Crafting a Business Plan for Construction Contracting SuccessCrafting a Business Plan for Construction Contracting Success
Let’s dive into the common features of many business plans—and why contractors should always take them a step further to achieve maximum success.
April 24, 2023
There are plenty of ways to create and document a business plan. It feels like we've seen them all over the years! Seeing so many drafts represents a great opportunity for learning because our team has had the chance to review solid, well-thought-out business plans and—perhaps more importantly—poorly considered plans.
As a construction contractor, you know that a business plan should look and feel a certain way; inspire your team in a certain way; and take into consideration where your business is today, where you’re going and how you intend to get there. Most of the attempts that have come across our desks over the years decidedly fall short in one aspect or another.
Even with these similarities, there remains a great deal of difference in how contractors define business plans. Here is a great working definition to get everyone on the same page: “a process of formal consideration of an organization’s future course resulting in an actionable, written plan.”
Before addressing what a successful business plan should be, let’s discuss the common qualities of most business plans—and why it’s important to take them a step further.
1. Most plans start with mission, vision and value statements, but those alone do not a business plan make.
Your company’s mission, vision and values are critical components of your plan because they create a common language for how you view, talk about and evangelize about your company. But often these statements quickly become too detailed and complex for this common language to be achieved.
For example, there was a cottage industry of consultants in the 1980s who traveled around and helped companies write mission statements. Almost every contractor’s lobby featured one. What should have been a short, compelling statement about the company’s core purpose had turned into a long, meandering recitation of intentions and aspirations. So often, no one in the business could commit such a manifesto to heart and recite it at a moment’s notice, which would be a clearer sign that your mission statement is of genuine value.
2. Many plans consist of a series of goals, targets, milestones and long to-do lists.
However, a simple list of goals—even when it includes timelines and who is responsible—does not constitute a sound plan. Goals are all well and good and should be components of your plan but, standing alone, they don’t suffice.
3. Other plans consist of a review of the last year, an analysis of milestone attainment and a general statement about this year’s intended volume.
Still others consist of spreadsheets and detailed budgets. How does a review of past performance or reams of budget figures inspire your people? Again, budgets and past performance reviews are part of the plan, but they shouldn’t dominate the version that leads your day-to-day business operations.
Neither does a long narrative—no matter how beautifully written—or an analysis of strengths, weaknesses, opportunities and threats (SWOT). The SWOT analysis has been a staple business exercise for decades and is a sound component, but it alone can’t provide inspiration or direction for your people.
Poorly conceived business plans usually have far too many goals, targets or initiatives and even more details. Having ONE overarching company initiative is optimal. One goal is best, two goals is okay, but the more you continue to split your attention on different goals, the harder it becomes to achieve them and to do so well. The human mind simply cannot focus on so many big objectives at the same time.
So, what else does a well-thought-out business plan include?
1. It should consider all aspects of your construction business.
This is where you take into account all of the smaller parts that make up the whole of your unique construction contracting business: mission, vision, values, culture, HR, capital spending, safety, technology, marketing and business development, SWOT, budgets and project planning and execution.
2. It should include a long-term strategy and action plans for shorter-term implementation.
It should represent your company’s North Star for you, your management team and every single employee.
3. You should use it every week as a management tool.
Don’t write an elaborate plan and place it on a shelf in a three-ring binder to gather dust! Why go through the exercise if your plan isn’t going to be the operating system for how you run your business?
Every person should have a copy and know with certainty how their roles contribute to the company’s overall success.