Got an icky feeling that a build is headed for delay but can’t quite nail down what to do about it? Check your data—you probably already have more intel at your fingertips than you realize, but you are just not putting it to strategic use. Read on for pointers on leveraging data to successfully steer your business.
Tracking The Right Stuff…
Let’s face it: having useful information on hand leads to better decision making, and improved decisions result in more successful projects—-and businesses. Of course it does take some discipline and time to set yourself up for success. The good news is that lots of helpful data is actually all around you. The question becomes: are you tracking it? Can you readily access what you need to know when you most need to know it? As Bob Salaj of Quickbase points out, tracking the right data, and acting on it in a timely manner, can make all the difference:
Every project, no matter how big or small, is a race against time. The longer it takes, the less profitable it is. And while shortcuts can save time, they can also lead to accidents. Striking the right balance between efficiency, productivity, profitability and ensuring worker safety is always the goal….When it comes to issues that impact a project going over budget or beyond the timeline, the most common reasons for delays are supply chain snags, the rising cost of materials, labor shortages, permitting delays, equipment failures, and client changes. These issues may appear to be out of your control because they involve third parties or seemingly unexpected changes. Yet those issues can often be identified early enough to take action and prevent them from throwing a project off track.
The construction business is notoriously difficult, given the inherent challenge of juggling shifting variables and seeming unknowns. However, by using data to identify trends before a project is off the rails, owners can gain much more control over the business. According to Salaj, examples of common challenges that can be overcome by accessing and leveraging “hidden data sources” include:
Supply chain issues: While some supply delays can take you by surprise, others may be predictable based on past behaviors. The areas to take a closer look at include vendor history, type of product and seasonal snags. A history of supply delays in these areas can help you build a buffer into your project plan.
Foreman and project manager skills: Before assigning a project manager, look at their past performance based on previous jobs, billing rate, and on-time performance. You may need to add a more experienced project manager during critical milestones to elevate the primary project manager’s skills.
Subcontractors: Keep track of the performance of your subcontractors including current records on their training, certifications, experience, rates, and project expertise.
Safety data: A history of incidents by location, worker and equipment can help spot trends (by season, weather, etc) that can be a prompt for toolbox talks and other onsite communications to prevent future accidents.
Once you begin thinking about all the practical data available to you, and all the insights you can glean from it, you’re likely to find even more intel to put to use for your success. For example, cross-referencing timelines from similar projects in the area, even when not yours, may help you plot a plan that accounts for potential jams. Site data and intel on closeout processes can also be extremely informative:
Site data: This includes survey data, topography, soil tests and projects built on similar terrain. By analyzing similar jobs, you can spot potential issues or building delays and any successful workarounds.
Closeout processes: You can streamline this part of the project by factoring in the average permitting process time and approval cycles based on location and type of project. For example, run a query on previous projects by zip code and you can learn a lot about local codes, permit costs and inspectors.
As you strive to run a data based business, you will probably find that you need to finetune your approach to centralizing data. No one relishes sorting through a variety of spreadsheets, apps, file folders (whether digital or paper) to pull information together. Fortunately, good, practical advice about centralized management platforms is in reach. Not ready to tackle that? Start by making more informed decisions about your business basics, using these 5 Simple Performance Indicators:
- Real Cash Profit (RCP) – the actual amount of cash you have in a bank account called PROFIT.
- Average Weekly Billing (AWB) – the total amount of money you’ve billed for this week, or the total value of the work you’ve put in place this week compared to the year-to-date average your business requires to hit your budgeted revenue goal.
- Closing Rate (CR) – the ratio of the number of Projects Awarded versus the number of Leads acquired.
- Revenue Per Employee (RPE) – the total amount of revenue produced during a giving period of time divided by the total number of employees (usually measured quarterly and annually).
- Gross Profit per Project (GP/P) – the total amount of revenue received (price) for a single project less the Cost of Goods Sold (COGS) to produce the project, expressed as a percentage of the total price.
Although this pared down approach to KPIs may not reveal every detail of your business, it will yield a helpful snapshot of your operations. Don’t forget: Colonial Surety Company is here to help too. Construction company owners can access practical financial intel every day, from the private owner’s dashboard that comes with The Partnership Account® for Contractors. In fact, as soon as you qualify for The Partnership Account® from Colonial Surety Company, you’ll get an edge on the competition with:
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