Profitability Trends

When you are looking at your scoreboard, remember that industry average benchmarks and single points in time only tell part of the story.

D. Brown Management Profile Picture
Share

When you are looking at your scoreboard, remember that industry average benchmarks and single points in time only tell part of the story.

Scoreboard: Invoice and Graph representing Company Profitability and Trends.

Just like physical training, what really matters for your personal health is that you are consistently improving.

  • Graph your key metrics over the last five years and look for relationships.
      
  • Analyze your data and look for outliers to help the trends make more sense. For example, did you have one super good or bad job in a year that completely skewed the metrics?

  • Be cautious not to over-rationalize “outliers.” If you have a bad job every year, remember that is more likely to be part of the trend rather than due to an outlier. For example, Motorola had something like 24 consecutive quarters of “one-time” expenses. If they occur that consistently, they are regular expenses and not one-time expenses. Also, Motorola is no longer around. 
     
  • What do those metric trends look like if you project them another 2-3 years into the future?

  • Which metrics are trending in the right direction?  

  • Which metrics can you improve?  How?  


Want to talk about it? Contact us for a conversation.




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.
Reflections on Learning to Ski - 8 Core Principles for Learning a Completely New Skill
While I am learning every day, it has been a very long time since I’ve put myself in the position of learning something completely new. That has now changed, as over the last couple of weeks of 2019, I learned to ski.
Levels of Strategic Decisions (The Basics)
There are many "Strategic Possibilities" developed from "Strategic Brainstorming" that must be explored to make choices that will best position a contractor to win over the long-term. These "Strategic Decisions" must be made and integrated at all levels.