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.




Sustainable Growth Through Balanced Execution
Building a construction business is different than building a construction project. You can't "Punch List" and "Complete" your business. It takes a combination of repetition, continuous improvement, and change as you operate and grow the business.
Structure and Strategy - Sustainable Growth Through Balanced Execution
As a contractor grows there are inflection points where their market strategy and organizational structure must be evaluated and refined. These changes are just part of the cycles every business goes through. They are never easy but are always necessary.
Leadership Combinations and States of Market Growth
There is a beautiful tension in leadership teams that is required for growth. That tension shifts with different stages of a market's growth and must be integrated with the contractor's stage of growth as a company.