Business Plans Can Provide A Competitive Advantage to any business has one and uses it. For construction firms the impact is even greater because very few contractors have one and many of the ones that do rarely look at it. This is because it was something they needed to produce to get a loan, investment capital or some other external force was applied. Once the crisis or need passed they simply let it rest-in-peace on the shelf.
Why Would Anyone Especially A Construction Business Owner spend the time and effort to develop a business plan? Because contractors use business plans all the time and they do not realize it until we show them:
In construction reputation is key because construction is a perishable commodity that does not age well and delays cost a lot of money. So construction firms establish and protect their reputations very carefully based in part on having the resources and expertise to complete the work on time and on budget.
What type of construction are we focused on? New, remodel, service and repair?
Every contractor has a different mix of resources and expertise which means there are some aspects of construction that are fast and easy for them and that is their Unique Selling Proposition (USP) where they should concentrate all their energies.
Every construction company knows who their best customers are and who the worst ones are. The key is to make a list to identify each group and apply the 80/20 rule.
The journeyman costs more per hour but produces more and better results at a lower costs over the long haul than a group of cheap laborers. This is easily documented in a well setup QuickBooks file
Contractors typically run their business with a daily print out from the online account at their bank. Some use software and most that we come in contact with use QuickBooks Premier Contractor Edition.
For construction companies with 1-10 employees, including the owner, and annual sales of $0-$5 Million, QuickBooks Premier Contractor Edition is in my opinion the only choice. It can produce all of the financial statements most construction companies need and much more. The most important reports for a contractor to see are the 5 Key Performance Indicators (KPI)
About The Author:
Our Co-Founder Randal DeHart - Is a Certified PMP (Project Management Professional) with several years of construction project management experience. His expertise is construction accounting systems engineering and process development. His exhaustive study of several leading experts including the work of Dr. W. Edward Deming, Michael Gerber, Walter A. Shewhart, James Lewis and dozens of others was the foundation upon which our Construction Bookkeeping System is based and continues to evolve and improve. Follow Randal on Google+