Since establishing the first construction company, there have been several stages in the evolution of the business. The primary objective is to complete the construction of a structure by finding a contractor and finding a location for the construction. Subsequently, you must determine the scope of the job and determine what skills and tools you will need. These are known as requirements.
The intervening years also witnessed much innovation in computer technologies. Established, long-standing service providers tailored their systems to meet the specific needs of construction business functions, such as procurement specialists or project managers. In recent years, computer applications have become an essential part of the construction industry and consequently, several construction companies have transformed into Information Technology (IT) businesses.
A vital component of any business is a sound business plan. Often called a blueprint for success, a business plan is essentially a road map for guiding the vision and the strategy of the organization. In many construction companies, project managers are responsible for crafting a solid business plan and marketing it to investors. In today’s high-tech, information age world, having a solid, clearly defined business plan is a prerequisite for obtaining a construction loan.
The business plan typically outlines the key customer objectives, provides a budget proposal, determines a financial plan, describes potential suppliers and contractors, describes risk factors and financial methods, and describes the operational methods to be used in producing the finished product. Along with a sound business plan, a construction business plan also includes periodic or continuous market research. This is often referred to as market analysis. Market research is designed to identify opportunities and problems in the construction market and to provide the business with recommendations as to how to exploit those opportunities and problems for increased profits.
Some of the methods used in construction market research include data analysis, site investigation, and field survey. Data analysis is the process of collecting and interpreting information from various sources in order to build an understanding of the construction market. Site investigation involves investigating a construction site and determining the most appropriate ways to locate supplies, equipment, and material. A field survey is designed to discover issues that may affect the performance of a construction project. These problems may range from structural concerns to safety and environmental issues.
Having a sound business plan is not enough to succeed in the construction industry. There are many other factors that must be considered to ensure the success of a new business. Many new businesses fail because the business owner did not invest in the necessary business strategies to guarantee success. For example, without a solid business strategy, a new business owner will likely fail to develop a marketing plan, determine a financial plan, manage labor and materials, and set up a construction schedule. Without these strategies in place, there is little chance that the construction business will ever see growth or profit.
A solid foundation begins with a sound business plan. However, there is also a significant need for a construction company to have a construction schedule and to have a reliable contractor or sub-contractor. Without a reliable contractor or sub-contractor, there is a high risk of delays and missed deadlines. In addition, without a reliable construction schedule, a business owner runs the risk of overspending on materials and or having to restart a construction project prematurely. Without a solid foundation, the likelihood of a successful construction endeavor is very low. Likewise, without a sound construction schedule, a construction business owner may find that their capital investments are stretched too thin.
No matter what type of contractor, sub-contractor, or manufacturer a business owner chooses, they must have a strong foundation. These strong foundations are usually developed through numerous factors, including the selection of a contractor, developing a business plan, developing a marketing strategy, and developing a construction schedule. Without a solid construction plan, a business owner runs the risk of overspending on materials and or having to restart a construction project prematurely. Furthermore, without a sound business plan, a business owner will not be able to accurately determine their future profits and projections. A construction business foundation requires the development of a solid business plan and a consistent approach to contract managing and construction schedule.