Are you about starting a construction company? If YES, here’s a complete sample construction business plan template & feasibility report you can use for FREE.
Okay, so we have considered all the requirements for starting a construction business. We also took it further by analyzing and drafting a sample construction marketing plan template backed up by actionable guerrilla marketing ideas for construction businesses. So let’s proceed to the business planning section.
A Sample Construction Company Business Plan Template
1. Industry Overview
The construction industry can comfortably boast to be responsible for the infrastructural development of the world. As such, the development of any country or city can be said to be the handiwork of construction companies and other stakeholders.
In other words, all the edifices, bridges, dams, roads, estates, campuses, shopping malls, office complexes, skyscrapers and massive structures that you see around are all products of the construction industry. Starting a construction business is capital intensive simply because of the type of heavy duty equipment that is required to carry out a construction project and also the cost of managing a large workforce.
Despite the fact that the construction industry requires huge start – up capital, the industry is highly profitable, especially if you have the expertise and capacity to deliver quality jobs. The major clients for construction companies are governments and the private sector.
Construction giants all over the world head towards developing countries, because they know that they are going to get juicy construction contracts there. Unlike in advanced economy, in developing countries and undeveloped world, there are loads of construction works to be done.
The fact that they have infrastructure deficit means that the government must be up and doing in terms of road constructions, bridge construction, public facility construction (hospitals, schools, office facilities and estates et al) and dams constructions.
After a war, the construction industry is one of the major stakeholders that contribute in the rebuilding of a country. In so doing, they work with governments in ensuring that basic infrastructures are restored and of course it will always ends up a win – win situation for both parties.
The government gets what they want and the construction company and contractors get good returns for delivering the projects.
Over and above, the success of a construction company to a larger extent depends on their relationship with the biggest clients in the industry; the government of any country. No doubt there is always enough construction contracts to go round as long as a construction company is competent and well positioned. They won’t lack construction contracts from both the government and the private sector.
2. Executive Summary
Shannon Berg Construction Company is an international construction company that has its headquarters in Grand Rapids, Michigan – USA. The fact that we are based in the united states does not in any way restrict our scope of operations to the United States of America.
We are an international construction company and we work for our clients (governments and private sectors) in any part of the world.
Shannon Berg Construction Company will be specialized in the constructions of skyscrapers, bridges, stadiums, roads, dams, Office complex, shopping malls, schools, campuses and estates et al. As a matter of fact, we are going to be known for delivering world class structures all over the globe.
Creativity, excellence and timely completion of construction projects will be our signature. We intend starting our construction business on a small scale in Grand Rapids, Michigan, but we have a bigger picture – to have our presence in any part of the world that our clients wants us to work. We hope to achieve this feat within the first 10 years of launching the company.
As part of our plans to make our highly esteemed customers our number one priority and to become a global construction brand, we have perfected plans and strategies that will enable us work with our clients in delivering projects that can favorably compete with the best in the industry at an affordable and reasonable price within the stipulated completion date barring any unforeseen circumstance.
Shannon Berg Construction Company is fully aware that starting a construction business requires huge capital base, which is why we have perfected plans for steady flow of cash from private investors who are interested in working with us.
We can confidently say that we have a robust financial standing and we are ready to take on any construction project that comes our way, as long as the project is duly commissioned by the required authority.
Shannon Berg Construction Company will be owned by the principal partner; Engr. Shannon Berg and other partners (Nani David, Lois Scotland and Christopher Parkston). They also have plans in the pipeline to sell the shares of the company in the nearest future to interested investors who would want to be part owners of the company.
Shannon Berg who is the principal partner has well over 25 years of experience in the construction industry. Before starting his own construction company, he was a senior project manager and consultant with one of the world’s largest construction company based in Germany.
Engr. Shannon Berg, Nani David, Lois Scotland and Christopher Parkston will be the major financier of the company. Nonetheless, we have made a concerted decision not to limit the number of investors with similar investment ideology that may want to invest in the business.
This is necessary in order for us to be able to retain financial flexibility. Ideally, our plan is that no investment will be less than $1,000,000, which would purchase a 1 percent equity position. It is our desire that all equity partners be limited partners.
3. Our Products and Services
Shannon Berg Construction Company is a construction company that is set to undertake both small construction projects and massive construction projects for governments, private sectors and for individuals which is why we do not intend to place limitations of the scope of the projects we handle and what we do.
We know that if we are good at what we do, it will make it easier for our brand to grow beyond Grand Rapids, Michigan to other parts of the United States of America and the rest of the world. Our business offering are listed below;
- Road Construction
- Bridge Construction
- Dam construction
- Airports and Helipads Construction
- Seaports Construction
- Skyscrapers construction
- Estate construction
- Public facility construction (hospitals, schools, shopping malls, office complexes and industrial facilities et al)
- Construction of residential facilities
- Property Makeover Services
- Construction Consultancy and Advisory Services
4. Our Mission and Vision Statement
- Our vision is to build a first class construction company that will have active presence in North America, South America, Africa and Asia.
- At Shannon Berg Construction Company, our mission and values are to help governments, the private sector and individuals in the United States of America and throughout the world realize their dreams of building a world class structure that can compete on a global stage with the best in the construction industry.
Our Business Structure
Shannon Berg Construction Company intend starting small from Grand Rapids, Michigan, but with a vision of growing the business to becoming a global construction brand with presence in all the continents of the world. In order to achieve this vision, we just have to position our company for growth and ensure that we hire dedicated and highly competent employees at all levels.
Shannon Berg Construction Company will ensure that we build a team that will work together towards achieving the company’s vision. We will build a business that has the right structures and process in place that can support growth; a business that runs on autopilot.
In view of the above, we have made provisions for the following position in our organization based on the size of the company we intend starting but as the business grows, we will create senior level positions and also create a structure that will support the business growth at every growth and expansion stage;
- Chief Executive Officer (President)
- Project Manager
- Civil Engineer
- Structural Engineer
- Quantity Surveyor
- Land Surveyor
- Company’s Lawyer/Secretary
- Admin and HR Manager
- Business Developer
- Accountant
- Front Desk Officer
5. Job Roles and Responsibilities
Chief Executive Officer – CEO:
- Responsible for providing direction for the business
- Creates, communicates, and implements the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
- Responsible for the day to day running of the business
- Responsible for handling high profile clients and deals
- Responsible for fixing prices and signing business deals
- Responsible for signing checks and documents on behalf of the company
- Evaluates the success of the organization
- Reports to the board
Project Manager
- Responsible for the planning, management and coordinating all projects on behalf of the company
- Supervises projects
- Ensures compliance during project executions
- Provides advice on the management of projects
- Responsible for carrying out risk assessment
- Using IT systems and software to keep track of people and progress of ongoing projects
- Responsible for overseeing the accounting, costing and billing of every project
- Represents the organization’s interest at various stakeholders meetings
- Ensures that project desired result is achieved, the most efficient resources are utilized and different interests involved are satisfied.
Civil Engineer
- Responsible for preparing bids for tenders, and reporting to clients, public agencies and planning bodies
- Ensures that sites meet legal guidelines, and health and safety requirements
- Assesses the environment impact and risks connected to projects
- Responsible for judging whether projects are workable by assessing materials, costs and time requirements
- Draws up blueprints, using Computer Aided Design (CAD) packages
- Discussing requirements with the client and other professionals (e.g. architects and project managers et al)
- Responsible for managing, directing and monitoring progress during each phase of a project
Architect
- Responsible for creating building designs and highly detailed drawings both by using the hands and by using specialist computer – aided design (CAD) software
- Works around constraining factors such as town planning legislation, environmental impact and project budget
- Writes and presents reports, proposals, applications and contracts
- Adapting plans according to circumstances and resolving any problems that may arise during construction
- Works with project team and management to achieve a common goal
- Responsible for applying for planning permission and advice from governmental new building and legal department.
Land Surveyor
- Responsible for undertaking land surveys/measurements using a variety of specialist technical equipment such as theodolites, laser alignment devices and satellite positioning systems et al.
- Responsible for presenting data to clients
- Responsible for producing and advising about construction plans and drawings
- Responsible for advising about technical matters and whether the construction plans are viable
Company’s Lawyer/Secretary
- Responsible for drawing up contracts and other legal documents for the company
- Consult and handle all corporate legal processes (e.g. intellectual property, mergers & acquisitions, financial/ securities offerings, compliance issues, transactions, agreements, lawsuits and patents et al)
- Develops company policy and position on legal issues
- Researches, anticipate and guard company against legal risks
- Represents company in legal proceedings (administrative boards, court trials et al)
- Plays a part in business deals negotiation and take minutes of meetings
- Responsible for analyzing legal documents on behalf of the company
- Prepares annual reports for the company
Admin and HR Manager
- Responsible for overseeing the smooth running of HR and administrative tasks for the organization
- Defines job positions for recruitment and managing interviewing process
- Carries out staff induction for new team members
- Responsible for training, evaluation and assessment of employees
- Responsible for arranging travel, meetings and appointments
- Oversees the smooth running of the daily office activities.
Business Developer
- Identifies, prioritize, and reach out to new partners, and business opportunities et al
- Responsible for supervising implementation, advocate for the customer’s needs, and communicate with clients
- Develops, executes and evaluates new plans for expanding increase sales
- Documents all customer contact and information (manage the company’s CRM system)
- Represents the company in strategic meetings with government agencies, private sectors and contractors
- Helps increase sales and growth for the company
Accountant
- Responsible for preparing financial reports, budgets, and financial statements for the organization
- Responsible for financial forecasting and risks analysis.
- Responsible for developing and managing financial systems and policies
- Responsible for administering payrolls
- Ensures compliance with taxation legislation
- Handles all financial transactions for the company
- Serves as internal auditor for the company
Front Desk/Customer’s Service Officer
- Receives Visitors/clients on behalf of the organization
- Receives parcels/documents for the company
- Handles enquiries via e-mail and phone calls for the organization
- Distributes mails in the organization
- Handles any other duties as assigned the line manager
6. SWOT Analysis
Surviving in the business world as a construction company requires more than knowing how to deliver standard projects but also how to network with key people that matter; decision makers that can decide who a project is given to and all that.
We know that it will be a bit difficult to compete with already established construction companies in the United States especially because we are new in the industry.
In order to properly position our company for growth and to favorably compete in the construction industry, we engaged the services of a Dr. Joe Whyte, a renowned HR and business consultants in the United States of America to help us run a SWOT analysis.
It is important that we know our strength, our weaknesses, and the opportunities that we can leverage on in the industry and the threats that we are likely going to be confronted with.
With that, we will be able to map out strategies that will not only help us to survive in the industry but also to build a global construction brand. Here is a summary from the result of the SWOT analysis that was conducted on behalf of Shannon Berg Construction Company;
- Strength:
Shannon Berg Construction Company can confidently boast of having a competent and highly experienced management team who are regarded as some of the best hands in Michigan.
Although we are a new construction company, but our president and board of trustee are respectable people in the United States of America who have served the US government in various capacity; we are a construction company that has the right network that is suitable for the kind of business we are into.
- Weakness:
Well the fact that we are a new construction company could count as a weakness. It is normal for clients to think twice before awarding construction contracts to newbies in the industry.
Another weakness that can count against us in the industry is the fact that we may not have the financial muscles to drive the business the way we ought to drive it. We require huge financial base to be able to acquire some of the latest heavy duty construction equipment.
- Opportunities:
Our business concept, our mission and vision puts us at an advantage in the industry. We will start small to build trust within Grand Rapids, Michigan and there are loads of opportunities for us there simply because we are well positioned to work with both the state government and the highly organized private sector.
- Threat:
Generally in the construction industry, both the already established construction companies and start – up construction companies are subject to threat from government policies, global economic downturn and unforeseen natural disasters (disasters that may cause setback).
These are the threats that we are likely going to face as a newbie construction company in Grand Rapids, Michigan. Another threat that we are likely going to face is the arrival of a big construction company in the location where our business has strong presence.
7. MARKET ANALYSIS
- Market Trends
The trend in the construction industry is that construction companies are always coming out with processes that will help them achieve more within a short period; construction jobs can be time consuming especially the construction of massive infrastructures.
Most players in the construction industry are fully aware that the government of any country or state is the biggest clients they can get and they do all the lobbying and horse trading to ensure that they get government contracts.
No doubt there are loads of big time investors that have stakes in the construction industry, but one thing is certain, there is room big enough to accommodate both the big construction companies and the small construction companies.
What smaller construction companies need to do to survive in the industry is to concentrate on developing estates, schools, hospitals and hotels et al before bidding for big construction contracts like road construction, bridge construction, dam construction and skyscrapers et al.
Another obvious trend in the construction industry is subletting of contracts. It is now obvious that construction giants leverage on their brands to win contracts and in some cases after they have won the contract.
They will go ahead to sublet the contract to smaller construction company that they trust can deliver to execute the project at an agreed fee that will be good enough for both parties to make profits. Smaller construction companies position themselves to be able to leverage on such opportunities once it present itself.
8. Our Target Market
Our target market cuts across governments at all levels and countries, the organized private sector and people of different class and from all walks of life. We know that our selling points will be our excellent and timely delivery of construction projects using global best practices.
We will start with the local market, people, organizations and the government in Michigan, but we hope to spread our nets to clients from other states in the US and thereafter other countries of the world.
Shannon Berg Construction Company will be known for working with smaller clients (various individuals) as well as working for bigger clients (various governments and organized private sector). Below is a list of the people and organizations that we have specifically designed our services for;
- Families
- Organized private sector (Corporate organizations)
- Land Owners
- Businessmen and Businesswomen
- University Campuses
- Foreign investors who are interested in owning properties in the United States of America
- The government of the United States of America (Government contracts)
- The governments of other nations of the world
Our Competitive Advantage
We are quite aware that there are big – time investors and construction companies who are well recognized in the construction industry, and we maybe have to compete with them when it is time to bid for juicy government contracts.
It might be challenging competing as a newbie in the construction industry, especially in a highly organized market like that of the United States of America, which is why we were deliberate in choosing our board members. Our competitive advantage is not limited to the crop of highly experienced professions that are members of our management team but also our board members.
Our board members are highly respected professionals in the United States who have served the government of the United States at various capacities; people who are accomplished business gurus and people who have the right connections and experience to make things happen with little or no struggle. For us, it is indeed part of the competitive advantage that we are bringing to the market.
Another positive for Shannon Berg Construction Company is the fact that our Chief Executive Officer / President is a renowned Civil Engineer, he has robust experience in the construction industry and he has worked extensively as a senior project manager for one of the world’s leading construction companies.
He is sure going to bring is experience, expertise and network (connections) to make Shannon Berg Construction Company one of the leading construction brand in Grand Rapids, Michigan and also active player in the global construction market.
9. SALES AND MARKETING STRATEGY
- Sources of Income
Shannon Berg Construction Company was established with the aim of maximizing profits through delivering quality and standard construction works for our highly esteemed clients. We will ensure that we generate income from every available means within the construction industry. Below are the sources we intend exploring to generate income for Shannon Berg Construction Company;
- Road Construction
- Bridge Construction
- Dam construction
- Airports and Helipads Construction
- Seaports Construction
- Skyscrapers construction
- Estate construction
- Public facility construction (hospitals, schools, shopping malls, office complexes and industrial facilities et al)
- Construction of residential apartments
- Property Makeover Services
- Construction Consultancy and Advisory Services
10. Sales Forecast
It is important to state that our sales forecast is based on the data gathered during our feasibility studies and also some of the assumptions readily available on the field.
We have relationship with major stakeholders in the real estate and construction industry in Grand Rapids, Michigan and also in order states in the US and we are sure of getting key construction contracts to kick start of business. Below are the projections that we were able to come up with for the first three years of Shannon Berg Construction Company;
- First Year-: $2,000,000
- Second Year-: $3,500,000
- Third Year-: $5,000,000
N.B: This projection is done based on what is obtainable in the industry and with the assumption that all things that will facilitate easy flow of construction contracts. From our calculations, we are likely going to make a minimum of 30 percent profits after task from executing key construction projects.
- Marketing Strategy and Sales Strategy
We have been able to clearly define our target market and have documented this in our construction marketing plan. We know how to get them to hire our services which is why we have decided to adopt some of the winning formula that construction giants utilize to win major construction contracts.
We know that it will take different marketing and sales strategies to win small clients and bigger clients. For example; there are requirements a construction company would hate to meet before they can be awarded a government contract. We have put all these factors in place before creating a workable marketing and sales strategy for Shannon Berg Construction Company.
Shannon Berg Construction Company is fully aware of the bureaucracy and horse trading that exists in bidding for construction contracts from the government and even the organized private sector, which is why we were able to put protocols in place to hire some of the best business developer to handle our sales and marketing.
No doubt, our sales and marketing team will be recruited based on their vast experience in the construction industry and their ability to fit into our Business model. We are going to pay more emphasis in the training of all our employees so as to give them all they would need to help the company achieve its aim and objectives.
Our goal is to become one of the leading construction companies in Grand Rapids, Michigan and we know we can achieve this by ensuring that our sales and marketing team are delivering on set targets. Shannon Berg Construction Company will adopt the following marketing and sales strategies;
- Introduce our business by sending introductory letters alongside our brochure to all the corporate organizations and government offices in Grand Rapids, Michigan and other States in the US.
- Promptness in bidding for contracts
- Advertise our business in real estate/properties magazines and websites
- List our business on yellow pages
- Promote our business on satellite TV stations and radio stations.
- Attend expos, seminars, and business fairs et al
- Create different packages for different category of clients in order to work with their budgets and still deliver quality housing/property to them
- Leverage on the internet (social media platforms and our official websites) to promote our business
11. Publicity and Advertising Strategy
We have been able to work with our consultants to help us map out publicity and advertising strategies that will help us walk our way into the heart of our target market. First and foremost, we want our brands to be visible and well communicated, which is why our publicity strategy have been well crafted to help us achieve our aims and business objectives.
All our publicity materials and jingles are done by some of the best hands in the industry. Below are the platforms we intend to leverage on to promote and advertise our property development business;
- Place adverts on both print and electronic media platforms
- Sponsor relevant TV shows
- Utilize our company’s website in promoting our business
- Leverage on the internet and social media platforms like; Instagram, Facebook ,Twitter, LinkedIn, Badoo, Google+ et al
- Install our Bill Boards on strategic locations
12. Our Pricing Strategy
Part of business strategy is to ensure that we work within the budget of our clients to deliver excellent and world class construction projects.
We are quite aware that there are major players in the construction industry in the United States of America who are not interested in small business deals and that is why we have positioned Shannon Berg Construction Company to take on such contracts.
Although our prices may not be outrageously lower than what is obtained in the industry, but we are hopefully that whatever price we bill our customer will be amongst the lowest they can get in the industry. The fact that we are going to be billing our clients lower than what is obtainable in the industry does not in any way going to affect the quality of our construction projects.
- Payment Options
Our payment policy in Shannon Berg Construction Company is all inclusive because we are quite aware that different people prefer different payment options as it suits them, but at the same time, we will not accept payment by cash because of the volume of cash that will be involved in most of our transactions. Here are the payment options that we will make available to our clients;
- Payment by via bank transfer
- Payment via online bank transfer
- Payment via check
- Payment via bank draft
In view of the above, we have chosen banking platforms that will help us achieve our plans without any itches.
13. Startup Expenditure (Budget)
- The Total Fee for incorporating the Business in New York: $750.
- The budget for Liability insurance, permits and license: $5,000
- The Amount needed to acquire a suitable Facility with enough space in Grand Rapids, Michigan (Re – Construction of the facility inclusive): $500,000.
- The Cost for equipping the office (computers, printers, fax machines, furniture, telephones, filing cabins, safety gadgets and electronics et al): $15,000
- The cost for acquiring heavy duty construction equipment: $2,000,000
- The Cost of Launching a Website: $600
- Additional Expenditure (Business cards, Signage, Adverts and Promotions et al): $5,000
- Working capital (investment fund): $3,000,000 (3 Million US Dollar)
Going by the report from our research and feasibility studies, we will need about $7,000,000 (7 US Million Dollars) to set up a construction company in Grand Rapids, Michigan. It is important to state that most of the heavy duty construction equipment that we will work with will be leased.
This necessary because some of these equipment are really expensive and it won’t be economical for us to acquire them from the start.
Generating Funding/Startup Capital for Shannon Berg Construction Company
- The Chief Executive Officer/President Engr. Shannon Berg will generate 20 percent of the start – up capital from his personal savings and sale of his stocks
- 30% of the capital will be generated from key partners (Nani David, Lois Scotland and Christopher Parkston)
- 50% of the capital will be sourced from banks
14. Sustainability and Expansion Strategy
Shannon Berg Construction Company was established with the aim of building a company that will outlive the founders and partners; a construction company that will have active presence in major cities in the world. Part of the vision of the company is to handover the baton of the company from one generation to generation; hence we have perfected our plans to put the right structures in place that will aid our succession plan.
In order to position of company for growth, we have been able to create strong partnerships with the government of the United States of America, organized private sector and construction giants. We are optimistic that we will continue to execute construction contracts for our clients.
Our marketing team will continue to get the needed support and encouragement that they need to be able to deliver on set goals and targets for the organization, and we will continue to improve our processes and structure to meet up with the changing trend in the construction industry.
Lastly, we will not relent in taking calculated business risks when it comes to bidding for bigger government contracts and taking on new business challenges and new business frontiers.
Check List/Milestone
- Business Name Availability Check: Completed
- Business Incorporation: Completed
- Opening of Corporate Bank Accounts various banks in the United States: Completed
- Opening Online Payment Platforms: Completed
- Application and Obtaining Tax Payer’s ID: In Progress
- Application for business license and permit: Completed
- Purchase of All form of Insurance for the Business: Completed
- Renting of Office Facility in New York City: Completed
- Conducting Feasibility Studies: Completed
- Generating capital from the CEO and Business Partners: Completed
- Applications for Loan from our Bankers: In Progress
- writing of business plan: Completed
- Drafting of Employee’s Handbook: Completed
- Drafting of Contract Documents (Tenancy Agreements et al), and other relevant Legal Documents: In Progress
- Design of The Company’s Logo: Completed
- Graphic Designs and Printing of Packaging Marketing / Promotional Materials: Completed
- Recruitment of employees: In Progress
- Purchase of the Needed furniture, office equipment, electronic appliances and facility facelift: In progress
- Acquiring of heavy duty construction equipment: In progress
- Creating Official Website for the Company: In Progress
- Creating Awareness for the business (Business PR): In Progress
- Health and Safety and Fire Safety Arrangement: In Progress
- Establishing business relationship with key players in the industry (networking and membership of relevant construction bodies): Completed.