Doubling the pretax net margin for contractors requires both effective selling AND operational excellence. The majority of of people in construction contracting businesses are operationally focused on building the work.
Building even a simple construction project requires the coordination of 100+ people. While we may like to think of ourselves as “Independent” this is not the highest stage of development.
Construction is a people-based business. Business is a fun, complex and high-stakes game. Winning is FUN!!! Contractors with teams that work together the best will win the game.
There are five main value levers that contractors can pull to truly increase the value of the business as measured in long-term return on capital and valuation during a succession.
Nothing will have a bigger impact on a contractor’s business than bringing in more quality revenue on a recurring basis. Effective business development is a capability to be designed and managed no different than the ability to build a project.
Project execution is the #1 priority for contractors. Effective project review meetings are the #1 control mechanism for ensuring projects stay on-track.
Construction in any given industry sector or geographical area is a cyclical business. There are four major levers a contractor can pull to ensure the business performs well throughout all economic cycles.