PMAC Construction performs a broad range of building services from high-end domestic projects through to small-scale commercial work. They specialise in New Builds, Renovations and Extensions and their work is kick ass.
Like many other building and construction owners, Peter (PMAC Construction’s Managing Director) was finding it difficult to put the right systems in place to scale out his business. This resulted in him working 80+ hours/week and consistently having to compete for jobs just to fill up his funnel.
That was before he joined The Professional Builder (TPB), which helped him put the right systems in place to see his turnover almost double from $650k to $1M in 12 months!
Here’s how Peter did it:
First Peter had a sit down with one of our coaches to review his business’s performance. Once he filled out his weekly tasks through TPB’s Freedom Finder, he was then able to assess how much money and time he was spending on each one. The spreadsheet below is an example of some of the general day-to-day activities, which highlight the cost per time spent on each task i.e. solving a problem for a client can result in a $200 hourly increase for your business, whereas drinking alcohol or eating fast food will decrease your performance, losing you $200 per hour.
Once Peter identified the roadblocks that were affecting his performance (aka his stop doing list), he was able to get a clearer picture of the systems he needed to put in place to reach his goals.
In order for Peter to progress and keep on track he used TPB’s default diary, which is a detailed planner that clearly outlines your business objectives.
One of our expert coaches then helped him create a tailored daily, weekly and monthly plan that would act as a reference point and hold him accountable for his progress.
One of the main concerns for Peter was not having enough time. This was largely down to the lack of understanding he had on his pricing structure.
To help him free up more time, he went through TPB’s pricing process to create measurable targets that focused on his overhead, pricing for jobs, cash flow and highly targeted profit objectives.
1) Overhead Calculator
The first initiative was to get Peter to calculate his overhead. The spreadsheet below (random figures) helped Peter identify all of his companies fixed overhead costs such as advertising, insurance, office staff etc.
Once he accounted for all of his expenses he used the formula (left) to calculate his total mark-up for his building projects.
Calculating the overhead and profit mark-up meant that Peter could identify exactly how much his expenses were coming to and what could be adjusted for the future to ensure a profit increase.
2) Labour Rates
Peter then went through his labour rates, as this was another fixed cost he needed to account for.
The spreadsheet below provided Peter with a full overview of his labour costs to ensure he was catering for:
- Working Days = Total days worked annually + contractual leave and public holidays
- Working Hours = Weekly working hours minus time lost due to things such as supervising, extra breaks and unproductive time
- Payment Rate = How much he pays his Foreman, Carpenter & Apprentice
3) Pricing A Job
After calculating his fixed costs, it was then time to start pricing up jobs. Subcontractors, demolition, site establishment, foundation and floors, farming and trusses and roof and fascia were all areas that Peter needed to account for when calculating his costs.
4) Cash Flow
To help Peter fast track his goals, it was important to ensure his cash flow wasn’t affecting his progress. To produce the high quality builds he wanted, there was an emphasis on when customers had to pay for his projects and what impact that would have on his team, acquiring equipment and finding potential jobs.
By taking care of his cash flow, it meant Peter was able to have work lined up for the next 6 -12 months so he could focus on the quality and landing bigger, more specialised jobs.
The spreadsheet below highlights current jobs, costs of sales and the total Gross profit across 3 months to provide an accurate reading of the cash coming in and out.
Would you like help to simplify, scale up, and double your construction business turnover in 12 months like Peter?
If you meet the following criteria:
- $2 – 5 million in turnover
- 2 – 8 people in your team
- Have been in business for 2+years
Then shoot an email over to Matt (one of our guru’s) at [email protected] with the subject line PROFIT LIKE PETER and a bit of info about your unique situation.