Business Plan Writer
$425 Flat Rate
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All Purchased Plans
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Business Plan Writer
$425 Flat Rate
No Templates Used
7 Day Turnaround

All Purchased Plans
Are Updated for 2018

Construction Company SWOT Analysis

 

Strengths

 

Although their revenues are subject to fluctuation, construction companies are generally able to remain profitable and cash flow positive in most economic climates. This is due to the fact that these businesses can reduce their size depending on the economy. One of the other strengths of operating a construction company is that these businesses will always be called upon to deal with major structural issues for commercial and residential facilities. The gross margins generated by these businesses are moderate. The barriers to entry for a new construction company are moderate depending on the location and the licensure required by the jurisdiction in which the construction company operates. Generally, a moderate scale construction company will require $150,000 to $300,000 of startup funds. Primarily, these funds are used for equipment and vehicles.

Weaknesses

 

The operating costs of a construction company are very high. Beyond facility rental costs, payroll and workman's compensation insurance are the two biggest expenses that are faced by these businesses. There are also operating risks related to getting paid for work completed for a client. The other factor that is a weakness for construction companies is that there is always a number of competitors in any given market seeking to acquire contracts. It is very difficult to properly position a construction company's marketing messages in a specific market.

 

Opportunities

 

There are vast opportunities for a construction company to expand. First, they have the ability to aggressively ramp up their operations if additional work starts to come in quickly. Second, construction companies can develop properties for sale using their own capital. While this is risky, there are tremendous profits to be made by developing residential and commercial properties in economically viable markets. This is one of the ways that construction companies boost revenues.

 

Threats

The biggest threat faced by construction companies is the economy. During times of economic recession or a bad housing market - the revenues and profits of these businesses take a dive. As such, it is very important for operators of these companies to manage their expenses very carefully when difficult economic times occur. As with similar businesses, competitive issues are always an issue.

 

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