Business Plans Can Provide A Competitive Advantage to any business has one and uses it. For construction firms the impact is even greater because very few contractors have one and many of the ones that do rarely look at it. This is because it was something they needed to produce to get a loan, investment capital or some other external force was applied. Once the crisis or need passed they simply let it rest-in-peace on the shelf.
Why Would Anyone Especially A Construction Business Owner spend the time and effort to develop a business plan? Because contractors use business plans all the time and they do not realize it until we show them:
Business Plans And Construction Follow This General Format:
#1 Executive Summary - Reputation
In construction reputation is key because construction is a perishable commodity that does not age well and delays cost a lot of money. So construction firms establish and protect their reputations very carefully based in part on having the resources and expertise to complete the work on time and on budget.
#2 Mission Statement - Construction Type
What type of construction are we focused on? New, remodel, service and repair?
#3 Competitive Analysis - What We Do Best
Every contractor has a different mix of resources and expertise which means there are some aspects of construction that are fast and easy for them and that is their Unique Selling Proposition (USP) where they should concentrate all their energies.
#4 Marketing Strategy - Our Best Customer
Every construction company knows who their best customers are and who the worst ones are. The key is to make a list to identify each group and apply the 80/20 rule.
#5 Staff Qualifications - Journeymen vs. Cheap Labor
The journeyman costs more per hour but produces more and better results at a lower costs over the long haul than a group of cheap laborers. This is easily documented in a well setup QuickBooks file
#6 Financial Information - Profit & Loss and Balance Sheet
Contractors typically run their business with a daily print out from the online account at their bank. Some use software and most that we come in contact with use QuickBooks Premier Contractor Edition.
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For construction companies with 1-10 employees, including the owner, and annual sales of $0-$5 Million, QuickBooks Premier Contractor Edition is in my opinion the only choice. It can produce all of the financial statements most construction companies need and much more. The most important reports for a contractor to see are the 5 Key Performance Indicators (KPI)
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About The Author:
Randal DeHart, PMP, QPA is the co-founder of Business Consulting And Accounting in Lynnwood Washington. He is the leading expert in outsourced construction bookkeeping and accounting services for small construction companies across the USA. He is experienced as a Contractor, Project Management Professional, Construction Accountant, Intuit ProAdvisor, QuickBooks For Contractors Expert and Xero Accounting Specialist. This combination of experience and skill sets provides a unique perspective which allows him to see the world through the eyes of a contractor, Project Manager, Accountant and construction accountant. This quadruple understanding is what sets him apart from other Intuit ProAdvisors and Xero accountants to the benefit of all of the construction contractors he serves across the USA. Visit http://www.fasteasyaccounting.com/randal-dehart/ to learn more.
Our Co-Founder Randal DeHart - Is a Certified PMP (Project Management Professional) with several years of construction project management experience. His expertise is construction accounting systems engineering and process development. His exhaustive study of several leading experts including the work of Dr. W. Edward Deming, Michael Gerber, Walter A. Shewhart, James Lewis and dozens of others was the foundation upon which our Construction Bookkeeping System is based and continues to evolve and improve. Follow Randal on Google+
