A Diverse Construction Business Plan with Multiple Revenue Streams

If you were the owner of a professional football team, your No. 1 goal would be to fill all the seats every week. Filling the seats takes a multiple approach: You must put a winning product on the field, and you must sell seats. It takes a huge effort to create sellouts at profitable ticket prices.

Over the last ten years, you didn't have to sell very hard to keep profitable revenue flowing into your company's coffers. If you put a mediocre team on the field, called the usual plays and used an average business strategy, your customers would keep coming back for more, as long as your price was somewhat competitive. And because business was plentiful, you didn't have to win over many new customers. Because there was enough work, you also didn't have to try different types of projects, customers or contract delivery methods. In fact, you even prided yourself as a specialist in a very focused business niche.

Now, fast forward to today, when it is hard to fill the seats, revenue is scarce and customers are hard to find. You've cut your overhead and reduced your expenses as low as you can to survive. You continue to bid more and more work against too many competitors at lower and lower prices. Now, you are even calling on potential customers you never wanted to work for before. You're trying to get on any bid list you can, including public works, which you always avoided because of the paperwork and prevailing wage issues. You've assigned your office manager or estimator to cold-calling and e-mailing any lead they can find in hopes of a miracle. Nothing is working, and getting new business at a reasonable price seems next to impossible.

Multiple Streams of Income

Now what? You're thinking you've got to fill the seats with paying customers or go broke. The sudden economic slowdown should have taught everyone one thing: Putting all your eggs in one basket won't work forever. Many contractors and business owners focused their efforts on doing only one kind of project and service for one type of customer to keep revenue and jobs flowing in. For example, many focused on only building housing tracts, shopping centers, industrial parks, custom homes or office building interiors. Some focused on building for general contractors, developers or home builders. Some expanded and did more than one type of project. But most didn't cross over into diverse types of work, and offering a service component to their revenue stream wasn't even considered because they were too busy to mess with little jobs.

A diverse business plan includes three types of revenue streams with many different types of projects per stream. Here is a partial list of the unlimited revenue and business opportunities contractors can choose from:

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