The Engineering Business Plan and the Business Model
Separate from a Business Plan is the Business Model. The Business Model is nothing more then a description of the means and methods the firm will employ to earn revenues projected by the Business Plan. The Business Plan describes what the business wants to accomplish and what resources it will use to reach those objectives. The model represents the business as a system of a series of steps (actions) to generate revenue and make a profit. The model includes the components and functions of the business, as well as the revenues it will generate and the expenses it incurs.
The traditional Civil Engineering Business Model is as simple as the engineering company and the customers within a key market like Land Development. The engineering company provides the services that the customer needs and wants, and in return the client pays a fess for those services. Once the engineering company has paid all of its expenses including salaries, the company is left with its profit.
This model although simplistic works well if there is very little or no competition and there is plenty of demand for your services. But rarely is this the situation especially in a declining market. The model in most cases needs to be more robust. One needs to see the “bigger picture.” In order to support the Business Plan the Model needs to address the four main components of the business; Framework, Financial, Client, and the Offer.
Business Framework (Infrastructure):
Key Resources – What are the company’s capabilities necessary to make the Business Plan possible?
Key Activities – What company activities are necessary to implement the Business Plan?
Key Partners – What company partners are motivated to participate in the Business Plan?
Client (Current and Prospective Clients):
Segment(s) of Clients – What is (are) the targeted audience for the company’s products and services?
Communication and Distribution Channels (Marketing) – What are the means the company will utilize to reach the customer and offer them those products and services? What marketing campaigns will the company utilize to reach its targeted clients?
Client Relationship – What are the processes the company will establish to maintain its relationship with the clients?