The Fifth of the Seven Deadly Sins of the Construction Industry: Failing to Work for a Profit
Seven Avoidable Mistakes Construction Businesses Commonly Make
Last week, we talked about understanding your true cost of doing business. This installment should give you something to think about: are you working for a profit? Sure…that’s the goal, and we all think everyone in the company is on board with that goal. But do you have the necessary checks and balances in place to make sure that is actually what is happening?
Complete production and job reviews regularly. Regardless of your business type, production and job review processes are critical to identifying production issues. These include accurately evaluating work in progress and accrued costs. Such a process creates the feedback required for pricing standards and managing production schedules and related issues, and ensures better accuracy of your monthly financial statements. Working for a profit is all about management: identifying potential issues and mitigating them.
Respond to, and mitigate problems urgently. It serves no purpose to have the needed information, but not mechanism to accomplish an urgent response. Your managers must be able to understand the information in front of him or her, and respond to it immediately. The manager must be able to target when and how the problem will be solved. All too often, the issue is not that a problem occurred, but that the problem is not resolved or mitigated quickly. There is no perfect business. The most successful companies are those who respond to problems, maximize these problems as opportunities by implementing targeted mitigation techniques, and stop making the same mistakes over and over again.
Observe, understand, respond, learn, and then adapt!
The next topic in this series will look at whether you are ignoring the needs of your most valuable asset, your employees.
Ideas? Thoughts? Questions? Post a comment and let’s discuss!
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