Grow When You’re Slow!

Words: Corey Adams 

1. Profit Margin: this goes without saying, but many companies miss this completely. If you can expand your profit margin by 1-2%, without growing sales, workforce, or overhead, that is growth! In fact, expanding the net profit margin is the easiest way and the first step in growing your construction company. Make your numbers work at an existing level, and scaling becomes an automated function. 
2. Employee Turnover: I feel this is an important factor in the health of a company. High turnover rates typically indicate some management issues. When starting a business, turnover rates are high- that is just the nature of being a smaller company. As you grow, turnover rates should creep down every year in business. If after a year or two, turnover start to increase, it is time to find the cause and eliminate it.  
3. Customer Satisfaction/Repeat Business Rates: if you’re not taking care of your clients, your competitors will. I think that speaks for itself.  
4. Expense Ratios: stripped down, this is a ratio of total expenses to total sales. There are a few different variations- Direct Costs vs. Sales, Overhead vs. Sales, etc., but they all come down to the same principal. Are we generating more or less return on the expenses we have? Some also classify this as Return on Investment (ROI).  
5. Sales vs. Estimates Ratios, or Conversion Rates: I like this one more from a pricing perspective. If you begin to land a high percentage of the estimates you send out, your price is probably too low. If your conversion rates begin to drop, time to sharpen the proverbial pencil.