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The time to get profit driven is now.
What is your top business priority every day? Where do you spend your time? Is it paying attention to details, the provision of customer service, supervising, scheduling crews or subcontractors, ordering materials, pricing jobs or paperwork? To improve your bottom line, it shouldn’t be any of the above. Maximizing your profit must be the top priority in everything you do.
You reach your profit target by becoming profit driven. Profitability is the best indicator of the following:
Many business owners and managers are volume driven instead of profit driven. They wait for the phone to ring and take whatever work comes in. They let customers control their business and hope the bottom line will work out when they start Project X, finish Project Y, or get paid on Project Z. Without clear profit targets, bad projects and headache-inducing customers accumulate. Do you know why you are working on Project X? Do you know how Project Y figures into your bottom line for the year? Does your project team have a specific profit target for Project Z?
Money as a top priority
Know your numbers
Aim at a clear target
Assure each member of your team knows exactly what the target is. For a general contracting company, use precise targets for sales, overhead, profit, bid-hit ratio, working capital, average job size, and total number of jobs. For your architect, give precise schedules with milestones and deadlines. For your project manager, use exact goals for job cost, profit and customer satisfaction. For your project superintendent, use exact goals for job schedule and quality standards. For the project administrator, use monthly deadlines for invoices, paperwork and shop drawing approvals. For your foreman, target specific quality, schedule, manpower, productivity and safety milestones that can be tracked and scored. For subcontractors, use mandatory requirements such as job meetings, inspections, notices and documentation. These are profit-driven actions.
|Last Updated on Tuesday, 26 July 2011 15:13|