Geoff is busy. Geoff is busy losing money for his building firm.
Tuesday, June 01st, 2021
Do you ever stop to think that even though you’re busy – your building firm could be losing money?
Not necessarily the ‘going horribly into the red’ kind of losing. But reducing and reducing and reducing the profit that you could have made on a job. Or put it another way, have you considered that the money you’ve been grafting for could have been so much more?
Take Geoff for instance.
Geoff has won more extension projects than ever before. And he’s booked up for another 12 months. But busy doesn’t mean he’s thriving.
- He uses out of date m2 rates
- His materials prices from last year
- He forgets to include important costs
- And he’s losing control of his jobs.
He funds all his errors from his already slim profit margins. But he’s busy!
Geoff knows that if he carries on like this he’ll never get off the tools, survive bad debts, have a pension, money in the bank or a home life.
What does Geoff need to do to stop losing money for his building firm?
- Only go after the jobs that require the least effort for the biggest return. Better to win 4 out of 10 jobs and earn good money from them, than win 7 out of 10 that don’t pay. There are a finite number of hours in the day. How you choose to spend them is crucial to the profitability of your business. Every hour, every day counts.
- Charge his company’s worth. I’m sure Geoff and his team put a great deal of care into their projects. He has helped his customers significantly – with more room, an attractive space – may even be life changing. Geoff should be proud of his prices and charge accurately and accordingly – not charge what he thinks the customer will pay.
- Quote for everything. Not sure many humans can hold all the finer details of a construction project in their heads. We’re talking all the materials down to the last tube of mastic, every hour of labour and the cost of different trades and skill levels, the plant, the skips, the loo, scaffolding… He would do well to use EstimatorXpress and remove the worry of forgetting something. And abandon spreadsheets or calculating by the square metre.
- Who’s paying for the busted wheelbarrows, the snapped spades, the lost hammers? I’m guessing not the customers. It’ll come out of the profit instead of being factored into the jobs. Who’s paying for the van lease, all the insurances, and all the other overheads. It all needs totting up and dividing over the year and adding to each job BEFORE putting the profit margin on.
- And profit that’s a whole separate article. Without putting a proper margin on each job Geoff will stand still – in fact at this rate in five years’ time he’ll have gone backwards. That’s if he’s even in business by then…
- There’s so much more to say really, about how Geoff promotes the business, the mindset he needs to adopt to go after higher-paying projects, how he manages each project to maximise and protect the profit margins…
…but in the meantime he could save himself a lot of time and effort by using HBXL Building Software. An EstimatorXpress quotation will impress customers wanting big ticket projects. They’ll like the transparency, the detail in the quote. Geoff will like that the software has done the leg work and thought of everything.
He’ll be able to call off a materials list for the builders merchant well ahead of the project. The UK’s materials crisis has proved that ‘next day deliveries’ are a thing of the past. The software maps out at what point in the materials will be needed. It advises on cashflow and when the next payment is required. You get the idea…
And seek advice from our partners the Better Business Group. They mentor building firms to go from ‘getting by’ to ‘having a life’. They’re offering a complimentary 30-minute chat over the phone – no strings attached. Check it out here.
Don’t be like Geoff. Be smart. Look at the bigger picture – yes while you’re this busy. Because you’re this busy. Discover how to price and manage your projects right with our help. It’s so much easier than you think.
Give us a call on 0117 916 7898 or book a short online demonstration here. Don’t wing it like Geoff. Nail it.