Focus in, or Focus out: Tasks that Kill Profits for Contractors Stuck Working in Their Company

Introduction

In the construction industry, knowing where to direct your efforts can make the difference between a thriving business and a struggling operation. This article highlights essential tasks that contractors should prioritize to enhance revenue and identifies common activities that can significantly erode profits. 

We'll also provide practical tips and manual tools that can be implemented immediately to plan ahead of these losses, especially for those who haven't yet adopted software to support operations as a solution yet.

Focus on What Brings Revenue

1. Efficient Project Management
   • Why It's Crucial: Managing projects efficiently ensures that they are completed on time and within budget, leading to satisfied clients and more referrals. Although most projects anticipate a buffer for completion, imagine being able to actually stick to a timeline and move onto another project without the headache that comes from missed deadlines. 
   • How to Improve: Employ simple visual tools like Gantt charts drawn on whiteboards or paper timelines to manage project milestones without complex software.
2. Solid Quality Control
   • Why It's Crucial: High-quality work reduces the need for costly rework and builds a strong reputation, attracting more business.
   • How to Improve: Use detailed inspection checklists for each project phase. Document findings with photos using smartphones to maintain evidence of quality practices.
3. Accurate Cost Estimation
   • Why It's Crucial: Proper cost estimations prevent budget overruns that can eat into your profits, improve client trust, and retention. This is something that should be planned in 3 phases: before the project starts, during the project, and after all is completed. This way expenses have been anticipated before the point of no return.
   • How to Improve: Use basic spreadsheets to track and analyze historical data from past projects to refine future estimates and bids. This can always be used to build your own estimation tool when you need something quicker. 

Profit Killers: What to Avoid

1. Neglecting Client Relationships
   • Problem: Poor communication and unmet expectations can lead to dissatisfied clients and fewer referrals (another way of saying, “we got a problem”!).
   • Suggestion: Have something to regularly update clients on progress. Simple tools like shared Google Docs can facilitate communication and transparency, before giving them access to something like a custom client portal. 
2. Excessive Overhead Costs
   • Problem: High overhead can quickly crush profit margins, especially when resources are underused, or unplanned for.
   • Something to try: Critically assess each expense. Perhaps opt for renting equipment rather than buying and downsizing resources that are not directly contributing to revenue generation (your accountant can help plan the best course of action here).
3. Poor Task Delegation
   • Problem: Overburdening skilled workers, or failing to delegate the task load effectively can lead to inefficiencies, costly and time consuming redundancies,  and high turnover. 
   • Something to try: Clearly define roles and responsibilities. Use daily or weekly planners like those created by Revalate or other digital tools to assign and track tasks, ensuring everyone knows their duties and has one place to find them. 
4. Inefficient Material Management
   • Problem: Improper tracking and management of materials lead to wastage and project overruns.
   • Something to try: Implement a manual inventory tracking system using ledgers or simple spreadsheets to monitor material usage and needs closely. For ways to automate or digitize material tracking, speak with Revalate for more options.
5. Underutilizing Technology
   • Problem: While sticking to traditional methods may seem cost-effective, the missing element not factored often enough is time. The time you, or your team spend on the tasks that technology can handle faster, or more efficiently often cost way more overall.
   • Something to try: Start with free or low-cost software tools like those created by Revalate that can automate simple tasks like estimating, invoicing, or time tracking to gradually improve productivity.

Tangible Takeaways

Focus in, or focus on should no longer be a question you’re stuck on. It’s time to take action and implement the tools suggested above to immediately see improvements in efficiency and cost management:

• Project Management: Use a whiteboard for a visual representation of project timelines.
• Quality Control: Create a standardized checklist for all projects and document the results with a camera.
• Material Management: Start a basic spreadsheet to keep track of inventory and avoid over or under ordering.

Conclusion

By focusing on these key revenue-generating tasks and avoiding the pitfalls that erode profits, contractors can see a marked improvement in their bottom line. Implement these simple manual tools today and know they can be used as the stepping stones to your own application, built to work the way you’ve designed with these manual tools. Feel free to speak with Revalate on more ways to improve your task management systems. Remember, in construction, efficiency is synonymous with profitability. Take control of your projects and costs with these straightforward strategies for immediate benefits.

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