Winning work doesn’t make money. Successfully managing a building project does.
Monday, October 26th, 2020
12 tips on managing a building project to make money: 5 minute read
OK so you won the job. Great! But you’re not on top of the job. Bad! It’s not the winning that counts (although you need to win to do the work – I get that). It’s how you carry out the building project once you’ve won it.
Success is ensuring the actual cost of the job is no more than the estimated cost. And the profit remains all yours. Does your project planning always give you a healthy profit at the end of it?
Whether you’ve got one project on the go or five, you risk losing thousands of pounds from your profit margin by wasting valuable labour hours or making last minute purchases. Or worse still, you risk making a loss.
What if everyone isn’t sure what they’re doing? What if materials aren’t ordered at the right time? Suppose you can’t get plant at the last minute? What if you take your eye off the ball? It can only end badly.
How managing a building project effectively makes you money
It will never be a waste of your time to stop and think about how you could make your construction projects (whether they’re loft conversions or new builds) happen on time, and on budget. At HBXL we believe that if you ‘Plan it’ you’ll ‘Boss it’. Your success is all in the planning. Here are 12 tips on how you can literally profit from efficient project management:
- Produce an accurate quote – don’t skimp on researching the project. Visit the site. Check for pitfalls. Don’t guesstimate. Be clear on provisional sums. Don’t risk eating into your profit margin.
- Be on top of your outgoings – make sure you cost for everything – not just the materials/labour. First cover your overheads, from van leasing to insurance. Then put money back into the business – for expansion, bumps in the road, new kit… Profit isn’t a nice-to-have.
- Produce a cash flow analysis – know when you need funds for the next phase of the project.
- Agree payment terms – be upfront with the customer and show them the build stages/phases requiring an interim payment.
- Draw up a contract – put the scope of the job down in black and white. Don’t get caught out if and when the customer moves the goal posts.
- Think Health & Safety – bring together all the documentation and follow through with the requirements. A fine could blow a year’s profit or worse. Make sure you’re Covid-19 secure too. Remember that PPE is an on-cost.
- Book your plant and sub-contractors in good time – use a Gantt chart to plot when you need them – time is money. You don’t want someone or something in the wrong place at the wrong time. A Gantt chart makes changing timings – and the cascading effect – so much easier.
- Order your materials in one go – you’ll be able to negotiate the best prices and will result in least disruption to the project.
- Monitor day-to-day progress – catch issues before they become costly problems.
- Document everything – every time you have to make a change make a note of it. Keep tabs on how these changes impact the timeline and the budget.
- Keep everyone informed – Communicate with the team. Brief them on what needs to be sorted that day, that week, next week. Talk to the customer and keep them posted too.
- Follow up on snagging promptly – finish on good terms and get that final invoice emailed over to the customer. Then you can ask them for a testimonial!
And if any of this sounds too much like hard work, then you should really consider software that does most of the work for you. In fact software would make a huge difference whether you consider yourself massively organised or not.
EstimatorXpress is the perfect example. This award-winning software is more than just an estimating software programme. It automatically produces 80+ management reports from your estimate data. As well as a full breakdown of costs, cutting lists, material schedules and labour schedules, it will also give you a cash flow analysis and tell you how much profit you are going to make. What’s not to like?
Hopefully the pointers above will give you food for thought when it comes to setting your profit and then protecting it at all costs. To really nail it though, why not have an online demonstration of EstimatorXpress? You can set it up here or give one of the team a call on 0117 916 7898.
Watch our video chat on builders and profit…
Watch the Power Hour between Jo from HBXL and building firm mentor, Simon of the Better Business Group