Georgia Tech Procurement Assistance Center

  • Home
  • About Us
  • Training
    • Class Registration
    • On-demand Training
    • GTPAC COVID-19 Resource Page
    • Cybersecurity Video
    • Veterans Verification Video
    • GTPAC Community
    • Other Training Audio & Video
  • Useful Links
  • Team Directory
    • Albany Counselor
    • Athens Counselor
    • Atlanta Counselors
    • Augusta Counselor
    • Carrollton Counselor
    • Columbus Counselor
    • Gainesville Counselor
    • Savannah Counselor
    • Warner Robins Counselor
  • Directions
    • Athens
    • Atlanta – Training Facility
    • Atlanta – Office
    • Albany
    • Augusta
    • Carrollton
    • Columbus
    • Gainesville
    • Savannah
    • Warner Robins
  • COVID-19
  • New Client Application
  • Contact Us

7 tips to maximize construction project profitability

June 27, 2019 By Andrew Smith

Many business leaders in construction worry about winning jobs, but sometimes a lost bid is a bullet dodged.  How do you know which projects will generate profits and which ones are better avoided?  According to Hal Macomber, Executive Vice President at Touchplan and expert Lean consultant, asking a few simple questions before taking on a project can make a big difference on your balance sheet.  The key is to take a project’s profit rate into account, in addition to its duration and size.  Read on for seven tips for more profitable projects.

Profit at the Project Level

The first step is to identify the rate at which a project will make money (also called the profit velocity).  Macomber illustrates the concept with an example scenario.  “If you have a ten-month project that is going to make $200,000, your profit velocity per month is $20,000.  And if you’re looking at two projects you might realize that you only have the staff to do one of them.  One of them is a $200,000 job and the other is a $250,000 job.  You might immediately think that you should take the $250,000 job.  But wait a minute. What’s the profit velocity?  The first project is ten months, so that profit velocity is $20,000/month.  The second project is twenty months, so that profit velocity is $12,500/month.  In this case, it’s actually a worse deal to take the job with the higher profit.”

In addition to profit velocity, there is another key factor to consider: the resources required to deliver a project.  Larger and more complex projects will require more senior staff, whereas junior staff can gain experience on smaller, more straightforward projects.  While the smaller project may have a lower total profit, it might end up costing the company less to execute, depending on the resources available.

Continue reading at:  ConstructionDive

Filed Under: Contracting Tips Tagged With: construction, profit margin, project management

Recent Posts

  • DoD publishes long awaited interim rule on CMMC
  • GSA Region 4 OSDBU hosting small business webinar
  • GTPAC launches COVID-19 resource page
  • GDEcD seeks GA Manufacturers and Distributors that can help with critical health care supply needs related to COVID-19
  • Georgia DOAS to hold 4th Annual Georgia Procurement Conference April 21-23, 2020

Popular Topics

8(a) abuse Army bid protest budget budget cuts certification construction contract awards contracting opportunities cybersecurity DoD DOJ False Claims Act FAR federal contracting federal contracts fraud GAO Georgia Tech government contracting government contract training government trends GSA GSA Schedule GTPAC HUBZone innovation IT Justice Dept. marketing NDAA OMB SBA SDVOSB set-aside small business small business goals spending subcontracting technology VA veteran owned business VOSB wosb

Contracting News

DoD publishes long awaited interim rule on CMMC

Small business subcontracting for cloud computing gets easier

Long awaited changes to WOSB/EDWOSB regulations expected this summer

The CMMC has arrived: DoD publishes version 1.0 of its new cybersecurity framework

GSA keeping ‘on track’ with schedule consolidation

Read More

Contracting Tips

A guide to labor and employment obligations for federal contractors

Who pays for CMMC certification?

Other transaction agreements: Where does an unsuccessful bidder go?

Knowledge is power, if you know how to use it

EAJA provides relief to construction contractor for government’s bad actions

Read More

GTPAC News

GSA Region 4 OSDBU hosting small business webinar

GTPAC launches COVID-19 resource page

GDEcD seeks GA Manufacturers and Distributors that can help with critical health care supply needs related to COVID-19

Georgia DOAS to hold 4th Annual Georgia Procurement Conference April 21-23, 2020

MICC Fort Stewart hosting acquisition forecast open house on Thursday, Feb. 6, 2020

Read More

Georgia Tech News

Dr. Abdallah testifies on U.S. competitiveness, research, STEM pipeline at Congressional hearing

Georgia Tech’s Technology Square Phase III to include George Tower

Student surprises his teacher with Georgia Tech acceptance news

Georgia Tech Applied Research will support DHS information safeguarding effort

$25 million project will advance DNA-based archival data storage

Read More

  • SAM.gov registration is free, and help with SAM is free, too
APTAC RSS Twitter GTPAC - 30th Year of Service

Copyright © 2021 · Georgia Tech - Enterprise Innovation Institute