All construction and trade contracting businesses gain their revenue and profit from the successful delivery and completion of jobs. These jobs range in size and complexity, however by streamlining the workflow and management of all jobs it ultimately results in increased profit and reduced time for all stakeholders.
Most business owners would say they understand their process for delivering each job stage. However, in our experience we find many businesses in the construction industry have weaknesses in their delivery. Teams do not work as cohesively as they could to deliver common goals. This results in wasted time, increased stress and ultimately less profit for the business.
Here are some fast-track ways to better manage jobs in your business:
Systemise your business workflow
A business workflow is a repeatable process consisting of a series of tasks that generally need to be completed in a specific sequence. Think of it as work flowing from one stage to the next until it is finished. Workflows are useful for ensuring important processes are done the right way every time.
Your business needs to have a documented workflow of how each part of the job is managed: including pricing, handover, procurement, delivery, invoicing, maintenance and defects. All team members need to be introduced to the system and continually communicated with to ensure the workflow achieves optimal results.
Implement and refine your job management software
There are now many different types of job management software suitable for construction businesses of varying scope and size. The key here is to firstly ensure you have a job management software. Secondly, it needs to be suitable for your current and future business needs. Ensure it can be used to its full potential such as:
- sending quotes
- tracking profitability
- scheduling your staff
- managing your staff and equipment
- retentions and cost control.
Track and target your job profitability
This is one of the key functions a job management software provides your business with, quickly and simply. As you would be aware, the annual sales and profit of a contracting business is the sum of the sales and profit generated from the delivery of each job. Therefore, it is critical that each job performs on its own merits even though of course some jobs are better than others. You must have a detailed understanding of each jobs performance so you can adapt, plan, and put strategies in place to improve where possible. Furthermore, the job would have been estimated and secured at a one percentage profit margin but driving the job profitability through various delivery stages is the key to finishing the job with a successful and profitable outcome.
Understand your work in progress and the cost to complete it
Many trade businesses carry out jobs and projects that last for several months and raise progress claims at the end of each month. Work in progress is understanding your total order book value and the work you have left to invoice. With an understanding of the completion dates for your projects you achieve a clear understanding of the sales forecasts for future months. With this information you can target new sales when required.
The monthly progress claims and the purchasing within these months will rise and fall, therefore you must have a clear understanding of the “cost to complete” figure for each job. This limits inconsistencies of profit and loss and negative surprises when month’s end and quarterly profit and loss figures are presented.
At Trade Advisory Group, we are highly experienced at delivering job management software and training teams on its use. If we can be of help please reach out to us on 07 3607 6348 or visit our website www.tradeadvisorygroup.com.au.