Net Profits - Four Major Levers

Increasing net profits for contractors comes down to four major levers that can be pulled.

D. Brown Management Profile Picture
Share
Leadership Tools: Four Basic Profit Levers. Like operating a backhoe; use all four levers simultaneously.
  1. Increase quality revenue up to the point where it stretches your operational capacity.  Not revenue for the sake of revenue but revenue in alignment with your market strategy and capabilities.  Not stretching to the point of breaking but just enough to allow you to grow. 
  2. Increase the “Sold Margin” on projects by finding the customers that will pay the most for the capabilities that you have and by building capabilities that the market places a higher value upon like advanced preconstruction services
  3. Decrease the cost of building project through investments in talent, training, process streamlining, tools and technology.  
  4. Decrease the cost of overhead and indirects in both absolute dollars by looking at every cost and asking how it truly adds value to the customer.  Be careful not to “over-cut” and create a hollow organization that will impact future growth.  

All are interrelated and seem simple on the surface. 


A 3rd party perspective can be helpful for assessment and planning purposes




Building a Systems Development Team - Industry
The pace of technology in construction has exploded and is only getting faster. The proliferation of mobile technology and widespread availability of fast internet on jobsites are the foundation and enablers of the technology explosion.
8 Indicators That You May Be at a Growth Inflection Point
While there is no "Perfect Signage" about the growth inflection points that contractors must navigate through, these eight questions can help you evaluate where you are at.
Plan Ahead, Adjust Early, and Accelerate Recovery
Construction in any given industry sector or geographical area is a cyclical business. There are four major levers a contractor can pull to ensure the business performs well throughout all economic cycles.