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A business plan paves the road to success
There are a lot more ways to lose money than to make it in the construction industry and controlling risk is one of the key ways you can minimize loss. Unfortunately, most construction managers just don't know how to control risk. The answer is simple - establish a well thought-out business plan that makes financial sense in your market place and stick to it.
Whether you're starting a new business or a new division, planning on handling new types of work, penetrating new markets, or expanding within your present market, a solid plan of attack is not only good to have, but essential to your success.
You should have heard your bank, bonding company, or other key source of funds or guarantees ask if you have a business plan. If they haven't, then they're doing you a disservice. They ought to be telling you the facts - a business plan is critical to the future of your business.
It's a fact that the construction industry has one of the highest failure rates in our economy today. One reason for this failure is that construction management often can't adapt to change. Successful managers know that change is inevitable and that a business plan is a great tool to help them prepare for, and deal with, change.
However, the truth is, many construction managers don't actually know what a business plan is for. If they are well-seasoned professionals, many lenders or guarantors won't even request a business plan from them. Consequently, contractors that are not required to business plan tend to disregard the idea altogether, failing to recognize the inherent value. You may be one of them. Perhaps you have been asked to produce a business plan, but see it merely as a way to satisfy your bank or bonding company. In both cases, you are making a serious mistake.
No company should dare fail to realize that people function better with defined goals than without, especially in business. Any growing business or new undertaking should have a well thought out and up to date business plan. It will give you that extra edge. It makes a statement to the internal and external business world that says that you know what you're doing, where you're going and how you're going to get there. There's no better way to start any negotiation!
Many mature, well-established profitable contractors believe that they have no need for a business plan. They don't realize that even they can benefit. At the very least, a business plan acts as an eye opener and identifies areas within your company that require attention or change. The simple exercise of creating a business plan is often enough to spark long-term thinking that can significantly impact those present day decisions that will determine the future direction of your company.
You'll find two elements in a business plan: the written part that covers future goals and objectives and the financial model that predicts corresponding income and expenses. So, a business plan not only defines your goals, but also, most importantly, acts as a financial road map that directs your company to long-term profitability. Staying on course with your goals will get you where you want to go in the shortest time possible, while the financial framework allows you to monitor your progress along the way.
Never underestimate the many uses of a business plan - they make real financial sense - i.e., they'll help earn you money! When you partner with Druml Group to create your business plan, we'll create a financial model that includes a detailed variables analysis, including projected property acquisitions, fixed asset purchases, accompanying debt and the potential overhead required to perform to your planned volume. We'll work closely with you to determine a margin that is representative of your market place and help you shape your future-making sure that you earn money as planned!
Druml Group has developed successful business plans for many construction companies and we'd be glad to help you too. Call us today. We'll help you master the art of planning to earn money!
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