In the construction business delivering margins is more important than growing revenue. The first step is to estimate accurately and bid accurately with desired margins. However, the equally important and perhaps more difficult aspect, is to ensure smooth and efficient construction of the project that doesn’t lead to cost escalations.
It is essential to ensure smooth and efficient operations before scaling up a construction business. As lack of efficiency will with more business will add to the chaos and complexity and may lead to a further decline in margins.
What factors leads to poor execution / margins?
- Lack of coordination between supervisors and project managers, leading to delays and cost escalation
- Delay in delivering material to the construction site, thus reducing labor productivity
- Time and resources spent in understanding the up to date situation at the site rather than on other productive tasks
CMS (Construction Management systems) tools can be a big part of the solution
The following are some key features of CMS that can lead to more efficient operation:
- Scheduling
- Budgeting and cost tracking
- Document management
- Real time collaboration
- Time sheets
- Mobile access
- Reporting Dashboards
Conclusion
Success for your construction business depends both on scale and margins (efficiency) . However, if you need to choose one, then always choose margin. Getting bids accurate with the desired profit margin is just step 1. Step 2 is to convert the profit on paper into actual cash in the bank.
Creating robust processes and systems with a good CMS integration is a big step in achieving the efficiency needed in your business to thrive.