Business Plan For Your Construction Company
Your Business Plan is one of your key Competitive Advantages that can massively increase your sales, profitability and cash flow. The reason is simple, 99% of your competition do not have one and many of the ones that do rarely look at it.
In most cases when a contractor has a Business Plan it was because they needed 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 spend time and effort to develop your business plan? Because contractors use business plans all the time and most of them do not realize how important it is until we show them.
Business Plans For Construction Follow This General Format
#1 Executive Summary - Reputation
In construction, your reputation is vital due to the continual onslaught of competition, which is why highly profitable contractors are careful who they have on their team.
#2 Mission Statement - What Type Of Construction Are You Good At?
What type of construction are you focusing on? New, remodel, service and repair? Understand all of the resources you have, your skills, number of employees, type and condition of your tools and equipment, office and warehouse or shop space, location and what type of work and customer demographic generates you the most money for the least effort. Get this right and you can be rolling in money. Get it wrong and you could be in for a lifetime of pain and drudgery!
#3 Competitive Analysis - What Do You Do Better Than Other Contractors Within Twenty Five Miles?
Successful contractors know what type of work they are better at than their competition. They keep a keen eye on their mix of resources and expertise so they always have what they need to complete the work on time and on budget. Every contractor has a different mix of resources and expertise. Successful contractors know which aspects of construction they are good at and which ones to outsource and subcontract. That is part of their Unique Selling Proposition (USP) where they should concentrate all their energies.
#4 Marketing Strategy - Who Are Your Most Profitable Clients Using The 80/20 Rule?
20% of your customers normally generate 80% of your net profit.
20% of the goods or services you sell contribute 80% of your revenue
20% or 2 out of 10 of your staff create 80% of the value for your customers.
The frightening consequence of the 80/20 rule is that 8 out of 10 hours we spend at work drive almost no value to the bottom line and the biggest drain is trying to save money doing our own contractor bookkeeping instead of reviewing the Key Performance Indicator (KPI) Reports. Through our contractors bookkeeping services system you can access them 24/7 without opening QuickBooks for Contractors.
Good contractor bookkeeping services can help you understand where your 20% is hidden.
By generating daily reports that uncover the best customers, jobs, services, or products, you will soon see how you can refocus your internal efforts on doing more good work.
This is the great contribution a company receives from good QuickBooks financial reports from using QuickBooks the ‘right-way’.
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
#5 Executive And Field 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.
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)
Success is a few simple disciplines practiced everyday
Failure is a few errors in judgment repeated everyday
Here Is What We Recommend You Do Next:
#2 Let Us Setup A LivePlan account for you and link it to your QuickBooks setup and then we will work with your via email and phone support to help you get the most out of it.
Profitable Construction - Companies have known about the value of outsourced bookkeeping services for a long time and now you know about it too!
For Construction Company Owners who do not need the full power of QuickBooks for contractors and want 24/7 online access we offer Xero Accounting Online and we have custom setup for construction companies. Click Here For More.
We Scan Your Receipts And Invoices link the appropriate transactions to QuickBooks or Xero Accounting Online depending on the construction accounting service you are using and provide ongoing Cloud Based Contractors Bookkeeping Services by accountants who understand construction.
Our Contractor Bookkeeping Services System Is A System
Thinking About Outsourcing Your Contractors Bookkeeping Services?
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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 and Bill.Com Certified Guru. 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+