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




Production Tracking - 5 Key Decisions
Implementing or refining a production tracking system in construction requires 5 key decisions. These decisions vary by project and task. They change as each project team evolves their approach towards productivity improvements.
General Contractor Solutions Overview
We provide a unique perspective for General Contractors wanting to take their company to the next level of success. From billion dollar businesses to emerging contractors; our hands-on approach accelerates profitable growth in all economic conditions.
Underlying Causes of Changes on Projects
Start improving your change management skills by creating some categories of the underlying causes of changes your company experiences.