All small-business owners can benefit from developing a strategic plan, and owners of construction companies are no exception. Just as you create blueprints for each of your construction projects, the strategic plan serves as a blueprint for growing your business's revenue and profit. It also focuses your team's efforts on achieving the goals you have set and provides a means to measure your progress toward the goals.
Evaluate your current situation. Analyze last year's results and determine which of your products, markets, divisions or business segments contributed the most revenue. Also review which ones were the most profitable. Evaluate areas in which your company excelled and areas where it fell short of achieving the expected results. For example, you may not have achieved the level of on-time performance -- completing projects on schedule -- that you planned. These construction delays may have negatively impacted your ability to accept new projects.
Review the competition. Analyze the strengths and weaknesses of your major competitors. Then compare them to the strengths and weaknesses of your own company. Listing these side by side can give you a clear view of where your competitors may be vulnerable. Describe what your competitive advantage is. For example, you may have the most efficient group of subcontractors, which allows you to consistently complete projects within budget.
Seek out expansion opportunities. Forecast the major growth areas for your industry or your market niche. Consider new markets or customer segments for the products you currently offer. Also consider new products, services or production capabilities you could add. A swimming pool contractor, for example, could add a monthly pool maintenance service and create an additional revenue stream from its customers.
Set goals and metrics. Set sales revenue targets, and goals regarding the number and type of projects. Make sure that within these numerical goals, you include metrics that show the steps required to accomplish them. For example, one metric could be the number of leads you obtain from home and garden trade shows. By looking at how many leads you actually generated and the conversion rate of leads to customers, you can see whether you chose the right shows to attend and whether your sales force's efforts were successful.
Develop marketing strategies. Review your goals and determine the strategic steps involved in achieving them. A home builder that forecasts a relatively weak new home construction market for the upcoming year, for example, may put more emphasis on obtaining remodeling projects to maintain cash flow. The owner would need strategies to reach out to homeowners that are considering remodeling, such as direct mail or advertising in home improvement magazines.
Create a revenue, cost and profit forecast. Determine the cost of implementing each strategy. Forecast the revenue that will be generated through your marketing strategies. Create a month-by-month spreadsheet with the revenues and costs, and the resulting bottom line profit. Review your net profit margin -- net profit divided by total revenue -- to see if it is in line with averages for your industry.
Make sure to include an implementation plan. Outline each of the smaller steps or tactics required to implement each strategy and the deadlines for each. Assign responsibility for completing each step. A construction company owner may have an advantage over owners of other companies because he is used to creating project plans. In this case, the project is to build his company.
Looks at your competitors in broad terms. Home improvement stores also subcontract construction work and should be considered competitors of home building and remodeling companies.