Profitability Trends

When you are looking at your scoreboard, remember that industry average benchmarks and single points in time only tell part of the story.

D. Brown Management Profile Picture
Share

When you are looking at your scoreboard, remember that industry average benchmarks and single points in time only tell part of the story.

Scoreboard: Invoice and Graph representing Company Profitability and Trends.

Just like physical training, what really matters for your personal health is that you are consistently improving.

  • Graph your key metrics over the last five years and look for relationships.
      
  • Analyze your data and look for outliers to help the trends make more sense. For example, did you have one super good or bad job in a year that completely skewed the metrics?

  • Be cautious not to over-rationalize “outliers.” If you have a bad job every year, remember that is more likely to be part of the trend rather than due to an outlier. For example, Motorola had something like 24 consecutive quarters of “one-time” expenses. If they occur that consistently, they are regular expenses and not one-time expenses. Also, Motorola is no longer around. 
     
  • What do those metric trends look like if you project them another 2-3 years into the future?

  • Which metrics are trending in the right direction?  

  • Which metrics can you improve?  How?  


Want to talk about it? Contact us for a conversation.




Our Mission
We exist to help contractors build stronger businesses for the next generation by leveraging talent, technology, and capital through alignment and transparency.
Lean Principle - Value Add vs. Non Value Add
For specialty contractors the field workforce represents most of their competitive advantage as well as their biggest source of variability. Making improvements to field productivity requires deeply understanding what truly adds value to the customer.
Percent Planned Complete (PPC) - Calculation Example
Yoda would be the perfect coach for managing schedules on projects: “Do or do not. There is no try.” This is the heart of Percent Planned Complete (PPC) and the weekly cycle of continuous production improvement.