The development of a construction business plan is essential to start a new, expand your current, or purchase an existing business in the construction sector.
In a BusinessLive article it was articulated that there are some green shoots in the local construction industry, despite the dire predictions that the sector is facing imminent collapse. 2023 will be a consequential year of recovery after the industry was hit by successive waves of adversity in recent times; a universal pandemic, a sharp economic downturn, ongoing energy woes and a regional conflict in Europe that threatens to deliver long-term, global consequences.
Construction is often a bellwether indicator of the health of the broader economy, even though it currently accounts for only about 3% of GDP. If there is an uptick in construction activity it may well lead to a recovery in other sectors, such as manufacturing, retail, and technology.
Several recently published reports conclude that there is an upward movement in construction activity that may have a ripple effect on the broader sector, including emerging contractors, black-owned, and women-owned enterprises.
The SA Construction Market Report, published by Construct Africa, projects that the industry will stabilise at an annual average growth rate of 3% from 2023 to 2026. This will predominantly be as a result of expected major investment flowing from government’s R2.3 trillion infrastructure plan and the benefits flowing from the Economic Reconstruction & Recovery Plan.
The bulk of this spending will go towards catalytic public infrastructure projects in the fields of energy, transport, housing and digital infrastructure. A construction project pipeline to the value of R340bn has already been announced.
Core components of a solid Construction Business Plan include:
Executive summary: This is a brief overview of your business, services, the amount requested, the purpose thereof, objectives, and mission.
Company summary: This section explains company ownership and history (if an existing company).
Services: These include design work, re-modelling and alterations, licensing, site preparation, carpentry, cement foundations, painting, plumbing and utilities installation, exterior renovations, and subcontractor assessment and evaluation.
Management and organisational summary: Summarises information about your business structure and management team. An organisational diagram is included.
Market and analysis summary: This section is an overview of market segmentation, target market segment strategy, service business analysis, and competition and buying patterns.
Strategy and Implementation Summary: This section states your competitive edge, marketing strategy, and sales strategy.
Financial projections: Documents comprising of the management account, income statement, balance sheet, cash flow, cash forecast, break even analysis, loan amortisation schedule, and fixed asset schedule. Charts, calculations, and ratios are included.
Annexures: Include additional information and documents required by funders in an application.
At Dream Team Capital…
We have extensive experience with developing business plans and therefore understand the complexities of the various requirements. Whether the document is used to raise funding and/or non-repayable business grants, we guide you through the process and provide access to our network of funders from across South Africa.
Contact us for more information & support today!