Contracting can be an extremely profitable business, but it's littered with pitfalls. Besides, if it's so profitable, why do so many constractors operate with little profit to show for their effor?
Commercial construction projects typically last around 18 months, and the truth of the matter is that the profits begin to leak from the first month, and by the time you reach the last, those "big" profits are gone.
No one sets out to lose money
You bid on a project with the hope of hitting a home run, but it rarely ends that way.
Once the project begins, obstacles arise, and profit moves to the back burner. Completion becomes the goal.
If you want a financial miracle in your business, managing profitability MUST be the goal.
For most, profit is an afterthought, something that happens IF the project goes well.
What most contractors do in an attempt to plan for unforeseen cost overruns is add a fudge factor. An educated guess at how much they think the prices of materials and labor will increase over the next 12 - 24 months until the project is complete.
Adding a fudge factor to your jobs never works because it's impossible to know what's going to eat your profit, how much will disappear, and when.
If you are in construction, profit can disappear quickly.
Heck, sometimes, before you're pouring the slab, profits are flowing from the job because of permits, weather, environmental issues, and a plethora of other obstacles.
Then there's...
- Increases in materials costs, tax on materials, and materials shortages
- Costly project delays and stop orders
- Underestimating materials, equipment, and labor needed to complete the project
- Lack of real-time reports that provide accurate daily project status updates
- Weather delays, worker delays, labor shortages, and excess labor hours
- Permitting and inspection delays
And these just scratch the surface.
So what do you do?
You do your best to manage your projects on spreadsheets, outdated software, and you hope your fudge factor will keep you from going broke.
It's no wonder why so many contractors go bankrupt as many as three times before they finally figure out that the most essential item you need to focus on from day on is PROFIT.
Profit can't be an afterthought - it must be the primary objective.
Profit isn't the only thing that matters in your business, but without it, you'll lead a life of stress and frustration.
Without profit, the entire project is in jeopardy, along with your company and everything you've worked so hard to build, including your reputation.
Low profit, the entire project is in jeopardy, along with your company and everthing you've worked so hard to build, including your reputation.
Don't be the next statistic. You can easily and predictably manage profitability. If you don't, you could be headed for disaster.
You may be thinking; i'm too busy to iomplement a new efficiency tool... Besides, i'm in the middle of a project that's eating my lunch.
Address this now you'll continue to:
- Finish projects late and over budget
- Take on more debt
- Work harder, with less time off
- Have more stress and anxiety as you grow
- Lose money or go bankrupt
Terry, a contractor in Chicago, says it like this.
"Every project starts with great hope and excitement. It feels like this project the one that changes everything. But by the end of the project, the profits are gone with nothing to show for it. It's so frustrating. There's got to be a better way."
The larger the project, the more risk.
"All i want is to provide a quality product and finish on time with a fair profit. I shoudln't have to risk my reputation and livelihood on every darn project."I've Been There Myself
"My name is Raj Kachu; I'm CEO, V-Plan Inc. I'm a certified cost professional with AACEI, member of the Toronto Construction Association, and Barrie Construction Association. I've been in commercial construction globally for over 30 years."
If you struggle with on-time completion... If you attempt to manage the impact of cost overruns on a spreadsheet... If delays derail your project for days or weeks... If your projects have little or no profit at completion...
If you are ready for a financial miracle in your business...
I've got some great news, I developed Realtraker™ to allow you to efficiently manage construction projects, personnel, processes, performance, paperwork, and PROFIT - from the cloud.
With Realtraker™, you can:
- Bid quickly and accurately without spreadsheets
- Prevent time delays and cost overruns from abushing your project
- Seamlessly communicate with personnel, subs, vendors, and workers in real-time
- Lock in profits at the beginning of the bid process with a live view of all costs so you can make adjustsments now rather than accepting a loss at the end of the project
And most importantly, you can finish ON TIME and PROFITABLY on EVERY project.
Realtraker™ is the only construction platform of its kind and comes with Profit Genie.
Every change, delay, and overrun has an impact on the overall profit of the project. When you know the impact, you can become proactive in seeking to make up the loss instead of waiting until the end when it's too late.
With the click of a button, you can see your profit projected all the way to the end of the project.
Profit Genie allows you to see the possible impact of ANY change now when it matters... When you still have time to do something about it.
Over budget on rebar? You can go into action and negotiate on other materials, labor, or equipment. Knowing the direct impact of every change in real-time puts you the position to control the project instead of it controlling you.
Remove the guesswork and transform every step of your project into a profit center.
Projects Without Profit Are A Thing Of The Past.
With Realtraker™, profitability has never been quicker or easier.
Here's What You Get With Realtraker™:
- Create live estimates without spreadsheets and bid management, submitting proposals
- Easily view projected cash flow vs. revenue in a single click
- Create and manage your database of contacts, vendors, and equipment, in one place.
- Share project content with your entire team in real-time
- Prevent time delays and cost overruns from ambushing your project
- Create and automatically send daily reports
- Track profits in real-time from start to finish with Profit Genie
Realtraker™ is made for constractors by contractors...
You get unlimited users on every project and no annual contracts.
Pay per project, never for users. Saving you hundreds if not thousands of dollars per month. Besides, contractors who use software with per-user feeds often have critical people on the project who won't participate. They don't want to cover the cost, or they wantyou to cover their monthly payment, which further eats aways profit.