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One of the most common issues in the construction industry, is the inability for businesses to move
beyond a certain level. Their owners can see the potential. They have the enthusiasm and work
ethic to do more. But no matter how hard they work or how hard they try, they keep hitting a glass
ceiling.

Sound familiar?

Here’s the great construction industry myth – If I win more projects, I’ll make more money. Sadly,
this just isn’t correct. In fact, a common reality is, the more projects you win, the less money you’ll
actually earn. This is true across every area of the building industry and what makes the
construction industry so unique.

But it’s not all doom and gloom!

Benchmarking – the tool that can change your business

Every area of construction has Benchmarks that indicate the financial health, stability and likely
profitability of a business. They are known as External Benchmarks and when you know these
benchmarks, you can see how your own business compares with your competitors.
For example, you might review the benchmark for operating costs in your sector of the building
industry and discover your costs are higher or lower than average. As a result, you’ll know what
you are doing well and where you need to improve. You’ll also gain an understanding of industry
best practice so you can reset your goals to increase profitability and grow your business.

In addition, there are Internal Benchmarks. They relate to the work you have already completed
and provide valuable information on things like:
- The average value of cost runovers and how frequently they occur
- Completion timeframes and whether they were longer or shorter than you anticipated
- Variations between budgeted material or labour costs and actual material or labour costs
- The average value of a job
- The profit margins you achieved compared with budgeted
- Which type of work provides you with the greatest profits

When you monitor your Internal Benchmarks, you can use them to clearly identify problem areas in
your business that are impacting your profitability.

But where do you start?

For many of our clients, understanding the theory is easy. It’s identifying the benchmarks and
implementing the changes that are most challenging. But that’s how CFO@Call can help.

We use a device called the Construction Business Navigator Growth Program to help you find new
ways to improve the profitability of your business and help you scale. To learn more, book your
FREE, no-obligation 15 Minute Construction Growth call.

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