Creating a Business Plan for Your New Construction Company

The UK’s construction industry has been growing considerably since the disruption that was the coronavirus pandemic; according to ONS data, the industry’s output price growth exceeded 10% between September 2021 and 2022. These figures are particularly promising for those looking to start up a new business in the industry – but starting up a business of any kind is not as simple as starting to trade. If you are considering instituting a company in construction, how should you pull together your business plan?

Executive Summary

An executive summary is essentially a broad-strokes description of your prospective business, no more than two pages in length. Typically, executive summaries are used to assist business owners in applying for business loans or private investments, as a crib sheet for advisers and investors to quickly get on board with the nature of your company. Here, though, it can also be useful to help you finalise your thinking about the nature of your business.

Business Structure

Speaking of which, another early stage in your business plan should be to settle on the structure of your business. Through your executive summary, you will have settled on the specifics of your business – that is, what exactly you are providing to customers, and in what form. You might be starting a construction firm with a specialism in domestic property, or a business that deals solely in renovations of historic structures; alternatively, your business might be purely mercantile in nature.

Whatever the specifics of your business, you will need to decide whether you are operating as self-employed or as a limited company. Self-employment simply means any profit your business makes is treated as income and taxed accordingly. If you intend to hire salaried staff, you will need to set up a limited company.

Market Research & Competitor Analysis

Next, you will need to give careful consideration to how your business fits in the wider construction industry – both in terms of your consumers and competition. Market research will give you some key insights into the demographics you should be targeting – and potential avenues for profit in your local area. Meanwhile, competitor analysis will give you a clear picture of the local landscape, and how hard you may need to fight for market presence.

Execution

Turning plans into action can often seem difficult, but with your research and structure decided upon, the hard work is done. All that is left is to create a realistic short-term roadmap for starting up – starting with the acquisition of tools and supplies and ending with the acceptance of your first client.

Logistics, Administration, and Documentation

Though last on the list, this is of extreme importance to the legitimacy of your new company. There are several logistical and administrative hoops you will need to jump through, particularly if you have instituted a limited company. In undertaking active work on behalf of others, your workers and customers will expect your builder’s insurance policy to cover a number of things – including worker and client injury. Without insurance, one wrong move could gut your finances.

Likewise, you must record all financial information as robustly as possible. HMRC tax audits are more likely for business entities that bring in more than £85,000, making it all the more important that profits, wages, and expenses are properly recorded. It may benefit you to budget for a third-party accountant to structure this on your behalf.