Construction Biz Wiz

Are you slouching or standing tall in this economy?

An article recently published in CFMA’s Building Profits magazine asks construction financial managers to consider the posture of their company in this economy: “Is your company on its toes, or its heels? Is the intense competition making your company stronger, or is it in retreat? Are your top leaders setting the right tone, demonstrating the right behaviors, and driving innovation? Or, are they dazed and confused, reacting slowly – or negatively? And, as the financial manager, what are you doing (or not doing) to help your company succeed?”

The author, Thomas W. Emison, believes that today’s successful contractors are on their toes and leaning forward despite the economy. Plus they all have leaders with a corporate culture that encourages innovation and forward-thinking that enables them to prosper and grow in tough economic times.

Emison previously wrote: “Successful contractors know that to win in this climate, they must outwit, outflank, and outperform the competition at every stage of the work.”

He goes on this current article to explain that unlike traditional differences among construction companies based on what they do (e.g., general, mechanical, electrical, structural, etc.), that there are six unique differentiations based on how and why they do it. Each type of company faces the same economic challenges but responds “on their toes” with different strategies.

Take for example, the Technology Thought Leaders. As Emison explains: “They are technology driven, not just technology oriented. They outsmart their competitors with quick adoption of emerging tech­nologies; they got the jump on facsimile transmission more than 25 years ago, e-mail more than 20 years ago, and BIM more than 10 years ago.”

We encourage you to consider: What type of culture does your construction business have? Are you an innovative team employing the latest in technology to get ahead? Do you utilize construction software to manage finances and reporting? Feel free to download this free whitepaper about choosing the right-fit construction accounting software for your business.

To read the Building Profits article, “On Your Toes or On Your Heals?” authored by Thomas W. Emison of Eide Bailly, LLP, in its entirety at the magazine’s web site, click here.

We’ve touched on the ‘rent or buy equipment’ topic before and considering the impact on the bottom line, it’s worth revisiting.

Today, it is more important than ever to control costs. Contractors tend to center their attention on cutting labor and material costs during tough economic times; however, equipment costs, especially for heavy contractors, can dramatically impact their financials even more than their workforce and material costs.

Construction Executive magazine published a special section about Equipment in its March issue with an article, “The Financial Ramifications of Leasing vs. Renting vs. Buying,” which offers a number of considerations and assessments worth some thought during a contractor’s decision-making process.

An excerpt:

“The construction market downturn has caused many contractors to rent or lease equipment instead of purchasing it. Understanding the differences between renting, leasing and buying construction equipment—as well as understanding the organization’s current needs and future projections—is crucial to choosing the option that will result in the best financial and strategic outcome. Contractors that weigh the pros and cons of renting, leasing and purchasing before selecting an option, as well as enlist the counsel of an accountant or lawyer, will have the advantage when entering into an agreement.”

At Maxwell Systems, we have seen that contractors using business management software are better able to obtain the highest productivity possible from their equipment (whether they rent or own), at the lowest possible cost, and extend the lifespan of equipment. This helps construction companies turn what might be considered an equipment burden into a true profit center for the company.

Furthermore, implementing the right construction management software to streamline processes and improve accuracy from bid-to-cash can be a great solution to keep jobs on schedule and on budget, as well as to help gain a competitive edge.

We invite you to download this free brochure and datasheet that detail the benefits of using a complete solution to manage your construction business and why you might want to invest in software for equipment management.

To read the Construction Executive article, “The Financial Ramifications of Leasing vs. Renting vs. Buying,” authored by Peter Ryan and Brian Bastis of Ryan & Wetmore, in its entirety at the magazine’s web site, click here.

There is no magical, mythical way to produce a construction cost estimate that translates to a profitable project. It takes skill and practice… in fact, it demands best practices. Given the importance of cost effectiveness and performance in this economy, Estimating Today featured an article that focused on the “myths that specifically involve cost estimating and cost controls.”

One aspect the article explains is “the problem does not lie in the estimating methodologies, per se, but rather the improper application of the estimate.”

The article explains that the investment in good project practices is cost effective and worth the investment … either choosing to have an in-house capability to implement best practices or by employing an independent contractor. The article adds: “Estimate accuracy depends upon the level of engineering and project planning completed, as well as the method employed for developing the estimate.”

Of course, it can be argued that it all starts with the right bid … the right numbers to win the work and to make a profit. Antiquated methods of scale, paper, roller wheel, spreadsheets, etc. do not position estimators with appropriate tools to do their job effectively. Investing in a comprehensive yet easy-to-use takeoff and estimating software solution can avail your company with powerful resources to accomplish best practices in a timely and efficient manner.

If you’re wondering how to compare products and determine the features that are critical for your business, your processes, etc., then download this free article, “Choosing Construction Estimating Software That’s Worth Your Investment.”

To read the Estimating Today magazine article, “A New Approach for Communicating Cost Estimating Best Practices: Debunking the Common Myths,” authored by Stephen Bransfield, Ph.D., John Owoyemi, PMP, and Brian Fogarty of Booz Allen Hamilton (Washington, D.C.), in its entirety at the magazine’s web site, click here.

You’re probably familiar with the English proverb, “Measure twice, cut once.” You surely know how critical it is to measure something properly and accurately. But when it comes to business processes, do you do it? And how often? What metrics do you use? 

Today’s highly effective contractors are reviewing last year’s key performance indicators (KPIs) and establishing this year’s metrics. They’re identifying business processes that need to be corrected and developing ways to improve the way they work. Cost estimating is a process that always deserves fine-tuning. But do you know what needs fixing? And do you know when it’s fixed?

Maxwell Systems has teamed with Software Advice to develop a construction estimating benchmark report. The report will help you and your company identify your estimating weaknesses and strengths.

For example:

• Are you part of the 40% that over-estimate bids “most of the time?”
• Do you turn around bids in less than 5 days, the market average?*
• Are you in the minority still using pen and paper or Excel spreadsheets?
• Are you part of the elite 10% of companies that win 90% of the projects you bid on?*

See how you stack up against your competition by participating in our estimating benchmark survey. Visit http://software-advice.polldaddy.com/s/construction-estimating-benchmark-survey.

Participants can receive a free copy of the benchmark report to be published later this quarter.