The Importance of tracking Construction Labor Costs One of the most significant expenditures for any construction project is labor. From painters to electricians and general contractors, budgeting and planning for the cost of labor can ultimately define a project's profitability and success. Budgeting and managing the costs of materials and equipment is relatively straightforward; however, labor costs can make or break the profitability of a project. A productive workforce is vital for project success, while poor supervision coupled with [...]

The Importance of Safety Programs for Construction Companies Protect your Employees and Your Profits Many people are quick to say, “safety first,” however, growing construction companies often disregard the importance of creating and implementing a safety program. The assumption that safety program isn’t needed until there are 50+ employees is simply not true. Implementing just a few simple policies can have a great impact on workers’ safety and health, ultimately leading to less injury and more profitability. While many companies don’t see [...]

The Difference Between an Estimate, a Quote, and a Bid. What is the difference, when do I use which, and are they legally binding? Estimates, Quotes, and Bids are the ways contractors, suppliers, or subcontractors use to outline costs for a construction project. These terms are used interchangeably but they do have different meanings and should be used according to what your client is asking for in order to avoid mistakes. Consider what the client wants and what kind of [...]

Construction Contracts Overview Ways to bill a project. When is time to select what kind the contract to choose you must keep in mind two things: • How the contractor gets paid • How financial risk is distributed between the owner and the contractor There are many ways to craft a construction contract, but there are four types of contracts commonly used in the construction industry (See the chart below). These types are based on either a fixed-cost; where [...]

Questions to ask yourself when you do a construction business plan: 1.- What type of construction contracting will your business pursue: General Contracting or Specialty Trade? 2.- What type of experience, skills, equipment, and other resources are needed for a reasonable entry into the selected business? 3.- Who are your segment market competitors? 4.- How much are your start-up costs? 5.- What is the business environment and the market for the type of construction contracting you have chosen? In what [...]

Balance Sheet Explained What does the Balance Sheet tell us about your company? What is important to look at in your Balance Sheet? How do you read your company’s Balance Sheet? A Balance sheet tells you what your company owns, owes, and how much shareholders have invested. This statement is one of the three core financial statements used to evaluate your business. It is a snapshot of your company’s finances at a specific point in time. The importance of this [...]

The Importance of Knowing your Business Numbers The knowledge of your business’s numbers is crucial for any business to achieve its business goals and make informed financial decisions. This allows you to plan, control, and manage your sales, cost, overheads, and profit. Otherwise, you will be in the darkness. What are your business numbers, and how do you find them? The basic business numbers are: 1.-REVENUE - “Sales” It is the income that you receive from sales, services, or products [...]

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