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Construction Industry Resources

Construction– Sector Overview
This part gives you a quick overview of this industry sector, the number of businesses that comprise the sector broken down into large and small businesses along with a discussion about some issues and challenges facing the businesses.

Construction- List of Businesses
This section provides our readers with a listing of the businesses that are categorized under this industry classification.

Construction- Resource Directory
A great tool put together painstakingly by our staff that identifies the major associations and organizations that serve the various businesses in this industry classification.  Besides the name and website, you will also find a brief description about the organization.  Our small business owners always thank us for putting this tool together – we are confident that you will find it useful as well.

CONSTRUCTION – SECTOR OVERVIEW

The first step in determining how to write a business plan at Trident Consultants involves identifying the correct business sector to which our client’s business belongs.  The construction sector is a vast industry classification as per the NAICS – North American Industry Classification System.  It covers residential construction, non-residential construction, industrial construction, utility systems constructions, land subdivision, highway and bridge construction as well as specialty trade contractors like foundation, framing, masonry, glass, roofing, siding, electrical, plumbing, HVAC and carpentry.  (A detailed listing of construction businesses has been included at the end of this page.)

There are 1.6 million larger businesses (with employees) in this industry sector that employ over 6.7 million people with a total payroll of $292 billion.  On average the larger construction firms have at least 4 employees and the average income nationally for each of these employees is about $43k.

In the small business world covering firms with no employees, there are 2.5 million such construction firms with total gross receipts of $153 billion and the average annual income as reported by each firm of around $60k.

The most important element in writing a business plan for the construction industry is recognizing the importance of highly cyclical nature of demand.  New residential construction is almost completely dependent on the economy in terms of employment and interest rates.  Business planning must include a solid assessment of the economic business cycle and it’s implication on the business.

Speculative building is very large component of the construction industry and the profitability of both residential and non-residential units is largely dependent over overall demand that can change as the project is underway.  Commercial contractors have to especially aware of the high risk of large capital outlays and cost of carrying inventory in the event of a market downturn or temporary slowdown.  A solid business plan must account for the projects cash flow under different scenarios of economic activity.

Business planning for the construction sector must understand that all real estate is local and so while the national and regional economy may be strong it is entirely possible that due to factors like competition and local regulations the project being planned could be adversely affected in-spite of decent demographic patterns.

A good business plan for construction must also factor in the varying costs of building material and the high dependence on seasonal labor.  Most of the small contractors and construction companies do not maintain a full time staff of labor and instead rely on their ability to hire jobbers and independents as and when the project demands it.  The business plan for the project must account for varying labor costs and the impact of non-availability of labor on the timely completion of the project.

A business plan must also lay out the strategic initiatives that are being taken by the business to offer non- construction services to the market place.  Many companies have diversified into Realty and mortgage operations to be able to improve their revenue base and also offer a vertical one stop shopping service to their clients.  Strategic alliances with moving companies are yet another example of the world of construction is changing.

Understanding the key macro trends in place in the construction industry is also yet another important facet of writing a good business plan.  For example, energy efficient homes are becoming very sought after and with Hi-tech gadgetry fast becoming standard in all new units.  This is very important for small contractors since the remodeling market is almost completely dependent on small firms.  A well thought out business plan must account for this kind of tactical changes in business services being offered to the market place.

If you are starting a business offering services, or are already established but are looking to grow, secure a partner, venture capital or business loans, we would be happy to help.

CONSTRUCTION – LIST OF BUSINESSES

The following is a list of the various businesses that fall under this industry sector:

Construction of Buildings
Residential Building Construction
New Single-Family Housing Construction (except Operative Builders)
New Multifamily Housing Construction (except Operative Builders)
New Housing Operative Builders
Residential Remodelers
Nonresidential Building Construction
Industrial Building Construction
Commercial and Institutional Building Construction

Heavy and Civil Engineering Construction
Utility System Construction
Water and Sewer Line and Related Structures Construction
Oil and Gas Pipeline and Related Structures Construction
Power and Communication Line and Related Structures Construction
Land Subdivision
Highway, Street, and Bridge Construction
Other Heavy and Civil Engineering Construction

Specialty Trade Contractors
Poured Concrete Foundation and Structure Contractors
Structural Steel and Precast Concrete Contractors
Framing Contractors
Masonry Contractors
Glass and Glazing Contractors
Roofing Contractors
Siding Contractors
Other Foundation, Structure, and Building Exterior Contractors

Building Equipment Contractors
Electrical Contractors
Plumbing, Heating, and Air-Conditioning Contractors
Other Building Equipment Contractors

Building Finishing Contractors
Drywall and Insulation Contractors
Painting and Wall Covering Contractors
Flooring Contractors
Tile and Terrazzo Contractors
Finish Carpentry Contractors
Other Building Finishing Contractors

Other Specialty Trade Contractors
Site Preparation Contractors
All Other Specialty Trade Contractors