Why your business needs a business plan

Back to news

There is no single formula for achieving business success in any industry and building/construction is no exception. As a small or medium-sized business owner it can be a struggle to keep up with the daily grind and find time to work on your long term business objectives. A comprehensive business plan is a useful tool to guide you through this process.

Why have a business plan?

So, how exactly can a business plan help you? Director at TR Consulting, Tim Roberts shares his top reasons why every business needs its own business plan.

1) Better management of your finances

“In the building industry cashflow management is critically important, especially as competition in the sector increases,” explains Tim.

“Throughout the last five years many profitable construction businesses have collapsed due to poor cashflow management.”

A business plan that includes solid financial projections and reporting can help to avoid this outcome by allowing you to see your profits, losses and expenditures, as well as how you are tracking compared to your expectations.

“Before writing up a business plan speak with an accountant or business consultant. Consider your expected fixed and variable costs. Then determine how are you going to price and quotethe projects that you choose to undertake,” says Tim.

2) Place a dollar value on your business

A business plan gives investors or buyers a greater ability to understand how much your business is worth and why they should consider investing.

The more thorough and well researched your business plan – including forecast profits and income streams – the more likely investors or buyers will be to take your business seriously.

“Solid reporting through a business plan can increase the value of your business by clearly demonstrating your business objectives, ideas and strategy,” says Tim. “It helps shift your business from an idea in your head to a well reasoned business case ready for implementation.”

3) Better planning

The underlying key to the success of any project is good planning, and this goes for your business, too.

Research the construction industry, the current market and your competitors. Consider where your business sits within this landscape and where your services are considered most valuable.

“Look at how you are going to differentiate your business from the competition,” says Tim. “What are the strengths you are marketing – can you build architecturally challenging plans or on difficult sites? Are you focusing on providing a highly competitive price point? Then exploit the advantages that you see.”

For further information about business plans visit business.gov.au.