7 Ways To Make More Money As Construction Contractor

There are several ways to make more as a construction contractor without cutting corners or paying less to your team. Mainly the construction companies do two things: Build structures and make a profit. The majority of the companies perform better at building great structures but struggle to make more profits. All the construction companies need to start thinking with profits in mind to be profitable in any contracting job. If you are not able to quote the job accurately you have lost the job even if you win it. Here are 6 ways to how construction companies can make more money.

Construction Contractor

MAKE SURE TO BID

To increase your revenue, you need to make sure you take a bigger size pie. To do that you need to bid on every project you qualify, bidding on jobs will take time but it’s important as most contractors are missing from $100K to $1m every year by not bidding if you don’t have an estimator or you are busy you can send us your plans or bid document to prepare bid for you.

To get more leads and bid properly you need to make sure certain things:

  • Keep an eye on every related project in your area.
  • Register yourself on The Blue Book, iSqFt, Building connected to get more leads.
  • After you do that make sure to bid them accurately to make it profitable.
  • Develop a relationship with your clients for the future and you can ask for referrals as well.
  • Make sure to check how close your estimates came to actual projects.

 

HOW TO QUOTE CONSTRUCTION JOBS ACCURATELY?

In order to quote or estimate any job accurately and be profitable, you need to understand the costs associated with completing each project. Mainly there are two types of costs, direct cost and indirect cost or overhead that you have to cover in order to properly accurate the job.

Direct costs or Job costs are basically anything that pertains to cost on Jobsite is part of job costs. It includes material, labor, equipment, supplies, bonding premiums, permits, and fuel, etc. Now indirect costs as well there are certain items like time spent picking up material from suppliers or fuel/gas spent getting to and from the job site which doesn’t have obvious price-tag in order to be profitable or accurately quoting a job you need to make sure you consider these items and be as precise as possible. Also, make sure to accurately estimate the prices of material and labor if you are working in multiple states. Fluctuation in these can greatly affect your profits.

Indirect costs or Overhead costs are the cost needed to operate your business is part of overhead. It includes utilities, insurance, tools, staff payroll, etc. In order to be profitable, make sure to accurately estimate the overhead costs.

Tip: Make sure to monitor the market trends to prepare accurate estimates as they can affect the material prices.

 

MANAGE PROFITABILITY & TRACK COSTS

Make sure to manage the project properly to improve profitability. To do that you need to keep the costs down and finish the project before the due date. For that make sure to keep track of costs and increase the productivity of workers by properly managing the Jobsite. Proper safety training should be provided to workers to increase productivity and profitability. Keep certain things in mind from project management terms in order to increase profitability.

  • Finish the project before the due date and within budget.
  • Keep track of costs.
  • Make sure to increase productivity by properly managing Jobsite.
  • Don’t do additional work you agree on the price and it should be approved by the client.
  • If any delay comes adjust the schedule to make sure it completes on time.

 

IMPROVE PRODUCTIVITY

To improve productivity on Jobsite, make sure to keep costs in control and manage construction activities properly on site. To properly manage the activities, make sure that General Contractors and Subcontractors are working together on a properly managed schedule. Select trustworthy suppliers and vendors to stay on schedule. Workers should be skilled so that no rework should be done to increase productivity, also make sure to give them proper safety training to reduce accidents or injuries.

 

DO PROPER CONSTRUCTION COSTING

Do proper costing instead of trying for the lowest bid. If you prepare the lowest bids the profitability will reduce, make sure to do actual costing considering all factors and don’t keep prices too low or too high (as you will not win the bid) because in both cases you will not make money.

  • Do accurate and real-time costing of items and consider indirect costs as well.
  • Don’t buy cheaper tools as you will have to replace them more often as compared to good quality tools.
  • Take help from your previous jobs’ data and do back costing to ensure you’re not losing money.

 

WASTE LESS MATERIAL

According to research about a lot of material is being wasted by the workers on Jobsite as it will increase the material cost as well as dispose of that waste as well. You can increase your profitability by properly managing it. Also, make sure to calculate the accurate value of material while doing takeoffs it will help you avoid buying unneeded material.

 

ANALYZE YOUR RESULTS

After completing the job make sure to compare the estimated profits and actual profits. Did the estimated costs of job site costs and overheads match the actual costs to complete a project? Keep in mind while preparing next estimate these factors and make sure to keep a check on productivity as well if you are having issues solve them accordingly by providing additional training to workers.

There are too many things in construction that can go wrong so keep an eye to make sure you handle it better on other jobs to grow your business and make it more profitable.