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How to Boost the Profitability of Your Construction Company

How to Boost the Profitability of Your Construction Company

by Proforma Construction, August 13, 2019

Improve the profitability of your construction company.

Despite doing good work, many construction companies struggle to make a profit.  Naturally, this prevents some companies from attracting new clients, finishing big jobs, and being successful in general.  So, what can you do to make your company more profitable?  Trust this advice from your Pleasanton contractor.

Improve Your Productivity

Maximizing your productivity on the construction site means working efficiently to control costs and remain on schedule.  Projects that are finished under budget and ahead of schedule typically mean higher profit margins for the construction firm.  The best way to keep productivity levels high is with careful planning, communication, and avoidance of accidents that could lead to project delays.

Understand Your Costs

In order to make a profit, you obviously need to know how much it costs to complete a project.  This includes project costs as well as your company’s overhead costs.  When calculating your project expenses, you should consider the cost of the following:

  • Labor
  • Materials
  • Supplies
  • Equipment rentals
  • Bonding premiums
  • Fuel
  • Permits

Overhead costs refer to the expenses needed to operate your business.  This includes the following:

  • Staff payroll
  • Tools
  • Insurance
  • Utilities
  • Office rental
  • Equipment
  • Debt payments
  • Owners’ salary
  • Legal fees
  • IT

You must add up both project and overhead costs to ensure that you are charging your clients enough to take care of these expenses and still make a profit.

These are two of the major things that you can do to improve your business’s profitability.  Are you looking for more advice for your commercial construction company?  If so, then contact your Pleasanton contractor at Proforma Construction.   Serving Pleasanton and the surrounding California area, our highly-trained team is ready to make your commercial construction dreams a reality.