Construction Industry Research for a Construction Business Plan

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Construction Industry Research for a Construction Business Plan
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Construction Industry Research for a Construction Business Plan
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Construction Industry Research for a Construction Business Plan
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Quality Business Plan
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Industry for Business Plan Research: Construction

The construction industry consists of companies building, maintaining or repairing structures.   From this broad definition, our business plan writers then use subcategories such as commercial, residential and “heavy”, which is building roads, bridges and railways.  Our business plan consultant research found that revenues, in 2017, for the construction industry exceeded $200 billion.  Further, the average growth rate over the last five years exceeded 10%.  The seat was accomplished by approximately 67,000 companies employing over 260,000 people (IBIS World).

In reviewing the construction industry statistics, specific analysis was done by our business plan writers and business plan consultants.  A growth rate of 10% is well above normal for most industries.  This shows that there is a large demand for instruction in general.  Further, revenues of $200 billion achieves by a relatively small number of businesses, 67,000, shows that the industry is dominated by large players.  From this, new entrance into the industry need to have well-thought-out strategy focused on systematically capturing a growing share of the marketplace.

Our business plan writers found that the main revenue drivers in the construction industry include residential home purchases, government spending on infrastructure and corporations repairing their offices or constructing new facilities.  Based on this information, an assumption may be made that construction industry is positively correlated with the economy.  In other words, as long as tax revenues continue to come in, corporate profits stay strong and residents’ wages continue to rise, construction industry should continue to enjoy exponential growth.

Construction Business Plan
Construction Business Plan

Industry Statistics for a Construction Business Plan:

  • In 2016, construction projects increased by $35.4 million.
  • Construction should tell you increased by 16% between 2012 and 2015.
  • Construction projects are not easily categorized. For most projects, they are classified as “other”.
  • Regardless of planning, construction projects are known for exceeding, sometimes substantially, budgeted cost (Capterra.com).

Threats and Opportunities for the Construction Industry:

Our business plan consultants found that a well-known fact is that the construction industry grows with a healthy economy and contracts in a recessionary time frame.  Because of this, industry competitors are faced with significant threat due to changing economic cycles.  However, construction business owners may mitigate this issue through strategic and business planning.  For example, using capital budgeting to structure debt and equity may help construction companies whether retraction nearing periods.

As for opportunities, large corporations, such as the ones that dominate the construction industry, are slow to respond to customer trends.  Because of this, new entrants into the market may quickly gain market share through differentiation.  For example, millennials have shown significant interest in eco-friendly built homes.  Businesses entering the home construction industry may use this customer trend to exploit the niche market. 

Important Sections of a Construction Business Plan:

Our business plan writers have found that industry competitors in the construction business often focus on, or rather obsess upon, startup costs for their construction company.  A main reason for this focus may be because of the significant cost overruns that often happen in the construction industry.  From this, our business by consultants often receive detailed breakdowns for startup cost from new construction competitors.  With this information, we always include it in a business plan, specifically in the appendix section.

Hopefully this brief discussion was helpful.  As always, thanks for reading Quality Business Plan's blog.  What are your thoughts about this topic?  Please share your thoughts and experiences in our comment section.

Author: Paul Borosky, Doctoral Candidate, MBA.

Owner of: Tutor With PaulQuality Business Plan, Finance Homework Help, Research Paper Now and Tutor4Finance.

 

Updated: 9/1/2018




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