Smart ways to improve your bottom line

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It’s a busy time in the industry and I am enjoying my new role as RMBF president and representing the organisation at numerous meetings, functions and on technical advisory groups.
I am looking forward to the upcoming House of the Year and Apprentice of the Year events which showcase the very best of the new and the already well established talent in our industry.

I’d like to take this opportunity to farewell and thank our previous president Brent Mettrick for his tireless work on behalf of the organisation and the industry as a whole.
Also I’d like to welcome to the RMBF Board our two new directors Greg Pritchard and John McDonald, and look forward to the significant contribution they will both make.
I intend to make my Building Today columns as informative and topical as possible, starting with this two-part piece on 18 Ways to Improve Your Bottom Line. I’ll go over nine this month and the rest next month.

It is very important to concentrate on your financial performance at all times, and even more so when work is more scarce as we have all been experiencing lately.
Below are some suggestions that will help you focus on maintaining a healthy bottom line:

1 Avoid taking on bad deals

It’s easier said than done when you need the work, but use your instincts and knowledge when it comes to the type of customer, job complexity and quality of plans and specifications. As with most things in life, your gut feel or intuition often proves to be right. Investigate your prospective clients and study the project in detail to decide if it’s right for you.

2 Don’t give things away

It’s really important to retain an acceptable margin. You need to know your true job costs and what your bottom line is. If you feel you may have to negotiate a little to win a job, make sure you have that room to move in the first place.

3 Design and build for your clients — not yourself

Make sure you focus on your customer’s needs, not your own. This is particularly relevant with spec building. Products need to be designed and specified to match the market/customer needs. Avoid incurring cost on items or work you think clients want but actually don’t.

4 Eliminate waste and excess material usage

Always measure quantities accurately and allow proven waste factors. Where possible, order selected lengths. The upshot of over ordering is that you either end up paying for the excess product or paying for the cost of returning or disposing of it.

5 Develop scopes of work and checklists

This is particularly important when employing subcontractors and signing off work. Having this detail avoids arguments later and improves quality control. These types of work scopes can be extended to cover performance and behavioural expectations as well.

6 Don’t start until you have detailed drawings

It’s extremely important that you understand the job well and price it accordingly. The more detailed the drawings means a higher degree of accuracy in your quoting, and the less likely you are to get caught out pricing and programming wise.

7 Value engineer the drawings

Keep a close eye on foundation details, window configurations and other key components. Taking note of what other builders are doing could highlight that your engineer may be over-designing in some areas. This is a real opportunity for small changes to make potential savings — a good example is window configurations.

8 Keep a tight control of budgets

Always track the costs as they come in, against budget and refer to corresponding supplier quotes. Make sure you can determine total job costs to date, and carry out a detailed back costing exercise at project completion. This type of information can be a huge help for future projects.

9 Improve your estimating

Try to be as accurate as possible and get your quantities right. This requires good technical and practical knowledge. An incorrect floor area or perimeter measurement will result in inaccuracies in the quantities of all key products required to do the job right first time.

I hope you find this information helpful. I look forward to sharing the second nine with you next month.

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