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Establishing a ROI for a Construction Firm
What is the appropriate compensation for an owner of a contracting firm? How much is the right number? Isn't just a salary with expenses enough?
These are good questions for all construction contractors. People have different answers. Thus, it is reflected in the bid results on any given day. Some contractors want to make a living while others are trying to build wealth for themselves. To be sure, if you compete with those who just want to make a living, you will have to be satisfied with just that. There is no profit margin in their bids therefore; there can't be any margin in yours.
If you want to build wealth, compete against those contractors who want to do the same. Their prices are higher and so, your bids can be higher. Great news for anybody in business.
For the rest of this chapter, read my book, Managing a Construction Firm on Just 24 Hours a Day (McGraw Hill, 2007, 406 pages). To order our book, go to any major outlet i.e. Amazon, Walden Books, Barnes and Noble, Reiter's. Brown's Stationers (UK), Borders, Booktopia (AUS) and other fine book retailers. You may order the bundle of book, 50 MS Excel Templates (featured in the book) and 55 e-classes at www.stevensci.com - click on the book image.
See our 150+ Best Practice Analysis and Library. It is an assessment for contractors seeking better ways of managing their contracting business. See our E-Store link below. 50+ page report and listing of 150+ Best Practices is included.
Read McGraw Hill's 400+ page book . "Managing a Construction Firm on Just 24 Hours a Day". It includes 170 Best Practices Used in Construction Contracting with over 100 illustrations and examples. We include a CD of 60 Excel Templates when you buy the book from our website. We also include our library of forms and 5 online courses.
The book is available for immediate shipment. We do take international orders.
See our secure Miva / EarthLink / Card Services International E-Store: http://stevensci.com/Merchant2/merchant.mvc?Screen=SFNT&Store_Code=SCII
Look for our new book, "The New Business Model of Construction Contracting" in 2007..
Matt Stevens is a management advisor who works only with construction contractors. He has performed training and business consultation for the contracting community since 1994. Matt can be reached at mstevens@stevensci.com.">mstevens@stevensci.com.
search terms: Pre-construction, post-mortem, lessons learned, Fiinancial Management, Accounting, Chart of Accounts, Return on Investment, Market Price, Bidding,
Posted by Matt Stevens at September 27, 2008 2:08 PM