How to undertake a market analysis when starting your land surveying business: Land Surveying Business Planning Part 2

In this blog post we'll be covering how to undertake a market analysis for a land surveying business.

How to undertake a market analysis when starting your land surveying business?

Market analysis is a very important part of any business. It helps you to understand your customers, their needs, and the market trends. Market analysis will also help you identify your strengths and weaknesses as well as find opportunities that can be converted into revenue generation sources.

Identifying the market outcomes is not just about organizational goals but also about finding the gaps in the market and effectively analyze them.

Identifying the market outcomes is not just about organizational goals but also about finding the gaps in the market and effectively analyze them. It is a continuous process that requires you to constantly monitor your business, understand where it stands and how it can be improved upon. Market analysis could be a qualitative approach or an ongoing process that helps you understand your target markets better.

Market analysis is more of a qualitative approach to the business.

Market analysis is more of a qualitative approach to the business. It’s more about understanding the market and its trends, understanding your customers and their needs and understanding how you can outperform your competition.

Market analysis is all about knowing what your strengths and weakness are, what your opportunities are, and threats that you need to overcome.

The first step in undertaking a market analysis is to know your business. A market analysis is all about knowing what your strengths and weaknesses are, what your opportunities are, and threats that you need to overcome.

Or it might not be a great solution to step into this market and you might have to choose a different market to target your land surveying services.

It's important not just because it's part of any marketing strategy but also because it enables us as consumers to make informed decisions about what we buy - which ultimately benefits everyone involved!

Six factors that you must consider for market analysis of your land surveying company include, consumer behavior, competitive environment, economic conditions, legal and regulatory factors, technological environment and social cultural environment.

Six factors that you must consider for market analysis of your land surveying company include, consumer behavior, competitive environment, economic conditions, legal and regulatory factors, technological environment and social cultural environment.

Consumer Behavior:
Competitive Environment:
Economic Conditions:
Legal and Regulatory Factors:
Environmental Planning

It requires continuous monitoring of these factors as they can change anytime while you are running your business.

It is a continuous process and not a one time activity. The market analysis will help you to understand the current trends of your industry, which helps you to take decision regarding customer needs and requirements. The key drivers for any business are customers and customer retention. For this purpose, we need to monitor all aspects related to customers such as:

Customer satisfaction level (CSAT)
Customer churn rate (CGR)
Customer complaints per month
Average revenue per user (ARPU)

Talk to customers (or potential customers)

When researching a market, it's important to talk to customers and potential customers. There are many reasons why this is so:

Understanding customer needs
Understanding customer pain points
Understanding customer expectations
Understanding the level of customer satisfaction with your services

Concluding a strong market analysis will allow you to know what you are doing right and where you need improvement.

Concluding a strong market analysis will provide you with an opportunity to know what you are doing right and where you need improvement. It is important to note that not all aspects of your business can be controlled, but the following sections of this guide will help you understand how to position your business in order to succeed within the market.

Conclusion

The most important thing to remember is that there is no one way to do market analysis. You can choose from any method available, depending on your business and its goals. However, it’s always good to start by defining what you want from the process so that your research will be focused on those objectives rather than scattered around aimlessly looking for answers in all directions at once.

Land Surveying Business Planning Part 1

You can use many different types of company structures to set up your company. For the majority of land surveying companies in the UK they have set up either a limited company, sole trader or partnership.

The whole point of these is to share or limit the liability of the works done. The sole trader is the highest risk and easiest setup, where you would have to do the business under your own name and the liability is unlimited to you. Whereas a company (if setup correctly) can limit the liability so that your own personal assets are not in danger.

The type of business entity you choose will depend on your business needs and the laws in your country (if talking globally).

There are four main types of business entities:

-Public liability Company. This is a corporation, but it’s not publicly traded on the stock market. This type of company is used by larger businesses that want to limit their liability and raise capital via debt or equity financing.

-Limited company. This is a corporation that limits its liability for debts, liabilities, and obligations through state law or charter documents.

-Sole trader. A sole trader is an individual who does business under his or her own name without incorporating as a separate legal entity (such as a corporation). He/she may hire employees or use a professional corporation such as an accounting firm to provide services for him/herself.

-Partnership. A partnership is created when two or more individuals agree to join together to engage in business activities for profit but without incorporating as a separate legal entity (such as a corporation).

Short-term and Long term strategies

Typically when you're running your land surveying business your need to have an objective to help you set your goals for you as the business owner but also the employees/staff.

The strategies can be just a set of goals that you highlight how you want the business to run. so for example you can have a 5 year plan set out such as:

establish the surveying business as a market leader for SMEs who are turning over <$5m/year
establish an average of 12% margin every year
grow the business turnover to $3m/year by year 5.

Of course, the examples above are just fictional but it gives you an idea of what to think about. You can read more about long term business strategies here and our short-term business strategy here.

Accounting Principles and Procedures Part 2

This is the second part of the Accounting principles and procedures that I am covering for one of the mandatory RICS competencies for Land Surveying (Geomatics) and Quantity Surveying. The first part covers capital, revenue expenditure, and taxation.

Revenue & Capital Expenditure

Revenue expenditure is the money that you spend on things that bring in revenue. It's the opposite of capital expenditure (capex), which is money spent on assets that don't provide a return.

For example, if you're running a restaurant, your revenue expenditure would include things like paying employees, buying ingredients for food and beverages, and renting space for your business. If you're running a factory, it might be things like buying machinery and paying workers' salaries.

The difference between revenue expenditures and capital expenditures lies in whether or not they contribute towards the creation of an asset. Revenue expenditures are typically short-term expenses that are meant to increase profits by increasing customer satisfaction or sales volume—for example, buying new uniforms for your employees so they look nicer when serving customers. Capital expenditures are longer-term expenses—you might buy a building as part of your expansion plan.

Capital expenditure is one of the most important parts of your company's finances. It's how you invest in the future of your business: buying new equipment or buildings, upgrading existing equipment, and so on.

Capital expenditure is different from revenue because it's not directly related to sales; it's a fixed amount that needs to be paid out regardless of whether or not you sell anything. If you don't have enough capital expenditure, your business will struggle to expand and grow, which can lead to lower revenues and profits in the future.

In summary, the Capital expenditure is the indirect cost to manufacture your goods, the Renveue expenditure is direct cost to manufacture the goods.

In construction, Revenue Expenditure can be:

Labour
Plant
Equipment
Subcontractor
Prelim (related to the works)

In construction, Capital Expenditure can be:

Your offices
Your marketing budget
Your head office

Cashflow

Cashflow is the movement of money into and out of your business. The goal of cashflow is to manage the flow of money in and out of your business so that you can pay your bills, cover expenses, and grow a business.

To calculate cashflow, you start by calculating how much revenue you received in a given period. i.e. from your applications, invoices. Then, you subtract how much you spent during that same period. i.e. material, equipment, subcontractor payment. This results in a number for net cashflow (aka "cash remaining").

Why is cashflow important? It's important because it helps you see how well your business is doing financially, which means it helps you make better decisions about where to invest time and money. For example: if you have a negative net cashflow for a period, then this probably means that more money went out than came in during that time period (and vice versa). This can help give you a sense of whether or not it would be wise to spend more on advertising, or maybe even hire someone else full-time so they could help with sales—but only if those things are actually necessary!

In construction, I work out the cashflow based on when my payments are going to be released from my clients. Usually 30days after my application for payment. I also calculate my outgoings by looking at how much invoices are due in a period.

I don't do it that often but it is something to be aware of for small projects, and companies.

Accounting Principles and Procedures Part 1

In the following blog posts, I will cover the accounting principles and procedures competency from the RICS.

This is a list of topics to cover for the RICS mandatory competency; this is useful for land surveyors (Geomatics) and Quantity surveyors aiming to get the RICS chartership done.

This competency covers the following items:

Balance sheets/profit and loss account (Part 1)
Taxation (Part 1)
Revenue and capital expenditure (Part 2)
Cash flows (Part 2)
Auditing (Part 3)
Ratio analysis (Part 3)
Credit control (Part 4)
Profitability (peppered throughout)
Insolvency (Part 4)
Legislation (peppered throughout)

As this mandatory competency at level 1; all you need to know about this competency is the knowledge element. It is up to the candidate to pass this test by demonstrating the knowledge element.

Most of the level 1 are just having an understanding and appreciation of the competency.

Balance Sheet and profit/loss account

The balance sheet is a snapshot of your business's assets, liabilities, and equity. It's a document that shows what your business owns, what it owes to others, and how much money is available to use in the future.

The balance sheet is created by an accountant or bookkeeper. The person who creates the balance sheet has access to all of your company's financial records and can track how much revenue you're bringing in, how much you're spending on expenses, and what kind of assets are being purchased.

A profit and loss account is also known as an income statement because it shows how much money was brought in versus how much went out during a specific period of time (usually one year). It doesn't show any information about the company's assets or liabilities—just how much money came in and went out during that time period.

A profit and loss account is another financial statement used by businesses to track their income, expenses, gains/losses etc over time so they can see how profitable their business activities have been over time.

Taxation

The Value Added Tax (VAT) is a tax that you pay on most goods and services in the UK. It's calculated as a percentage of the price of the item, with 20% being the standard rate.

CIS (Construction industry Scheme)

The CIS deduction is a 20% deduction scheme where the labour element of an invoice is paid by the contractor directly to the HMRC. CIS is a deduction from the contractor’s VAT liability. The CIS deduction has to be claimed by the subcontractor on their VAT return.

This 20% deduction is only applicable to the labour element and only if the subcontractor is registered under CIS. If they are not they are charged the 30%.

So if a subcontractor's invoice comes up to:

Labour: £100+vat

total invoice: £100+vat

Total paid to Subcontractor: £100.00

Total paid to HMRC by the Contractor: £20.00

If the subcontractor is not CIS registered, it will be calculated as follows:

Labour: £100+vat

Total invoice: £100+vat

Total paid to Subcontractor: £90.00

Total paid to HMRC by the Contractor: £30.00

If there is a material element you have to calculate it separately from the labour and then you have to add it on to the labour cost.

So if a subcontractor's invoice comes up to (CIS registered):

Labour: £100+vat

Material: £50+vat

Total invoice: £150+vat (£180)

Total paid to Subcontractor: £160.00

Total paid to HMRC by the Contractor: £30.00

An online excel sheet can be found here on our Google sheets

You can play around with the spreadsheet.

If the subcontractor's invoice is not broken down into the labour, plant element the breakdown will be under calculated on the whole value of the invoice. Of course, as long as their scope falls under the CIS scheme.

The CIS deduction is a tax deduction that you can claim if you're self-employed and make business purchases on which you've already paid VAT. It's calculated as a percentage of your taxable income, and it reduces your income tax bill by up to £3,000 per year.

A CIS deduction counts as any expense that was essential to your business—for example, if you needed to buy new equipment for your office or pay for a software license so that you could operate your company.

To calculate CIS deductions, first determine how much money you made from self-employment during the year. Then find out what percentage of it was above £6,000 (this will be 20%). Finally, multiply those two numbers together and subtract that amount from your total annual income before calculating your personal allowance for tax purposes (the amount you can earn without paying any tax). This will give you a number that represents how much money you can deduct from your taxes through CIS deductions—up to £3,000 per

Reference:

https://www.pattersonhallaccountants.co.uk/cis-tax-deduction-calculator/