How to Create a General Contractor Business Plan

You’ve been firing on all cylinders for your clients’ construction projects, but what about your own company’s future?

It’s not that you don’t have a plan…

You haven’t gotten where you are by accident, right?

You know what needs to be done day to day, and you do it. Even if that means your work day drags into the double-digits. And they do. Often.

But there’s that little voice at the back of your mind that occasionally – or frequently – asks:

How long can this go on?

If you’re ever going to gain control over your days, not to mention work less of them, you’ll need to take that vision out of your head and translate it onto the page.

You’ve got to write a business plan.

This article will walk you through a step-by-step process to create one that’s not just simple and effective, but energizes you about the potential of your general contracting company.

What is a general contractor business plan?

A general contractor business plan is a future-focused document that outlines the financial, operational, sales and marketing strategies of a general contracting company to achieve its goals over the next five to ten years.

Why does my general contracting company need a business plan?

If you’ve been functioning without a business plan, you’re not alone. Most contracting companies don’t have one. Which is all the more reason why you should.

A business plan sets the foundation for your vision and will ultimately put you ahead of your competition. It provides numerous benefits, including:

• Providing guardrails for making financial and operational decisions.
• Giving you a scorecard to check your progress and keep you moving forward each year.
• Keeping your team informed about the company’s priorities.
• Making you a more confident leader because you know where you’re going.

What should I include in my general contractor business plan?

1. Executive Summary - highlights of your business plan
2. Company Overview - key details about your company and culture
3. Market Analysis - industry, competitors and customers
4. Marketing & Sales Strategy - how you’ll land jobs
5. Operations Plan - how you’ll execute those jobs
6. Financials & Revenue Forecasting - how much you’ll make from those jobs

This is an example of a standard general contractor business plan, but you don’t have to follow it exactly. If you’re searching for investors, they’ll likely expect a document similar to the above format, but otherwise… it’s your plan, you can structure it however you like.

For the record, you also don’t have to call the various sections by those titles either. You can rename them with phrases that better suit your vibe. For example, “Company Overview” could be “Who We Are.”

You also won’t want to write the sections in the above order – nor will you really be able to. You’ll have to do a bit of research on the various aspects of your business first and what you learn about one area will impact the others.

But don’t worry, we’ve got a framework you can follow.

How do I create a general contractor business plan?

1. Conduct market analysis: Who’s your competition?
2. Work out what matters: What’s your ‘why’?
3. Study your numbers: What are your financial projections?
4. Design your lead flow: What jobs do you need to land?
5. Set an operational path: How will you get the work done?
6. You’ve got your plan - now summarize it!

Let’s take it step by step, looking at questions to consider and where in your plan to slot your answers.

Step 1. Conduct market analysis

When you’re busy managing vendors, customers and employees across multiple job sites, it doesn’t leave much space for keeping tabs on what else is happening out there.

This first stage of the business plan writing process forces you to take a step back, look at the big picture of the construction industry and research what other general contractors are doing.

The reason it works well as a starting point is because once you have a sense of the whole, you can figure out how best to position your company within it.

Stuff you want to find out includes:

• Is there likely to be an increased demand for general contractors in your region?
• What type of construction projects are prevalent? Remodels? Developments?
• Who are the big players?
• Who’s running a similar general contracting business you admire?
• Who are your ideal customers? Are they the ones you’re currently chasing?

Your answers to these questions will make up the third section of your business plan: Market Analysis.

Step 2. Work out what matters

Okay… NOW’s the time to use everything you’ve just learned to inform what is arguably the most crucial section of your business plan. This is where you’ll define your ‘why.’

Think about elements such as:

• What kind of construction projects you want to focus on
• Your competitive advantage
• Your ideal potential clients
• Your values
• The larger purpose your company offers the world
• What motivates you more than money

Your answers to these questions will become the second section of your plan: Company Overview.

Step 3. Study your numbers

This step assumes you have historical financial data to work from, which… well… isn’t always the case. We get it.

If your financial plan has consisted mainly of tossing receipts into a box at the bottom of a filing cabinet, it’s time to bring it into the light of day.

This section is easiest to complete by working with whatever number’s you’ve got, even if that means taking your best guess. Ideally, you’ll want to have a rough idea of your expenses, including both fixed overhead and variable costs.

From there, if you can figure out approximately what your net and gross profit margins have been, even better. If not, it’s okay. But definitely take a stab at calculating your financial projections, such as where you want your annual revenues to hit in the next five or ten years.

Another important aspect of this step is putting a proper budget in place. If you don’t have one, don’t fret! Download this Budget Quick Tool to get on your way to financial clarity and decisive future planning.

Even though it appears last in the document, you’ll need to have given careful consideration to your finances in order to set your sales, marketing and operational strategies (which are up next).

Your answers will help you build out the last section of your plan: Financials & Revenue Forecasting.

Step 4. Design your lead flow

Alright, so you’ve figured out how much you want to make, now you need to calculate the conversion levels needed to meet your financial goals.

This involves working through the following:

• What’s the size of your average construction project?
• How many jobs do you need to complete to meet your revenue and profit margin targets?
• How many estimates do you need to do to land that many jobs?
• How many leads?
• How are you going to attract potential clients?

The answers to these questions will go in the fourth section of your plan: Sales & Marketing.

Step 5. Set an operational path

Once you set your targets, the next step is putting the high-level plan to hit them. Emphasis on “high-level.”

Consider:

• What’s your BHAG (Big Hairy Audacious Goal)?
• Who will you need on your management team?
• What systems do you need to implement?
• How will you track your progress?
• How will you keep your team accountable?

These answers will help you round out the fifth section: Operations Plan.

It will also lay the groundwork for your annual strategic planning, where you’ll break your big vision down into executable actions. Curious what that looks like? Download our Strategic Plan template.

Step 6. Summarize it!

Good news! You can give your brain a break now. You’ve got the nuts and bolts of your business plan, all that’s left is highlighting the main points from each section.

Provide a brief overview of everything, without getting bogged down in the specifics. Even though it’s the last thing you write, it will be the first section of your plan: Executive Summary.

Do’s & Don’ts of creating a general contracting business plan

Ready to put your plan into action? We’ve got you. Learn more about how to supercharge your growth… and your team.