Have you ever watched a football game where the backs and centres have worked hard to take possession of the ball, feed it through to the forward line, only to repeatedly fail when it comes to converting to points? It’s frustrating for everyone! This is like the marketing/estimating team in a business winning a fantastic job/project at a solid gross margin, only to be let down by the technical team, who make errors and cause the job to be continually dragged out.

Once you have been awarded the job/project (at the required gross profit margin) production and delivery timeliness and quality is where you will generate the profit. A quality, on time delivery will usually lead to consistent gross profit. Alternatively, a poor-quality job can start to leak profit, damage reputation and over an extended period this may eventuate in closure.

Here are four ways to help you boost your gross profit on every job. 

1. Monitor job progress daily/weekly

How does your production team know they are winning? Do they actually know what winning looks like? If not, how can they help the business win? Monitoring how your projects and production team are performing, on at least a weekly basis, is essential. The larger and longer the project, the more important it is to measure and manage the delivery. Measuring ‘gross profit per X’, (X could be van/truck, team or project) will assist to identify and then reduce errors, faulty work, overspending, and poor productivity. What gets measured, gets managed.

2. Track and improve billable hours (capacity)

Gross profit margins will improve when your production team (on the tools team) spend the majority of their weekly hours completing work that is generating income for the business. Again, measuring this is essential to being able improve it. Start by monitoring how much each of your employee’s time is spent completing billable/chargeable work each week. There will usually be a certain amount of non-billable time such travel, paperwork, meetings/training, etc. However, the goal is be able to charge 85-90% of their weekly hours to a job/project.

3. Create and implement key production procedures

“If you want to get it done right, you need to be there onsite or do it yourself.” Heard this before? Maybe from someone you know intimately? These are the words from a business owner who may be stuck. If you are the owner and choose to be on site every day, and you are happy with this business model – there is nothing wrong with this. However, if you wish to free yourself up to either grow your business, or give yourself some flexibility, then there is an alternative.

Start by creating checklists and/or documenting step-by-step procedures for the majority of tasks that your production team work through on a daily basis. Provide training, give feedback and gradually empower your team to work unsupervised. Seem like a daunting project for you? Think big, and start small. Plan for this to gradually release you from ‘having’ to be on site over a 6 to 12-month period. Write one-two procedures a week, and in 12 -month you may have up to 100 in place. Just think what value this will bring to your business – and flexibility to your life!

4. Train to Retain a Champion Team

Did you know that your employees love to learn? Yes, all of them. In fact, many of them ‘crave’ it. The reality is many have had poor learning experiences. How did you enjoy school? So, lets change that approach in your business. It doesn’t mean at all that you need to be the teacher, just provide the opportunities.

Grab a pen and paper and list out the skills you would like your team to acquire over the year ahead. Even better, ask them! From here, you can create a structured skills training plan. You could engage some of your more experienced technical team to be mentors and teachers. Engage a third party to teach the office team new computer skills, or your senior team leadership and people management skills. The list is endless. You will also benefit by retaining your best people longer. Employer funded training has consistently been proven as the #1 employee retention tool.

Make a commitment to become a master at delivering an amazing result for your customer, on time and on budget – every time. It can transform your business!

Written by Jon Mailer.
CEO of PROTRADE United.