{"id":14891,"date":"2024-01-07T21:25:25","date_gmt":"2024-01-07T21:25:25","guid":{"rendered":"https:\/\/www.growthink.com\/?page_id=14891"},"modified":"2025-12-15T19:43:21","modified_gmt":"2025-12-15T19:43:21","slug":"financial-plan","status":"publish","type":"page","link":"https:\/\/www.growthink.com\/businessplan\/help-center\/construction-business-plan\/financial-plan","title":{"rendered":"Construction Business Plan Financial Plan"},"content":{"rendered":"

Construction Financial Plan<\/h1>\n
You can download our Construction Business Plan Template (including a full, customizable financial model) to your computer here.<\/span><\/a><\/b><\/div>\n

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet and cash flow statements.<\/p>\n

Income Statement<\/strong>: an income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenues and then subtracts your costs to show whether you turned a profit or not.<\/p>\n

In developing your income statement, you need to devise assumptions. For example, will you serve 10 customers in the first year or 20? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.<\/p>\n

Balance Sheets<\/strong>: While balance sheets include much information, to simplify them to the key items you need to know about, balance sheets show your assets and liabilities. For instance, if you spend $100,000 on building out your construction business\u2019 office, that will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a bank writes you a check for $100.000, you don\u2019t need to pay it back immediately. Rather, that is a liability you will pay back over time.<\/p>\n

Cash Flow Statement<\/strong>: Your cash flow statement will help determine how much money you need to start or grow your business, and make sure you never run out of money. What most entrepreneurs and business owners don\u2019t realize is that you can turn a profit but run out of money and go bankrupt. For example, let\u2019s say a client approached you with a $100,000 contract, that would cost you $50,000 to fulfill. Well, in most cases, you would have to pay that $50,000 now for supplies, equipment rentals, employee salaries, etc. But let\u2019s say the company didn\u2019t pay you for 180 days. During that 180-day period, you could run out of money.<\/p>\n

In developing your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a construction business:<\/p>\n

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    • Purchases, which include tools, equipment, and input materials (the largest expense for construction companies)<\/li>\n
    • Payroll or salaries paid to staff (27% of a typical construction company\u2019s costs)<\/li>\n
    • Business insurance<\/li>\n
    • Rent and utilities<\/li>\n
    • Taxes and permits<\/li>\n
    • Legal expenses<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n

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