Web Analytics
Getting Started

BUSINESS PLANS: SETTING YOUR NEW BUSINESS UP FOR SUCCESS

In order to obtain financing, many lenders require that you present them with a written business plan. A comprehensive business plan is the roadmap that explains how you plan to structure, manage, and grow your business.
It’s definitely worth your time to write one, as in most cases this is the key to getting your business funded, or even enabling yourself to bring on new partners. Use your business plan as an opportunity to showcase why funding your business makes sense – and don’t be afraid to brag just a little bit.

Download All our business resources

While we’ll walk you through how to structure a small business plan in just a moment, it’s important to add that you don’t need to stick strictly to this structure. What’s most important is that your business plan fits your company. Feel free to move things around or add sections when the time comes for you to write your own. Make sure it meets your needs!
The U.S. Small Business Administration sorts most business plans into one of two classes: traditional or lean startup. Choosing a traditional business plan will be much more work, but it will also give you the opportunity to go into more detail, and display as many of your business’s strengths as possible. Lean startup business plans are less common than traditional, but as you can imagine, they’re far less detailed and can take around an hour to complete.
For more information on the traditional versus lean formats, check out sba.gov. Additionally, you can find a detailed example of a business plan for your specific industry here.
For now, check out our business plan template and use it to help build your own as you read this guide.

DOWNLOAD BUSINESS PLAN TEMPLATE

BUSINESS OVERVIEW

Starting off, you’ll need to create a business overview. In the overview, you’ll want to explain what your business is in a brief summary, along with your objectives and goals for it.
Remember to include your service, basic information like your business’s location, as well as your tagline or mission statement. Give a basic, high-level overview of your business’s financial situation, and explain the competitive advantages you hold.
You might want to ask yourself questions like:

OPERATIONS

This section gives you an opportunity to discuss your business’s operational structure. Here, you can highlight your team and the unique experience they bring to the table that will contribute to your company’s success or even show gaps that need to be filled by funding.
Give a comprehensive look at the advantages of your structure, and innovations or improvements like using a top-notch business management software.
A few questions you might want to answer include:

MARKET ANALYSIS

In this section, you’ll want to give a brief overview of your market. Take the time to conduct customer and competitor market research, which will help you to define your consumer’s behavior as well as economic trends.
Even if you don’t end up writing a business plan, market research will help you avoid future pitfalls by identifying them in advance. Utilize demographic data like age, marital status, interests, or any other factors that you think are relevant to your company.
You may even want to include a SWOT analysis, which gives a market analysis overview detailing your business’ strengths, weaknesses, opportunities, and threats to its success.

MARKETING & SALES STRATEGY

In this section, you’ll want to outline how you plan to price, position, and market your products and services. You might talk about your pricing structure and the marketing avenues you plan to utilize like print marketing or Google PPC (pay-per-click) ads.
If you haven’t already, you should get started by creating a Facebook Business Page, as well as a website.

FINANCIAL PLAN

Under this section, you’ll want to detail your current financial projections (typically for the next 3-5 years), funding requirements, and how you plan to use funding.
Be sure to include:
Now that you’ve created your business plan, you’ll be ready to start getting your business funded! To help with this part, we’ve created a comprehensive guide on how to apply for business loans and grants through your local, state, and federal governments, as well as tax credit options to help you save money while you’re getting started.

CONTRACTOR BONDS

Contractor bonds are guarantees of work to be provided to a certain standard. You will often see companies say “insured and bonded” which means they have such a good reputation that an insurance company was willing to offer the guarantee of their work.
Contractor bonds are hard to get for new businesses since insurance companies like to see a track record of your work that can be verified. Most large commercial jobs will often require their contractors to be bonded.
Bonds will be paid out by the insurance company if the contractor was unable to finish the work that was outlined in their contract or if the work was performed at an unsatisfactory level.

WHAT IS A CERTIFICATE OF LIABILITY?

If you perform commercial work, you will most likely be asked to provide a certificate of liability or “cert”. This is a summary of your coverage and limits and has to be created new each time a new customer requests and after each policy renews.

COST OF CONTRACTOR INSURANCE

Insurance premiums or the cost of insurance varies depending on size of the company, how prone your industry is to insurance claims, total cost of property, etc.
To make it easy, a contractor that is starting a new business will most likely get a BOP which is an average cost of $1,200/year).
Usually the full payment of your premium is due upfront but you can work with finance companies to spread that cost over a year but you will pay interest.

HOW TO BUY BUSINESS INSURANCE

For new or small businesses, insurance companies such as Nationwide, Travelers, Hartford and others have online quoting that make it easy and inexpensive to purchase BOP’s or and other coverages. As you grow, it’s better to use an insurance broker that can help find coverages that include more risks that will be paid out if there is a loss, they can help manager safety so you are OSHA compliant, they can help get claims paid or fight for you, and be your advocate all around to make sure you are getting the best of everything.

BUSINESS INSURANCE AUDITS

This only applies if your insurance policy has an audit clause. Only General Liability and Workers’ Compensation have audits. This means that at the end of the policy year, the insurance company wants proof of your revenue and payroll for the policy year. Since the cost of the policies is based on what your expected revenue and payroll, they want to make sure that you paid the correct amount. This can be good or bad depending on if you overstated or understated these when getting your insurance quote.

COMMERCIAL VS RESIDENTIAL WORK IN INSURANCE

As you grow and no longer qualify for a BOP, you will have more options for insurance carriers and you will purchase your coverage as an individual coverage, not a packaged policy. This means that each coverage will be analyzed separately by underwriters. Certain insurance companies do not like to insure/cover contractors that do any type of residential work because residential work has a history of high claims.

INSURANCE BROKER VS. INSURANCE CARRIERS

Insurance carriers are the companies that write the coverage, decide the premium, and actually cover you in case of a loss. Many insurance companies only allow you to purchase their insurance products from an insurance broker/agent. However, some insurance companies allow companies to go directly to them to purchase their insurance products. For new or small business contractors, you are able to go directly to the insurance companies websites and get quotes. As you outgrow the revenue threshold of those direct companies, you will have to use an insurance broker to find the best insurance for you.
Insurance brokers/agents have access to several different insurance companies. Once you are large enough, you will want to ask several different insurance brokers to find insurance for you since some of them have access to certain insurance companies that other brokers do not have access to. Be careful about which insurance brokers you work with because some of the ability to help with OSHA, claims, safety, and other aspects that can help decrease your insurance premiums while other brokers are just there to make money from selling you an insurance policy.

BEST INSURANCE COMPANIES FOR CONTRACTORS

For new or small business contractors, there are several companies that offer online quoting and have some of the best coverages available. Nationwide is the largest carrier for contractor insurance. Our other recommendations are The Hartford, Next Insurance, and Thimble.

Continue your journey to a successful business

improve your business

Get top-rated features and support for a fraction of the price with FieldPulse’s all-in-one business management software for tradesmen.

Take The Business Playbook With You!