Net Profits - Four Major Levers

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

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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




Lean Principle - People First (Then Process and Tools)
To optimize productivity, a contractor must focus on their people first, then processes and tools including technology as an integrated management system with a hierarchy. This is not a linear process: S.M.A.R.T. Experiments + Continuous Improvement.
Builder and Business Manager Integration
A successful and sustainably growing construction business has the right balance of builder and business manager skills on the team.
Project Delivery - Integrated Project Delivery
Integrated Project Delivery (IPD) can be the best method for a project if the culture and competencies of all parties, including the Project Owner, are all aligned.