn revenue during different stages of its growth. By identifying certain milestones in your plan, you can get a general sense of whether your business is on track or if you need to make adjustments. 

Finally, when you're applying for a business loan, grant or other types of funding, people may want to see your business plan before they give you money. 

The Small Business Administration (SBA) suggests your business plan include the following:

• An executive summary that provides basic information about your company and team, including what your product is and your company's mission. 
• A company description with more specific details about the market you serve and the advantages you believe you have that will give you an edge over the competition. 
• Trends or themes you're seeing in your target market.
• The legal structure of your business and who will be on your team (also mention if you're flying solo).
• An in-depth description of your product or service (including any patent filings and copyrights) as well as your marketing plan. 
• A declaration that you're seeking funding (if applicable). It can also be a good idea to include your financial projections with your funding request if you're approaching investors for your business. 

The business model is the part of your business plan that breaks down how you'll make money.

There are many business models and plenty of examples of companies that have obtained success with each one. Picking the right one depends on the nature of your business (among other things), since what works for a tech start-up might not fly for a food truck.  

Service (Fee-for-service)

As the name may suggest, a service-based business model involves carrying out a task or service in exchange for a fee. The fee may be paid as a fixed sum or an hourly rate. Common small business examples using a fee-for-service model include consulting, coaching or freelance work. 

Subscription

A subscription business model involves charging a fixed fee on a recurring basis in exchange for a product or service. This is a common model among online service providers, but it can also be used to sell physical products, such as subscription boxes.

This business model involves introducing customers to a free, basic version of the service in the hopes that they'll upgrade to a paid premium version with more features. Because this business model makes it possible for some customers to simply stick with the free version, it isn't ideal for product-based businesses. One example of a freemium business model is an app with free basic features and premium features that are unlocked when you pay to upgrade your plan.  

This type of business model involves selling a physical item in exchange for money. Products can either be sold in-person (think: bakery, ice cream shop, stationery store, etc.) or online as an e-commerce brand. It can be costly to produce a product so the goal is to make the item for a low cost and sell it at a higher price. 

You're going to need some type of funding to get your business up and running. Those costs can range from the equivalent of a night out to the price of a midsize sedan (and more) depending on your business, but you have plenty of options to secure your seed money. 

These are the most common ways to finance your small business idea.

Bootstrapping 

Best for: Businesses with low startup costs; founders with enough personal savings

Bootstrapping is perhaps the simplest way to fund your business because it involves spending your own money to get started. You don't have to apply for funding or worry about paying back a lender. 

Bootstrapping works best when you have low start-up costs (or if you have a high amount of personal wealth). The biggest risk with bootstrapping is sinking too much money in the business and then coming up short in your personal life when you need cash for an emergency or to cover the essentials.

If you aren't in a place where you feel comfortable assuming the risk of bootstrapping, there are other options to consider. 

Crowdfunding 

Best for: Raising small amounts

Crowdfunding involves asking multiple people to provide small amounts of money to help you reach a larger funding goal for a business idea. So if you need $5,000, you might have 200 people giving you small amounts of money to help you reach that goal. 

With crowdfunding, you typically don't have to pay back the people who gave you money (though some crowdfunding platforms make you give the cash back if you don't reach your funding goal within a certain amount of time). 

When Dr. Jenny Woo was working to launch Mind Brain Emotion , a deck of skill-building cards, she used a combination of bootstrapping with a small amount of money and crowdfunding through Kickstarter. 

"For me personally, Kickstarter was the lowest risk," she explains. "The worst risk is you don't get funded. It's also less time-consuming than if you were to pitch [to investors] or try to get a loan."

Crowdfunding can be a good way to close small funding gaps that you can't afford to fill with your personal savings. However, keep in mind that many campaigns may only last 30 to 60 days on the platform so you have to be realistic about how much money you can raise in that time. 

Some crowdfunding platforms charge a platform fee. The fee is charged as a percentage of the total funds you raise and it can range from 5% to 12%. This obviously eats into the money you can walk away with.

Best for: Businesses that don't need urgent funding; businesses that can meet any usage rules

A grant is a lump sum of money awarded to a business or organization that doesn't need to be paid back. Business grants are commonly provided by government organizations, nonprofits and corporations. 

You'll need to fill out an application to be considered. Some grant application processes may have lengthy approval and disbursement timelines so even if you qualify it may take some time to receive the funds. This is why grants may not be for everyone. If you need money more urgently to fund product development, you may need to look at other options.

While it can take a while to be awarded grant money, it can be well worth it if you don't need to dip into your savings or take on debt for your business. 

Also keep in mind that some grants have strict rules on how you can use the funding. For instance, some grants may only be used to fund research and development while others can only be used for purchasing equipment. 

Small business loans 

Best for: Founders who need a large lump sum of money upfront and can afford to make small, incremental repayments

Unlike a grant, a small business loan is money that's provided by a lender that must be paid back within a certain amount of time. The terms of your small business loan can depend on your credit score, the type of business you're running and how much money you need. 

You'll also need to pay interest in addition to the principal amount. So before you decide to take on a small business loan, make sure you can afford to pay it back without defaulting on your balance. 

CNBC Select ranks OnDeck as one of the best small business loan lenders for its same-day funding service, and Kiva for its 0% interest crowdfunded microloans.

Types of loans

Better business bureau (bbb) rating, loan amounts.

$5,000 to $250,000

Up to 24 months

Minimum credit score needed

Minimum requirements.

In business at least 1 year, $100,000 annual revenue, business bank account

Terms apply.

• Potential for same-day cash disbursement (only available in certain states, for term loans up to $100,000)
• Top-tier A+ rating with the BBB
• Low minimum credit score
• Fixed monthly payments
• 100% Prepayment Benefit option, so you can pay your loan off early without any penalty or fee
• Doesn't lend to businesses in Nevada, North Dakota or South Dakota
• Early prepayment fee if you don't qualify for the 100% Prepayment Benefit

Peer-to-peer crowdfunded loan

$1,000 to $15,000

Up to 3 years

No minimum credit score required

You must be 18, live in the U.S., use this loan for business purposes, not currently in foreclosure, bankruptcy or have any liens, and have a small number of your friends and family willing to make a loan to you (Nevada and North Dakota residents are not ineligible)

• Ability to borrow with no interest
• Loans are geared toward borrowers who are unbanked and have trouble qualifying for financial products
• Ability to market your product to 1.6 million lenders on Kiva
• You need to prove your creditworthiness by inviting friends and family to lend to you
• It can take a while to receive your loan since investors need to raise money
• No BBB rating

Small business credit card 

Best for: Founders who want access to a line of credit for small expenses over time

A small business credit card also involves taking on debt to finance your business costs. Unlike a loan, a business credit card is a form of revolving credit that you can use repeatedly (so long as you make good on your payments). This can make it more flexible than a loan, where you need to apply for a lump sum upfront, requiring you to know exactly how much money you'll need from the very beginning. 

The Blue Business® Plus Credit Card from American Express is a strong option for business credit because it offers a 0% intro APR period of 12 months on purchases from the date of account opening (18.49% - 26.49% variable APR after that; APR will not exceed 29.99%). ( See rates and fees ).

The Blue Business® Plus Credit Card from American Express

Earn 2X Membership Rewards® points on everyday business purchases up to $50,000 per year, then 1X point per dollar

Welcome bonus

Earn 15,000 Membership Rewards® points after you spend $3,000 in eligible purchases on the Card within your first 3 months of Card Membership.

0% for 12 months on purchases from date of account opening

Regular APR

18.49% - 26.49% variable; APRs will not exceed 29.99%

Balance transfer fee

Foreign transaction fee, credit needed.

See rates and fees , terms apply.

• No annual fee
• Straightforward rewards program
• 2.7% foreign transaction fee

The Ink Business Unlimited® Credit Card is also a solid contender since it doesn't charge an annual fee and you'll earn 1.5% cash back on purchases for your business.

Ink Business Unlimited® Credit Card

Earn 1.5% cash back on every purchase made for your business

Earn $750 bonus cash back after you spend $6,000 on purchases in the first 3 months from account opening

0% for the first 12 months from account opening on purchases; N/A for balance transfers

18.49% - 24.49% variable

Either $5 or 5% of the amount of each transfer, whichever is greater

Good/Excellent

• Free employee cards
• Simple cash-back program
• Special financing offer for purchases
• 3% fee charged on purchases made outside the U.S.

Which funding method is right for you?

When deciding which funding route to take, you probably want to spend as little of your own money as possible. In this case, you might first consider crowdfunding and applying for grants since you don't need to pay back this money. In the best-case scenario, you'll raise all the money you need for start-up costs without spending a dime of your savings. 

But it's more likely that crowdfunding or grants will cover some of your expenses, but not everything. If you need to save some money to bridge that funding gap, consider a high-yield savings account . An FDIC-insured account is one of the safest places to put your cash, and your funds will earn interest while remaining easily accessible. The Marcus by Goldman Sachs High Yield Online Savings account, for example, doesn't charge any monthly fees, overdraft fees, or excessive transaction fees. LendingClub High-Yield Savings also has no monthly fees, and doesn't require a minimum balance to earn its high APY.

Marcus by Goldman Sachs High Yield Online Savings

Annual percentage yield (apy), minimum balance, monthly fee, maximum transactions.

At this time, there is no limit to the number of withdrawals or transfers you can make from your online savings account

Excessive transactions fee

Overdraft fee, offer checking account, offer atm card.

• No minimum balance or deposit
• No monthly fees
• No limit on withdrawals or transfers
• Easy-to-use mobile banking app
• Offers no-fee personal loans
• Higher APYs offered elsewhere
• No option to add a checking account
• No ATM access

LendingClub High-Yield Savings

No minimum balance requirement after $100.00 to open the account

Overdraft fees

Taking on debt to start your business should be a last resort and only used after careful consideration. You must be confident that you can pay back in full any money you borrow for your business. 

Your business's name communicates to the world who you are and what you can do — so it's important to pick a name that lets you put your best foot forward. 

But there are also some legal considerations to make when picking the right business name. For instance, you must avoid selecting a name that sounds too similar to your competitors' names. You can use the Trademark Search tool from the United States Patent and Trademark Office to see if your desired business name has already been trademarked by another business. 

Additionally, you may also need to double-check any laws around naming a business for your state. Some states may require you to add certain "identifiers" to the end of your business name if you're a registered legal entity. Identifiers could include words like "Inc," or "Corp." 

If you're confused about where to start, services like LegalZoom can help you get started in the right direction. LegalZoom lets you set up your business legally and will check that your desired business name is available for you to use.

From $35 to $279+

App available?

Standout features.

LegalZoom offers all sorts of legal document templates online so users can avoid having to hire an outside lawyer. Its downloadable wills, living wills and financial power of attorney documents make it easy to estate plan. LegalZoom also has its own network of attorneys that customers can utilize to ask questions, etc.

Your business needs a website to let potential customers know where to find you online and how to contact you. Your website's complexity will often depend on the type of business you're running. If you have a coaching or consulting business, a simple website where you can talk about who you are and what services you offer works perfectly.

Creating a simple website on your own is relatively straightforward, especially when you use a service like Squarespace or Wix that lets you use premade templates without having to learn to code.  

Squarespace

Plans start at $16/month when you pay annually

Free trial available?

14-day free trial

Squarespace offers several features for building yourself a website, including a wide variety of templates to choose from, support from a Squarespace web designer, marketing tools, a logo maker and more. Its offerings cater to several industries and website uses including blogs, portfolios, fitness, beauty, restaurants, artists, photographers and weddings to name a few.

Plans start at $17/month

No free trial but Wix offers a 14-day money back guarantee

Squarespace offers over 900 website templates, and a website building tool that leverages AI to design a site based on your desired customizations.

However, if you're selling goods and your website is your online storefront, you'll need more functions such as accepting (and processing) customer payments, collecting contact information, displaying your goods in an easy-to-navigate user interface and more. You can still use services to build a more complicated e-commerce website on your own, but it may be worth hiring an expert depending on your skill, time and patience.

Here are some signs that you may want to hire a website designer instead of creating the website yourself:

• You need advanced features to help you sell products online. 
• You need a long-term relationship with a designer to help your site evolve as your business grows.
• You're too busy to do it yourself and are comfortable spending the money to have someone else do it.

One key decision to make that will have far-reaching consequences with taxes and more is your business's legal structure. The three most common legal structures that pertain to small businesses are a sole proprietorship, a limited liability company (LLC) and an S Corporation (S-Corp for short). 

Each structure outlines its own set of distinctions and protections for operating your business. 

Sole proprietorship

A sole proprietorship is probably the simplest structure to understand and use. A sole proprietorship is owned by one individual (the sole proprietor). You don't need to file any paperwork to "incorporate" your business as a sole proprietorship. If you begin operating a business and don't file as any business structure, you'll be automatically considered a sole proprietorship, according to the Small Business Administration (SBA) . 

However, because a sole proprietorship doesn't create a separate entity for your business, you are liable for your business's debts.

"I rarely recommend a sole proprietorship because it's the default structure and you aren't taking advantage of the legal rights you can have with other business structures," says Shaliz Sadig Romano, the Co-Managing Partner at Romano Law , a law firm that represents entrepreneurs. "If something goes wrong, we want to make sure the assets of the company are what's on the line, not your house, car or other personal assets." 

Limited liability corporation (LLC)

Next down the line is an LLC. As the name suggests, an LLC limits the liability you may take on from your business activities. With this type of legal structure, your business becomes an entity that's separate from you and will have its own bank account and taxpayer ID. 

This creates a huge advantage for you as the business owner since you'll be able to protect your personal assets from liabilities, debt, lawsuits or bankruptcies incurred by your business. 

According to Romano, filing for an LLC also sets your business up for growth – investors may feel more comfortable getting involved with an LLC, for example, and you also can hire employees under this structure.  

"As the saying goes, an LLC is a lawyer's likely choice because it's great for small businesses and even some bigger ones that want to keep growing," Romano says. 

S Corporation

An S Corp is another legal structure that provides limited liability protection to the business owner, much like an LLC. Both LLC's and S Corps are considered "pass-through" entities because the business itself doesn't pay taxes but rather the tax liability "passes through" to the owner's personal taxes. Both structures allow owners to protect the owner's personal assets. 

One key difference between the two is that an LLC can have an unlimited number of owners (called members or shareholders) while an S Corp can have no more than 100 shareholders.

Which one is right for you?

Begin by thinking about where you see your business heading. This can provide some clues about which structure may be right for you. "What I tell clients before diving in is that it's important to have a vision of where you want to start and what you want to see in the next two to five years," Romano explains. "Are you looking to be a really small solopreneur like a consultant and don't intend on hiring or having office space? Or are you looking for something much bigger?"  

For instance, if you're planning to run an online e-commerce business on a platform like Etsy all by yourself on the weekends, you may feel secure enough to run it as a sole proprietorship. But if you want to open up a storefront and can see yourself seeking assistance from investors one day, an LLC or S Corp may be a better fit for you. 

Another consideration is the scope of your business practices. According to Romano, while an LLC is fine for doing business in the U.S., not all countries recognize an LLC as a legal entity or have different rules around it. So if you plan on doing business overseas, you'll want to read up carefully on that country's practices around legal structures so you can choose the one that's right for you. 

The other thing to consider are requirements for filing an S Corp . To file an S Corp, you must be a U.S. citizen or legal resident and your business must operate domestically. You also can't have more than 100 shareholders — a person or organization that owns stock in the company — and those shareholders must have voting rights. 

This is not the case for filing an LLC. You don't need to be a U.S. citizen or legal resident to file an LLC. 

Understanding the requirements and do's and don'ts of each of the legal structures can give you a sense of which one best suits your needs. LegalZoom also offers tools to help you figure out which type of legal structure is best for your business.

These companies help you legally form your business

LegalZoom is a well-known service in this space. According to its website, LegalZoom helps users through three steps for getting their business started: Choosing a name and business structure, compliance information and paperwork filing for the business structure. Once you're off the ground, you can also use other LegalZoom features — like getting the right business licenses and getting operating agreements — to manage your business. Pricing can depend on the type of business you're forming, the formation state and any other business management features you might need.

For a more bare-bones service, Tailor Brands is a standout option. At the most basic tier, you can file an LLC application in your state and get it processed within 14 days. For this, you'll only pay your state's filing fee. Other tiers are more costly but offer services beyond just LLC application filing.

The highest pricing tier for Tailor Brands — the Elite package — comes with LLC formation, expedited LLC filing (processed within two days), legal compliance, a domain name and website plus a $50 Amazon gift card all for $249 per year plus your state's fee. You'll also get access to a host of additional business tools with this tier, like digital business cards, eight free logos and more.

Tailor Brands

From $0 to $249/year + state fee

Tailor Brands offers a basic LLC filing service for new business owners that costs $0 (you'll just pay your state's filing fee). It also offers a more comprehensive suite of business management services for a yearly subscription fee, including a website, domain, compliance services, business cards, logos and more.

Another service, Bizee , offers a ton of bang for your buck even at the most basic pricing tier ($0 + your state's filing fee). At this pricing level, you can take advantage of

• unlimited business name searches
• paperwork filing
• access to a Registered Agent (to assist with state compliance for a year)
• compliance alerts
• banking offers
• business tax consulting
• unlimited phone and email support.

There are also several add-ons for an additional charge that you can pick and choose from.

From $0 to $299/year + state fee

Bizee offers a slew of features even at the most basic pricing tier. You'll be able to submit your business filing, receive compliance alerts and take advantage of business tax consultations, business banking offers and unlimited phone and email support. There are also several add ons you can pay extra for at any tier.

A business license is an official permit distributed by a state or local government allowing an organization to conduct business. Not all businesses may require a license but there are certain industries where you must have a license to operate.

For instance, if you're opening a business as an esthetician and offering hair and nail services to clients, you'll likely need an esthetics license to perform those services. If you're opening a bakery, you'll also need a license to prepare and sell food. And if you're starting a construction business, you'll want to get licensed as a contractor. 

As you might imagine, there are many consequences for operating a business without a license — especially if your services result in harm.

Always be sure to check with your state or jurisdiction's business license requirements before you begin operating. 

An employer identification number (EIN) allows the IRS to identify your business and track its tax activities. 

While an EIN may not be necessary for every type of business, certain entities are required to have one, including corporations, partnerships and organizations with employees. 

Business owners can visit the IRS website for additional information on who needs an EIN.

It's free to get an EIN. You'll just need to submit IRS Form SS-4 . If you choose to apply and submit your information online, your EIN will be issued immediately, according to the IRS website . If you apply by mail, it'll take approximately four weeks to process your application. 

There's also the option to apply by fax, which will allow you to receive an EIN within four business days. 

Business insurance can protect your business and its physical property, but it can also provide coverage in the event of a lawsuit, harm, theft and more. 

For instance, if a natural disaster wrecks your bakery's storefront or the vehicles you use to make deliveries get broken into, you can file an insurance claim to cover your losses.

Insurance can also help pay for some expenses if your business is facing a lawsuit. Or, if an employee becomes sick or injured while doing their job, an insurance policy that includes worker's compensation will allow your business to provide the medical care they need. 

The type of insurance and the amount of coverage you need will depend on the business you're running and how much risk is involved with that business. 

CNBC Select ranked The Hartford Business Insurance as one of the best providers for small business insurance since this company services many industries at relatively affordable prices. Nationwide also excels at offering a wide variety of plans to business owners.

The Hartford Business Insurance

The best way to estimate your costs is to request a quote

Policy highlights

The Hartford has been offering insurance policies for over 200 years and insures over 1 million small businesses. It offers coverage for a variety of industries and is highly rated for customer satisfaction.

App available

• Quotes available online
• Highly rated for customer satisfaction
• App doesn't support business policy management

Nationwide Business Insurance

Nationwide offers insurance policies for small and large businesses alike in a variety of industries. A number of insurance types also help business owners to tailor their coverage.

Keeping your business finances separate from your personal finances is ideal since it allows you to stay organized and keep better track of your transactions come tax time. Plus, some lenders and grant funders require that you have a business bank account so that you can receive your funds. 

It's fairly simple to open a business bank account, and the process is very similar to opening a personal bank account. 

CNBC Select ranked the Bluevine Business Checking Account as one of the best accounts for small businesses since it doesn't charge a monthly maintenance fee, has no minimum deposit required to open the account and no minimum balance requirements. On top of that, account holders earn interest on their balances and get access to a convenient mobile app.

Bluevine Business Checking

Special offer, monthly maintenance fee.

Standard $0; Bluevine Plus $30/month (with options to waive) ; Premier $95/month (with options to waive)

Minimum deposit to open

Standard: 2.0% APY on balances up to and including $250,000 if you meet a monthly activity goal* Bluevine Plus: 3.0% APY for Plus customers Premier: 4.25% APY without minimum qualifications

Free ATM network

No fees at over 38,000 ATM locations nationwide

ATM fee reimbursement

Small business perks.

Two free checkbooks

Mobile check deposit

Terms apply. Bluevine accounts are FDIC insured up to $3 million per depositor through Coastal Community Bank, Member FDIC

• No monthly fees, monthly or daily balance minimums, ACH payment fees, incoming wire fees or overdraft fees
• Ability to instantly lock and unlock your Bluevine Business Debit Mastercard® for added security
• Connect to business tools like PayPal, Stripe and Expensify
• Unlimited transactions
• Online only (not great if you prefer in-person banking)
• No ATM refunds for out-of-network transactions

*The requirements to earn interest are either:

• Debit Card Spend: Spend $500 per month with Bluevine Business Debit Mastercard® issued by Coastal Community Bank pursuant to a license from Mastercard inc, which can be used everywhere Mastercard® is accepted.
• Incoming Payments: Receive $2,500 per month in customer payments into Bluevine Business Checking account via ACH, wire transfer, mobile check deposit, or directly from merchant payment processing provider

As for savings accounts, one of the strongest options on the market is the Axos Bank Business Premium Savings account. It doesn't charge a monthly maintenance fee, doesn't have a minimum deposit required to open the account and there are no overdraft fees. It offers a very attractive APY for account balances and you can deposit checks into the account through the mobile app.

Axos Bank Business Premium Savings

Minimum deposit.

Up to 6 free withdrawals or transfers per statement cycle

Yes, if the account holder has an Axos business checking account

• Above-average APY
• Deposit checks remotely using your mobile device
• No physical branches for in-person banking

Set up your accounting system

As a business owner, you'll need to prepare for tax events and manage your cash flow to help you reach your business goals year-round. Working with a professional can help you understand the numbers underpinning your business and clarify what decisions you need to make for long-term success.

"Staying organized is key," says Sheneya Wilson, Founder and CEO of Fola Financial. "Work with a professional who's not just interested in giving you services at the end of the year but rather someone who can work with you throughout the year so you can be prepared."

Of course, good professionals can cost a lot of money. If you want to take a more DIY approach to your business's accounting, consider paying a small monthly fee for software like Quickbooks or Xero . These types of programs can often help you track business expenses, pay bills, and accept payments. They can also integrate with payroll services to make paying your employees simple.

Quickbooks® Payroll

Starts at $22.50/month + $6/month per employee (with discount; regular price starts at $75/month + $6/month per employee)

Benefits Administration

401(k) plans, health benefits, workers' compensation administration

Starts at $3.75 per month for three months (with discount; regular pricing starts at $15 per month)

Yes, through a partnership with Gusto

Yes, in partnership with Gusto; When you sign up for Xero you get 30 days of Gusto for free and after that, you must pay Gusto's standard charges

Once you've checked off all the other items on your to-do list, the last thing left is to actually launch your business and begin operating. 

Before you launch, it can be helpful to set up social media profiles for yourself so you can spread the word before your business is even running. You may be able to get your early clients and customers through friends and family. 

This is also where you can refer back to your business plan for steps on how you'll market the business and increase sales. 

Keep in mind that running a business means you're constantly learning and adapting. There will always be ups and downs but being able to pivot quickly and learn from what's working (and what's not working) can help you recover quickly and build a sustainable business.

Money matters — so make the most of it. Get expert tips, strategies, news and everything else you need to maximize your money, right to your inbox.  Sign up here .

Meet our experts 

At CNBC Select, we work with experts who have specialized knowledge and authority based on relevant training and/or experience. For this story, we interviewed: 

• Sheneya Wilson, the Founder and CEO of Fola Financial
• Shaliz Sadig Romano, the Co-Managing Partner at Romano Law 
• Dr. Jenny Woo, the Founder and CEO of Mind Brain Emotion 
• Abby Mercado, the Co-Founder and CEO of Rescripted and a former Venture Capital Investor at the Altira Group

Why trust CNBC Select? 

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every article is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of small business products. To research the best insurance companies, we compiled over 100 data points on more than a dozen insurance companies. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics. See  our methodology  for more information on how we choose the best commercial auto insurance companies. 

Catch up on CNBC Select's in-depth coverage of  credit cards ,  banking  and  money , and follow us on  TikTok ,  Facebook ,  Instagram  and  Twitter  to stay up to date.

For rates and fees of the Blue Business Plus Credit Card from from American Express, click here

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