The Importance of a Business Plan There are many reason to write a Business Plan, but the most important is: established your short and long term business goal, and describe how you are going to achieve them. A BP is a tool that every single business must use; regardless of their size. It is roadmap of your business, and like every roadmap it must be check it periodically to know if we are going to the right path, or [...]
The Importance of Knowing your Mark-Up and How to Calculate It According to my experience 4 out 10 business owners know how to calculate their mark-up which is a low percentage. Taking in consideration the importance of what this ratio represents, the markup concept is easy to apply but sometimes misunderstand. Let me explain the concept, and how we should calculate it. First in order to calculate the mark-up, you need to know your gross profit that is the result of [...]
Break-Even, Knowing Your Cost Structure. A key goal for any construction company is to make money or generate profit, and consequently increase the value of their investment; which will be accomplished setting its target level for company revenue, gross profit margin, overhead, and profit. Analysis conducted based on the profit equation, break-even volume of work, or/and break-even contribution margin ratio are going to clarify how the company is going to make profit and make knowledgeable business decisions. The first thing [...]
Market Segmentation, Targeting, and Positioning Base of Your Market Strategy Regardless of your business size, market (B2B or B2C) and industry; developing a Marketing Strategy is critical for every business. Businesses that do not have a Marketing Strategy are losing the possibility to find potential new business opportunities, new product development, identify unfulfilled needs, delivery value to their customers, and improve the organization’s chance of maximizing its long-term profitability. Thus, putting their business in a disadvantaged position like price war, [...]
Covering the Basics About Estimates, Invoices, Change Orders, & Outstanding Balance Report The importance of these four documents is to establish a smooth and cordial commercial relationship, which is critical. Most of the construction services start with an estimate, that is known as a proposal or quote. The elements that make an estimate clear at the beginning are not only the price of your services, but also the conditions. Every quote should include: Date of the quote Quote [...]
