For home builders just starting (or keeping up with) a home building business, a well-constructed business plan serves as their company's foundation — much like a sturdy concrete slab supports an entire house.
A strong business plan for a construction company is a pragmatic and vital tool that helps builders map out their goals, understand their market, and create a realistic path to profitability. Business plans can also offer a critical blueprint to guide decision-making and attract potential investors, along with providing you — and the rest of your team — with a structured approach to growing your company.
Drawing from our extensive experience working with construction industry experts, we've distilled the best strategies for developing a construction company business plan into this guide. Read on for our top five tips.
Five Steps to Create a Construction Company Business Plan
1. Identify and target the right customer segments
You can’t build an effective business plan without first understanding your target customer market. A home builder's business plan must first identify the primary buyer persona — whether they are young families, retirees, or professionals. For example, if your target customers are young families, consider organizing family-friendly community events and using messaging that resonates with their needs and lifestyle (more playgrounds, proximity to schools, more backyard space). Tailor your marketing to these segments to keep efforts relevant and impactful.
Your plan should also factor in the community's development stage. In the early stages, your focus may be on realtor relationships and local businesses. As the community matures, shifting your focus toward referrals and prospective buyers is key.
More on target customer profile and customer segmentation here.
2. Refine your construction company business plan quarterly
Let’s face it: Things change fast in the construction world of new homes. You need to be ready to update your business plan on an ongoing basis and construct it in a way that allows for continual changes. Quarterly updates keep your sales team and management on the same page about current goals and objectives. You can better analyze traffic, sales, and marketing metrics from the previous quarter and set new, clear targets for the upcoming one.
The quarterly plan refreshes should focus on the following:
- Reviewing past performance: Understand what worked and what didn’t in the previous quarter. Can you pinpoint the reasons why and make adjustments?
- Setting new goals: Based on the analysis, define specific, measurable objectives for the upcoming quarter.
- Identifying needs: What new resources are necessary from the builder or management team to achieve these goals?
Track these metrics so builders can adjust their strategies accordingly to meet both short- and long-term objectives.
3. Leverage technology for tracking and optimization
Today, there is ample technology and tools to help at builders’ fingertips to help them track and optimize their planning and goal setting. Make sure you’re taking advantage of it!
At New Home Star, for example, our proprietary software, New Home Connect™, helps track the effectiveness of marketing initiatives, powers sales training courses, and creates peer networks that allow agents to ask and respond to questions from others in their network. By monitoring metrics like traffic, sales conversions, and marketing costs in New Home Connect™, home builders can identify effective strategies to include in their plans. This data helps refine business plans and focus on resources and tactics that generate the highest return.
4. Promote team collaboration and communication
The success of a business plan for a construction company ultimately depends on effective communication between sales teams and builders. Regular presentations or check-ins where salespeople present their quarterly plans and results can create a collaborative environment that encourages feedback. This environment ensures everyone, from sales agents to construction managers, is aligned with the company’s objectives.
Encourage open feedback and be receptive to new ideas. Sometimes, the best strategies come from those who are directly interacting with customers and prospects.
5. Set clear sales and marketing goals
At the heart of any successful construction company business plan is a strong focus on sales and marketing — and for good reason. In an industry as competitive as home building, your ability to effectively attract, engage, and convert potential customers makes or breaks the difference between stagnation and substantial growth.
Sales associate marketing initiatives (SAMIs) are a crucial part of this strategy. These are local, low-cost marketing efforts that drive additional traffic and sales at the community level. SAMIs include tactics such as:
- Prospect-focused events: Hosting behind-the-scenes design center tours or educational events.
- Referral programs: Organizing BBQs or donation events to encourage current homeowners to refer new clients.
- Realtor networking: Hosting headshot events and offering gifts to realtors.
- Business partnerships: Collaborating with local businesses to create special incentives.
More on SAMI tactics here.
Every quarter, home builders should evaluate past SAMIs and marketing efforts and plan for the upcoming 90 days. This ensures that your marketing approach is both strategic and targeted (and ultimately leads to more sales).
Business Plans for Construction Companies: A Roadmap to Success
A construction company business plan isn’t just a formality; it’s a roadmap for growth that makes all the difference in helping leaders plan for and sustain the inevitable ups and downs of the market.
If you’re looking to refine your construction business strategy, New Home Star’s proven methodologies, like SAMIs and quarterly business planning, can help you achieve your goals and set your business on the path to success.
CTA: Want to learn more? Schedule your consultation with New Home Star today.
