Look Backwards to Move Profits Forward

October 17, 2017 charity.araoz@oncenter.com


Allen L. Crowley, Jr., FAIC, On Center Software

Let’s face it, the ebb and flow of construction work means jobs will overlap. Projects will intersect. Crews and equipment will be spread thin. On the one hand, it’s the nature of the beast. On the other hand, it’s not always smart to view each job as a separate, independent project.

With boom times come pressure to hurry from job to job. Sometimes, contractors will skip over or give a cursory look at the fine details of the job just completed because they’re too busy looking forward to the next job. Without a consistent post-project review system, they may end up making the same mistakes again. When you apply lessons learned from one job to the next, you can build on your knowledge and make adjustments to projects in progress.

Make Every Job Profitable

Why not think of your projects as circular rather than linear? For example, you’re a concrete subcontractor specializing in decorative concrete. Even though you’re focused on delivering quality and expertise, you fail to complete each job with a profit and loss (P&L) statement. A P&L statement is essential if you want to close the loop—from the office to the field and back again. This helps you make sure the job you just finished is as profitable as the next one.

One way to do this more easily is with user-friendly software. When contractors use tools to track progress against their original estimate, they can more accurately predict just how long it will take to complete the next job. Tools like takeoff software can help you get a jump on that next job by saving your historical calculations. When you use software to track your productivity, you can see more easily how cost overruns and project delays impact profits. In addition, cloud-based software applications can improve communications and ensure that crew members are no longer tied to one server back at the office.

Have a Strong Post-Project Strategy

Think for a minute how a strong post-project strategy can boost your reputation with clients. Why not wrap up a project by meeting one-on-one with your client to discuss the job just completed? This allows your business to document just how well expectations were met from the customer’s point of view and gauge their overall satisfaction with the job.

Cover and combine the customer’s feedback with the notes gathered in the internal post-project review, be sure to include senior managers, estimators, project managers, the superintendent, the job foreman, and director of operations. Allowing them to provide feedback will help you evaluate everything from job safety to project scheduling. Here are more recommendations for contractors to build a strong post-project strategy:

  • Compare your actual costs to your budget
  • Make sure your estimator receives positive or corrective feedback from the project management group for future bids
  • Capture before, during, and after photos to illustrate what worked and didn’t work
  • Spend time reviewing with crew members, the estimator, project manager, and administrators all pertinent aspects of the project, change orders, and bid to final costs
  • Take lots of digital pictures and notes from your team lead to create a top 10 strength’s story and also identify your top 10 weaknesses

Applying Lessons Learned

Indeed, it is not an easy job to keep clients happy from start to finish. Do you tend to pour your focus into the next job without wrapping up the last one? Do you have a thorough review built into your closing process? Applying post-project takeaways from one job to the next can only strengthen your process for future bids and projects.

Even in these red-hot economic times, it is easy to get caught up trying to win lots of jobs—without taking a step back to assess why you are bidding those jobs. Don’t let estimating challenges overwhelm your efforts. On Center Software can help show you how to bid what you do best and lessen your risk. Get our white paper, Overcoming the Pitfalls of Estimating, for more winning strategies.

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