5. Failing to Work for a Profit

Complete job reviews monthly and include the estimated cost to complete. Whether you are a remodeling company, residential builder, or commercial builder, and if the job takes two weeks or two years, a job review process inclusive of an estimated cost to complete process assists you in rapidly identifying job issues. It creates a feedback required for estimating and managing field issues, and ensures better accuracy of your monthly financial statements. Working for a profit is all about management, knowing potential issues, mitigating them, and building knowledge. Those four elements control profit along with your time investment and the quality of the buildings you build.

Compare sales results and billing results to planned results. All too often, companies “take what they get” as a sales result. Just as you manage a job, estimating processes and quote processes, the lead generation process must be set with standards that are linked to your revenue and profit plan. Those standards must be measured and responded to. One of the primary duties of the manager is to respond to the results of the measurement of standards. It is expensive when you do not target your estimating process. It is equally costly to have poor lead generation and follow up of leads. Determine the results of sales, billing and lead generation every month and compare those results to the cost of inaction versus the benefit of action. You will find poor results that can be improved.

Respond to and mitigate problems urgently. It doesn’t do anyone any good if you have access to information or knowledge and there is no urgent response to it because you didn’t understand it or address it. A manager must be able to clearly understand the accuracy and meaning information in front of him and respond to it immediately. The manager must determine when and how the problem will be solved. All too often in business, the issue is not that problems occur, but that they are not recognized, resolved, or mitigated quickly. There is no perfect business. The most successful companies are the ones that respond to problems and opportunities, maximize opportunities, mitigate current problems, and stop making the same mistakes over and over again. They look…they understand…they respond…they learn…they change.