business plan construction company

Construction Business Plan Template

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.

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

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:

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:

  Easily complete your construction business plan! Download the construction business plan template (including a customizable financial model) to your computer here<–  

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:

business plan construction company

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:

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:

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:

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:


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.

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:

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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:

Next Section: Executive Summary >

Construction Business Plan FAQs

What is the easiest way to complete my construction business plan.

Growthink's Ultimate Construction Business Plan Template allows you to quickly and easily complete your Construction Business Plan.

Where Can I Find a Free Construction Business Plan PDF Download?

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

What Is a Construction Business Plan?

A construction business plan provides a snapshot of your construction business as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategy for reaching them. It also includes market research to support your plans.

Why Do You Need a Construction Business Plan?

The construction industry is tough. If you’re a contractor looking to start a small construction business or construction services company, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your construction business in order to improve your chances of success. Your business plan is a living document that should be updated annually as your company grows and changes. As always, we are here to help you write a business plan and guide you through the steps of taking your business idea from dream to reality.

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?

Please see this article on our website: How to Start a Construction Business

What Are the Keys to Success for a Construction Business?

Below are some of the keys to success in the construction business:


Other Helpful Business Plan Articles & Templates

Use This Simple Business Plan Template


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How to Write a Successful Construction Business Plan That Sets You Up for Success

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:

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,

GCs near me example

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:

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:

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:

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.

Do you want more projects?

Learn how to get leads on autopilot, bid jobs faster, and close more sales.

Learn about our Contractor Sales Academy .

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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.


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.


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

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Jordan Schneir

How to Write a Business Plan for Your Construction Company

Imagine that you have a treasure map: it details where a treasure is and what roads you need to take to get there. Without the map, there’s no way you’ll find that chest filled with gems and coins.

There’s no denying the importance of that map, right?

But when it comes to businesses… you’re not really looking for a treasure chest, you’re want to achieve success and help your company grow. Every business, no matter what type, size, or location, needs to know where it’s going and how it’s getting there.

The way to achieve this is not through a map. But through a business plan.

If you have a construction company, a business plan will help you set and accomplish goals for your business. Writing a business plan will help make sure that your business has a clear direction and growth strategy.

Learning how to write a business plan for your construction company is, fortunately, more straightforward than you probably think.

Let’s take a look at why you need a business plan and how you can write one for your construction business.

Men at Work. construction company. concept: business plan

What is a Business Plan?

A business plan is a document that businesses use to guide their operations. It will help you establish goals for your construction company and plans to achieve those goals.

A standard business plan for a construction company typically includes sections such as:

The details in these sections will help ensure that you can effectively manage your construction company so that you may continue to grow and thrive in the competitive construction industry.

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

Every construction company needs a solid business plan for a variety of reasons, including:

These are just a few of the primary reasons why every construction business needs a business plan, but they aren’t the only ones.

From establishing a management structure to creating a marketing strategy, your construction company will rely on your business plan for many things.

Reasons for a business plan for your construction company: competitors, growth, financing

Learning how to write a business plan for your construction company is not that complicated. First, you just need to research your market and your target audience. This will give you a clear picture of what information your business plan is going to have.

Next, you need to start writing. Any respectable business plan needs to have these sections:

1. Executive Summary

Most business plans start with an executive summary.

This is where you introduce your construction company, the company’s owners, and where you should give a brief overview of your company.

This section should include:

Keep this section brief. You’ll go into more detail in the later sections of your business plan.

2. Company Description

Your company description is essentially a more detailed version of your executive summary.

This section is your opportunity to explain what your company is and why you expect it to be successful.

3. Market and Competition

You need to perform thorough market research to complete this section of your business plan.

This section should include items such as:

4. Services

You should create a list of services that your construction company provides and how much you charge for your services.

Services could include:

It’s vital to assess your market to determine what services you can offer to maintain constant work throughout the year.

5. Marketing

Every business, no matter what type, relies on a successful marketing strategy. This strategy should be explained in your business plan.

This can include:

Business plan, construction business. Construction worker smiling, working. concept: business plan. Designed by Freepik

6. Management

In this section, you should detail the management structure of your construction company.

You should be sure to explain:

This section will likely be shorter than other sections but is very important.

7. Finances

One of the most critical sections of your business plan is the finances section.

This is where you should include items such as:

Potential investors and lenders will need a clear picture of your construction company’s finances before making a decision.

This section will also help you create an adequate budget for your construction company.

Along with your finances section, you can include a part for financing.

From increasing cash flow to purchasing equipment, most construction companies require funding at some point.

In this section, you can include:

This section will make it much easier for your construction company to find the financing you need in the future.

9. Appendix

Lastly, you can include an appendix, which should contain any documents or information that didn’t fit into any other sections.

This section is your chance to convey any information that you think will help investors or lenders better understand your construction company’s goals and intentions.

By following these steps and completing all the sections described above, you can get started on a comprehensive business plan for your construction company today.

If you need any help getting started, check out this excellent construction company business plan template from Bplans .

Construction worker reviewing a business plan for his construction company.

Consider a Business Loan to Grow Your Construction Company

Construction companies, like any other business, rely on business loans for several things, from purchasing equipment to hiring employees.

When writing the ‘funding’ section of your business plan, you should be able to determine how much financing you need and what you need it for.

Once you’ve done this, it might be time to consider applying for a business loan to increase your working capital and invest in the growth of your company.

Are you ready to invest in the growth of your construction company? We invite you to keep reading:

Cheerful latino woman wearing hardhat smiling happily looking at camera while posing confidently in her construction business. Concept: how to get a business loan for your construction business

How to get a business loan for your construction company

At Camino Financial, we offer small business loans with favorable terms. Our fast approval times makes us one of the top choices for construction business owners like you, who usually have to wait longer than any other industry to receive payments from clients. Therefore, they need a quick solution that fills in the gap in cash flow.

With Camino, you could receive your funds directly deposited in your account in as little as two days!

Check if you qualify for a loan

Jordan Schneir

Jordan Schneir

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9 steps to create a construction company business plan.

Construction Worker

I played a lot of touch football when I was around 10 years old. Eight of us neighborhood boys would gather at our local park and choose teams. Then, the two teams would line up across from each other, agree on the rules and get ready to start the game. After a coin toss, one team would kick off to the opponent. The receiving team would have the fastest player catch the ball and run down the field as far as he could without being tackled.

Then, the offensive team huddled to decide their play for the next down. The quarterback usually called the plays, even though he wasn't always the smartest player on the team. He was usually the one who was the tallest, fastest or had the best arm. Obviously, there wasn't a playbook, nor did the teams have time to practice their game plan. Before each down, the inexperienced quarterback gathered his team in a huddle and called plays based on what he thought would work and would surprise the opponent. The players were also loosely told what position to play, who would run which way, whose job it was to block and where they were to go—not a very good strategy for a winning outcome.

Are You Smarter than a 10-Year-Old?

Think about starting your construction company. Is your business strategy better than a neighborhood football game? Do you huddle up before every decision? Do you tell your players what to do before every project? Do they know what to do based on written systems and strategies from your company playbook? A professional football team is a good model to copy for small business owners. Professional teams have written strategies for every season and each game. They also have written plays designed to work in every situation they encounter. Do you?

Unless you want to run your company like a young, inexperienced quarterback, you need a winning playbook to follow. When starting a construction company, what needs to be in your business plan?

A professional team must have all the bases covered to put a winning team on the field and make as much money as possible. Where should you start to draft a winning game plan?

1. Determine Your Overall Company Mission, Vision & Values

Sit down with your key managers and take time to discuss why you are in this business and why you own your own company. This exercise will get you focused on the real reason you go to work everyday. I often ask business owners why they are in business. Their typical answer is to make money doing whatever they do, such as plumbing or construction.

You are not in business to do plumbing or construction. You are in business to maximize your resources of time, energy and money so you can get the biggest return in whatever manner you desire.

For example, a construction company is a great start to achieve what you want. It is very rewarding, but demanding, work. But, it is limited in net profit margin potential, as it is very cyclical with thin margins. In my opinion, owning a construction company creates an excellent chance to seek wealth-building opportunities versus just building for others. Building for customers allows you to make some money. When you build for your own company, it allows for passive income, freedom and equity growth. What is your overall company mission, vision and values?

2. Assign Coaching Staff Assignments & Responsibilities

When a professional sports team is not winning many games, what happens? They don't fire the players — they fire the head coach. And most of the coaching staff gets let go as well. In order to build a winning team, you must surround yourself with the best managers possible. Excellent managers require high pay to keep them. I recently spoke at a national association of material distributors where a successful business owner approached me and stated his goal was to double his company to $30 million in sales over the next 5 years. He loved selling and wanted to try to find someone who could run the operations side of his company. I asked how much he was willing to pay to give himself more free time, double his company and make more profit. He said he was willing to pay $50,000 to $75,000 per year to find a vice president of operations. I smiled and said, "Good luck!" In my opinion, to find the right person would cost him around $100,000 to $150,000 per year.

The problem with small thinkers (and entrepreneurs) is that they try to hire cheap and think they can fill in the gaps themselves with a weak (cheap) manager. When you hire cheap and you fill in the gaps, you don't make any money, and your business doesn't grow. Make a list of the top five positions you need filled with the best possible people you can find at whatever it will cost:

Next, decide which will benefit your company the most. Go out and hire at least one top professional to help your company grow. Then, look to the future and do it again and again until your company is growing and maximizing the bottom line.

3. List Your Players, Their Strengths & Weaknesses

Professional sports teams have many people assigned to scouting and managing their players. They realize that winning games requires the right players. Most small business owners don't spend a lot of time managing their employees and working to help them become the best they can be. Small businesses hire people to do a job and then hope they perform. When they don't, they get frustrated and complain they can't find any good help.

To solve this problem, sit down and make a list of all the positions needed to operate your company. Next to each position, list what accountabilities and responsibilities are required to achieve the results you want. Then, look at who you have assigned to each position. You'll find that several positions are filled with the wrong people. This almost never happens on a professional sports team. The manager of player personnel is always looking to fill each position with the best player possible, even if it means trading away a player for another. And guess what else? The bad players who don't achieve the expected results are benched or cut from the team quickly. How are you doing as the manager of your players?

4. Design Your Offensive Plays & Strategy

To win more games than you lose is simple—just score more points than your opponents. In business, what plays will guarantee you to win, provide excellent service and provide superior quality? My recent visit to the dentist office is a good example of excellent organization and preparation. I noted while waiting in my chair that all of the tools and supplies for my procedure were laid out in the exact order of when the dentist would need them. And, my new crowns were sitting in a small box ready to be installed. Prior to my arrival, a technician had prepared the room for my dental work. I am sure they must have used a checklist to get ready. What kind of preparation and checklists do you use to ensure your offensive plays work?

Think about where you can lose the most money the fastest. For example, a carpenter forgets to block a wall for a future fixture installation. A slab is poured with the wrong concrete design mix, sub-base material or expansion joint spacing. A foreman proceeds to install extra work without a signed change order. Or a project manager runs a meeting without a standard agenda and forgets to review some urgent approvals in a timely manner. Where have you lost money? Make a list of the plays you need to write out, and make them a company standard.

5. Design Your Defensive Plays & Strategy

Without a good defense, you can't win many games. Defensive business strategies are those that ensure you don't get sued or need to sue to earn your money. We use a checklist on our construction contracts to list how many days notice is required for things like approvals, changes, notices, changes, etc. We also have a general contract checklist to make sure we don't miss a clause that we wouldn't want to agree to. We also have a collection policy we follow that includes how we invoice, what we do when not paid and how to file a lien. What system do you follow when you want to protect your rights or when things aren't going your way?

6. Implement a Training Program

Professional sports teams spend a great amount of their time practicing and training. Football players attend a long spring training camp and then practice and train five or six days a week during the season. They only play games once a week. In business, most companies don't train or practice very often, if at all. They just hire people and throw them into the game and hope for great results. It takes a concentrated effort and a priority to implement a comprehensive training plan with exercises and drills to improve people's skills.

To start a simple and effective companywide training program, make a list of the top five things each position must do well to win your games. For example, a project manager must be able to organize, manage and lead meetings. A concrete foreman must be able to ensure all the embedded steel is in the right place before each pour. A bookkeeper must be sure a subcontractor's invoice is correct and any change orders have been fully executed prior to payment and funded by the customer. Estimators must be sure they have read the project specifications to ensure they have included the correct insurance requirements in their bids. While all of these seem simple, each of them will cost you lots of cash if they are not done properly.

Make training a priority by implementing a weekly twenty minute training session for each department or crew. Pick one or two areas to review with the teams. Then, have them practice doing the task on their own with input and coaching. Remember—no pain, no gain!

7. Develop an Equipment Inventory Management System

Imagine being an equipment manager for a professional football team and not keeping an updated list of what you have, what needs to be fixed and what equipment you'll need in the future. Without a good equipment inventory management system, your team would eventually show up without enough helmets or uniforms for the next game. In your business, employees rely on trucks, skill saws, backhoes, generators, extension cords and screw guns to get their jobs done. With outdated, broken or missing tools and equipment, it's impossible to get the job done efficiently

Start by making a complete list of all your tools and equipment. Next to each piece, write out the condition, maintenance schedule and rental value. Then, assign someone in your company to be in charge of managing the process for you. The ultimate goal is to keep your crews working efficiently so you can make as much money as possible.

8. Initiate Business Development Plays

The key to success in any business is customers and lots of them. Even in professional sports, an empty stadium won't keep a team on the field very long. Is your sales system to sell the most tickets and fill all your seats to the top? Do you regularly contact your repeat and loyal customers and thank them for their business? Do you have an ongoing program to reach out to potential customers and lure them into buying from you? Professional sports teams have an entire department focused 100 percent on selling tickets and taking care of their fans. Without a fan appreciation and attraction program, your company will not reach its bottom line potential.

9. Track Your Financial Plays & Strategy

Did your team win or lose? Without a prominent scoreboard, sports are irrelevant. In your business, the score is of utmost importance. What numbers will you keep score of? I suggest you spend time every week getting to know your numbers—sales, gross profit, net profit, job costs, employee costs, equipment costs, receivables, payables, bid-hit ratio and markup trends. Without a clear knowledge of your financial score, you can't judge how well your team is playing the game.

Play Business Like a Sport

Business is more fun when you manage like a professional sports team owner or head coach. Every day, ask yourself what decisions you need to make and how a coach would go about making the right decision. In order to win, you've got to be operating on all nine cylinders described above. Without any of these chapters in your playbook, you will eventually lose more games than you will win.

George Hedley, CSP, CPBC, is a professional construction BIZCOACH and industry speaker. He helps contractors build management teams and get their businesses to work for them. He is the bestselling author of “Get Your Construction Business To Always Make A Profit!,” available on Email Hedley at [email protected]

To sign up for his free e-newsletter, start a BIZCOACH program, attend a Wealthy Contractor BIZ-BUILDER Boot Camp or get a discount at  online university for contractors. Visit  for more information.

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Construction Business Plan Template [Updated 2023]

Construction business plan template.

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

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

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

Below are links to each of the key sections of your Construction business plan:

I. Executive Summary

II. Company Overview

III. Industry Analysis

IV. Customer Analysis

V. Competitive Analysis

VI. Marketing Plan

VII. Operations Plan

VIII. Management Team

IX. Financial Plan

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Construction Business Plan Outline

construction business plan template

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Construction Company Business Plan

Are you thinking of starting a construction company We have prepared a sample construction company business plan that guides you on every stage of your business plan writing

business plan construction company

If you have the right knowledge and skills for getting into construction, you might have thought of starting your own construction business at least once.

After all, having your business can give you authority and the freedom to work with your dream clients and it is a lucrative business for sure.

But at the same time starting and running a construction company is no mean feat and takes a lot of work and accountability.

So, to help you through your daily business activities and long-term business goals you’ll need a construction company business plan. A business plan makes your life easier and lets you focus on what really matters in your business.

Industry overview

The US construction industry stood at a market value of 1.36 trillion dollars in 2020 and was expected to decline in 2021. But instead, it experienced a wave of recovery and continues to grow even now.

The major reason for the growth of the construction sector is the resumption of construction projects, be it residential or commercial. Also, new projects keep coming up due to the rapid urbanization and increasing need for space all around the country.

However, before you dive right into it, you should plan it, down to the last detail. A business plan would help you in avoiding roadblocks and failures. It would act as a guide that would help your company rise as high as the skyscrapers you build.

If the above idea sounds interesting, read on to find out how a business plan can help you and how to write a construction company business plan.

Things to Consider Before Writing a Construction Company Business Plan

Get necessary licenses and permits.

A construction business requires several permits depending upon the state you are working in and a few documents that are common all over the country. The main reason behind this is the nature of the work that requires proper attention to safety requirements.

But getting all the legal documents can look like a lot of work, especially when your business is going on in full swing. Hence, it is a better practice to make a checklist of all the necessary documents and get them before getting started.

Figure out the safety requirements

Safety requirements are another crucial aspect of starting a construction business. Figure out what are the tools and measures you’ll need to have to ensure the safety of your workforce and other people on construction sites. It helps you avoid accidents and injuries that can be prevented by taking necessary measures.

Get the right workforce and equipment

A skilled workforce is the biggest asset of your construction firm. They can make or break a deal, and also decide what kind of reputation your business would have in the construction industry. Hence, it is important to hire a skilled workforce and make sure they get the right equipment to work with.

Know your target audience

Knowing your target audience and their preferences is crucial for any business. As a construction company, knowledge about your target audience comes in very handy when you are pitching for projects. Hence, try to know all the relevant things about your target audience.

How can a construction business plan help you?

Though you might believe that having the right knowledge of equipment and personnel is the only thing important for running a construction business, good business practices and a proper business plan are equally important.

A business plan can help you in planning your finances, organizing your business structure, having a hassle-free operational strategy, and knowing your customers better. All in all, it can make your life less chaotic and run your business smoother and easier.

So if you want to conduct your business smoothly, read on to find out how to write a business plan.

Chalking out Your Business Plan

A good construction business plan consists of several different aspects that are common to all business plans and several that are specific to a construction business.

And though writing a business plan might seem like a time-consuming process initially, it can save you a lot of time and trouble later on. To write a well-rounded business plan you can either use a premade template or an online business plan software, that would help you write a flexible and dynamic plan.

Before you start writing your business plan for your new Construction Company, spend as much time as you can reading through some samples of real estates business plan templates .

Our sample HDFL – Construction Company Business Plan can help you with writing a well-rounded business plan for your business. It can act as a guide and prevent you from getting stuck in a certain section for too long.

Construction business plan outline

This is the standard construction company business plan outline which will cover all important sections that you should include in your business plan.

What to Include in a Construction Business Plan?

A good construction business plan consists of several sections, the major ones are as follows:

1. Executive Summary

The executive summary section forms the first page of your business plan and is the most important one to get you funded.

It consists of an overview of all the major sections of your business plan and a good executive summary would help you win an investor’s confidence and get your business funded.

It summarises the following sections:

2. Mission Statement

A clear and concise mission statement helps your clients resonate with your company and business idea. It gives out a clear message of what values you stand for as a company. Hence, writing a good mission statement is important for the success of your business.

It would consist of the following sub-segments:

3. Market Analysis

Analyzing the market comes in handy while making several business decisions as it helps you in knowing the market and the industry better. It helps you in understanding the pitfalls of your business, its strengths as well as what your competitors are doing.

It would consist of the following subsections:

4. Management and Organizational Structure

This section would include details about your company’s organizational structure as well as the levels of management of your firm. You must also include your firm’s work as well as the roles and responsibilities of your team members in this segment.

For example, you should include which person is responsible for onboarding clients, who are responsible for dealing with architects and hiring construction workers, who are responsible for overlooking the construction process, etc.

5. Marketing Plan

A good marketing strategy makes you memorable for your clients. It helps you reach out to your target audience , creates a brand image, and makes you stand out from your competitors.

A well-rounded marketing plan consists of the following sub-segments:

6. Financial Plan

A good financial plan is key to running a successful and profitable business. One cannot emphasize enough on planning your finances in the initial stages of your business, it helps you immensely as your business experiences growth or setbacks.

A financial plan decides the measure of your business’s success, and a good one consists of the following aspects:

Construction Business Plan Summary

In conclusion, a good business plan can help your construction company prosper. It can help you deal with all the hiccups your business goes through and set out a clear road map for your business journey. So, if you want to start a construction company go ahead and start planning.

After getting started with Upmetrics , you can copy this construction business plan example into your business plan and modify the required information and download your construction business plan pdf or doc file. It’s the fastest and easiest way to start writing your business plan.

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Business Planning Resources

We have plenty of  free business planning resources  available to help you with your planning. You can download our resources to learn all about business planning.


Not found what you are looking for? Explore our 200+ sample business plans to find match for your business.

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DISCLAIMER: The business plans, templates, and articles contained on are not to be considered as legal advice. All content is for informational purposes, and upmetrics makes no claim as to accuracy, legality or suitability. The site owner shall not be held liable for any errors, omissions or for damages of any kind.

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7 easy tips for writing your construction business plan

Strategy, Legal & Operations

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Asavin is an expert in business technology and innovation for SMEs.

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Walt Disney, whose characters inspired the iconic entertainment parks built by the Buena Vista Construction Company, once said: “You can design and create, and build the most wonderful place in the world. But it takes people to make the dream a reality.”

Those people are the on-the-ground electricians, plumbers, painters, carpenters, joiners, architects, and builders who get the job done no less creatively than the famous animator himself.

Even on a small scale, the responsibility of project managing any construction jobs is hugely challenging.

You are managing budgets and deadlines, ordering resources, problem solving, and keeping clients happy all at once. It isn’t easy to catch a breath and think about where your next project is coming from, or what you’re working towards in the grand scheme of things.

How do you find more leads, bid for jobs, and organise your finances when your office is your phone and you’re always on the road or on-site?

It would help if you had a building and construction business plan that you can refer to and adapt on the go to ensure you keep building your business to its full potential.

Your business plan will never be truly complete. As your business goals and environment changes, you’ll need to continually revisit and revise the intent to make sure it remains a live document that helps you grow.

Here are the key areas to explore in your business plan.

1. Write your business summary

2. decide on your business structure, 3. do your market analysis and competitor research – where do you fit in, 4. crunch the numbers: what is coming in and going out.

5. Map out how you will win and keep customers

6. Form a strategy for winning jobs

7. figure out how to stay in hmrc’s good books, additional resources.

When writing a business plan, it’s best to write your business summary (also known as an executive summary) last – once you have worked through all the ins and outs of your business and can ably sum it up.

This section goes right at the front of your plan.

It’s your at-a-glance statement that details your business and summaries the big questions that will help ensure you stay on track with whatever your plan turns out to be.

Use this section to outline what you are working towards, answering questions such as:

Sample business summary

Customers in the west London area are looking for beautiful, functional kitchens and bathrooms. They need a designer/builder who can provide high-quality work as part of a home renovation.

We strive to offer the best quality design, site preparation, cost estimates, construction, repair and alteration to homeowners and landlords needing small-scale kitchen and bathroom construction services.

With more than a decade of experience and expertise under our belts, we provide a high standard of service that outperforms our competitors – whose customers generally need to find and hire separately.

West London is booming with property investment right now. Many of the buildings in the area are old and in need of refurbishing, making this is an attractive market for a specialist business such as ours.

We will be concentrating on the customers who need for a full-service design and building package. This is a big investment for most people, so having somebody who can deal with their kitchen or bathroom being renovated from start to finish at a reasonable price is a godsend for them.


There are numerous competitors in the London area. However, many of them do not have our experience in building both designing and building solid kitchens and bathrooms using materials from different brands.

The market in west London is big enough for a high-quality kitchen and bathroom designer and builder to win work and have a regular stream of customers. This is an excellent time to gain a foothold in the market.

Through the connections and experience we have building designing kitchens and bathrooms in the past, we have developed a wealth of contacts who can supply materials at low prices, as well as assist in related kitchen works, including plumbing, masonry and the electrics.

Expectations and forecast

We have no personal or business debt and own all the equipment necessary to design and build high-quality kitchens and bathrooms. We expect to see increased profits as we develop word or month and our marketing strategy by the end of year one. Over the next three years, we expect higher profits as we make inroads.

For this the first year, we expect to have overall revenues of £70,000, which will significantly increase from years two to five.

One of the earliest decisions you will need to make concerns your company structure.

This will inform how your tax and finances will work moving forward. If you already know all about this, then you can skip to the next section (however, if you need a refresher, read on).

Sole trader

Becoming a sole trader is relatively simple, with fewer administrative requirements to deal with than if you set up as a limited company.

However, it may not be for you if your business requires investment. A sole trader and their business are the same – any business actions and debts are the owner’s responsibility.

Sole trading is more financially risky, with earnings entirely based on business performance. You will have to accept personal risk and the need to spend money on public liability insurance.

Limited company

Running a construction business as a limited company is more tax-efficient, with you taking a small salary (limiting PAYE and National Insurance liabilities and withdrawing the remainder as dividends).

A limited company and its owner are two different entities.

You have unlimited liability for your business, making it possible for you to hire employees, who you may need if you work on bigger jobs and projects.

Here, it would help if you looked at your goals and aspirations. Is having limited liability worth the increased administrative duties of a limited company?

If you decide to become a limited company, you need to:

To register your company, you will need an official address and Standard Industrial Classification (SIC) code that identifies what your company does.

You can set up your limited company at and follow the step-by-step instructions.

You will need to research the competition, analyse your market, and clarify its business opportunity and target market.

In your business plan , you need to consider:

Once you have done your research, decide on your propositions – what will you offer, where and for what price?

Your business plan will have a financial section. This is one of the most important parts of your document, as it will answer the crucial question – how much money will your business generate?

When you first set up shop, this will feel a bit like putting up a finger in the air as you try to get your bearings.

As you build experience and study other established businesses through your market research, you will be able to gradually understand how much money you are likely to make and set yourself some clear financial goals.

There are a few basic concepts and ideas that you should get to know when it comes to construction accounting .

Revenue is the total income generated by the work you do.

Profit is the amount of income that remains after accurately accounting for all expenses, debts and operating costs.

In the construction business, it is essential to understand that revenues and profits come from projects (or jobs) . Put simply, revenue from projects deduct the costs chargeable for doing the project – this is known as gross profit.

Gross profit is what remains of the projected revenue after all project costs are paid. Gross profit is not pure profit; you must count in overhead costs, including rent and office expenses, if you have them. Gross profit appears on your income statement and can be calculated by taking your revenue and subtracting the total costs chargeable for the entire project.

Revenue forecasting

You may rely on instinct to forecast revenue at first, but as you grow, it will become easier to understand where your business may be in the next six to 12 months.

To forecast revenue, you will need to look at the work volume you’re likely to have. Here are a few key areas to focus on to better understand how much work you have in the pipeline.

Lead reporting

These list potential projects that you are targeting. How you measure this depends on your software’s sophistication. Spreadsheets such as Excel can help you track significant leads, but customer relationship management (CRM) software will have more functionality.

Whatever solution you go for, it will be a useful tool when it comes to gauging predicted revenue, calculating your chance of winning new work, and when it is likely to start.

Proposal pipeline

Your project pipeline starts when you put in an action to pursue a new opportunity, such as putting in a bid for a project.

Here, you would have a list of your outstanding proposals with details such as its value, the chance you will win the bid, and when you anticipate the work might start and end.

New business report

This report identifies the value of the projects you win within a particular period. You might run this weekly, tracking towards monthly and yearly goals for the year.

Backlog report

This shows you much how much revenue you are due to make under contract but have not yet billed.

Using the different types of reporting at your fingertips, you can work out how much money you are likely to make in the months ahead, the growth you can expect, and how much you can spend when it comes to future investment.

Cash flow is the amount of money coming into a business from completing projects, or the money flowing out, typically in the form of costs such as materials. A positive cash flow is desirable, while a negative cash flow is not.

The first rule of cash flow is that you need more cash coming in than is going out in any given month. The second rule is that money needs to come in at the right time.

A cash flow statement will show by how much you are down (losses) or how much you are up (profits) for a specific timeframe.

You can create a 12-month spreadsheet and work out what you intend to sell and when you expect payment. In another column, work out what you need to pay and when.

In construction, it’s more important than ever to keep a careful eye on cash flow as jobs and projects often require money to be spent on materials and labour before you get paid in full.

You will need to work out how much money you always need to have in the pot to keep afloat and get jobs done while waiting for invoices to be paid.

Cash flow can be doubly challenging to manage for builders because each project is typically unique with different contract and payment terms.

This also needs to be factored in: how can you maintain some stability when your work can be somewhat unpredictable or seasonal?

The financial part of your business plan is where you consistently update your changing circumstances, spot trouble areas, and plan contingencies.

Here are a few essential tips for ensuring quality cash flow that can be worked into your strategy (and if you’re using cloud accounting software tailored to building and construction , you’ll be able to automate a lot of these steps to speed up payments):

Bill early, bill often

Bill as soon as possible to help set your customers’ payment expectations and demonstrate your professionalism. More frequent billing also results in smaller invoices , making it easier for your customers to make payments.

You will also find out sooner if your customers are having financial problems so you can take appropriate measures on your end.

Stay on top of your bills

Pay your bills weekly to take advantage of early pay discounts and keep your vendors and subcontractors happy with prompt payments. This also sets you up to receive the best service from materials suppliers and subcontractors who want to do business with you.

Use progress billing

When negotiating your contract, ask to use a percentage of completion billing instead of fixed draws based on completed project stages.

Progress billing allows you to send invoices regularly that more closely match your cash requirements. If the project is held up, you can still bill and get paid for the work completed to date.

Remind your customers to pay

Your cash flow depends on getting paid on time, so don’t be shy about asking for the money you are owed.

Many contractors worry about damaging customer relations by as a result of asking too assertively to get paid, but a friendly reminder can be a help to both parties. An end-of-month statement summarising outstanding amounts is an excellent way to gently remind your customers of their obligations.

Collect the money you are owed

In addition to reminding your customers to pay, you need to develop regular (ideally weekly) procedures to monitor and collect your accounts receivable. Begin investigating as soon as invoices become past due. Unfortunately, rather than telling you about a problem they might be having with your work or their own cash flow, some customers simply don’t pay –

and the older an invoice gets, the harder it becomes to collect. Be sure to document all conversations with customers and project managers regarding past due invoices.

Accept electronic payments

By accepting more electronic payments – whether that’s through debit/credit cards or contactless – you can significantly reduce payment cycles. If you integrate a payment system with your accounting software, you can also eliminate the extra step of manual payment data entry. You can also add a ‘pay now’ button to your invoices, making it even easier for your customers to pay you.

In your business plan, be sure to take note of what you need to do to manage cash flow, weather any storms, take advantage of the work you have, and successfully stay in business.

5.  Map out how you will win and keep customers

How you secure new business and retain and retarget existing clients is central to your long-term business plan.

Here are some ideas for creating a robust marketing strategy, ranging from setting up a website to word-of-mouth advertising.

Use your contacts

Start by building a database of existing contacts – it’s always much easier to secure work from people who know you than it is to find new customers.

If you are already well-established, then the customers you already have are your best prospects for immediate sales.

They offer the most cost-effective way to increase business because you have already gained a positive reputation with these customers.

They know the quality of your work and trust your business, making them more likely to think of you when fresh projects become available.

Winning new customers

Once you have tapped into your existing customers, it’s time to log those potential leads. The best new customers are likely to match the profile of your current top clients.

Where appropriate, ask existing customers for referrals and develop incentives for customers to refer their networks to you.

Your current customers are a good source of new customer referrals. If you provide excellent service, word-of-mouth referrals will hopefully follow.

But as this is not guaranteed, you need to be proactive.

Set up a simple website that sets out your proposition and why you are the best person for the job. Don’t forget to ask happy clients for short testimonials and photographs of your work that you can add for credibility.

Ensure your price points and contact details stand out, and let people know when they can expect to hear back from you.

On that note, always be quick to respond to any online inquiries.

Look at which social media channels might work best for you. For example, Facebook could be instrumental in building a small and loyal community, where clients freely upload images of your excellent work and provide ratings.

Websites such as MyBuilder and Checkatrade are also great channels. Many clients use these sites to find specialist builders and place a lot of trust in the reviews and ratings built up by other customers, which could result in driving up your referral rate.

You won’t be the only business looking for work.

Potential clients will take quotes from your competitors to find the best quality work they can find at the lowest price possible. So it’s worth giving some thought to how you approach (and win) bids.

It will work to your advantage to have a section in your business plan outlining how you’ll provide a persuasive pitch when bidding for and estimating work.

Here are some tips on giving yourself the edge on the competition.

Think about how your business adds value

Don’t make the mistake of thinking solely about the price of your services, because your prospective customers certainly aren’t.

People want the best service, great quality work, and a reasonable price, so it is up to you to convince the them that you have the full package and deliver on that promise.

Draw out your specific expertise and specialities that give added value.

Perhaps you can guarantee a faster and more professional service, for example.

Do you also take pains to ensure the site is left completely clean and tidy? Will you give a discount if two jobs are scheduled?

All these seemingly small details will make a huge difference.

Highlight your qualifications and value

Be direct when explaining why your business should be in the top spot for the job at hand.

If prospective customers can see evidence of your experience and reputation, there’s a greater chance of them putting more trust in you.

After all, they want quality, flexibility and great customer service – and are generally prepared to pay a premium to get that.

This is where that website comes in handy – it’s a place to archive your testimonials and showcase proof of your success and reliability.

It’s also worth getting set up on Google My Business, a free, easy-to-use tool for businesses to manage their online presence and boost visibility across Google, including Search and Maps.

To help customers find your business, you can also get it verified and edit your information accordingly.

Make sure your quote meets customer expectations

When you submit a quote, you should understand what the customer will be looking for. Avoid just putting a price down – you need to break down your costs and let them know where you will be spending their money – whether that’s equipment, materials or external contractors to help you out.

Consider sharing a portfolio of your work, showing before and after shots of different jobs you have completed.

You’re excited to get down to work as soon as possible, that’s understandable. But first, you need to get all things tax-related in order.

In your business plan, remember to state how your tax and finances are going to work moving forward. It’s no-good doing this on the job, as getting HMRC on your back at the start of your journey isn’t the best way to launch your business and can end up costing you a fortune in time and money.

If you’ve been working for others, you probably haven’t had to handle some of the specific tax and compliance requirements for anyone working in the building trade.

If you are going to be working for yourself, though, you should have at least the necessary details outlined in your business plan, particularly around these critical areas:

Construction Industry Scheme (CIS)

Whether you are a sole trader or limited company, contractors need to register under the Construction Industry Scheme (CIS).

The CIS is a payment handling system that handles payments from contractors to sub-contractors and passes this to HMRC.

The VAT domestic reverse charge for  building and construction services , to give it its full title, is how VAT is handled for certain kinds of  construction services  in the UK, along with the building and construction materials used directly in those services.

The VAT reverse charge for construction is effectively an extension of the CIS. It applies only to transactions that are reported under the CIS and are between VAT-registered contractors and sub-contractors.

The scheme means that since March 2021, those supplying construction services to a  VAT-registered customer no longer have to account for that VAT. Instead, the customer is responsible for it; that means this VAT is considered an input tax for them, as though they have made the supply to themselves.

Basically, for any services they provide, sub-contractors need the contractor employing them to handle and pay the VAT directly to HMRC.

The payment received will be for the cost of the work done (plus materials used), net of any CIS deductions for tax and National Insurance, but no VAT will be paid on the invoice.

If you’d like to learn more about the ins and outs of the VAT reverse charge for construction , check out our expert guide.

An important piece of tax reform called IR35 came into force in April 2021.

If you’re a sub-contractor, you could be affected by IR35 if you are operating as an incorporated business.

There was some confusion about whether IR35 considerations take precedence over the CIS rules. Both seek to withhold tax and National Insurance at the source.

However, the government states that “the off-payroll rules take precedent over the CIS”.

In other words, construction contractors should always consider incorporated sub-contractors as employees if the IR35 rules outlined above apply rather than looking to go down the CIS route.

Contracting and employing staff

If you are planning to take on larger projects rather than select jobs, you might want to put some detail in your business plan on how you intend to take on more people if required.

As we’ve already mentioned, when work is done on a project-by-project basis, you may want to use sub-contractors temporarily, especially at the very beginning of it all. If your business is growing rapidly, then you may want to consider taking on permanent employees.

Compliance with industry regulations

Throughout your business plan, keep in mind that construction is one of the most heavily regulated industries in the UK, which is understandable considering the potential for injury and fatality through improper construction practice. You must have a solid understanding of the regulations you need to stick to as an expert in your trade.

Construction is subject to strict health and safety regulations such as the Health and Safety at Work Act 1974 and Construction (Design and Management) Regulations 2015 (CDM).

With the CDM, for example, contractors are required to “plan, manage and monitor construction work under their control, so it is carried out without risks to health and safety”.

Your business plan should show you have given due consideration to the kind of insurance policies you want to take out.

The risk on construction projects can be quite significant, so you should think about what type of insurance is best suited to your construction business.

Are you looking for more help in creating your construction business plan? Here are some useful resources you can check out.

Final thoughts

Creating a business plan for your construction business can really help you to be clear on what you’re offering your customers and how you’ll deliver on that.

It’s worth taking the time and effort to write one and keep it up to date.

As your construction company evolves, your business plan should do the same. And by documenting everything, it will put you in good stead for future planning, as well as if you require any funding in the future.

Taking the confusion out of construction accounting

Is the challenge of sorting your construction accounting holding your back? This free guide will help to simplify things so you can stay on top of managing your business admin.

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