According to FMI, a significant percentage of contractors still do not generate the strategic results they hope for from their business development planning. Simply put, they are missing key steps of the process.

FMI's 2004-2005 Business Development and Marketing Survey shows that more contractors are discovering the way to achieve strong bottom line results. Others continue to chug along on mediocre profits. The difference is the company's ability to differentiate themselves from the competition.

Differentiation starts in having a solid business development plan, says FMI. Fifty-five percent of contractors responding to the survey said that they had formal business development plans, even though 69 percent of the companies said that their market planning process is strategic and driving the company's future vision. The difference clearly shows there is an opportunity to improve bottom line results.

The best business development plans identify the road map for winning the right customers and projects by investing business development time and efforts wisely, notes FMI. To stand out from the competition, companies must differentiate their services and create a distinct image. When that differentiation resonates with customers, the company wins work that is more profitable.

The survey identifies a group of contractors that stand out from the pack as the "differentiators." Revenue growth for the differentiators has been slower than the fastest growing companies, but profit margin growth for differentiators was several percentage points ahead of the competition. One measure of business development success, according to Cynthia Paul, FMI director, is how effective the sales force is at calling on the right customer.

Differentiators said 43 percent of the time their sales force was very effective compared to only 15 percent for all others. According to Paul, "It isn't that the group we are calling the ‘differentiators' have some magic formula for beating the competition. They've done their homework and have focused all efforts on the ‘sweet spot' of their markets. They use a fact-based approach." In other words, they follow the best business development practices in the industry.

The survey demonstrates that the best business developers continue to challenge and push themselves to deliver something fresh to the marketplace, FMI says. They lead change rather than scramble to catch up. Contractors that have a business development department operating at the top of its game are not just shooting for "best practices," they are working on "next practices."

To obtain a copy of FMI's 2004-2005 Business Development and Marketing in the Construction Industry Survey Results, contact Phil Warner, FMI marketing coordinator, at 919-785-9357 or by e-mail at

FMI's management consulting practice provides an array of services including strategy development, leadership and organizational development, marketing and related research, and project delivery improvement. For more information, visit

Publication date: 05/30/2005