IndustriesConstruction
A construction business plan where working capital is the real ask
Specialty trade contractors rarely fail on margin. They fail on the gap between paying crews weekly and being paid in sixty days, on retainage held to completion, and on one job that goes wrong. The plan a lender wants is a working-capital plan.
Written for an SBA or bank loan, which is where most plans in this sector goNAICS 238000
Where the money goes
Typical shares of revenue in this sector. Shown as a starting point to argue with, never as a target to hit — your own figures replace all of these at intake.
- Direct labour
- 30%
- Paid weekly. The timing, not the amount, is what breaks contractors.
- Materials and subcontractors
- 40%
- Largely pass-through, but financed by you until the draw clears.
- Equipment
- 6%
- Owned or rented. Rental is more expensive and far more flexible early on.
- Insurance and bonding
- 4%
- Bonding capacity is often the real constraint on the size of job you can take.
A worked model
One plausible construction, built out in full.
Not an illustration. These assumptions were run through the same engine the product uses, and the plan review was run over the result. It is here so you can see the shape of the answer before you start.
- Year 1 revenue
- $2.6M
- Year 3 revenue
- $3.3M
- Operating profit from
- Month 2
- Year 3 net margin
- 7.2%
- Coverage, first full year
- 6.69×EBITDA less tax, over debt service
Balance sheet ties in all 60 periodsNo blocking findings — this model would exportLowest cash $17.9K in month 6
The revenue build
Not a growth rate. These are the drivers a reader can argue with, which is the only kind worth putting in a plan.
Contracted work
Contracts × monthly value
- Opening contracts
- 0.0
- New per month
- 1.0
- Monthly value each
- $46,000
- Term
- 6 months
- Cost of salesMaterials and consumables
- 40%
Sixty months of it
Monthly revenue against monthly EBITDA. Both are flows, so they share an axis honestly — plotting a cumulative cash balance beside a monthly figure would flatten the one that matters. The cash trough is in the strip above.
- Monthly revenue
- Monthly EBITDA
Year by year
| Year | Revenue | EBITDA | Net income | Closing cash |
|---|---|---|---|---|
| Year 1 | $2.6M | $539.8K | $387.9K | $325.9K |
| Year 2 | $3.3M | $349.7K | $239.6K | $569.6K |
| Year 3 | $3.3M | $344.2K | $237.4K | $808.4K |
| Year 4 | $3.3M | $338.4K | $235.2K | $1M |
| Year 5 | $3.3M | $332.4K | $233.2K | $1.3M |
Sources and uses: $200K debt, $195K owner capital, $185K of fit-out and equipment. 18 people on the payroll by month 36.
Against the construction (specialty trade) band
Benchmarks warn; they never overwrite. An assumption outside the band is flagged with its source so you can justify it — substituting an industry median would destroy the specificity that makes a plan credible.
- Gross margin
- 30.7%in band
- 15.0%median 24.0%35.0%
- Net margin
- 7.2%in band
- 2.0%median 6.0%12.0%
Source: Construction financial benchmarks, 2026 · NAICS 238000 · secondary tier. Secondary-tier bands are usable as ranges, not as something a lender will read; where a figure has to survive scrutiny we substitute RMA Annual Statement Studies or IRS SOI data. Working capital, not margin, is what usually fails these plans.
What they will ask first
A plan that answers these before they are asked reads as competent. One that does not gets sent back with them attached.
- What are your payment terms, and how much is held as retainage?
- Five or ten per cent held until completion, against crews paid weekly, is the whole cash story. It belongs in the model, not in a footnote.
- What is your bonding capacity?
- It caps the size of contract you can bid. A revenue forecast above your bonding line is a forecast of work you cannot legally take.
Where these plans get sent back
The one bad job
A single underbid or disputed contract can consume a year of profit. A reader wants to know the largest single job as a share of revenue.
Retainage timing
Cash locked until completion is cash that cannot make payroll. Model it as a receivable that ages past the invoice.
Licences and filings to budget for
These belong in the use of funds, not in a footnote. A missing permit line is the cheapest possible reason to be sent back.
- State contractor licence at the classification and dollar limit you intend to bid
- Payment and performance bonds for public and larger private work
- Workers' compensation, with rates set by trade classification
- Lien notice filings, which have short and unforgiving deadlines
Requirements vary by state, county and city, and they change. Treat this as the list to go and verify locally rather than as legal advice — the product tracks the dated ones as configuration with a source and an effective date, and prints which version it assumed.
Start from these defaults, then make them yours.
The intake pre-fills this sector’s drivers and tags each one as your figure or an industry default — and says which in the finished plan.