business plan for commercial contractor

BUSINESS STRATEGIES

How to create a contractor business plan

• Jeremy Greenbaum
• Oct 30, 2023
• 12 min read

When launching a contracting business, it's essential to craft a detailed and precise business blueprint tailored to your industry. A contractor business plan is a meticulously crafted document that delineates your company's objectives, tactics and financial forecasts within the contracting sector. This blueprint serves as your guiding compass when starting a business , charting the course to success and offering solutions to potential hurdles. It spells out the specific strategies needed to efficiently operate a contracting enterprise.

Keep reading for tips on how to get started with your own business plan when starting a contractor business .

Looking to open up the doors to your business online by making a website ? Try Wix’s website builder today.

Creating a business plan for your contractor business is vital in order to establish a clear direction and ensure the success of your venture. Here are the six primary sections of a business plan to get you started:

Executive summary

Company and domain names, market analysis and research, operations plan, marketing and advertising plan, financial plan, 01. executive summary.

The executive summary is a concise overview of your entire contractor business plan. It should provide a snapshot of your business's mission, goals, products or services, target market, competitive advantage, financial projections and funding requirements. A clear executive summary succinctly communicates your business's essence and potential, serving as a compelling introduction to captivate the reader's interest.

Example of an executive summary: "GreenBuild Contractors is a dynamic and innovative construction company specializing in sustainable residential and commercial projects. With a commitment to quality craftsmanship and environmental stewardship, we aim to revolutionize the construction industry. Our team of experienced professionals combines expertise in green building practices with a passion for creating spaces that resonate with both clients and the environment. By leveraging our unique expertise, GreenBuild Contractors is poised to tap into the growing demand for eco-friendly construction solutions. We are seeking funding to scale our operations, enhance market presence and position ourselves as a leader in sustainable construction."

02. Company and domain names

Choosing the right business name is pivotal for building brand awareness and trust in your contractor business. It should resonate with your services, reflect professionalism and be memorable. To find inspiration, consider using business name generators that offer creative suggestions tailored to your industry.

Be inspired:

Contractor business name ideas

Painting business name ideas

Plumbing business name ideas

Selecting a domain name is equally crucial in today's digital age. It should be aligned with your company name, easy to remember and relevant to your services. Before finalizing your choice, ensure the domain name is also available and not already in use.

Once you’ve decided on your company name and legal structure, make sure to register your business with your state.

03. Market analysis and research

Incorporating a market analysis and research section in your contractor business plan helps you understand the competitive landscape and devise an effective business strategy. Conduct market research to identify your target audience's needs, preferences and pain points. Analyze your competitors' strengths and weaknesses to uncover opportunities for differentiation. This insight will guide your marketing efforts and positioning strategy.

Find your niche:

Handyman business plan

Painting business plan

04. Operations plan

An operations plan within your contractor business plan outlines the practical aspects of your business, including its location, premises, equipment and staffing needs. Describe your business's physical setup, such as office or construction site locations. Detail the types of equipment required for your services and address staffing requirements, roles and responsibilities. A comprehensive operations plan ensures a smooth workflow and efficient resource allocation.

05. Marketing and advertising plan

Your business plan should lay out a detailed marketing and advertising strategy to promote your contractor business. Identify the most relevant marketing channels for your industry, such as a business website , social media, local advertising and trade shows. Highlight specific campaigns—such as showcasing completed projects, offering promotions or educational content about construction trends.

Don’t forget to think about your branding. No matter where you choose to promote your business, you’ll want to make sure that your branding is consistent. Start by using a logo maker to brainstorm construction logo ideas . Shape your visual identity around it, plus articulate your brand’s values, mission and vision (among other essential aspects).

06. Financial plan

The financial plan is a cornerstone of your contractor business plan, detailing how your business will be funded initially and outlining a timeline for achieving profitability. It includes projected revenue, expenses and cash flow statements. Specify the initial investment required for equipment, staffing and other startup costs. Outline your funding sources and clearly define your business's financial trajectory, demonstrating its sustainability and growth potential. Lay out how you plan to make money as a contractor.

Contractor business plan example: UrbanRenovate Builders

Below is a business plan example of a hypothetical contractor business, UrbanRenovate Builders. Feel free to use this as a guide for when you’re creating your own contractor business plan.

UrbanRenovate Builders is a forward-thinking contractor business poised to redefine urban spaces through innovative renovation solutions. With a focus on delivering exceptional craftsmanship and modern design, we aim to become a trusted partner for clients seeking transformative renovation projects. Our team of skilled professionals combines expertise in architectural design, construction and project management to create living spaces that reflect our clients' unique lifestyles. By leveraging our expertise and commitment to quality, UrbanRenovate Builders aims to establish a prominent presence in the competitive renovation market.

Company name : UrbanRenovate Builders

Domain name : www.urbanrenovatebuilders.com

The name "UrbanRenovate Builders" captures our emphasis on urban revitalization and renovation expertise. The corresponding domain name aligns with our brand identity and offers easy access to our online presence, enabling potential clients to learn about our services and portfolio.

Market analysis : UrbanRenovate Builders operates in the bustling urban renovation sector, targeting homeowners and commercial property owners seeking modernization and transformation. Our research indicates a growing demand for sustainable and aesthetically appealing renovation solutions, reflecting a shift towards environmentally-conscious living.

Competitive landscape : We have identified key competitors offering similar renovation services, emphasizing the importance of differentiation through innovation, superior customer service and sustainability.

Location : UrbanRenovate Builders will be headquartered in a central urban location, facilitating easy access to our target market.

Premises : Our office space will accommodate project management, design consultations and administrative tasks.

Equipment : We will invest in state-of-the-art construction and design tools to ensure precise execution of projects.

Staffing : Our team will consist of experienced architects, designers, project managers and skilled construction professionals.

Marketing channels : Our marketing strategy involves a mix of digital platforms (website, social media), local advertising (flyers, community events) and participation in home renovation expos.

Campaigns : We will launch a "Before & After" campaign showcasing successful transformations. We’ll additionally launch a "Sustainability Spotlight" campaign highlighting eco-friendly practices, and "Client Stories" sharing positive experiences.

Startup costs : Initial investment of $150,000 will cover equipment, office setup, marketing efforts and staff salaries.

Funding : Funding will come from personal savings ($50,000) and a bank loan ($100,000).

Financial projections (first year) : revenue: $300,000, expenses: $220,000, profit: $80,000

Financial projections (second year) : revenue: $500,000, expenses: $350,000, profit: $150,000

Profitability timeline : UrbanRenovate Builders aims to achieve profitability within the first year of operation, supported by strategic marketing efforts and excellent project execution.

Benefits of creating a contractor business plan

No matter what type of business you’re starting, a business plan offers several key advantages that can significantly contribute to your company’s success.

Funding : A well-written business plan can be instrumental in attracting investors and raising money for your business . Investors want to see a clear roadmap that outlines your business's potential for growth and profitability. A robust plan demonstrates your commitment, knowledge of the industry and strategies to mitigate risks, making it more likely for investors to feel confident in providing financial support.

Resources : A detailed business plan helps you understand the precise resources, supplies and staff required to launch your contractor business. By conducting a thorough analysis of the equipment, tools, materials and personnel needed, the plan ensures that all essential aspects are considered and allocated appropriately. This proactive approach minimizes the risk of resource shortages or mismanagement, allowing for a smoother business launch.

Operational efficiency : A business plan provides a structured outline of your business's operations. It outlines the step-by-step processes involved in executing projects, managing tasks and meeting client expectations. This clarity improves operational efficiency, reduces confusion among staff and enhances overall project management. Additionally, having a well-defined plan in place helps business owners respond effectively to unexpected challenges, ensuring that projects stay on track.

Risk mitigation : Starting a contractor business involves inherent risks, from market fluctuations to unforeseen project delays. A business plan allows you to identify potential risks and develop corresponding mitigation strategies. By addressing challenges proactively, the business is better equipped to navigate uncertainties and disruptions, maintaining its resilience and reputation.

Competitive edge : A well-researched business plan includes a thorough analysis of the market landscape and competitors. This insight will enable you to identify gaps in the market, recognize emerging trends and position your contractor business strategically to stand out. By tailoring your services to meet specific client needs, your business can gain a competitive edge and establish a unique value proposition.

Financial projections : A crucial aspect of any business plan is its financial projections and growth strategy. By outlining revenue forecasts, expense estimates and profit margins, the plan provides a clear picture of the contractor business's financial health. You can set realistic financial goals and create actionable plans to achieve them, guiding your growth trajectory in a sustainable manner.

How profitable can a contractor business be?

Contractor businesses can be very profitable. According to a report by IBISWorld, the average profit margin for contractor businesses is 10%. This means that for every $100 in revenue, contractor businesses generate $10 in profit.

Of course, not all contractor businesses are equally profitable. Some contractors are able to charge higher fees and generate more profit than others. However, even contractors with a lower profit margin can still be successful if they have a steady stream of clients.

Here are some factors that can contribute to the profitability of a contractor business:

Specialization: Contractors who specialize in a particular area of construction or remodeling can charge higher fees and attract more clients.

Experience: Contractors with more experience tend to be more efficient and can complete projects more quickly. This can lead to higher profits.

Reputation: Contractors with a good reputation are more likely to attract repeat clients and referrals. This can lead to increased business and profits.

Marketing: Contractors who effectively market their business are more likely to generate leads and close more deals. This can lead to increased revenue and profits.

If you are considering starting a contractor business, it's important to do your research and develop a plan to make your business as profitable as possible.

Here are some additional tips for increasing the profitability of your contractor business:

Invest in quality tools and equipment. This will help you complete projects more efficiently and reduce costs.

Track your expenses carefully. This will help you identify areas where you can cut costs and improve your profitability.

Negotiate favorable terms with your suppliers. This can save you money on materials and other costs.

Outsource non-essential tasks. This can free up your time so that you can focus on the most important aspects of your business.

Invest in training and development for your team. This will help your team to be more productive and efficient.

By following these tips, you can increase the profitability of your contractor business and build a successful enterprise.

How to market your contractor business

There are a number of ways to market your contractor business. Here are a few tips:

Create a strong online presence. This includes having a professional website and being active on social media. Your website should be well-designed and easy to navigate, and it should include information about your services, experience and contact information. Your social media pages should be updated regularly with interesting content and photos of your work.

Use local search engine optimization (SEO). This means optimizing your website and online content so that it ranks higher in search engine results pages (SERPs) for relevant keywords. When people search for contractors in your area, you want your website to be one of the first results they see.

Run paid advertising campaigns. You can run paid ads on search engines and social media platforms to reach a wider audience. When creating your ads, be sure to target your ideal customers and use relevant keywords.

Network with other businesses in your area. Attend industry events and join trade associations. This is a great way to meet potential clients and partners.

Offer discounts and promotions. This is a great way to attract new customers and encourage repeat business. You can offer discounts for first-time customers, bulk orders or referrals.

Get involved in your community. Sponsor local events or donate to charities. This is a great way to build relationships and generate goodwill.

Focus on your unique selling points. What makes your business different from other contractors in your area? Highlight your unique selling points in your marketing materials and online content.

Use high-quality photos and videos. Show potential customers the quality of your work by using high-quality photos and videos in your marketing materials.

Make it easy for customers to contact you. Include your contact information prominently on your website and social media pages. Make sure to respond to inquiries promptly and professionally.

Provide excellent customer service. This is essential for building a successful contractor business. Make sure to communicate regularly with your customers, keep them updated on the progress of their project and resolve any issues promptly.

Strategies to launch your contractor business plan

Here are some strategies to launch your contractor business plan:

Define your target market and services. Who are your ideal customers? What services will you offer? What are your unique selling points? Once you have a clear understanding of your target market and services, you can develop a business plan that is tailored to their needs.

Create a strong brand identity. Your brand is what will set you apart from other contractors in your area. Develop a logo, tagline and website that are professional and reflect your business values.

Market your business effectively. There are many different ways to market your contracting business. You can use online and offline marketing channels, such as search engine optimization (SEO), social media and networking events.

Get licensed and insured. In most states, contractors are required to be licensed and insured. This shows potential customers that you are a legitimate business and that you are qualified to perform the services you offer.

Build a team of reliable subcontractors. If you're unable to perform all of the services yourself, you will need to build a team of reliable subcontractors. Make sure to check their references and licenses before hiring them.

Provide excellent customer service. Customer service is key to success in the contracting business. Make sure to communicate regularly with your customers, keep them updated on the progress of their project and resolve any issues promptly.

Here are some additional tips for launching your contractor business:

Start small and scale up as you grow. Don't try to take on too much work at once. Start with small projects and gradually build up your business as you gain experience and a good reputation.

Offer competitive pricing. When setting your prices, be sure to research what other contractors in your area are charging. You want to offer competitive pricing without sacrificing quality.

Get involved in your community. Sponsor local events, donate to charities and get to know other businesses in your area. This will help you to build relationships and generate leads.

Network with other contractors. Join a trade association or attend networking events for contractors. This is a great way to learn from other professionals, get referrals and find new opportunities.

Launching a contractor business can be challenging, but it's also very rewarding. By following these tips, you can increase your chances of success.

Contractor business plan FAQ

How do you build a successful contracting business.

To build a successful contracting business, you need to focus on the following:

Provide excellent customer service. This means communicating regularly with your clients, keeping them updated on the progress of their project and resolving any issues promptly.

Deliver high-quality work. This is essential for building a good reputation and attracting repeat clients.

Be reliable and trustworthy. Show up on time and complete your projects on schedule.

Be professional and courteous. Dress appropriately and treat your clients with respect.

Market your business effectively. Let potential clients know about your services and how you can help them.

What type of construction is most profitable?

Can a contractor be a millionaire, want to create another type of business plan.

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How to Write a Construction Company Business Plan (12 Steps)

You are starting a construction business. You own a construction company. Do either of those statements sound like you? If so, you need a construction company business plan. Building a construction company is hard work, but you don’t reach success on hard work alone. You also need strategic planning, an in-depth understanding of the competition, and a way to finance your business. These are all things that construction business plans address. In this post, we take a deep dive into how to write a business plan for a construction company. Read on to learn everything you need to know.

Why Do You Need a Business Plan for Your Construction Company?

Before you get too deep into “how” to write a home-building business plan, it’s helpful to understand “why” you should write one. There are three main considerations here: competition, growth, and financing.

Competition

The 50 U.S. construction companies with the highest annual revenue all made more than $1.5 billion in 2020 , with the highest-grossing company topping $14.4 billion. This is the level thousands of construction companies in the U.S. and around the world are trying to reach, and the fight to get there is fierce. With that in mind, you need to understand your competition. This is a primary purpose of a construction company business plan. You probably already know who your competitors are, but you need to do market research and write it all down. A construction or general contractor business plan will force you to do that.

Like it or not, if you’re not growing, you’re more than likely dying in the construction industry. And your financial backers will want to see that you intend to grow. That means you need to have a plan for growth — how to achieve it and how to manage it when it happens.

How are you going to fund the expansion of your business? How will you get the initial capital to buy equipment? There are plenty of questions related to finances when you’re building a construction company. And any large or small construction company business plan will answer them and help you get the financing you need in the process.

Two Types of Information to Include in a Construction Business Plan

The information you include in your commercial or residential construction business plan will fall into two categories: industry information and general business information. Both are important to your business for different reasons. Perhaps the most important reason to include thorough information in your business plan is that it demonstrates your knowledge of the industry and business in general to the investors and banks who will read the plan when considering you for a loan. See below to learn more.

Industry information:

What do you know about the construction industry that others don’t? In other words, what makes your approach to your construction business different from the rest? This is what investors in your business will want to know as they try to gauge your chance of success. Don’t rely on empty buzzwords here — words like friendly, service, reliable, and the like. These are fine words, but you need to be more specific. How does what you know about the construction industry make you capable of running a successful construction business? Make sure those points are clear in your construction company business plan.

General business information:

In addition to your expertise in home building, you need to demonstrate some knowledge of general business practices. That means construction business plans need to have detailed information on the basic running of the business, the plan to get construction jobs, cash flow, corporate taxes, and similar items.

How to write a construction business plan

A business plan for a construction company is not a single page of text. It’s a complex, multi-part document that requires a lot of information. While not all construction company business plans are the same, most of them have a similar format. They include 12 key sections, which we explore in more detail below.

Executive Summary

Your executive summary is your introduction. It needs to summarize the rest of the document but not go into too much detail. Try to limit the executive summary section to a single page if at all possible, and cover topics like the following:

• The reason you are starting a construction company
• Your goals for the business
• Where you plan to operate and offer residential construction services
• Your estimated business expenses and profits
• How your home building business will fit into the existing market

Again, don’t go into too much detail here. The details will come later in the business plan. Just hit the high points.

Company Description

The second part of your construction business plan will echo some of the points you raised in the executive summary, but it will go into deeper detail. In the company description section, the takeaway point for a reader should be why you think your business will be successful. To that end, you need to describe any specialties you or your business partners have, any special positioning you can achieve within the market, and any revenue streams or reduced expenses that can make you more competitive. You will also need to describe the existing competition here. Who are your competitors, how successful are they and why do you expect to outperform them? These are all questions your company description should answer.

Operational Plan

You will get into even more detail in this section. But instead of focusing on who you are and what your business will be, you will use the operational plan section to describe how your business is going to run day in and day out. You’ll need to cover a few key areas: Technology: List and describe the pieces of technology and equipment you will use in the operation of your construction business. This can include initial construction equipment purchases and office technology like computers, programs, and even home design software .

Bidding processes: How do you plan to bid on residential construction jobs? This is an important part of generating revenue for your construction company, so it needs to be described in detail in your business plan.

Production schedules: When you get a home-building job, you are instantaneously on a tight schedule. As you know, it takes a lot to take a home from paper to real life, and the logistics behind that process are complex and unforgiving. So, make sure your business plan demonstrates your knowledge of production schedules and, more specifically, how you plan to structure your company’s production schedules.

Inventory partners: Being willing to build homes is one thing, but having the right partnerships in place to get the job done is entirely another. Which vendors and suppliers will you work with? Why? Do you have any existing relationships that could prove beneficial to your business? Answer these and any related questions in your operational plan.

Market and Competition

You’re probably not going to be the first construction company in town. Who else is already established in your intended service area? How successful are they? Your construction company’s business plan needs to contain an in-depth analysis of the competition you’re going to face, as well as the market for residential construction services in the place you plan to operate. The reason why is simple. You need to know who your competitors are so you can see what they’re doing and look for ways to grab some market share from them. And you need to know whether people want the service you are going to provide. This section will cover all of that — for both your knowledge and that of your financial backers.

Construction is a service, but it contains within it multiple related services that you can choose to offer or not offer to your customers. This is going to be an important part of your business plan — starting a construction business without a list of services you will provide is like opening a store without knowing what you’re going to sell inside it. So, make a list. Here are some of the construction-related services you may want to consider:

• Residential construction
• Commercial construction
• Home design
• Landscape work

Sales & Marketing

You may not be a marketer at heart, but you’re going to have to have a plan to market your construction business and bring in home-building jobs. The sales and marketing plan you write in your business plan should be as detailed as possible. Include information on the following subtopics:

• Your marketing budget
• Your company’s marketing assets, such as a website
• Advertising plans (such as billboards, newspaper ads, and search engine advertising)
• Whether and how you plan to leverage social media
• Loss leader plans, such as offering free home design consultations
• How you will measure the success of your marketing efforts

In addition to marketing, this section of your construction company business plan will need detailed information on your sales processes. Will you have dedicated salespeople? How will your sales team get leads? Will salespeople be paid on commission? Answer these questions and more.

Managers can make or break a construction business. These are the leaders of your company — the ones who will define the path your business follows and bear the responsibility for the successes and failures you have along the way. That’s why this is an essential part of your home-building business plan. Management may shift over time, but at the start, you need to have a good idea of who’s going to be in charge of what. You will also need to include an explanation of why you have chosen these people, who they answer to, and what you are planning to pay them.

For financial backers, this is going to be one of the most important sections of your business plan. They want to know how you plan to manage the money they may give you so they have an idea of whether this is a sound investment. Give them as much detail as possible. Cover everything from your revenue projections and operational costs to employee wages and the price of your services. Wherever possible, you need to include exact figures based on hard data and research instead of soft estimates based on your own beliefs. Remember — lenders and investors have a head for numbers, so they will immediately notice if you’ve left something important out.

The funding section of a business plan for a construction company is an extension of the finance section, but it’s not the same thing. This is where you describe how you plan to obtain the money you need to start, run, and expand the business. The audience reading your business plan will hopefully play a part in the funding — that’s the whole idea, anyway — but you need to convince them that you will be able to use their funds wisely to generate revenue. Be specific about how much startup funding you’re going to need and why. Go into detail about how you will repay a loan or generate returns for investors. Describe how initial funding will be used in your business — to buy equipment, hire talented employees, market your business, and so on. With these bases covered, you will set yourself up to receive the funding you need to get this business off the ground.

Financial Projections

You’re hoping for a bright future for your new construction company. That’s a given. But you need to show that bright future with the financial projections in your business plan. Include projections for revenue, expenses, and profits for five years out from your starting date. Don’t just say you plan to bring in $100 million by the fourth quarter of year three — show the numbers behind how you’ll get there. You will be able to reference the information from the other sections of your business plan to support your projections.

Funding Request

If you need investments or a loan to start your construction business, you need to include in your business plan a specific funding request. This is where you ask for the money you need. Here again, you need to provide some detail:

• How much money do you currently have for the business?
• How much are you contributing alongside the investment or loan you are seeking?
• What assets do you already own, and what assets do you still need to acquire?

Many of the facts and claims you have made in other sections of your construction company business plan will have supporting information or related documents that won’t quite fit. The appendix is where you include those references. Any extra information that could help financial backers understand your proposed business should be included here. And don’t worry — this section will not likely be read in its entirety, so you can include everything. In general, more information in a business plan is better than less.

Final Thoughts

Writing a construction company business plan is a big task, but if you break it down into small steps, you can get it done. From the executive summary to the appendix, your business plan needs to demonstrate your ability to achieve success in the residential construction industry. With your business plan written and your company started, you’ll need to get home-building jobs and please your clients. Cedreo can help with that. Our home building software can help you quickly create 3D home designs to help clients visualize the project and make them much more likely to close the deal with you. Interested? Learn more about our home building software here, or contact us for more information.

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General Contractor Business Plan

Your constructional expertise, contractual knowledge, and project management skills are enough for you to start a general contracting business. However, you need something more to succeed—a well-thought-out business plan.

Having a business plan can help you secure funding, set priorities, make informed decisions, and steer your business in the right direction.

Need help writing a business plan for your general contractor business? You’re at the right place. Our general contractor business plan template will help you get started.

Free Business Plan Template

Download our free business plan template now and pave the way to success. Let’s turn your vision into an actionable strategy!

• Fill in the blanks – Outline
• Financial Tables

How to Write a General Contractor Business Plan?

Writing a general contractor business plan is a crucial step toward the success of your business. Here are the key steps to consider when writing a business plan:

1. Executive Summary

An executive summary is the first section planned to offer an overview of the entire business plan. However, it is written after the entire business plan is ready and summarizes each section of your plan.

Introduce Your Business:

Market opportunity:, product and services:.

• For instance, construction services, project management, construction consulting, and maintenance & repair can be included as services, and specialized expertise and competitive pricing can be part of your USPs.

Marketing & Sales Strategies:

Financial highlights:, call to action:.

Ensure your executive summary is clear, concise, easy to understand, and jargon-free.

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2. Business Overview

The business overview section of your business plan offers detailed information about your company. The details you add will depend on how important they are to your business. Yet, business name, location, business history, and future goals are some of the foundational elements you must consider adding to this section:

Business description:

• Residential construction
• Commercial Construction
• Civil construction
• Industrial construction
• Green building and sustainable construction

Company structure:

Mission statement:, business history:.

• Additionally, If you have received any awards or recognition for excellent work, describe them.

Future goals:

This section should provide a thorough understanding of your business, its history, and its future plans. Keep this section engaging, precise, and to the point.

3. Market Analysis

The market analysis section of your business plan should offer a thorough understanding of the construction industry with the target market, competitors, and growth opportunities. You should include the following components in this section.

Target Market:

• For instance, homeowners, property owners, real estate developers, and insurance companies can be a target audience for a general contracting company focusing on residential projects.

Market Size and Growth Potential:

• You may include statistics and information like the number of ongoing and upcoming residential or commercial projects, the value of construction spending, etc.

Competitive Analysis:

Market trends:.

• For instance, there is a growing demand for eco-friendly and sustainable construction practices; explain how you plan on dealing with this potential opportunity in the market.

Regulatory Environment:

Here are a few tips for writing the market analysis section of your construct contractor business plan:

• Conduct market research, industry reports, and surveys to gather data.
• Provide specific and detailed information whenever possible.
• Illustrate your points with charts and graphs.
• Write your business plan keeping your target audience in mind.

4. Products And Services

The product and services section should describe the specific services and products that will be offered to customers. To write this section should include the following:

Describe your services:

Mention the services your contracting business will offer. This list may include services like,

• Construction project management
• Renovation services
• Budgeting or cost estimation services
• Project coordination
• Maintenance and repair

Service Process:

Case studies:, additional services:.

In short, this section of your general contractor plan must be informative, precise, and client-focused. By providing a clear and compelling description of your offerings, you can help potential investors and readers understand the value of your business.

5. Sales And Marketing Strategies

Writing the sales and marketing strategies section means a list of strategies you will use to attract and retain your clients. Here are some key elements to include in your sales & marketing plan:

Unique Selling Proposition (USP):

• For instance, timely project delivery, quality craftsmanship, competitive pricing, and sustainable practices can be some of the great USPs for a general contracting company.

Pricing Strategy:

Marketing strategies:, sales strategies:, customer retention:.

Overall, this section of your construction contractor business plan should focus on customer acquisition and retention.

Have a specific, realistic, and data-driven approach while planning sales and marketing strategies for your general contractor business, and be prepared to adapt or make strategic changes in your strategies based on feedback and results.

6. Operations Plan

The operations plan section of your business plan should outline the processes and procedures involved in your business operations, such as staffing requirements and operational processes. Here are a few components to add to your operations plan:

Staffing & Training:

• Include their qualifications, relevant experience, the training required, and the duties they will perform.

Operational Policies and Procedures:

Equipment & technologies:.

• Explain how these technologies help you maintain quality standards and improve the efficiency of your business operations.

Contingency Plans:

Adding these components to your operations plan will help you lay out your business operations, which will eventually help you manage your business effectively.

7. Management Team

The management team section provides an overview of your general contractor business’s management team. This section should provide a detailed description of each manager’s experience and qualifications, as well as their responsibilities and roles.

Founders/CEO:

Key managers:.

• It should include key executives, general contractors, and other department managers (e.g. project manager, safety manager.) involved in the business operations, including their education, professional background, and any relevant experience in the industry.

Organizational structure:

Compensation plan:, advisors/consultants:.

• So, if you have any advisors or consultants, include them with their names and brief information consisting of roles and years of experience.

This section should describe the key personnel for your general contracting services, highlighting how you have the perfect team to succeed.

8. Financial Plan

Your financial plan section should provide a summary of your business’s financial projections for the first few years. Here are some key elements to include in your financial plan:

Profit & loss statement:

Cash flow statement:, balance sheet:, break-even point:.

• This exercise will help you understand how much revenue you need to generate to sustain or be profitable.

Financing needs:

Be realistic with your financial projections, and make sure you offer relevant information and evidence to support your estimates.

9. Appendix

The appendix section of your plan should include any additional information supporting your business plan’s main content, such as market research, legal documentation, financial statements, and other relevant information.

• Add a table of contents for the appendix section to help readers easily find specific information or sections.
• In addition to your financial statements, provide additional financial documents like tax returns, a list of assets within the business, credit history, and more. These statements must be the latest and offer financial projections for at least the first three or five years of business operations.
• Provide data derived from market research, including stats about the construction industry, user demographics, and industry trends.
• Include any legal documents such as permits, licenses, and contracts.
• Include any additional documentation related to your business plan, such as product brochures, marketing materials, operational procedures, etc.

Use clear headings and labels for each section of the appendix so that readers can easily find the necessary information.

Remember, the appendix section of your general contractor business plan should only include relevant and important information supporting your plan’s main content.

The Quickest Way to turn a Business Idea into a Business Plan

Fill-in-the-blanks and automatic financials make it easy.

This general contractor business plan sample will provide an idea for writing a successful general contractor plan, including all the essential components of your business.

After this, if you still need clarification about writing an investment-ready business plan to impress your audience, download our general contractor business plan pdf.

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Frequently asked questions, why do you need a general contractor business plan.

A business plan is an essential tool for anyone looking to start or run a successful general contractor business. It helps to get clarity in your business, secures funding, and identifies potential challenges while starting and growing your business.

Overall, a well-written plan can help you make informed decisions, which can contribute to the long-term success of your general contractor company.

How to get funding for your general contractor business?

There are several ways to get funding for your general contractor business, but self-funding is one of the most efficient and speedy funding options. Other options for funding are:

Small Business Administration (SBA) loan

Crowdfunding, angel investors.

Apart from all these options, there are small business grants available, check for the same in your location and you can apply for it.

Where to find business plan writers for your general contractor business?

There are many business plan writers available, but no one knows your business and ideas better than you, so we recommend you write your general contractor business plan and outline your vision as you have in your mind.

What is the easiest way to write your general contractor business plan?

A lot of research is necessary for writing a business plan, but you can write your plan most efficiently with the help of any general contractor business plan example and edit it as per your need. You can also quickly finish your plan in just a few hours or less with the help of our business plan software.

About the Author

Vinay Kevadiya

Vinay Kevadiya is the founder and CEO of Upmetrics, the #1 business planning software. His ultimate goal with Upmetrics is to revolutionize how entrepreneurs create, manage, and execute their business plans. He enjoys sharing his insights on business planning and other relevant topics through his articles and blog posts. Read more

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How to Write a Business Plan for a Construction Contractor?

• September 14, 2022
• Small Businesses

Whether you’re looking to raise funding from private investors or to get a loan from a bank (like a SBA loan) for your construction contractor company, you will need to prepare a solid business plan.

In this article we go through, step-by-step, all the different sections you need in the business plan of your construction contractor business. Use this template to create a complete, clear and solid business plan that get you funded.

1. Construction Business Executive Summary

The executive summary of a business plan gives a sneak peek of the information about your business plan to lenders and/or investors.

If the information you provide here is not concise, informative, and scannable, potential lenders and investors will lose interest.

Though the executive summary is the first and the most important section, it should normally be the last section you write because it will have the summary of different sections included in the entire plan.

Why do you need a business plan for a construction business?

The purpose of a business plan is to secure funding through one of the following channels:

• Obtain bank financing or secure a loan from other lenders (such as a SBA loan )
• Obtain private investments from investment funds, angel investors, etc.
• Obtain a public or a private grant

How to write an executive summary for a construction business?

Provide a precise and high-level summary of every section that you have included in the business plan of your construction business. The information and the data you include in this segment should grab the attention of potential investors and lenders immediately.

Also make sure that the executive summary doesn’t exceed 2 pages in total: it’s supposed to be a summary for investors and lenders who don’t have time to scroll through 40-50 pages, so keep it short and brief.

The executive summary usually consists of 5 major sub-sections:

• Business overview : start by introducing your proposed construction firm, where it will be located, the types of construction services you will offer, and the pricing strategy you want to implement. Also mention what sets you apart from other construction contractors in the area
• Market analysis : summarise the market where you will operate and provide a brief about your target market , target audience, spending capability, etc. Also give certain data points about the construction industry in the area where you want to operate (size and growth), as well as an overview of the main competitors, etc
• People : introduce your construction business’ management and employee structure. Provide a brief (no more than a couple of sentences each) of the knowledge and experience of the team. Also, mention how the company will be structured (management roles and reporting lines)
• Financial plan: how much profit and revenue do you expect in the next 5 years? When will you reach the break-even point and start making profits? You can include here a chart with your key financials (revenue, gross profit, net profit )
• Funding ask : what loan/investment/grant are you seeking? How much do you need? How long will this last?

2. Construction Contractor Business Overview

In this segment of the business plan, you will provide details about your proposed construction firm.

You must answer here some important questions that potential investors and lenders often ask about your business and operations. Here are some examples of questions you must answer:

• What is the rationale behind your opening a construction business today?
• In which location will you operate and why?
• What type of services will you offer?
• Are there specific types of services that you specialize in?
• What will be your pricing strategy and why?
• What will be the legal structure of your company?

a) History of the Project

Any business overview must start with explaining the history of the project. There are 2 components here:

• Passion & experience of the business owner
• Rationale behind starting a construction business today

Passion & experience

Displaying your passion is a must, but in the construction business, you must have ample experience, too. You must reveal your experience. For instance, you may have worked as a subcontractor responsible for designing beautiful buildings for large construction companies. At the same time, you were also responsible for overlooking and managing the design execution.

Is there a certain problem (or perhaps, a set of problems) that your construction firm will try to solve when it comes into existence? For example, there may be a steady rise in demand for state-of-the-art and elegant commercial buildings because of an increasing influx of international companies.

Unfortunately, there may be only a few construction companies capable of executing such projects with precision, and you want to fill in the gap.

b) Business Model

This section of the Business Overview should explain the model you want to adopt for your construction business. For example:

• Who will be your target audience (homeowners, commercial entities, government, etc.)?
• How big is the market and is there enough demand for your services?
• What type of services are you going to offer?

What are the different construction contractor companies?

You may choose one of the following:

• Commercial construction
• Residential construction
• Institutional construction
• Infrastructure construction
• Industrial construction
• Energy & utilities construction

Typically, construction businesses do not operate in multiple niches at once, and even if they do, they are usually large corporations. Thus, make sure to select your niche properly after evaluating your expertise and experience.

No matter what you select, you must ensure that there is enough demand for the type of construction firm you want to open and the range of services you will offer.

c) Construction Services

This is the segment where you will outline the type of construction services you will offer. Make sure that you are precise and list the most important services that you want to offer to potential clients.

Some services that you may offer include:

• Residential home building
• Repairs and renovations
• Commercial building
• Deck building, etc.

If you want to start as a subcontractor, you may offer your services in areas like:

• Exterior painting
• Tile work, etc.

d) Pricing Strategy

This is where you will provide an overview of your pricing strategy. For instance, you may charge higher than your competitors because exceptional craftsmanship, high-quality materials, etc.

Similarly, you may decide to charge lower than your competitors because you have years of relationship with suppliers who will supply raw materials at say, a 15% discount over the prevailing market rates.

Pricing table

While it may not be possible to provide a proper pricing table for all services that you will offer, it is still a great idea to provide a table that gives an overview of your pricing structure.

Consider providing a pricing range for your services. For example:

• Flooring : $15 to $45 per square foot depending on the material used
• Drywall Installation : $1.50 to $3.50 per square foot, etc.

However, don’t go into extreme details because potential investors are not interested in the nitty-gritty of your pricing. They just need the big picture to assess the profitability, because they will tie your pricing strategy with your financial projections later on.

e) Company Legal Structure

Finally, your business overview section should specify what type of business structure you want. Is this a corporation or a partnership (LLC)? Who are the investors? How much equity percentage do they own? Is there a Board of Directors? If so, whom? Do they have experience in the industry?

3. Construction Industry Market Overview

A complete understanding of the market where you want to operate is important for the success of your business. That’s also something you must showcase in your business plan.

For example, if there is a high demand for residential and commercial construction companies but you want to focus on industrial construction despite a very small market size , it may not be a great business decision.

Therefore, you must cover here 3 important areas:

• Industry size & growth : how big is the construction business industry in your area? What is its growth rate (or decline rate) and what are the factors contributing to its growth or decline?
• Competition overview : how many competitors are there? What type of customers do they serve? What type of projects do they specialize in? How do they compare vs. your business? How can you differentiate yourself from them?
• Customer analysis : who is your target audience? What type of construction services do they need? 

a) Construction Industry Size & Growth

How big is the construction contractor industry in the us.

The construction industry is one of the largest sectors in the US: there were over 733,000 construction contracting firms in 2022 employing about 7.5 million workers!

The same year, the industry was worth about $1.9 trillion: that’s an average annual turnover of $2,600,000 per company!

In terms of new residential constructions, there were 991,000 and 390,000 building permits granted in 2020 alone for single and multi-family buildings respectively.

How big is the construction contractor industry in your area?

After getting a clear picture of the construction business industry in the US as a whole, narrow down to your location.

It’s likely that you won’t find the number anywhere (at least not for free). In that case, you can use our guide to estimate the TAM, SAM, and SOM for your business. Here is an example of how to do it:

We already know that the average annual turnover of a construction firm in the USA in 2022 was $2,600,000. Therefore, if the location where you will operate has a total of 20 construction companies, the construction business industry in the area is approximately $52 million.

How fast is the construction business industry growing in your area?

Next on our list is market growth: is the industry growing or declining in your area?

US market growth can be a great addition to your business plan, yet it doesn’t necessarily help to assess the industry in your area of service. For example, the industry might be growing in the US, but declining in your region for a number of reasons.

As you likely won’t find this information online, you can instead rely on the number of construction contractor companies in the area.

For example, if the region had only 18 construction businesses in 2018 and 20 in 2022, you can assume that the average growth rate of the construction contractor industry in your area is about 5% per year.

b) Construction Contractor Competition Overview

Studying your competitors’ business models is vital. As such, we strongly recommend you do some research and create a comparative table summarizing their businesses, the type of construction services they offer, etc.

Here is a sample table that you can use:

Construction Business SWOT Analysis

SWOT stands for Strength, Weakness, Opportunities, and Threats. This analysis will help lenders and investors better understand how you compare vs. competitors as well as the overall risk and reward profile of your business.

Here is a sample that you can use as a reference:

• Strengths : 10 years of experience as a subcontractor under a nationally reputed construction company; multiple successful construction designs under the belt with the most prominent ones being the commercial green building with 40% glass work for deep sunlight penetration and solar energy utilization; ability to acquire discounted construction material; etc.
• Weaknesses : no direct clients, no initial brand reputation
• Increased demand for residential buildings because of the increasing population in the area
• Increased demand for commercial construction because of increased business opportunities
• Harsh weather conditions force homeowners to repair their homes
• Existing players expanding their services
• Strong seasonality – contracts and products drop significantly during the winter months which can lead to cash flow shortfall in the short-term

c) Customer Analysis

This is the sub-section where you will provide a detailed analysis of your target audience. For instance, you may want to start with residential construction, but soon want to expand your operations into commercial construction.

Some important points that you must include in your customer analysis include:

• Who are your customers: individuals or businesses?
• What type of construction services do they need (new vs. remodeling)?
• What type of construction companies do they prefer (expensive, low-cost, established, new players, etc.)?

4. Sales & Marketing Strategy

This is the segment where you outline your customer acquisition strategy. Try to answer the following questions:

What is your Unique Selling Proposition (USP)?

• What are the different marketing strategies you will use?
• How do you intend to track the success of your marketing strategy ?
• What is your CAC or customer acquisition cost?
• What is your marketing budget?
• What introductory promos and offers do you intend to provide for attracting new customers?

What marketing channels do construction businesses use?

A few marketing channels that construction businesses typically use are:

• Signages, vehicle branding
• TV and radio ads
• Print ads (newspapers, specialized magazines, flyers, etc.)
• Email marketing
• Word of mouth, recommendations

It is not necessary to use all channels. Instead, you can start by focusing on a few of them, and include other marketing strategies later.

In other words, how do you differentiate yourself vs. competitors? This is very important as you might need to win customers from competitors.

A few examples of USPs are:

• Low-cost leader : you may have a special partnership with a large construction material supplier that can allow you to underbid your competitors, thereby allowing you to offer low-cost construction services 
• Time commitment : you may have excellent project management skill that allows you to complete constructions projects within the estimated time, and hence, prevent unwanted delays and frustrations that eventually lead to increased construction cost
• Quality guarantee : you may offer a quality guarantee for a long duration that none of your competitors provide

5. Management & People

You must address two things here:

• The management team and their experience / track record
• The organizational structure : different team members and who reports to whom?

Small businesses often fail because of managerial weaknesses. Thus, having a strong management team is vital. Highlight the experience and education of senior managers that you intend to hire to oversee your construction business.

Describe their duties, responsibilities, and roles. Also, highlight their previous experience and explain how they succeeded in their previous roles.

It is also important that you explain how their experiences and qualifications help you in implementing the construction business you are proposing. If they have certain experiences that will play a key role in the success of your construction business, mention that. 

For example, your General Project Manager may have years of experience in labor relations, cost control, and project supervision in a leading construction company. 

Organization Structure

Even if you haven’t already hired a general project manager, office manager, administrative assistant, quality control officer, architect, and other relevant staff members, you must provide a chart of the organizational structure defining hierarchy and reporting lines.

6. Financial Plan

The financial plan is perhaps, with the executive summary, the most important section of any business plan for a construction contractor company.

Indeed, a solid financial plan tells lenders that your business is viable and can repay the loan you need from them. If you’re looking to raise equity from private investors, a solid financial plan will prove them your construction contractor company is an attractive investment.

There should be 2 sections to your financial plan section:

• The startup costs of your company
• The 5-year financial projections

a) Startup Costs

Before we expand on 5-year financial projections in the following section, it’s always best practice to start with listing the startup costs of your project.

For an construction contractor company, startup costs are all the expenses you incur before you start making sales. These expenses typically are limited especially for small businesses and include:

• The lease deposit (if you rent an office and/or warehouse for your equipment)
• Machines, vehicles
• Construction equipment, tools, etc.
• License & permits, business insurance, etc.

Of course, the startup costs depend on a number of factors, like the size of your business (employees), the services you plan to offer (which will dictate what equipment you may need), etc.

b) Financial Projections

In addition to startup costs, you will also need to build a solid 5-year financial model in the business plan of your construction company.

Note that your financial projections should be built using a spreadsheet (e.g. Excel or Google Sheets) and presented in the form of tables and charts in your business plan.

As usual, keep it concise here and save details (for example detailed financial statements, financial metrics, key assumptions used for the projections) for the appendix instead.

Your financial projections should answer at least the following questions:

• How much revenue do you expect to generate over the next 5 years?
• When do you expect to break even?
• How much cash will you burn until you get there?
• What’s the impact of a change in pricing (say 10%) on your margins?
• What is your average customer acquisition cost?

You should include here your 3 financial statements (income statement, balance sheet and cash flow statement). This means you must forecast:

• The number of contracts (customers) over time ;
• Your expected revenue ;
• Operating costs to run the business ;
• Capex (cost to buy the equipment and vehicles, etc.)

When projecting your financials, make sure to sensitize sales volume (customers), pricing as well as the expenses (inventory, salaries, etc.). Indeed, a small change in these assumptions may have a significant impact on your revenues, and most importantly, your profits.

7. Use of Funds

This is the last section of the business plan of your construction contractor company. Now that we have explained what your business model is, what type of services you offer, how you get customers, etc., this section must now answer the following questions:

• How much funding do you need?
• What financial instrument(s) do you need: is this equity or debt, or even a free-money public grant?
• How long will this funding last?
• Where else does the money come from? If you apply for a SBA loan for example, where does the other part of the investment come from (your own capital, private investors?)

If you raise debt:

• What percentage of the total funding the loan represents?
• What is the corresponding Debt Service Coverage Ratio ?

If you raise equity

• What percentage ownership are you selling as part of this funding round?
• What is the corresponding valuation of your business?

Use of Funds

Any business plan for a construction contractor company should include a clear use of funds section. This is where you explain how the money will be spent.

Will you spend most of the loan / investment in paying your employees’ salaries and the COGS (inventory)? Or will it cover mostly the cost for acquiring the equipment and machines?

For the use of funds, we also recommend using a pie chart like the one we have in our financial model template where we outline the main expenses categories as shown below.

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How to Write a Successful Construction Business Plan That Sets You Up for Success

by: Daniel Quindemil

What if I told you there was a “copy and paste” formula that any construction business can follow and be successful?

Seriously…. there is…

Before I started I AM Builders, I helped grow a Commercial Construction Company from a $0 to $7,000,000 per year company.

I initially started I AM Builders to be an estimating firm. But as time went on I realized there was a big problem in the construction industry…. Contractors know how to build, but no one teaches them how to grow a company.

As a side a note: we specialize in estimating projects for busy contractors . If you ever need help estimating projects, we can prepare your entire estimate and bid for you and we can walk you through all strategies to help you close. Learn more about our estimating service for Contractors and Subcontractors .

Every entrepreneur wants to write a business plan. And yes, in most businesses you need a business plan to get financing, venture capital money, etc.

But construction is the only industry where you can start a business with zero financing become a million-dollar business almost overnight.

And guess what….. it doesn’t take a fancy business plan.

When I walked into Caroni, they were a drywall labor company and had just starting getting their first GC jobs. We didn’t know how to grow a construction business .

We started trying out different ways to get leads, estimating strategies, negotiations strategies….

We tried it all….

And after all was said and done, the secret to growing a construction business can be summarized in these three steps.

This is your business plan.

5 Pillars of a Contractor Business Plan

1. develop a system to get a ton of potential projects and client leads, 2. develop an estimating team that can bid jobs fast, 3. develop a follow-up system to negotiate and close sales.

4. Set Up Project Management Systems to Keep Everything Running Smoothly

5. Build Your Field Team and Perform an Outstanding Job on Every Single Project

Before you start… do this.

Here are some questions to ask yourself:

• What do you want your reputation to be?
• How do you want to handle your bidding process?
• How much time do you have for your construction company?

Next, it’s time to get some specific goals.

Too many contractors are only caught up with their jobs and the busyness of their daily schedules that they never sit down and think, “ what am I working toward ?”

This is why it’s important to get into the specifics and have clear goals on what to achieve.

For more info on how to prepare detailed goals and targets read this post: Grow Your Construction Business in 3 Months .

After helping over 1200 contractors grow their company, we’ve concluded that there are 5 steps to creating an effective business plan.

Let’s get into each one.

1. Determine Your Lead Generation Strategy

How are you getting your leads?

Before doing any work on the field, before estimating the job, before even getting the job , you need to capture the lead for the job.

That’s why it’s the first step in this list.

So the question is, how do you capture leads? Well, the first thing you should probably do is educate yourself deeply on this specific topic alone. Lucky for you, we have an article on how to get more jobs for you to dive into.

Next, you need to sign up for lead generation services like iSqft and Bluebook to consistently get the opportunity to bid on jobs. They both serve as the lead generation tool and the bidding tool as well, so it’s a 2-in-1 deal.

If you want more details on these lead gen services and a few other ones, check out this article .

After investing in these lead gen services you’ll have potential jobs coming in guaranteed, but there’s also another strategy you can take to get more leads.

It involves building a Select 12 Cluster (S12C). An S12C is essentially a list of 12 potential clients that you handpick and focus on that will provide you with a steady stream of business.

For example, if you’re a general contractor you would do a quick Google search for developers in your area,

Then you would pick 12 of them and either send out personalized emails, give them all a call, or visit their offices.

But you’re not just going to introduce yourself, remember that goal is to let them know you exist. Not any other contractor… but you . Stand out from other contractors, display authority and give value by helping them with their jobs, or by giving potential clients advice. This goes a long way in developing a relationship with everyone in your S12C.

The main idea with the S12C is to put your horse blinders on and laser focus on 12 ideal clients and develop relationships with them so they can start using you as the go-to when they need work with your trade.

So just to recap:

• Invest in lead generation services
• Set up and develop a S12C

After securing leads consistently and reliably, it’s time to have a specific plan to bid and estimate those jobs.

2. Establish Your Bidding and Estimating Process

The second step after getting leads is to have a system that bids and estimates those jobs for you at lightning speed so you can focus most of your time on selling the job.

There’s 3 options for you to consider:

• Hire an in-house estimator to work full-time.
• Hire an estimating service to handle each individual project.
• Do the whole thing yourself.

If you choose to do it yourself, it will prove to be really tough to expand your business when you’re so deep in it all day. Plus, imagine working for 1 and a half days straight to estimate a project, only to find out your potential client just used you for better pricing (they really do this). Successful contractors are ones that know how to build a team , how to lead them , and how to sell jobs to bring in business.

In other words, delegate as much as possible so you can focus on the thing that really brings in revenue, selling jobs.

So if you’re estimating jobs yourself as a one-man show, then delegate that task as soon as possible, otherwise, you won’t ever be able to effectively grow.

Let’s say you finally decide to hire an estimator to work in your office. The average salary of an estimator is $81,219/Yr, according to Indeed . Then after payroll taxes and insurance (26%), you’re looking at over $102,000 a year!

Which translates to about $8,500/Mn and $2125/Wk. If you want to bid 10 average-sized projects a month, that means you’re paying your estimator $850 per project!

To save money, time, and effort to manage an extra employee(s), the best option is to outsource your estimating to a reliable firm that can produce accurate pricing and only work on a per-project basis, so you only pay when there’s a project to bid, instead of having to pay an estimator full-time whether they’re hard at work or not.

3. Create a Sales Team that Closes Jobs

After you have leads coming in and you’re bidding those jobs at lightning speed without doing the tedious work, it’s time to dedicate most of your time to sell the job.

There are many strategies to closing jobs, but as a whole, it involves investing in the client .

Investing in a client means giving , being patient, and then asking when the time is right. You can give to the client through automatic follow-up or manual follow-up.

Automatic follow-up means using a Customer Relations Manager (CRM) to systematically contact specific people at specific times. It’s a software you can also use it to send mass emails with similar pitches to different clients in your area.

Manual follow-up involves a lot of calling and talking to people. This is on your own time, that’s why it’s called “manual” follow-up.

Before bidding a project, be sure to meet your potential client in person to:

• See if they’re someone you want to work with
• Get them to know who you are and what you bring to the table

If someone knows who you are, gets calls from you now and then where you genuinely help them out with any problems or ask how they’re doing…

Who do you think they’re most likely to pick for the job?

This is why it’s critical for contractors to have a S12C where they focus on 12 specific clients and get 80% of their work from them.

It’s ideal for the owner of the construction company to be the main salesperson but if there’s just not enough time in the day (we understand), then hire 1-2 Account Managers who’s entire job consists of talking to potential clients, following up with previous ones, and being the main form of communication between your company and the outside.

4. Set Up Project Management Systems

At this point you’ll have leads pouring in, you’ll be estimating those jobs on autopilot, and you’ll be selling the projects. It’s only a matter of time before you suddenly have a couple projects to work on, and the hard work really begins. This is where you need to understand how to manage subcontractors .

As stated above, the owner of a construction company, or any company for that matter, should focus on leading teams and selling. That’s it. Being on the job site all day stressing and pulling your hair out is not going to bring in new business. Unless you truly love being on the field, you need to delegate everything to seasoned professionals.

But before you go running around and delegating everything, you need to set up a system to manage all your projects so your contracting business can be a coordinated, smooth-oiled machine that pumps out only quality work.

You’re going to need 3-4 software to help you manage your fieldwork:

Bid Management Software

This is what you’re going to use to bid out jobs and keep track of your bids. It’s quick, it’s easy, and it’s a whole lot better than handing people estimates all day and having to remember due dates off the top of your head. If you want to check out some bidding software go take a look at SmartBid and Quick Bid .

Project Management Software

This is software for people on the field to be in constant communication with one another. One of the first steps in professionalizing a construction company is to get a project management software that helps all the workers, supervisors, project managers, and superintendents all be on the same page all the time. Some great P.M.S are CoConstruct , Buildertrend , and Procore .

Accounting Software

It always helps to have all your finances done automatically and as hands-off as possible. Let an accounting software manage all your finances so you can focus most of your effort on bringing in revenue by selling jobs. QuickBooks is the cream of the crop here but Zipbooks and Stripe are also great alternatives.

Estimating Software

This is optional because if you outsource your estimating to qualified estimating firms, then spending money on estimating software won’t be necessary. But if you want to hire estimators in-house or want to do a mix of in-house and out-house estimating, then you’re without a doubt going to need a takeoff and estimating software that can help you be as accurate and as quick as possible. We use Planswift in our office but Bluebeam is also great as well.

You can find software packages that include all-in-one packages like Procore, Corecon, or Buildertrend that include everything you need to professionalize your construction business. The pricing will reflect that, but it’s a necessary investment for your construction company.

5. Found a Field Operations Team

Now that you have project management systems set up, it’s time to create a field operations team. Keep in mind this is only for people in the field , not in the office.

Every construction company is different, some may choose to subcontract work instead of hiring workers and training them, and then others may lease workers from other companies.

So first understand how you want your company to operate, then the next step is to understand the roles of a steamrolling field operations team and how to find the right people for the job.

General Superintendent

This is the main field operations manager. He/she is the one overseeing all the projects a company is currently working on. A general superintendent needs to be comfortable under pressure, an effective leader that gets people to work, and able to raise their voice from time to time.

Project Superintendent

There are the overseers of single projects. They put all their attention on a single job to make sure it runs well. They need to have a deep understanding of construction, their workers, and be on top of their game even when under pressure.

This is the next subdivision in the field. Larger jobs typically get broken up into multiple sections and while they’re all being managed by the project superintendent, the foreman is the one managing specific sections or trades.

Skilled laborers are the true engine behind the construction job. These are the people on the field doing the actual work. Hiring workers is relatively simple but be sure not to fall in the trap of hiring cheaper labor to save money because the reality is all the mistakes they make end up costing more than if you would have hired workers a bit more expensive.

Hire people, train them, and let them train other workers.

We’re not going to have a project manager on the list because they’re not typically on the field but a good project manager will be in the field often to help the superintendent run the job.

That’s how you set up a strategical business plan that set’s you up for success.

Construction can be a tough industry, but a great plan on how you’re going to run your business and even better execution on that plan can make your life a lot easier.

We hope you enjoyed this piece and got some real value from it. Feel free to comment below your $0.02.

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The Complete Guide to Commercial Construction Management and Commercial Construction Project Managers

By Diana Ramos | May 27, 2021

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In this article, we’ve compiled the most useful tips and step-by-step instructions for hiring a commercial construction manager. Plus, you’ll learn all about the responsibilities of the role and how proper management helps projects succeed.

Included on this page, you’ll find key questions to ask when hiring a commercial construction management firm , a commercial construction management plan template , and common construction management certifications for commercial construction .

What Is Commercial Construction Management?

Commercial construction management (CM) , also called commercial construction project management (CPM) , uses business principles to make building projects more successful. These techniques address scheduling, cost, scope, quality, function, and safety.

Construction managers improve project efficiency by leveraging their expertise in both construction and project management. Commercial construction managers represent the interests of the owners and oversee the commercial construction process from start to finish. They coordinate architects, engineers, contractors, and subcontractors from pre-design to project completion.

The term commercial construction refers to the building of structures for use by private-sector businesses. This field includes a wide variety of building types, such as factories, office towers, and shopping malls. 

However, commercial construction management principles do not apply exclusively to the private sector. Many other large-scale projects also incorporate these principles, such as large residential developments, industrial construction, and public-sector construction, like schools and roads. 

The Commercial Construction Management Association of America (CMAA) has led the development of the CM discipline. Its Construction Management Body of Knowledge and Standards of Practice document best practices and ethical standards for the profession. 

Depending on the scale of your project, your CM may consist of one individual manager or a whole team.

Residential vs. Commercial Construction Management

Commercial construction differs from residential building in many ways, including size, purpose, materials, regulation, systems complexity, budget, and stakeholders. 

Residential construction generally refers to single-family homes and projects of four units or fewer, as well as remodels of these homes. The building of large apartment complexes and subdivisions, with dozens or even hundreds of homes, operates as commercial construction. 

The distinctions between residential and commercial building are as follows:

• Size: Commercial buildings are typically much larger than homes. For this reason, it’s more challenging to coordinate a commercial project and adhere to its schedule and budget. 
• Purpose: Residential construction creates living spaces. Commercial buildings are those that the owner intends to use to make a profit.
• Materials: Residential buildings are primarily timber framed. Commercial buildings generally require steel and concrete. Homes usually have shingle roofs, while the roofs of commercial structures call for bitumen or thermoplastic polyolefin (TPO). The latter category of materials give builders the ability to construct larger and taller structures, and can also withstand heavier use.
• Regulation: Building codes for commercial structures are more strict. For example, commercial codes require sprinkler systems to put out fires. (Residential codes do not include this requirement.) For commercial projects, governments may dictate construction methods, design, and size, as well as electrical and plumbing specifications. The process for acquiring permits for commercial buildings can take months or even years, and may entail public hearings. Home construction undergoes a simpler review.
• Systems: Commercial building systems are complex because these systems serve larger structures (with more users) and, therefore, must fulfill more diverse purposes. Such systems include elevators, electrical construction, plumbing, heating, security, and air conditioning. As a result of this complexity, commercial builders need more specialized construction expertise.
• Budget: Commercial projects are usually more expensive than residential ones. Size, materials, complexity, and labor needs drive these costs.
• Stakeholders: Residential projects typically have a small number of participants — the builder and homeowner or investor may be the only active stakeholders. Commercial projects involve a bigger group, including the general contractor (GC), subcontractors, engineers, architects, and the construction manager. If the construction manager is not in house, the owner may also have executives monitoring the project.

Scale of Commercial Construction Projects

Commercial construction usually involves medium or large-scale projects, such as factories, shopping malls, and office buildings. Homes are generally small-scale construction jobs. 

Residential construction seldom has a dedicated construction manager. The builder or general contractor manages the project.

Medium-scale commercial construction includes making cosmetic updates to existing structures and new buildings. It also includes the building of new strip malls, medical and dental offices, apartment complexes, and light industrial structures.

Anything larger than medium-scale commercial construction qualifies as large-scale commercial construction. Examples include the sector known as public works construction , which refers to government projects like schools, courthouses, and highways. In this sector, a government or government agency is both the owner and client. Therefore, unlike other sectors of commercial construction, public works construction is not for profit.

Commercial construction management practices are the norm for medium and large-scale projects. But, public works construction employs some different processes. Governments, for example, often have very strict competitive bidding rules for contracts.

Commercial Construction Project Manager Responsibilities

Commercial construction project managers have numerous responsibilities — according to the Construction Management Association of America, these PMs have 120 responsibilities  spanning cost management, time management, quality management, project management planning, contract administration, safety management, and professional practice. 

The term professional practice refers to project-related duties, including evaluating the goals of the project, creating controls, and putting in place communication norms. The manager also establishes the structure of the project team and defines the roles. 

Construction project managers are responsible for keeping the project moving according to plan. The goal is to manage the project so that it finishes on schedule and within budget, while still meeting building codes, plans, and specs. 

Some of the most significant responsibilities of the commercial construction manager include the following: helping the owner and architect during the design phase; reviewing drawings; evaluating construction feasibility; estimating costs; creating work packages for the bidding process; and overseeing construction. Learn more about making budgets and schedules for construction projects in “The Comprehensive Guide to Construction Budgeting” and “Construction Project Management 101.”

Per the CMAA’s seven categories of responsibilities, the list below provides a sampling of some of those obligations:

• Project Management Planning: Creating a CM plan, setting performance criteria, compiling reference data, establishing a decision-making structure, organizing the project, defining the roles and responsibilities of team members, planning site use, selecting design professionals, and verifying insurance
• Cost Management: Estimating costs or overseeing cost estimating, developing a budget, creating a cost management structure, modeling costs, projecting cash flow needs, understanding the potential impact of external economic changes
• Time Management: Developing a schedule, reporting on progress, identifying project milestones, determining the critical path , factoring in the role of float , determining the impact of change orders on the schedule
• Quality Management: Defining the quality objectives of the owner, making sure drawings and specifications align with quality objectives, organizing the design review, identifying the construction elements that affect quality, evaluating bids for quality, inspecting quality, managing change order procedures
• Contract Administration: Understanding design phase contracts, implementing construction procurement strategies, pre-qualifying and soliciting bids, defining the submittal process, developing contract and documentation procedures, checking deliverables, resolving contract disputes, managing risk, compiling information to support owner financing of the project, preparing punch lists, managing the project closeout
• Safety Management: Assessing the contractor’s safety record, understanding site safety liability by statute and regulation, verifying insurance for safety claims, managing workers’ compensation, creating the project safety manual, documenting incidents, developing an emergency plan
• Professional Practice: Adhering to the standards and ethics of construction management, defining the commercial and legal relationship between the owner and the construction manager, identifying practice and third-party liabilities, complying with environmental regulations

Commercial Construction Management vs. General Contractors

The work of a commercial construction manager may overlap with that of a general contractor, but their roles and their relationship with the owner are different.

Here are some of the key differences between a commercial construction manager and a general contractor:

• Time of Hire: The construction manager usually comes on board at project inception, before the design phase. Once the design is final, a number of general contractors bid on the job. Because the CM is involved from the outset of the project, they can increase the schedule’s efficiency by being able to overlap procurement and construction.
• Design Input: Because CMs work during pre-construction, they can advise on project options, including design, specifications, and materials, and solve problems in order to help save money and improve the functionality of the overall building. Such activities constitute the process of value engineering . Because general contractors do not join the project until the design is complete, they cannot provide this kind of input. For this reason, CM-guided projects often generate fewer change orders and more accurate cost and time estimates.
• Compensation Model: The commercial construction manager receives a fee, either as a flat amount, a per-hour rate, or a percentage of the project cost. The general contractor often wins the job by being the lowest bidder (the bid includes money to cover overhead and profit).
• Relationship with Owner: The commercial construction manager represents the owner. The manager obtains the materials and services needed for the project by soliciting competitive bids on behalf of the owner, who pays the costs in addition to the CM’s fee. The CM provides the owner with complete transparency regarding these ongoing project costs. Conversely, the GC provides only the bid price (which represents all costs). Once work begins, the general contractor has an incentive to maintain or increase the profit margin by coming in under budget. They can achieve this by holding down costs and, in less frequent cases, cutting corners. Because of this incentive, the interests of the GC and owner may be at odds.
• Team History: General contractors have staff members, including foremen, carpenters, and laborers, who work together as a team. The GC also frequently works with subcontractors. This means that the people on the job are already familiar with each other and, thus, share expectations and norms. Construction management staff members are professionals, and they manage construction work by procuring builders. As a result of this procurement process, the CM may assemble a team of laborers among whom there is no shared history. The familiarity and shared understanding among members of a GC team can offer the owner an advantage.
• Control: By using a construction manager, the owner generally gains more control over construction, but also must be more involved in the project. With a GC, the owner gets less control over the project, but also bears less responsibility.
• Risk and Liability: Unless the contract with the CM explicitly states that such a manager is responsible for costs beyond the budget, the owner carries the financial risk of cost overruns. GCs, on the other hand, typically must absorb increased costs, such as overtime, except when they have to issue change orders for scope changes or plan mistakes. In terms of liability, the construction manager is only responsible for a construction worker’s injury when the CM’s contract specifies an obligation to maintain safety or the CM assumes said obligation through their actions. GCs, on the contrary, must ensure worker safety and comply with safety regulations.

Despite these differences, the roles of CMs and GCs can still overlap.

When the owner and general contractor have built mutual trust (through past projects or otherwise), they may hire that GC to act as construction manager. 

Moreover, in some cases, the CM may oversee the general contractor, who, in turn, directs subcontractors. Or, the CM may contract directly with trade firms, such as electricians, placing that construction manager in the role of GC (i.e., the person who hires and supervises subcontractors, such as electricians).

Advantages of Using a Commercial Construction Manager

Hiring a construction manager to lead a commercial construction project offers the owner several benefits, including end-to-end oversight, cost and time savings, and greater control.

Here are the most important advantages of using a commercial construction manager:

• Cost and Time Savings: As discussed above, because the commercial construction manager begins at the outset of a project, you can save in terms of your budget and your time. The CM also minimizes change orders and avoids delays. 
• Reduced Stress: The commercial construction manager’s expertise can increase the owner’s confidence that the project will be successful. The CM also deals with day-to-day oversight of the construction and any problems, which relieves the owner of these responsibilities.
• Quality: The CM’s expertise, close supervision, and opportunity for value engineering result in a high-quality structure. 
• Flexibility: A construction management firm can use a variety of scheduling and procurement approaches, which allows the CM to shorten the construction schedule and increase efficiency.  
• Control: Because the CM acts as an extension of the owner, the owner gains more project control. 

A study by the CMAA of 623 construction projects found that more buildings with a construction manager finished on or under budget than those without. And, more projects led by a CM were on or ahead of schedule. 

The value of the CM projects in the study averaged $17.8 million; those without a CM averaged $13.4 million. This discrepancy suggests that when the stakes are high, owners depend more heavily on CMs. 

Specifically, the study found that 84.9 percent of CM projects versus 81.9 percent of non-CM projects came in on or under budget. They also found that 68.8 percent of CM projects versus 65.9 percent of non-CM projects were on or ahead of schedule.

Main Frameworks for Adding Construction Management to a Project

There are many ways to add a construction manager to your commercial project: You can hire a solo consultant, contract with a CM firm, or acquire this capacity in house. 

If you choose to hire outside construction management, there are different ways to structure the relationship.

For centuries, builders and owners did not view construction management as a distinct process. But, in the 1960s, CM began taking shape as a professional service in its own right , the CMAA says.   

Now that commercial construction management is a well-established discipline, property developers and large construction firms have made construction managers and CM departments integral parts of their organizations. 

However, most owners do not build frequently enough to justify having a commercial construction manager or team. Owners typically hire a commercial construction management firm or an independent construction manager.

When an owner hires an independent CM, that CM generally takes one of three traditional approaches to this contractual relationship: The manager acts as a pure construction manager, a construction manager as agent (CMaA), or a construction manager at risk (CMAR). 

• Pure Construction Manager: Here, the CM plays a role on a commercial construction project similar to that of a general contractor. The pure CM identifies and hires subcontractors and suppliers, and also oversees the construction process. But, the CM performs these particular tasks for an itemized fee, rather than as part of a GC-oriented bulk bid (the GC does not enumerate these details for the owner). Because of the pure CM’s fee structure, the owner can benefit from any cost savings. But, that owner also loses the security of having a fixed bid.  
• Construction Manager as Agent: Also called construction manager as advisor , this type of CM acts solely as an advisor to and coordinator for the owner. For a fee, the advisor offers their expertise to the owner and helps the owner make decisions. The owner contracts directly with the subcontractors. Because a commercial construction manager joins at project inception, the CMaA can advise the owner at every stage of the project. For this reason, the CMaA model can be helpful for owners without deep construction knowledge. 
• Construction Manager at Risk: Also known as construction manager as constructor , the commercial construction manager in this model gives the owner a guaranteed maximum price (GMP) and assures such owner that they will complete the project on time. In this approach, the CM may get a fee, build a profit margin into the GMP, share any cost savings with the owner, or use a combination of these payment structures. The CMAR advises the owner during the pre-construction phase, and also manages material procurement and subcontractor hiring. Then, the construction manager at risk oversees the building work. In this relationship, the main advantage for the owner is the CMAR’s assumption of the majority of the risk. 

Design-build is another popular construction project delivery method. This approach is closely related to the three aforementioned ones. In design-build, the entire project, including design and construction, falls under one contract and one team, usually either the architect or contractor. That team alone is responsible for the entire project. 

This particular approach streamlines the project for the owner and limits the shifting of blame. Proponents like design-build for its efficiency and collaboration. 

Design-build and CMAR are similar in that they both entail end-to-end responsibility. But, there are also some important differences between the two approaches. While the CMAR may bring a great team together, these subcontractors and other participants work for different firms, which renders them unable to integrate in the way that the single team of the design-build method can.

The two methods also have different contractual standards for performance. In CMAR, the standard of care covers the legal obligation to guarantee that the design functions as intended. Maintaining this performance standard means putting in as much effort as any other reasonable professional would. In design-build, the contractor must maintain a commitment to performance , meaning they must achieve the level of performance that they’ve specified in the contract. In other words, the design-build firm must fix any problem that arises.

In addition, once construction gets underway, CMARs are not liable for any design problem that a contractor discovers. Instead, the architect or engineer resolves any issue by responding to a change order request. Conversely, because the design-builder is both the designer and builder, they are responsible for constructing a building that functions as intended. The design-builder’s team must, therefore, work to resolve the issue so that the building performs as promised. Consequently, the design-builder does not use change orders. This responsibility (or lack thereof) highlights the essential difference between the standards of build-as-designed and build-to-perform .

Steps in a Commercial Construction Project

The commercial construction manager guides a project through its entire lifecycle, and manages all the steps of the construction process: development, design, pre-construction, procurement, construction, commissioning, owner occupancy, and closeout.  

(To learn more about each of these steps, see “The Stages of Construction Project Management.”)  

1. Development: This step entails finding a site, doing a feasibility study, and arranging financing.

2. Design: During this stage, architects and engineers draft plans for what the building will look like and design the substructures and systems that will make the building perform its intended function safely. 

3. Pre-Construction: In this step, the commercial construction manager shepherds the building through the zoning and permit processes. The manager coordinates final drawings and specifications, oversees detailed site preparation, prepares bid packages, and qualifies contractors and subcontractors. 

4. Procurement: In this phase, the commercial construction management firm awards contracts and obtains materials and equipment. (For details on different procurement methods and how to bid on commercial construction projects, read “Bid Like a Winner: The Master Builder’s Guide to Construction Bidding.” ) Then, the newly hired contractors must make submittals regarding materials to the architect or engineer for approval. At the same time, the CM engages in detailed budgeting. 

Download the following sample commercial construction budget, which calculates costs per square foot, to help plan, track, manage, and automate your project budget.

Download Commercial Construction Budget Example — Microsoft Excel 

5. Construction: This refers to the active building phase during which the CM answers RFIs , controls costs, manages the schedule, and inspects the work. Such progress tracking is critical to keeping a project on schedule. 

Download the free commercial construction template below to create a visual timeline of actual versus planned progress. (Check out these links for more free timeline templates and free construction schedule templates .) 

Download Commercial Construction Timeline Template

Microsoft Excel | Smartsheet

6. Commissioning: This phase of the process involves verifying that all parts of the building function as intended. The CM tests systems such as heating and air conditioning to make sure they perform to specifications.

7. Owner Occupancy: As the owner moves into the building and takes possession of the keys, the CM oversees the installation and calibration of equipment and furnishings.

8. Project Closeout: The CM makes sure that the crew has completed all the work; then, the team dismantles the job site. The CM compiles a number of documents for the owner, including manuals and documentation about the building as well as contractual paperwork. The owner does a final walkthrough.

This commercial building construction process flow chart shows the phases of commercial construction.

For each of these steps, you can find helpful templates, such as a bid tabulation form and a project closeout checklist, in “Excel Construction Management Templates.”

Commercial Construction Management Plan Templates

Below, you will find all the templates you need to compile a commercial construction management plan.

Commercial Construction Management Plan Template

This template provides the high-level structure for a commercial construction management plan.

Download Commercial Construction Management Plan Template

Microsoft Word | Google Doc

Construction Project Resource Management Template

Use this template to identify resource needs and manage them appropriately. 

Download Commercial Construction Resource Management Plan Template Microsoft Excel | Google Sheets

Construction Project Timeline Template

This template will help you outline the timeline for your commercial construction project. 

Download Commercial Construction Project Timeline Template Microsoft Excel | Google Sheets | Smartsheet

Construction Project Bid Tabulation Template

This template gives you space to document each individual bid and associated cost. 

Download Commercial Construction Bid Tabulation Template Microsoft Excel | Google Docs | Smartsheet

Construction Project Abstract of Bids Template

As you gather contractor bids, use this abstract of bids template to rank the bids against each other based on project-specific criteria.

Download Commercial Construction Abstract of Bids Template Microsoft Excel | Google Docs | Smartsheet

Construction Project Subcontractor Documentation Tracker Template

This template helps you track subcontractor work and related documents, making it easier to manage subcontracted jobs.

Download Subcontractor Documentation Tracker Template

Microsoft Excel | Google Sheets | Smartsheet

Construction Project Daily/Weekly Inspection Report Template

Use this template to gather details of daily inspections and record details of each activity area.

Download Commercial Construction Daily/Weekly Inspection Report Template Microsoft Excel | Google Sheets

Construction Project Contractor Progress Payment Template

This template enables you to document payments made to contractors while the project is underway. These monthly payments reflect the percentage of completed work.

Download Commercial Construction Contractor Progress Payment Template Microsoft Excel | Google Sheets | Smartsheet

Construction Risk Register Template

Employ this template to assess and record risks associated with your commercial construction project. 

Download Commercial Construction Risk Register Template

Microsoft Excel | Google Sheets |   Smartsheet

Construction Punch List Template

This template functions as a record of outstanding work in the final stages of the project.

Download Commercial Construction Punch List Template Microsoft Excel | Smartsheet

Construction Project Closeout Checklist Template

Use this template to check that all the major items in the commercial construction project are completed.

Download Commercial Construction Project Closeout Checklist Template Microsoft Excel | Smartsheet

Construction Project Submittal Form Template

This template gives a standardized way to track requests from contractors to both architects and engineers, helping you verify the installation of correct products. 

Download Construction Submittal Form Template

Microsoft Excel | Microsoft Word | Adobe PDF | Google Doc | Smartsheet

Construction Project Schedule of Submittals or Submittals Log Template

Also known as a submittal log, use this template to compile an accurate record of all submittals and responses. 

Download Commercial Construction Schedule of Submittals Template

Microsoft Excel | Google Doc

Download Commercial Construction Submittals Log Template

Microsoft Excel | Google Doc | Smartsheet

Construction Request for Information Template

This template offers a standardized way to track requests for information, which is used when there are missing details in construction documentation.

Download Commercial Construction Request for Information Template

Tips for Commercial Construction Managers

Experienced commercial construction managers say certain practices are especially important for project success, including the following:

• Read the Construction Contract Carefully: The CM needs to be familiar with all parties’ rights and obligations under the contract from the start. Such information includes when a party can make claims and liens and how to handle delays and change orders.
• Expect the Unexpected: Be prepared to deal with surprise expenses, extreme weather, staff turnover, and delays. Doing this requires flexibility and multiple back-up plans.
• Keep Your Boots on the Ground: While CMs have lots of paperwork to handle in a commercial construction project, they must also be on site as much as possible to help spot brewing problems. 
• Hold a Kickoff Meeting: This meeting should include the owner and other project participants. Make sure everyone has the same understanding of the project, and encourage discussion of potential trouble spots, delays, or cost issues. Use this feedback to adjust scopes of work if necessary. By conducting this meeting, you lay the groundwork for good communication throughout the life of the project.
• Manage Schedules Meticulously: Factor in long lead times to procure customized building components. Avoid stacking trades, i.e., having multiple subcontractors work in a confined space at once, because doing this impedes work and creates inefficiencies. 
• Maintain a Safe Work Site: Watch for hazards and take measures to prevent injuries. On site, use guardrails, set up barricades around open holes, and require proper safety equipment. Safety is critical to avoiding injuries, project delays, and insurance claims.
• Hone Your Negotiating Skills: At every stage of the commercial project, the CM acts as a negotiator. Understand that in the pre-contract phase, the owner and CM usually have more leverage than the contractor and subcontractor. During construction however, that power structure reverses, giving the contractor and subcontractor more influence. Strategies such as principled negotiation (deciding on merits), mutual-interests negotiation (finding common ground), and aggressive negotiation have their places. Change orders in particular are subject to negotiation.
• Be Organized: Commercial construction requires an enormous amount of paperwork — from material orders to submittals and contracts. Without this documentation, you expose yourself to breach of contract and liability claims. Don’t waste time hunting for documents. Use software to manage administration.

How to Select a Commercial Construction Management Firm for Your Project

If you are an owner embarking on a commercial construction project, bring in a construction manager early in order to take advantage of their expertise. Following are nine steps for a successful hiring process based on advice from the CMAA.

• Write a Project Statement: This document details the prospective building’s size, purpose, and other characteristics. Commercial construction management firms will use this to grasp project complexity and understand the experience required.
• Provide Your Cost and Time Goals: While these may change through your work with the CM, schedule and budget goals are important project parameters.
• Establish Your Internal Processes: Clarify who will be the main liaison with the CM and who will have authority on decisions about spending, design, and day-to-day management.
• Form a Selection Panel: Include members with construction knowledge and someone who will have ongoing involvement with the project. Familiarize the panel members with the project.
• Years of experiences
• Professional credentials
• History of similar projects
• Screen These Submissions to Make a Short List: After reviewing the submissions, winnow the list down to those firms you want to investigate further. 
• Solicit Proposals: Ask firms on the short list to submit proposals. This request for proposals (RFP) should outline the project in detail so the firms can address how they would approach the project and any relevant experience they have. Ask firms to provide preliminary pricing or bids in separate financial proposals, so you can evaluate technical expertise and cost independently.  
• Evaluate the Proposals: Assess the submissions for technical merit, and rank them. Then review the financial proposals (note that these numbers are still subject to negotiation). Identify the top candidates for interviews.
• What is it like to work with you?
• What are the hallmarks of your CM process?
• How do you differ from the competition?
• What is your record on things that are important to us or the project such as smart building technology, environmental innovation, or distinctive design? 
• When could you begin this project?
• Finalize a CM Contract: Agree on scope of service and price. The contract should define deliverables and milestones for performance measurement.

Commercial Construction Manager Job Description

To hire a skilled commercial construction manager to join your team, use a job description that highlights key responsibilities and necessary skills. Download the free job description below, which covers duties such as overseeing the construction site and managing costs. 

The following downloadable job description is designed to target an on-staff commercial CM position at a large construction, property development, or construction management firm. However, you can easily adapt the description and customize it to suit your needs.

Sample Commercial Construction Manager Job Description

Use the format and content in this sample commercial construction manager job description as a starting point, and add details relevant to your needs. You can use the job description to recruit applicants.

Post the job description on employment boards. Publicize the vacancy on social media, linking to the full job description on your website. Your job description should include the following sections: 

• Sample Introduction: Beaver Valley Construction Management is a thriving independent consultancy with a staff of 75 commercial construction managers. We serve clients in a tri-state area who are building office and retail structures. Beaver Valley managed the construction of the 50-story Three Rivers Tower, which is now the anchor of a complex that 75,000 people use on a daily basis. We brought this job in ahead of schedule and under budget.  
• Manage major commercial construction projects from inception to closeout.
• Work with owners, architects, engineers, contractors, subcontractors, and other professionals to achieve a successful result.
• Oversee the design, pre-construction, construction, and commissioning phases of a new commercial building construction. 
• Define deliverables and determine necessary resources.
• Estimate costs.
• Procure materials, equipment, and labor.
• Negotiate contracts with project participants.
• Develop and maintain the construction schedule and budget. 
• Assess and manage both on-site and off-site risks.
• Supervise site work and day-to-day construction.
• Handle zoning, permits, and licensing.
• Coordinate contractors and subcontractors.
• Ensure that the work meets plan specifications and quality standards.
• Monitor compliance with all regulations.
• Communicate with stakeholders through regular written and oral reports.
• We need a skilled negotiator who can reach contract agreements that meet all stakeholders’ needs and comply with the budget and schedule.
• You must be a multitasker who is able to manage competing priorities and time constraints.
• You have to be an experienced estimator who can determine precisely what resources the project requires.
• We require a detail-oriented leader who delegates when necessary and ensures completion. 
• You must be a strong collaborator who works cooperatively with architects, engineers, contractors, and owners to achieve project objectives and milestones.
• We need a problem solver who’s adept at resolving job-site challenges  and keeping the project on track.
• You have to be an experienced user of construction technology, including BIM, project software, and major budgeting and scheduling solutions. 
• We require an articulate communicator who is comfortable speaking in front of others.
• You must have a bachelor’s or master’s degree in Construction Management, Architecture, Engineering, or a related field.
• The position requires 10 years work experience in construction management or project management in an AEC setting.
• We prefer candidates who have experience with large-scale commercial construction.
• You must have in-depth knowledge of current construction techniques and materials.
• Certification from the Construction Management Association of America or American Institute of Constructors is a prerequisite.
• We offer a competitive salary with benefits, including health, dental, and life insurance, 401(K) match, tuition reimbursement, and flexible spending accounts for healthcare and dependent care expenses.
• The commercial construction manager is expected to spend about one quarter of their time at our offices in either Beaver Valley or Three Rivers and the remainder of their time at client offices and construction sites in the tri-state area. Occasional overnight travel is required.
• This is an exempt position that requires schedule flexibility to meet project needs. This schedule includes regular evening and weekend work. There is no paid overtime. 
• Beaver Valley Construction Management is an equal opportunity employer and certified federal government contractor. 
• To learn more about what it’s like to work at Beaver Valley Construction Management, see the careers section of our website. We encourage qualified candidates to apply by clicking the “Get Started Now” button. We will accept applications until we fill this position. We will invite candidates who pass an initial screening for an in-person interview and skills test. No phone calls, please. 

Download Customizable Commercial Construction Manager Job Description

How to Become a Commercial Construction Manager

The steps toward becoming a commercial construction manager involve both formal education and on-the-job training. 

This career track usually entails the following:

• Education: CMs often obtain a bachelor’s degree in construction management, architecture, engineering, or a similar field. A four-year degree in construction management can be expensive, with tuition costing up to $240,000, but there are many more affordable options. In addition, there are associate-degree and certificate programs.
• Field Experience: Starting before and during college, CMs pursue construction site work, especially hands-on building experience. Internships in commercial construction management and related roles, such as cost estimating, are also desirable. Apprenticeships offer another way to gain experience. Howard Community College in Maryland combines classwork and on-the-job training in its apprenticeship program . 
• Work Experience: Entry-level jobs in CM are usually as assistants or in project roles such as quality assurance inspector, cost estimating, scheduling and documentation management with a CM firm or team. From there, CM specialists advance into construction manager roles, leading projects, and program executive positions.
• License: Some U.S. states require construction managers to be licensed. For example, California CMs need to obtain either an architect, engineer, or general contractor license to work on state and local government projects. Check the requirements in your state.
• Certification: After a certain number of years work experience, you can take a test to gain certification from various industry bodies. This signifies that you meet high standards of technical expertise and ethics.
• Graduate Degree: This is not required, but you can enhance your resume by pursuing a master’s degree in construction management.  

Another track is the construction manager in training (CMIT) program of the CMAA. This pathway involves four progressive levels of competence and work experience. To gain the CMIT designation, you must be at least 18 years old, pass a level one exam, have a supporting letter from a supervisor, and know the basics of CM. 

Attaining each subsequent CMIT level (up to level four) requires passing an exam, completing soft skills training, and having at least six months experience per level in specific aspects of construction management, such as contract administration and time management.

In addition, CMIT participants work with mentors who help them gain experience, provide support, and facilitate networking.

Education Opportunities for Commercial Construction Management

The study of construction project management is a specialty field in which you learn about management, planning, and organization in order to successfully complete projects in the construction industry.

Historically, people in this field rose to construction project manager positions from trade jobs, such as carpentry or plumbing. But, construction has grown so complex, that companies now look for education and experience. 

From four-year plans to certificates to PhD programs, there are many educational possibilities in construction management.

Commercial Construction Management Education and Training Opportunities

Today’s construction project manager typically has a bachelor’s degree in engineering or construction, while some pursue master’s degrees and certificates as well. And, with the rise of online classes, it has become much easier to take classes during your off hours. 

Here are the education options for those wanting to pursue construction management:

• Clemson University in Clemson, South Carolina, which has a 90 percent job placement rate for graduating students.
• The University of Washington in Seattle, Washington, which boasts an entire Construction Management Department.
• Georgia Institute of Technology in Atlanta, Georgia, notably its School of Building Construction .
• University of Florida in Gainesville, Florida, the first to become accredited by the American Council for Construction Education (ACCE).
• Cal Polytechnic State University in San Luis Obispo, California, with courses in Construction Management in its College of Architecture and Environmental Design
• Pratt Institute , the renowned art and design school with campuses in New York City, Brooklyn, and Utica, New York, has close ties to New York construction resources. Its faculty has overseen such projects as the World Financial Center.
• Kennesaw State University in Kennesaw, Georgia, provides scholarships to qualifying construction management students, and its advisory board actively engages in hiring the school’s students and graduates. 
• Arizona State University in Tempe, Arizona, offers undergraduate, graduate, and doctoral studies of construction management. It also offers an accelerated master’s program called “4+1,” which allows undergraduates to begin a master’s program in their senior year. Its school of construction is the largest in the state and produces 21 percent of all construction management degrees in Arizona. ASU also offers an online master's program in construction management, designed to meet the growing need for professionals with advanced technical, management, and applied research skills in the construction industry.
• Stanford University in Stanford, California has a graduate and doctoral program in three construction course tracks: construction engineering and management, design-construction integration, and sustainable design and construction.
• The University of Washington in Seattle, Washington includes certificates, undergraduate, and graduate degrees in construction management. The department also has strong ties to local construction agencies, leading to many student internships.
• Clemson University in Clemson, South Carolina, has received high marks for its construction management master’s program from both the National Center for Construction Education and Research, and the Associated General Contractors of America.

Commercial Construction Management Certification Choices

There are many certifications that commercial construction managers can pursue. The most well known is the certified construction manager (CCM) designation from the CMAA. 

Note that many universities, colleges, and community colleges offer CM certificates for students who complete multi-week or multi-month programs, often online and self-paced. Certificates differ from certifications, which require passing an exam and meeting other industry standards.

Attaining one of the top CM certifications typically takes at least eight years of combined education or work experience. There are other certifications that demonstrate your mastery of certain aspects of construction, but they do not focus on construction management practices.

Do You Make More as a Commercial Construction Project Manager if You Have Certification?

Commercial construction managers with certifications and advanced degrees earn about 10 percent more than their counterparts, the CMAA says. 

According to the U.S. Bureau of Labor Statistics, the 2019 median pay for construction managers was $95,260 a year or $45.80 an hour. The top-earning 25 percent of CMs made $126,040, while the bottom quartile made $71,900. 

The job outlook for construction managers is bright. There were 476,700 CMs in the United States in 2019. Between 2019 and 2029, that number is forecasted to grow eight percent, much more than average, the Bureau says.

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Electrical Contractor Business Plan Template

Written by Dave Lavinsky

Electrical Contractor Business Plan

You’ve come to the right place to create your Electrical Contractor business plan.

We have helped over 1,000 entrepreneurs and business owners create business plans and many have used them to start or grow their Electrical Contractor companies.

Below is a template to help you create each section of your Electrical Contractor business plan.

Executive Summary

Business overview.

Oak City Electric, located in Raleigh, NC, is a newly established family owned and operated electrical contracting company. The company provides electrical contracting services to the local metropolitan area and its surrounding communities. With an emphasis on customer service and rapid response time, Oak City Electric is set to establish itself as one of Raleigh’s most trusted and reliable electrical contractors.

Oak City Electric was founded by Randy Wallace. Randy Wallace has been an electrician in the community for over 40 years. Although he has worked for several local competitors, Randy Wallace has always wanted to own and operate his own electrical contracting company. He finally saved up enough money and built up a large enough client base to make his dream come true. Randy’s education, experience, and skill set will quickly make Oak City Electric the #1 electrical contracting company in the area.

Product Offering

Oak City Electric will provide a variety of different electrical contractor services. These services include:

• Residential Electrical
• Commercial Electrical
• Industrial Electrical
• Safety Inspections
• Fixture, Smoke Detector, And Carbon Monoxide Detector Installation
• Smart Home Installation
• Security Systems
• Home Theater Installation
• Camera Systems

Pricing for all services will vary depending on the complexity and size of the project.

Customer Focus

Oak City Electric will primarily serve the residents living within Raleigh, NC, and the surrounding areas. About 51% of the city owns their own homes and will likely need electrical work at some point. There are also thousands of businesses in the area and over 1 million square feet of industrial/warehouse space. Many of the city’s residents and businesses are underserved when it comes to electrical services, so our services will be in high demand.

Management Team

Oak City Electric is led by Randy Wallace, a local electrician who has worked for the largest electrical contractor companies in Raleigh for over 40 years. Randy Wallace is fully licensed and bonded and has gained an impressive reputation as the most reliable and trustworthy electrician in the market. As a project manager that oversaw hundreds of projects, Randy has the proper knowledge and experience to own, manage, and operate his own electrical contracting company. He also has built a loyal client base, with many clients promising to use his services once the company is fully running.

Success Factors

Oak City Electric will be able to achieve success by offering the following competitive advantages:

• Technology: Oak City Electric will be able to provide the latest advancements in electrical contracting.
• Price: Oak City Electric is able to offer their services at the best and most competitive price.
• Community Relations: Oak City Electric will be a pillar in the community and be heavily involved in family-related activities in the area. It will sponsor events and provide free electrical services (for small jobs) to non-profit organizations and area schools.
• Highly Trained and Experienced Staff: Oak City Electric will be led by Randy Wallace who has decades of experience as an electrician and project manager.

Financial Highlights

Oak City Electric is seeking $400,000 in debt financing to launch. The funding will be dedicated to securing office space and build-out and purchasing the necessary equipment and tools. Funding will also be dedicated toward three months of overhead costs, including payroll, rent, and marketing costs. The breakout of the funding is below:

• Office space build-out: $100,000
• Equipment, tools, and supplies: $50,000
• Three months of overhead expenses (payroll, rent, utilities): $150,000
• Marketing costs: $50,000
• Working capital: $50,000

Company Overview

Who is oak city electric.

Randy Wallace has saved his wages for the necessary down payment to receive local bank financing. He has also located a prime spot for the lease of the company headquarters where the equipment and vehicles will be kept. Due to his experience and reputation in the electrical contractor industry, Randy has been able to receive written commitments from large development companies in Raleigh for them to be the preferred electrical subcontractor for their upcoming projects.

Oak City Electric’s History

Once his market analysis was complete, Randy began surveying the area for an available office space with plenty of surface parking to house the company’s large fleet of vans and trucks. Randy incorporated Oak City Electric as a Limited Liability Corporation in April 2023.

Once the lease is acquired for the space, light construction can begin to build out the company’s headquarters and small office.

Since incorporation, the Company has achieved the following milestones:

• Located an office space that would be ideal for the company
• Developed the company’s name, logo, and website
• Hired a general contractor for the build-out of the warehouse, small office, and parking area
• Determined equipment and necessary supplies
• Determined how many vehicles necessary for the fleet
• Began recruiting key employees

Oak City Electric’s Services

Industry analysis.

The electrical contractors industry has had healthy revenue growth over the last five years. This is mostly due to the increase in new construction activity and an uptick in renovations. Demand for nonresidential and residential construction projects is high, primarily due to low interest rates and access to credit. In addition to growing per capita disposable income and corporate profit, rising demand for construction projects requiring electrical work has boosted demand for industry services from corporations and individuals alike.

Over the next five years , industry revenue is expected to grow at a faster rate, largely as a result of pent-up demand. As the economy booms, the value of nonresidential construction and per capita disposable income are both anticipated to increase and contribute to industry revenue growth. In addition, the industry is projected to benefit from continued renovation and retrofitting activity, particularly green upgrades, such as energy-efficiency projects and smart home technologies. According to Arizton, these factors are expected to help boost the electrical contractor industry by a CAGR of 3.94% from now until 2028. Therefore, this is the perfect time to establish a new electric contracting company as there is a great demand for these services.

Customer Analysis

Demographic profile of target market.

Oak City Electric will serve the community residents of Raleigh, NC, and its surrounding areas.

The community of Raleigh has thousands of single family homes that will likely require electrical work. There are also a number of businesses and industrial parks that require regular lighting and other electrical services.

The demographics of the area in which we will operate are as follows:

Customer Segmentation

The Company will primarily target the following three customer segments:

• Contractors

Competitive Analysis

Direct and indirect competitors.

Oak City Electric will face competition from other companies with similar business profiles. A description of each competitor company is below.

Wallmore Electrical Contractors

Established in 1977, Wallmore is Raleigh’s largest and most requested electrical contractor. The company has grown itself to be the premier electrical contractor as it has completed dozens of projects over the years and has grown its workforce to over 100 employees and electricians.

The company was formed as a small family company and later acquired another electrical company in the area to allow itself to grow and add more services. They also have a very capable fleet of vans and trucks that are able to travel not just around the city, but across the state as well.

The company specializes in electrical lighting systems, such as LED retrofit, residential, commercial, industrial, and landscape lighting. They are also a preferred subcontractor to numerous large general contractors to complete their electrical projects for them. The projects range in size from residential developments to commercial remodeling and warehouse improvements.

We-Do-It-All Electrical & Mechanical Contractors

We-Do-It-All Electrical & Mechanical Contractors offers a complete electrical company to commercial industrial customers. The company offers a quick response to proposals and system installation services. Their team of well-trained and experienced electricians are capable of performing complicated projects with precision under tight time constraints.

The company has a lead industrial electrical contractor and commercial electrician that provides the design and implementation that is required for the project. He focuses on communicating with the client through the entire process; from initial planning and design to final implementation and testing. We-Do-It-All also places an emphasis on safety as they offer incentives for safe performance for all of their licensed electricians on staff.

Gamma Ray Electrical & Mechanical Contractors

Gamma Ray is an HVAC contractor that provides all electrical and mechanical services for any and all projects. The Gamma Ray electrical and mechanical team includes proficient electricians that are able to fix any electrical issue that can be found in the client’s living room, kitchen, or fuse box. The company’s electrical contractor services are open to both commercial and residential clients and can handle everything from troubleshooting to installing electrical systems for commercial buildings.

Gamma Ray’s complete list of electrical services include troubleshooting, infrared electrical testing, hookup and power supply, lighting and security lighting, wiring and connections, energy-use evaluation, 24-hour emergency services, preventive maintenance, electrical installation, diagnosis repair, updates and maintenance, equipment power supply, generator installation, electrical panel upgrades, and circuit installation.

Competitive Advantage

Oak City Electric enjoys several advantages over its competitors. These advantages include:

Marketing Plan

Brand & value proposition.

Oak City Electric seeks to position itself as a respectable, upper-middle-market competitor in the electrical contracting market. Customers can expect high-quality electrical work and customer service.

The Oak City Electric brand will focus on the company’s unique value proposition:

• Complete list of electrical services
• Licensed with the latest technology
• Highly trained and capable staff of electricians
• Large fleet of vehicles that is ready to be dispatched at a moment’s notice 24/7
• Affordable pricing

Promotions Strategy

The promotions strategy for Oak City Electric is as follows:

Website/SEO  

Oak City Electric will invest heavily in developing a professional website that displays all of the services the company will be able to provide. It will also invest heavily in SEO so that the brand’s website will appear at the top of search engine results.

Social Media Marketing

Social media is one of the most cost-effective and practical marketing methods for improving brand visibility. The company will use social media to develop engaging content, such as educational content about electrical work and about the services the Company offers.

Word of Mouth Marketing

Oak City Electric will encourage word-of-mouth marketing from loyal and satisfied clients. The company will use recommendations and word-of-mouth marketing to grow its customer base through the network of its existing customers. The company will incentivize its existing customer base to encourage friends to call Oak City Electric to help them with all their electrical needs.

Special Offers

Offers and incentives are an excellent approach to assisting businesses in replenishing the churn in their customer base that they lose each year. The company will introduce special offers to attract new consumers and encourage repeat purchases, which will be quite advantageous in the long run.

Oak City Electric’s pricing will be moderate so clients feel they receive great value when utilizing the company’s electrical contracting services.

Operations Plan

Operation Functions:

The following will be the operations plan for Oak City Electric.

• Randy Wallace will be the Owner, President, and Manager of Oak City Electric. He will be in charge of the general operations of the company. He will also provide customer service and provide electrical work for his customers until he hires a large staff of electrical contractors.
• He is assisted by his long-time friend, Jack Taylor, who will be the Vice President of the company. He will assist with the marketing and administrative aspects of the business.
• Randy will also hire several electrical contractors to provide electrical services to his long list of clients.

Milestones:

Oak City Electric expects to achieve the following milestones in the following months:

• 7/202X Finalize lease agreement
• 8/202X Design and build out
• 9/202X Hire and train initial staff
• 10/202X Kickoff of promotional campaign
• 11/202X Launch Oak City Electric
• 12/202X Reach break-even

Financial Plan

Key revenue & costs.

Oak City Electric’s revenues will come primarily from its electrical contracting services. The company will provide a range of electrical contracting services to the community and its surrounding areas. As the company’s revenues increase, it will look to gain a wider distribution area.

The warehouse lease, equipment, supplies, fleet of vehicles, and labor expenses will be the key cost drivers of Oak City Electric. Ongoing marketing expenditures are also notable cost drivers for Oak City Electric.

Funding Requirements and Use of Funds

Key assumptions.

Below are the key assumptions required in order to achieve the revenue and cost numbers in the financials and pay off the startup business loan.

• Monthly rent: $1,500

Financial Projections

Income statement, balance sheet, cash flow statement, electrical contractor business plan faqs, what is an electrical contractor business plan.

An electrical contractor business plan is a plan to start and/or grow your electrical contractor business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.

You can easily complete your Electrical Contractor business plan using our Electrical Contractor Business Plan Template here .

What are the Main Types of Electrical Contractor Businesses?

There are a number of different kinds of electrical contractor businesses , some examples include: Commercial Electrical Contractor, Residential Electrical Contractor, and Industrial Electrical Contractor.

How Do You Get Funding for Your Electrical Contractor Business Plan?

Electrical Contractor businesses are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding.

What are the Steps To Start an Electrical Contractor Business?

Starting an electrical contractor business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.

1. Develop An Electrical Contractor Business Plan - The first step in starting a business is to create a detailed electrical contractor business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast.  

2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your electrical contractor business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your electrical contractor business is in compliance with local laws.

3. Register Your Electrical Contractor Business - Once you have chosen a legal structure, the next step is to register your electrical contractor business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws. 

4. Identify Financing Options - It’s likely that you’ll need some capital to start your electrical contractor business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms. 

5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations. 

6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events. 

7. Acquire Necessary Electrical Contractor Equipment & Supplies - In order to start your electrical contractor business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation. 

8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your electrical contractor business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising. 

Learn more about how to start a successful electrical contractor business:

• How to Start an Electrical Business

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Commercial Contractor Business Plan

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7 tips on how to become a successful entrepreneur in the construction business, engineering consulting business plan sample, construction business plan.

Click here to view this full business plan

Executive Summary

Twin Brothers Construction (TBC) plans to become a leading provider of construction and renovation services in the local area. The company’s overall strategy will be based on a continuing improvement process of setting objectives, measuring results, and providing feedback to facilitate further growth and progress.

TBC is a company, with principal offices located in the local area. The company’s management is highly experienced and qualified: the brothers who will lead the management team have each accumulated over twenty five years of experience in the construction industry. Products/Services Through their years of experience, TBC’s owners have developed sophisticated bidding, scheduling and materials solutions for some of the most complex construction projects being done today. The company will use versatile and completely adaptable methods for a variety of building configurations.

Owners, developers, construction managers, general contractors, and sub-contractors are expected to realize substantial savings in labor and material costs by using the company’s construction methods and systems. Applications include commercial and residential structures.

The Market The housing industry has been growing at a fast pace for several years. An all-time record was set in 1998, when 886,000 new-site single family homes were sold. That represented a 10% gain from the robust total of 804,000 homes sold in 1997. Although there was a slight drop in the number from 2003, this makes for an excellent opportunity for future expansion of the industry.

Twin Brothers Construction plans to rapidly develop marketing alliances with industry leaders and pursue new sales of its services to residential and commercial builders. The marketing strategy will focus on securing city, county, and state and federal government contracts.

TBC plans to use a direct sales force, relationship selling, and sub-contractors to reach its target markets. These channels are most appropriate because of time to market, reduced capital requirements, and fast access to established distribution channels.

1.1 Mission

Our mission is to be the best partner for our customers, suppliers and employees. To realize our vision, we will strive for profitable growth, operational excellence, customer satisfaction and strong brand positioning.

1.2 Objectives

• To have up to three construction projects established within the first year.
• To have two building renovation projects in progress by the end of the first year.
• To locate and purchase our first rental building by the end of the first year.
• To achieve at least 7% profit by the second year.

1.3 Keys to Success

We believe our keys to success will be:

• Using the most updated materials and equipment to assure quality construction projects for ourselves and our customers.
• Educating the customers and providing valuable advice during the construction planning stages.
• Helping to confirm customer’s research about targeting markets and specific sectors.
• Overseeing the logistics associated with a project, which can include arranging local transportation, booking meetings etc.
• Assigning the actual work to an experienced and qualified third-party contractors and sub-contractors.

Company Summary

The brothers will invest a total of $90,000 combined ($55,000 and $35,000) in the start-up of the company. Initial cash requirements will total $50,000. Start-up assets total $55,000.

2.1 Company Ownership

The company ownership will be shared by the Chairman and Chief Executive Officer in the following percentage amounts:

Chairman = 60% Chief Executive Officer = 40% Both owners are veterans in the building industry, each with over 25 years experience.

Products and Services

TBC will sell its services to clients in the area of commercial construction and renovation. The company’s staff will design specialized construction drawings that outline the schedule, work sequence and the materials needed for building and renovation construction projects. Owners, developers and general contractors will realize substantial savings in labor and material costs by using TBC’s customized performance methods. TBC’s methods will offer complete adaptability at cost-effective prices. The drawings that the company will furnish to the contractor will specify the order of assembly and erection, including the location of the strongbacks and joists, the location and actual loading of the ties, location of accessories and advise clients of the maximum allowable rate of concrete placement.

A longer-term service will be commercial building rental management. This will include the purchase of commercial building sites or existing buildings that need renovation, coordinating the construction/renovation, then managing the rental of the property. The company will also be looking for existing property owners whose properties need renovation to update and increase its income potential, with TBC eventually taking over the management of these properties on behalf of the owner.

To enter the market with minimum overhead costs, TBC plans to utilize in the first year of operation mainly sub-contractors and independent experts for its building and renovation projects. Accident prevention will be the cornerstone of TBC’s safety commitment. The company will strive to eliminate foreseeable hazards which could result in personal injury or illness; at TBC, health and safety will not be compromised.

Market Analysis Summary

There were about 792,000 construction companies in the United States in 2002: 237,000 were building construction contractors; 60,000 were heavy and civil engineering construction or highway contractors; and 496,000 were specialty trade contractors. Most of these establishments tend to be small, the majority employing fewer than 10 workers. About 4 out of 5 workers are employed by small contractors.

Construction offers more opportunities than most other industries for individuals who want to own and run their own business. The 1.6 million self-employed and unpaid family workers in 2002 performed work directly for property owners or acted as contractors on small jobs, such as additions, remodeling, and maintenance projects. The rate of self-employment varies greatly by individual occupation in the construction trades. The local area is booming at this time, with many development projects running both by public and by private sources. Overall business growth over the past seven years has averaged approximately 9.5% and is expected to continue for at least the next several years. This constitutes an attractive market for TBC. The company will be concentrating on office building construction. This is the fastest growing segment of all the commercial clients requiring our services. The other categories to serve will include building renovation along with a segment it calls the general category, to serve other potential commercial clients.

One longer-term field of operation for the company will be the selling of building material and components to contractors. By slowly establishing itself as a first-rate material provider, the company expects to broaden and strengthen its stance in the local building industry. Initially it will focus on purchasing supplies for its own construction and renovation projects, then use those completed projects as marketing examples to showcase the quality of materials used and the customized approach used to design and construct them.

The company plans to develop marketing alliances with industry leaders and pursue new sales of its services to commercial builders. The market strategy is to capitalize on the company’s future alliances by securing city, county, and state government contracts. TBC also plans to use a direct sales force, relationship selling, and sub-contractors to reach its markets. These channels are most appropriate because of time to market, reduced capital requirements, and fast access to established distribution channels.

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How To Write a Winning Construction Company Business Plan + Template

Creating a business plan is essential for any business, but it can be especially helpful for construction company businesses who want to improve their strategy or raise funding.

A well-crafted business plan not only outlines the vision for your company, but also documents a step-by-step roadmap of how you will accomplish it. To create an effective business plan, you must first understand the components essential to its success.

This article provides an overview of the key elements that every construction company business owner should include in their business plan.

Download the Ultimate Construction Business Plan Template

What is a construction company business plan.

A construction company business plan is a formal written document describing your company’s business strategy and feasibility. It documents the reasons you will succeed, your areas of competitive advantage, and it includes information about your team members. Your business plan is a key document that will convince investors and lenders (if needed) that you are positioned to become a successful venture.

Why Write a Construction Company Business Plan?

A construction company business plan is required for banks and investors. The document is a clear and concise guide of your business idea and the steps you will take to make it profitable.

Entrepreneurs can also use this as a roadmap when starting their new company or venture, especially if they are inexperienced in starting a business.

Writing an Effective Construction Company Business Plan

The following are the key components of a successful construction company business plan:

Executive Summary

The executive summary of a construction company business plan is a one to two page overview of your entire business plan. It should summarize the main points, which will be presented in full in the rest of your business plan.

• Start with a one-line description of your construction company
• Provide a short summary of the key points in each section of your business plan, which includes information about your company’s management team, industry analysis, competitive analysis, and financial forecast among others.

Company Description

This section should include a brief history of your company. Include a short description of how your company started, and provide a timeline of milestones your company has achieved.

If you are just starting your construction business, you may not have a long company history. Instead, you can include information about your professional experience in this industry and how and why you conceived your new venture. If you have worked for a similar company before or have been involved in an entrepreneurial venture before starting your construction firm, mention this.

You will also include information about your chosen construction company business model and how, if applicable, it is different from other companies in your industry.

Industry Analysis

The industry or market analysis is an important component of a construction company business plan. Conduct thorough market research to determine industry trends and document the size of your market. Questions to answer include:

• What part of the construction industry are you targeting?
• How big is the market?
• What trends are happening in the industry right now (and if applicable, how do these trends support the success of your company)?

You should also include sources for the information you provide, such as published research reports and expert opinions.

Customer Analysis

This section should include a list of your target audience(s) with demographic and psychographic profiles (e.g., age, gender, income level, profession, job titles, interests). You will need to provide a profile of each customer segment separately, including their needs and wants.

For example, a construction company business’ customers may include:

• Businesses (e.g., office complexes, restaurants, retail stores)
• General contractors
• Other construction companies

As you conduct your customer analysis, keep in mind that your target customers may not be aware of your company or product right away. You will need to have a marketing strategy to reach them and get them interested.

You can include information about how your customers make the decision to buy from you as well as what keeps them buying from you.

Develop a strategy for targeting those customers who are most likely to buy from you, as well as those that might be influenced to buy your products or construction company services with the right marketing.

Competitive Analysis

The competitive analysis helps you determine how your product or service will be different from competitors, and what your unique selling proposition (USP) might be that will set you apart in this industry.

For each competitor, list their strengths and weaknesses. Next, determine your areas of competitive differentiation and/or advantage; that is, in what ways are you different from and ideally better than your competitors.

Marketing Plan

This part of the business plan is where you determine and document your marketing plan. . Your plan should be clearly laid out, including the following 4 Ps.

• Product/Service : Detail your product/service offerings here. Document their features and benefits.
• Price : Document your pricing strategy here. In addition to stating the prices for your products/services, mention how your pricing compares to your competition.
• Place : Where will your customers find you? What channels of distribution (e.g., partnerships) will you use to reach them if applicable?
• Promotion : How will you reach your target customers? For example, you may use social media, write blog posts, create an email marketing campaign, use pay-per-click advertising, launch a direct mail campaign. Or you may promote your construction company business via word-of-mouth.

Operations Plan

This part of your construction company business plan should include the following information:

• How will you deliver your product/service to customers? For example, will you do it in person or over the phone only?
• What infrastructure, equipment, and resources are needed to operate successfully? How can you meet those requirements within budget constraints?

The operations plan is where you also need to include your company’s business policies. You will want to establish policies related to everything from customer service to pricing, to the overall brand image you are trying to present. Finally, and most importantly, in your Operations Plan, you will lay out the milestones your company hopes to achieve within the next five years. Create a chart that shows the key milestone(s) you hope to achieve each quarter for the next four quarters, and then each year for the following four years. Examples of milestones for a construction company business include reaching $X in sales. Other examples include hiring a certain number of employees, signing up a certain number of customers, or completing a certain number of projects.

Management Team

List your team members here including their names and titles, as well as their expertise and experience relevant to your specific construction industry. Include brief biography sketches for each team member. Particularly if you are seeking funding, the goal of this section is to convince investors and lenders that your team has the expertise and experience to execute on your plan. If you are missing key team members, document the roles and responsibilities you plan to hire for in the future.

Financial Plan

Here you will include a summary of your complete and detailed financial plan (your full financial projections go in the Appendix). This includes the following three financial statements:

Income Statement

Your income statement should include:

• Revenue : how much revenue you generate.
• Cost of Goods Sold : These are your direct costs associated with generating revenue. This includes labor costs, as well as the cost of any equipment and supplies used to deliver the product/service offering.
• Net Income (or loss) : Once expenses and revenue are totaled and deducted from each other, this is the net income or loss.

Sample Income Statement for a Startup Construction Company

Balance sheet.

Include a balance sheet that shows your assets, liabilities, and equity. Your balance sheet should include:

• Assets : All of the things you own (including cash).
• Liabilities : This is what you owe against your company’s assets, such as accounts payable or loans.
• Equity : The worth of your business after all liabilities and assets are totaled and deducted from each other.

Sample Balance Sheet for a Startup Construction Company

Cash Flow Statement Include a cash flow statement showing how much cash comes in, how much cash goes out and a net cash flow for each year. The cash flow statement should include:

• Cash Flow From Operations
• Cash Flow From Investments
• Cash Flow From Financing

Below is a sample of a projected cash flow statement for a startup construction business.

Sample Cash Flow Statement for a Startup Construction Company

Finish with an appendix section which will include:

• Your complete financial projections
• A complete list of your company’s business policies and procedures related to the rest of the business plan (marketing, operations, etc.)
• Any other documentation which supports what you included in the body of your business plan.

Writing a good business plan gives you the advantage of being fully prepared to launch and/or grow your construction company. It not only outlines your business vision but also provides a step-by-step process of how you will accomplish it.

A well-written business plan is an essential tool for any construction company. The tips we’ve provided in this article should help you write a winning business plan for your construction company.  

Finish Your Construction Business Plan in 1 Day!

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• Small Business

As commercial insurance rates skyrocket, how can business owners keep costs down?

Insurance premiums for commercial properties have steadily increased, costing business owners thousands of dollars.

Over the last two decades, insurance premiums for commercial properties have steadily increased, costing business owners thousands of dollars to protect their workplaces. Unfortunately, the trend is continuing this year.

According to experts, there may be another 5% to 25% increase in property insurance rates in 2024.

How can businesses — particularly small businesses — keep their insurance costs under control this year? Here are few things to consider.

Work with a broker

Some insurance companies offer policies directly online. But buying insurance is complicated, which is why it’s important to work with a good broker who communicates in a timely fashion, understands your needs, and is looking out for your interests.

“A competent insurance broker will have access to multiple, well-rated insurance carriers and take the time to shop policies on your behalf in order to find the best coverages and pricing,” said Brian McCollum, who owns McCollum Insurance in Manayunk. “They’ll provide you with unbiased advice and advocate for you if you have to file a claim.”

Shop around

Colleen Terra, who owns Terra Insurance Services in Philadelphia, thinks it’s also important to shop your policies every year. She says that a good broker will always be looking for the best price for their clients.

“It doesn’t cost us anything to shop policies, and by looking out for our clients’ best interests, we’ll be able to keep them for a longer period of time,” she says. “If you’re seeing an increase in premiums, you should always be pushing your broker to shop around and look for better deals.”

Share everything with your broker

Terra wants to know everything about the clients she represents so she can match the best policy to the situation and sometimes gets frustrated when her clients don’t reveal all the information about their companies — the type of work they perform, the number of workers and contractors they employ, and how much they pay.

“Tell me everything that you’re doing, and that way I’ll be able to get you the insurance you need,” she tells her clients. “The more information I have, the better price I can get.”

Service matters

Both Terra and McCollum also say it’s not always price that should be the determining factor when searching for insurance coverage. The level of services and responsiveness of a carrier are also very important.

For example, the Hartford Insurance Co. — which insures more than 1.5 million small business owners — recently built a platform for their customers that’s available 24/7 for them to request and receive certificates of insurance with a short period of time. (The Hartford is a client of my company.)

“It’s a big deal if you’re a small-business owner and have to wait for your insurance company and it could potentially delay work or even payment,” said Christopher Jones , head of small commercial at The Hartford. “In most cases, our system can deliver a certificate within minutes of requesting.”

Consider bundling

When you find a good carrier, consider bundling policies with them. Many carriers offer business owners’ plans that combine key coverages — liability, property, cyber — in one plan and at a discount.

McCollum says that when you bundle your policies, you can often get the best pricing.

“It also allows a business to work with one broker for all their needs,” he said. “This becomes important when it’s time to report a potential claim.”

Ratings matter

It’s also important to make sure you’re dealing with insurance carriers that have high ratings. While it’s no guarantee, ratings services like AM Best evaluate the balance sheets, operations, financial performance and other factors — such as the ability to meet short- and long-term obligations — in order to determine a carrier’s reliability with grades assigned ranging from A+ to D. These ratings fluctuate year to year so it’s important to look at a carrier’s historical record as well as its current year rating.

Keep good records and carry an umbrella

When it comes to reporting claims, both McCollum and Terra agree that no one can foresee these things, but the more prepared you are, the better. This is accomplished by keeping good documentation — including photos and receipts — for significant assets as well as complete payroll records and insurance certificates from brokers or outside parties.

Finally, lean in into umbrella coverage. This type of coverage is sold over and above your existing coverage as an extra layer of protection. It tends to be affordable and can be important if ever a big claim is filed.

“An umbrella policy is a relatively small portion of your total insurance cost and can be very helpful if something goes wrong,” Jones said. “We’ve been seeing more business owners buy this type of policy over the past few years.”

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Trending Topics

Follow our news, recent searches, more construction firms going bust after pandemic, say liquidators, advertisement.

The sector is still reeling from the aftermath of COVID-19 and a slump in overseas investments, on top of dealing with higher costs.

Construction cranes seen at a construction site in Singapore on May 18, 2020. (File Photo: Calvin Oh)

This audio is AI-generated.

Nasyrah Abdul Rohim

Darrelle Ng

SINGAPORE: Liquidators are seeing more construction companies going under, with numbers higher than pre-pandemic levels.

Insiders said that the sector is still reeling from the aftermath of COVID-19 and a slump in overseas investments, on top of dealing with higher costs.

Construction engineering company TA Corporation, which for years profited from building freehold condominium projects, is one such victim of the spillover from the pandemic years.

It closed its subsidiary Tiong Aik Construction last July, citing inability to pay debts.

A high interest rate environment, coupled with labour and material costs rising by more than 35 per cent, also forced the firm to sell the subsidiary's office space at a loss.

“The burn rate for our company was very high for our construction arm. We're talking about S$2 million (US$1.47 million) to S$3 million a month,” said the firm’s group CEO Neo Tiam Boon.

“By cutting off this borrowing, it allows us to go on very low operating costs. So, this is the direction we took.”

The office at New World Centre was sold at S$43 million, below the market value of S$51.06 million.

With Tiong Aik Construction’s closure, the company also had to retrench about 180 staff and 600 workers.

“It was a very, very difficult decision, especially since this business started from my dad and it had been going on for the last 45 years. The family put in tens of millions of dollars personally to try and rescue the business but there was only so much we could do,” said Mr Neo.

“The COVID years were the drag. Most, if not all, construction companies suffered (similar) fate. Whenever we see each other, our first question is: ‘how much have you lost?’”

HIT BY DELAYED PANDEMIC WOES

Liquidators CNA spoke to said that the effect of delays due to the pandemic are now being felt as affected projects enter completion phase and disputes over delays and costs start to surface.

“Construction companies have been buoyed over the last few years by COVID relief measures and significant government projects in the post-pandemic era. But the reality is starting to sink in,” said lawyer Danny Quah.

“Drastic changes to global supply chains, upward pressure on costs, the severe tightening of foreign worker quotas, the strong Singapore dollar which is causing loss of competitiveness in exports – these are but some of the factors creating the perfect storm for construction companies to undergo insolvency or restructuring proceedings.”

On top of the challenging environment, construction firms also face having to meet project completion deadlines or be served expensive lawsuits.

HIGH NUMBER OF DEFAULT LOANS

Mr Quah, who is director of civil and commercial litigation and arbitration at law firm CHP Law, said he expects to see an increase in the number of liquidations of construction firms.

The sector had the greatest number of default loans overall last year at 6.81 per cent, compared with an average of 1.72 per cent, according to the Monetary Authority of Singapore (MAS). 

The outlook is especially bleak for general contractors, experts said.

“With the residential market cooling down, we are likely to see less new residential development,” said Mr Tan Wei Cheong, a partner with consultancy firm Deloitte Singapore.

“Construction companies that are general builders may start to see less demand for such services. This will affect them moving forward until the property market improves again.”

The latest national business survey by the Singapore Business Federation found that a higher proportion of construction businesses indicated they are facing some form of inability to finance their operation. The report released in January showed that 10 per cent of the sector is facing a severe credit crunch, compared with 3 per cent in 2022.

In the current environment, industry players are more careful when it comes to taking on new projects.

“Businesses are more cautious right now. We don't see people making big decisions in terms of investments or financing because they don't know where things are moving. A lot of people are observing and taking a more defensive position,” said Mr Tan.  

PUBLIC PROJECTS PROP UP SECTOR

Still, bright spots remain. Public projects propped up growth in the construction industry in the first quarter this year, even as private sector construction output fell.

The public sector is expected to contribute about 55 per cent of total construction demand this year, including new Build-To-Order (BTO) flats, phase two of the Cross Island MRT Line, and airport and port developments.

“Every company has a different appetite for risk,” said Mr Kenneth Loo, executive director of Straits Construction Singapore.

“At the end of the day, when you tender for a job, you have to evaluate your own resources and your own position on how to move forward. If you take a higher risk, and if your resources are insufficient, that will be very challenging.”

Meanwhile, TA Corporation’s Mr Neo said the firm will concentrate on other areas such as high value bungalows, and does not foresee returning to high rise private housing construction such as condominiums in the foreseeable future.

“Personally, I will not go back to this industry again because it's no longer viable, and competition is very steep,” he said.

However, even with the closure of contractors such as Tiong Aik Construction, homeowners are unlikely to be heavily impacted, as developers will be able to quickly find replacements, Mr Loo said.

Market watchers expect more commercial and industrial listings at property auctions

Home buyers need to be more cautious, prudent amid looming economic uncertainties: Desmond Lee

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B-ON and Chery plan joint venture for electric commercial vehicles

The former StreetScooter successor B-ON and the Chinese vehicle manufacturer Chery announced a joint venture for electric commercial vehicles. The first joint product is the Pelkan electric van, which is to be delivered to customers in mainland Europe from mid-2024.

• B-ON Pelkan

Chery and StreetScooter – this duo has a history: in 2019 , a sale of the Deutsche Post subsidiary StreetScooter, which was still run as an electric car division, to the Chinese OEM Chery was about to be finalised before the deal fell through. Deutsche Post then rumoured that it wanted to discontinue production of the electric delivery vans. As we all know, things turned out differently: in January 2022, B-ON (then still under the name Odin Automotive ) took over production of the StreetScooter in Düren. And Chery will be doing business with B-ON in 2024.

Both sides now want to establish a joint venture for the development, production and marketing of electric commercial vehicles. B-ON hopes to gain access to funding and Chery’s production base, while the Chinese car manufacturer will gain access to the European and US markets in return (because B-On had produced in Germany via contract manufacturer Neapco and in California via Karma Automotive ). The duo no longer has anything to do with StreetScooter. After B-ON GmbH, the manufacturer of the vehicle, went bankrupt in 2023 , Aachen-based Professor Günther Schuh – the inventor of the StreetScooter – took over the rights again at the beginning of the year.

Instead, B-ON wants to build a new family of electric delivery vehicles. The company unveiled its first representative, the Pelkan , at the Japan Mobility Show last October. At the time, it was said that the Pelkan would celebrate its world premiere and go on sale in 2024. The subsequent announcement that the model is to be delivered to customers on the European mainland via the planned joint venture as early as mid-2024 confirms this schedule. It is not known whether there will be any technical changes to the electric van as a result of the collaboration with Chery.

According to the model data published by B-ON in October, the Pelkan has a maximum output of 85 kW with a maximum torque of 256 Nm and will be available with two battery variants (43 and 54 kWh). With the larger 54-kWh battery, the van is expected to achieve a WLTP range of more than 250 kilometres. At a DC charging station, the charging process from 30 to 80 per cent SoC (“State of Charge”) should take less than 30 minutes. The AC charging process from 0 to 100 per cent is specified as “under 8 hours”. According to B-ON, the payload should be 1,235 kilograms and the top speed 120 km/h. The manufacturer puts the external dimensions of the Pelikan at 5,725 x 1,850 x 2,515 mm and the wheelbase at 3,380 mm.

According to Reuters , Chery has a stake in B-ON and will provide working capital to finance the joint venture. The Chinese manufacturer is currently investing heavily in order to expand overseas: Just a few days ago, Chery confirmed that it will produce electric cars together with Spanish car manufacturer Ebro-EV Motors at a plant in Barcelona in the future.

“As a leading global automaker, we have long recognized the need to be prepared for an electric future,” commented Tongyue Yin, Chairman of the Chery Group. “Innovative, agile companies like B–ON are uniquely poised to supply the nascent and rapidly expanding commercial vehicle market in their local geographies but lack the manufacturing base to address the full mass-market demand. Our partnership makes for a perfect union. Together, our future is bright.”

“Partnering with a major world leader like Chery Group is a pivotal moment for B–ON and its growth,” added Bruno Lambert, CEO of B-ON. “Combined, our ability to provide high quality, low-cost electric commercial vehicles is unmatched in the market today, and I’m extremely optimistic about our joint prospects.”

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Electrical Contractor Business Plan Template

Written by Dave Lavinsky

Electrical Contractor Business Plan

Over the past 20+ years, we have helped over 1,000 entrepreneurs and business owners create business plans to start and grow their electrical contracting businesses. On this page, we will first give you some background information with regards to the importance of business planning. We will then go through an electrical contractor business plan template step-by-step so you can create your plan today.

Download our Ultimate Business Plan Template here >

What is an Electrical Contractor Business Plan?

A business plan provides a snapshot of your electrical contractor business as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategy for reaching them. It also includes market research to support your plans.

Why You Need a Business Plan for an Electrical Contracting Business

If you’re looking to start an electrical contractor business, or grow your existing electrical contractor business, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your electrical contractor business in order to improve your chances of success. Your electrical contracting business plan is a living document that should be updated annually as your company grows and changes.

Sources of Funding for Electrical Contractor Businesses

With regards to funding, the main sources of funding for an electrical contractor business are personal savings, credit cards, bank loans and angel investors. With regards to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the electrical contractor will not only want to confirm that your financials are reasonable, but they will also want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business. Personal savings and bank loans are the most common funding paths for electrical contractor businesses.

Finish Your Business Plan Today!

How to write a business plan for an electrical contracting business.

If you want to start an electrical contracting business or expand your current one, you need a business plan. Below are the details for each section of your electrical contractor business plan template:

Executive Summary

Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.

The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of electrical contractor business you are operating and its status. For example, are you a start-up, do you have an electrical contractor business that you would like to grow, or are you operating a chain of electrical contractor businesses?

Next, provide an overview of each of the subsequent sections of your plan. For example, give a brief overview of the electrical contractor industry. Discuss the type of electrical contractor business you are operating. Detail your direct competitors. Give an overview of your target market. Provide a snapshot of your marketing plan. Identify the key members of your team. And offer an overview of your financial plan.  

Company Analysis

In your company analysis, you will detail the type of electrical contractor business you are operating.

For example, you might operate one of the following types of electrical contractor businesses:

• Commercial Electrical Contractor : this type of electrical contractor business will focus on developing outdoor spaces such as college campuses, parks, gardens and more.
• Residential Electrical Contractor: this type of electrical contractor business collaborates with homeowners to design and/or install electrical and electronic systems.
• Industrial Electrical Contractor: this type of electrical contractor business works on large projects for manufacturers or warehouse facilities.

In addition to explaining the type of electrical contractor business you will operate, the Company Analysis section of your business plan needs to provide background on the business.

Include answers to question such as:

• When and why did you start the business?
• What milestones have you achieved to date? Milestones could include the number of customers served, number of positive reviews etc.
• Your legal structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.

Industry Analysis

In your industry analysis, you need to provide an overview of the electrical contractor industry.

While this may seem unnecessary, it serves multiple purposes.

First, researching the electrical contractor industry educates you. It helps you understand the market in which you are operating.

Secondly, market research can improve your strategy, particularly if your research identifies market trends.

The third reason for market research is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.

The following questions should be answered in the industry analysis section of your electrical contractor business plan:

• How big is the electrical contractor industry (in dollars)?
• Is the market declining or increasing?
• Who are the key competitors in the market?
• Who are the key suppliers in the market?
• What trends are affecting the industry?
• What is the industry’s growth forecast over the next 5 – 10 years?
• What is the relevant market size? That is, how big is the potential market for your electrical contractor business? You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.

Customer Analysis

The customer analysis section of your electrical contractor business plan must detail the customers you serve and/or expect to serve.

The following are examples of customer segments: homeowners, businesses, general contractors, developers, etc.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of electrical contractor business you operate. Clearly, a homeowner would respond to different marketing promotions than a local government, for example.

Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, include a discussion of the ages, genders, locations and income levels of the customers you seek to serve. Because most electrical contractor businesses primarily serve customers living in their same city or town, such demographic information is easy to find on government websites.

Psychographic profiles explain the wants and needs of your target audience. The more you can understand and define these needs, the better you will do in attracting and retaining your customers.

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Competitive Analysis

Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are other electrical contractor businesses.

Indirect competitors are other options that customers have to purchase from that aren’t direct competitors. This includes in-house electricians and homeowners who do minor electrical work themselves. You need to mention such competition as well.

With regards to direct competition, you want to describe the other electrical contractor businesses with which you compete. Most likely, your direct competitors will be electrical contractors located very close to your location.

For each such competitor, provide an overview of their businesses and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as:

• What types of customers do they serve?
• What types of projects do they specialize in?
• What is their pricing (premium, low, etc.)?
• What are they good at?
• What are their weaknesses?

With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.

The final part of your competitive analysis section is to document your areas of competitive advantage. For example:

• Will you provide a wider array of services?
• Will you provide special discounts or perks for returning customers?
• Will you provide better customer service?
• Will you offer better pricing?

Think about ways you will outperform your competition and document them in this section of your plan.  

Marketing Plan

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For an electrical contractor business plan, your marketing plan should include the following:

Product : In the product section, you should reiterate the type of electrical contracting business that you documented in your Company Analysis. Then, detail the specific products you will be offering. For example, in addition to installing traditional electrical systems, will you also install smart home control systems or fire and security systems?

Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your marketing plan, you are presenting the services you offer and their prices.

Place : Place refers to the location of your electrical contractor company. Document your location and mention how the location will impact your success. For example, is your electrical contractor business located in a growing community with a booming construction sector, etc.  Discuss how your location might be the ideal location for your customers.

Promotions : The final part of your electrical contractor marketing plan is the promotions section. Here you will document how you will drive customers to your location(s). The following are some promotional methods you might consider:

• Advertising in local papers and magazines
• Reaching out to local websites
• Social media marketing
• Local radio advertising

Operations Plan

While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your business operations plan should have two distinct sections as follows.

Everyday short-term processes include all of the tasks involved in running your electrical contractor business, including marketing your business, working on current projects, prepare for upcoming projects, and overseeing the entire project.

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to install your 500 th electrical system, or when you hope to reach $X in revenue. It could also be when you expect to expand your electrical contractor business to a new city.  

Management Team

To demonstrate your electrical contractor business’ ability to succeed, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.

Ideally you and/or your team members have direct experience in managing electrical contractor businesses. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act like mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in overseeing construction projects or successfully running their own electrical contractor businesses.  

Financial Plan

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet and cash flow statements.

Income Statement : an income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenues and then subtracts your costs to show whether you turned a profit or not.

In developing your income statement, you need to devise assumptions. For example, will you work on 1 project at a time or will you oversee multiple projects at any given time? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

Balance Sheets : Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $50,000 on building out your electrical contractor business, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a bank writes you a check for $50,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Cash Flow Statement : Your cash flow statement will help determine how much money you need to start or grow your business, and make sure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt.

In developing your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing an electrical contractor business:

• Cost of equipment and supplies
• Payroll or salaries paid to staff
• Business insurance
• Taxes and permits
• Legal expenses

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your office location lease or contracts for upcoming projects.  

Putting together a business plan for your electrical contractor business is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will really understand the electrical contractor industry, your competition, and your customers. You will have developed a marketing plan and will really understand what it takes to launch and grow a successful electrical contractor business.  

Electrical Contracting Business Plan FAQs

What is the easiest way to complete my electrical contractor business plan.

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What is the Goal of a Business Plan's Executive Summary?

The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of electrical contractor business you are operating and the status; for example, are you a startup, do you have an electrical contractor business that you would like to grow, or are you operating a chain of electrical contractor businesses?

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Concrete Installation

Executive summary executive summary is a brief introduction to your business plan. it describes your business, the problem that it solves, your target market, and financial highlights.">.

Introduction Concrete Installation LLC plans to become the leading provider of concrete formwork services in the area. This means always having the best and most efficient facilities, processes, and people. To achieve this, Concrete Installation is investing in many ways that will pay off in competitive advantages for its customers.

The company’s overall strategy will be based on a continuing improvement process of setting objectives, measuring results, and providing feedback to facilitate further growth and progress.

Concrete Installation is an Oklahoma Limited Liability company, with principal offices located in Sulphur, Oklahoma. Concrete Installation’s management is highly experienced and qualified. Mr. Barry Newman leads the management team with over ten years of experience in the construction industry.

Products/Services Concrete Installation has developed sophisticated formwork solutions for some of the most complex construction projects being done today. The company’s standard form systems are versatile and completely adaptable to a variety of configurations such as Y-walls, shafts, and circular walls.

The Concrete Installation system can be adapted to almost any construction requirement that calls for forming. The company’s expert staff has the capability to design and manufacture any custom component or accessory item that may be required to complete the formwork package.

Owners, developers, construction managers, general contractors, and concrete subcontractors have realized substantial savings in labor and material costs by using structural contours construction methods, systems and equipment. Applications include commercial and residential structures, bridges, educational projects, recreational projects, civil projects, tunnels, utility projects, environmental projects, and virtually every other type of concrete construction.

The Market The housing industry has proceeded at a red-hot pace for several years running. An all-time record was set in 1998, when 886,000 new-site single family homes were sold. That represented a 10% gain from the robust total of 804,000 homes sold in 1997, and an 8.1% rise from the prior record of 819,000 units in 1977. Single-family housing construction accounted for $48 million of the total $125 million generated in the industry. This makes for an excellent opportunity to expand Concrete Installation operations and gain significant market share in its primary target market segment. The company also plans to focus to a lesser extent on the residential and heavy construction industry, which is also very robust at the moment.

The company plans to rapidly develop marketing alliances with industry leaders and pursue new sales of its services to residential and commercial builders. The market strategy is to capitalize on Concrete Installation’s alliances by securing city, county, and state and federal government contracts.

Concrete Installation plans to use a direct sales force, relationship selling, and subcontractors to reach its markets. These channels are most appropriate because of time to market, reduced capital requirements, and fast access to established distribution channels.

Financial Considerations We expect to be profitable during the first year of operations. Despite initial large outlays in cash to promote sales, the company’s cash account is expected to remain healthy. The company expects to earn approximately 1.5 million dollars in revenue by Year 3.

1.1 Mission

The mission of Concrete Installation is to provide quality service at competitive pricing.

Company Summary company overview ) is an overview of the most important points about your company—your history, management team, location, mission statement and legal structure.">

Concrete Installation is an Oklahoma Limited Liability company, with principal offices located in Sulphur, Oklahoma.

Concrete Installation will be committed to conducting business in a manner that protects the health and safety of all employees, customers, and persons living in the community where it operates. To accomplish this, Concrete Installation will ensure that it complies with current Health Administration and Occupational Health and Safety laws and will maintain its operations, procedures, technologies, and policies accordingly. Each employee will have the responsibility to fully comply with established safety rules and to perform work in such a manner to prevent injuries to themselves and others. Concrete Installation is very concerned about job-site safety and plans to set up a comprehensive safety program.

Concrete Installation’s formworks will offer major advances, complete adaptability, and high strength-to-weight ratio, and all at cost effective prices. Assembly will be quick and easy. During form use, maintenance will be minimal. Concrete Installation will recommend, as a safety precaution, occasional inspection for bolts and nuts that may have loosened from handling.

The required formwork drawings that Concrete Installation will furnish to the contractor eliminate all guesswork. The company will specify the order of assembly and erection including the location of the strongbacks and joists, the location and actual loading of the form ties, location of all accessories and advise clients of the maximum allowable rate of concrete placement.

Accident prevention is the cornerstone of Concrete Installation’s safety commitment. The company will strive to eliminate foreseeable hazards which could result in personal injury or illness; at Concrete Installation, health and safety will not be compromised. Concrete Installation will sell its services clients in the area of commercial construction.

3.1 Applications

The following applications are uses for Concrete Installation’s services.

• Foundations
• Parking Lots
• Parking Garages
• Low Rise/Tilt-Up
• Flowable Fill/Soil Displacement
• Retaining Walls

Market Analysis Summary how to do a market analysis for your business plan.">

Industry Statistics – Concrete Work

Special trade contractors primarily engaged in concrete work, including portland cement and asphalt.

Establishments primarily engaged in manufacturing portland cement concrete manufactured and delivered to a purchaser in a plastic and unhardened steel.

4.1 Market Segmentation

The housing industry has proceeded at a red-hot pace for several years running. An all-time record was set in 1998, when 886,000 new-site single family homes were sold. That represented a 10% gain from the robust total of 804,000 homes sold in 1997, and an 8.1% rise from the prior record of 819,000 units in 1977. Single-family housing construction accounted for $48 million of the total $125 million generated in the industry.

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The record setting string of home sales since the second half of 1997 has forced builders to pick up the pace of their construction activity. During 1998, total starts increased by 9.7% to 1.62 million units. Starts for single family units moved up 12 % for the year, and those of multifamily units were ahead by 1.5%. As an indication of building activity at year-end 1999, housing starts in November 1999 came in at a seasonally-adjusted annual rate of 1.6 million units.

The table below outlines the total market potential of the three targeted market segments in the served markets (in US$ thousands).

(Information provided by Standard & Poor’s)

Strategy and Implementation Summary

Concrete Installation will be committed to ensuring that the products used on its’ customers job sites, everything from access scaffolding to concrete shoring frames and forming equipment, is safe and OSHA approved. Along with clients, the company believes in a health and safety initiative that is all pervasive, managing any potential loss in the work environment.

Concrete Installation will develop sophisticated formwork solutions for some of the most complex construction projects being done today. The company’s standard form systems will be versatile and completely adaptable to a variety of configurations such as Y-walls, shafts, and circular walls.

With that in mind, Concrete Installation will adopt a corporate strategy that is dedicated to improving the performance of activities on the critical path of its customers’ projects. The company will do this by building on its core strengths: innovative equipment, design engineering expertise, and project and site management, within an environment of safety excellence.

At Concrete Installation, customer service is a pro-active partnership, a relationship that ensures a professional, efficiently run, safe workplace. The company’s customer service philosophy starts at the top, is ingrained into the fabric of the company, and is closely aligned to Concrete Installation’s goal of contributing to its’ customers critical success factors.

Customer service can be divided into two interrelated areas: equipment and people. On the job site, with the help of a newly integrated technology system and a well-trained staff, Concrete Installation will be able to maintain excellent control over such key areas as inventory, shipments/deliveries, damage loss, and invoicing. Troubleshooting, which customer service representatives often do right on the job site, will be handled quickly and efficiently. On the people side, Concrete Installation will provide a highly qualified and well-prepared labor force, ensuring that schedules and deadlines are met and worker safety remains a top consideration.

5.1 Sales Forecast

The following table and charts show our projected Sales Forecast.

5.2 Marketing Strategy

Concrete Installation plans to use a direct sales force, relationship selling, and subcontractors to reach its markets. These channels are most appropriate because of time to market, reduced capital requirements, and fast access to established distribution channels. The overall marketing plan for Concrete Installation’s service is based on the following fundamentals:

• The segment of the market(s) planned to reach.
• Distribution channels planned to be used to reach market segments: television, radio, sales associates, and mail order.
• Share of the market expected to capture over a fixed period of time.

In addition, Concrete Installation plans to advertise in magazines, newspapers, and radio.

The table and chart below outline the company’s sales forecast for FY2000-2002. In our sales forecasts, the cost of sales includes only direct labor costs (administrative labor costs are discussed below).

Promotional Campaign

Concrete Installation is committed to an extensive promotional campaign. This will be done aggressively and on a broad scale. To accomplish initial sales goals, the company will require an effective promotional campaign to accomplish two primary objectives:

• Attract customers who will constantly look to Concrete Installation for their construction projects.
• Attract quality sales personnel who have a desire to be successful.

In addition to standard advertisement practices, Concrete Installation will gain considerable recognition through these additional promotional mediums:

• Press releases sent to major radio stations, newspapers, and magazines.
• Radio advertising on secondary stations.

Marketing Programs

For the first six months of operation, advertising and promotion is budgeted at approximately $11,000. A fixed amount of sales revenues will go toward the state Concrete Installation advertisement campaign. On an ongoing basis, Concrete Installation feels that it can budget advertising expenses at less than 10% of revenues.

Incentives. As an extra incentive for customers to remember Concrete Installation’s name, the company plans to distribute coffee mugs, T-shirts, pens, and other advertising specialties with its logo.

Brochures. The objective of brochures is to portray Concrete Installations’ goals and products as an attractive functionality. It is also to show customers how to use the latest in technology as it relates to construction and building services. Concrete Installation will develop three brochures: one to be used to promote sales, one to use to announce the product in a new market, and the other to recruit sales associates.

Management Summary management summary will include information about who's on your team and why they're the right people for the job, as well as your future hiring plans.">

The company’s management philosophy will be based on responsibility and mutual respect. Concrete Installation will maintain an environment and structure that will encourage productivity and respect for customers and fellow employees.

Concrete Installation will be responsible to its employees, the men and women who work with the company throughout the state. At Concrete Installation, everyone will be considered as an individual and the company will respect their dignity and recognize their merit. Employees will be encouraged to have a sense of security and pride in their jobs. Additionally, employees will be free to make suggestions and complaints. The company will afford equal opportunity for employment, development, and advancement for those qualified.

Concrete Installation employees will be committed to:

• Providing a safe work environment to protect employees, the employees of customers and subcontractors, and the public.
• Supplying safe products for customers.
• Continuously improving the company’s safety program to reduce the risk of accidents and occupational illness in a changing work environment.
• Encouraging employees to participate in accident prevention programs and take personal responsibility for their own and their co-workers’ health and safety.
• Regulatory compliance and contribution to high safety standards for our industry.
• Monitoring workplaces, enforcing safe work practices, and communicating the company’s safety performance to employees and other stakeholders.
• Making safety a value-added service that the company provides to its customers.

6.1 Personnel Plan

Financial plan investor-ready personnel plan .">.

The following sections describe the financials for Concrete Installation.

7.1 Projected Cash Flow

Projected cash flow statements for FY2000-2002 are provided below.

7.2 Break-even Analysis

During the first year of operations, the break-even sales volume is estimated as shown below.

7.3 Projected Profit and Loss

Concrete Installation is in the early stage of development, thus initial projections have only been made on accounts that are believed to most drive the income statement. 

7.4 Projected Balance Sheet

The table below provides Concrete Installation’s projected balance sheets for 2000-2002.

7.5 Business Ratios

The following table presents important ratios from the concrete work industry, as determined by the Standard Industry Classification (SIC) Index code 1771.

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