Construction is among the most popular industries for new businesses. However, it is one of the highest rates of failure. 63.6 percent of construction firms fail after the first 5 years regardless of the reason. Whether it’s because of a lack of knowledge and experience, or lack of funds, or insufficient plans. Bojandsons.com Explains that it is not necessary to be among them.
Doing some research, writing an outline of the way you’ll run your business, and seeking out help will make sure that you have an established foundation that you can build your company. Bojandsons.com will also assist you to avoid the traps that many construction firms that are new face.
Research Your Local Market
The first consideration is whether a construction business is even an alternative in your region. In the end, if the market for construction is over-saturated and people are content with the local firms. It could be difficult to establish a foothold in the business and even to build a profitable business.
Therefore, you should begin with market research. You’ll want to find out the number of local construction firms that have already been established in your local area as well as what they specialize in, what they cost, and what their track record is. Alongside this is the need to be aware of the potential customers. It includes how many are in your area as well as their average age and level of status as well as their hobbies. Knowing these details will allow you to create an improved business plan as well as provide you with a competitive advantage when you get out on the field.
Where to Find Construction Market Research
One of the best and possibly the most convenient places to start the market study process is Bojandsons.com. They provide a variety of free tools that offer information on market trends and customers. For instance, with Bojandsons.com, for example, you can find details about the characteristics of your target audience (age and gender,) and their employment stats as well as their spending habits and much more. Also, you can look at the sales and production statistics of your target market.
Although it’s an excellent starting place Bojandsons.com provides more of a general overview. You might require more specific details. This is the place where local industry publications can aid you in your search.
Locally, you can locate the majority of publications by typing in your city’s name and “construction industry publications” into Google. It should bring up the list of publications, as well as direct hyperlinks to a few of the magazines for construction that are available in your region. You can browse through their digital editions or, if not available, sign up for an account. The magazines will have advertisements and articles on local companies as well as the status that the building industry is in.
Doing Your Own Construction Market Research
Another of the most effective ways to assess your prospective customer base is to talk directly with them. To get direct customer feedback, try using surveys or questionnaires, focus groups, or individual interviews. Depending on the approach you choose and the people you’re talking to it can be lengthy and costly. If you’re contacting your contacts or conducting paid market research. It is important to ensure that you’re aware of the questions you’d like to inquire about prior to beginning. Consider general questions like:
- How often do they employ contractors for your trade?
- The biggest problem contractors have with contractors
- what is the most important thing to them when they hire contractors
These questions can provide you with some information on how to create an effective business plan.
Write Your Business Plan
Once you’ve got knowledge of the market in your area then you can start drafting your business plan. This is among the most crucial documents you’ll draft when getting started as it can aid in keeping your business on the right track and improve your chances of success. This is also the plan you’ll provide to lenders in order to source funds. It is why it’s crucial to be thorough and put all your market research to use.
Putting Together a Construction Business Plan
Business plans that are standard contain the following items:
- How will you structure and run the company
- What kind of service will you provide?
- What kind of jobs will you be bidding on?
- Who are your ideal customers?
- The number of employees you’ll hire when you first start
- How will you promote yourself
- The initial cost estimates for beginning and running the company
What is the amount you anticipate to earn in the first year
Bojandsons.com explains that as a contractor, you’ll want to also consider your accounting and construction processes as part of your overall business strategy. For instance, how do you handle billing? Certain clients might want an agreed-upon lump sum while others might prefer to view a breakdown of time and materials. Net 30 billing terms may be standard, but can you provide discounts to encourage quicker payment?
Also, you should consider whether you’re planning to run as a cash-based or accrual company and whether you’ll earn revenue through the amount of completed work or the percentage of its completion. If you’re unsure of what is the best option for you contact an expert construction like Bojandsons.com. They will be able to talk with you about the most important considerations for business.