What is visibility across commercial construction companies? Visibility is your ability to see your company’s future projects and planned earnings. What kind of earnings and profits do you foresee? How many projects do you anticipate taking on? With realistic goal-setting, how does your performance and profitability look?
While visibility projections sometimes focus only on profit and loss, it’s hard to know your workload and financial outlook unless you have good visibility across all aspects of your construction business.
We’ve put together a few tips for you to improve visibility across your commercial construction companies.
Uncover and Prevent Repeated Mistakes
Analyze your historical projects and look for repeated problems in key areas like labor, materials, equipment, and wait times. Data from site management reports can reveal repeated bottlenecks, such as wait times for material deliveries. You may also see that you need to spend more time on selecting the best people for the job.
Another area for improvement could be the permitting process. Builders around the globe cite permitting issues as a primary source for downtime and resulting lags in scheduling and cost/time overruns. You can’t control permitting and inspections but you can make the process as smooth as possible and build anticipated delays into your projects to improve efficiency.
Mistakes in labor cost estimating routinely rise to the top when contractors are surveyed about errors affecting their profitability and efficiency. Error trends in labor cost-estimating can be difficult to pin down using manual methods or spreadsheets. Construction management software reports make these errors easy to spot. Once reports reveal this type of error, you can build more accurate estimating into future projects.
Improve Workforce Management
The construction industry has lagged behind a few other industries in productivity growth over the past 50 years. Industry analysts at the Construction Industry Institute say part of the problem is uneven technology use across the industry. Gaining the ability to analyze productivity at multiple stages of the construction process is one of the biggest advantages to construction management software and technology.
Productivity doesn’t just mean how much an individual worker can complete in workday. You can analyze productivity across your workforce and enterprise. At the same time, don’t hesitate to look down to the individual worker level. You may find you have a wide gap in performance. These gaps may not be exclusively due to different physical abilities or the proverbial “laziness” vs “hard worker.” You may find you have a problem with equipment, supervising, or reporting that is the root cause of the problem, not a failing worker.
Look at Your Current Performance and Set Benchmarks
Take a good look at your present business and set some benchmarks to judge your future goals and performance. Be honest about your key performance indicators (KPIS). It’s better to start out with realistic goals and move forward than it is to set unrealistic goals that can’t be achieved. You can compare commercial construction companies’ performances in key areas of measurement using the Construction Industry Institute’s (CII) benchmarks.
You should also consider different kinds of KPIs. Some KPIs are finance-oriented. They can include:
- Profit or Loss on a per-job and time period basis (quarterly, annually, etc).
- Operational cash flow – delays in cash flow can impact your efficiency and profit through work delays.
- Gross and net profit margin – your gross profit margin is the amount of profit you have before taxes; net profit is your profit after taxes.
- Revenue growth – the amount of money you earn in a given time period.
- Expenses – your spending on a per-job and in a given time period.
Other KPIs analyze work processes, including:
- Efficiency – measured as a ratio of your job inputs to outputs.
- Productivity – how much work is accomplished in a given time period.
- Cycle time – how long it takes to complete job segments or project phases.
- Error rate – how many job errors occur and their frequency.
Get Better Visibility With Construction Industry Business Intelligence
Technology like ProEst’s cloud-based estimating software lets you get actionable intelligence and clear visibility on your construction company operations. The software’s reports offer an accurate picture of which jobs you not only bid well on and earned your best profit from, but other jobs where the bidding process may have left you working too hard for too little profit.
As an owner, you need good visibility in all of your company’s key performance areas to make the right choices to grow your company. Using technology tools like construction management software and cloud-based estimating software like ProEst will help you to get a better idea of what your business has done in the past, and how you can grow and improve for the future. Visibility across your construction business really means “seeing the big picture.” Think of construction business industry software and tech as a way to improve your vision and perception to gain a competitive edge.
ProEst is a cloud-based pre-construction estimating platform that helps you create accurate estimates and digital takeoffs directly from blueprints quickly, allowing you to determine the most favorable rates for your company within the estimation process. There’s no guesswork involved. ProEst makes quality project estimation assurance in commercial construction companies effortless. You won’t have to engage your entire team to be sure your numbers are accurate.
If you would like to learn more about how your commercial construction company can increase its profits and reduce miscalculations during the estimation process, reach out today and schedule a 1-on-1 walkthrough with one of our specialists.