How to Make More Money on Construction Projects

Doug Herbert speaks at CFA Convention

My speech at the CFA Annual Convention showed concrete contractors how to make more profit on their construction projects. Photo courtesy CFA.

I was asked to speak at the Annual Convention of the Concrete Foundations Association of North America (CFA). My speech at the largest gathering of cast-in-place foundation contractors in the country answered the question I am often asked, which is, “How do I make more profit on my construction jobs?”

One of the best ways to make more money on your construction jobs is to find better prospects.

There are prospects out there right now that are a good fit for you. You would be profitable doing their work and they would appreciate the value that you provide. Many of them will pay more to use you. However, they are currently using your competitors.

These are the prospects you have to market to. But, how do you find them?

Click here to get my FREE "Quick Guide to Determine Your Ideal Client Profile."

Create Your Ideal Client Profile

You find better prospects by identifying what your ideal client looks like – by creating your Ideal Client Profile. When you know what your ideal customer looks like, then you can go find prospects that come close to matching that description. Your Ideal Client Profile describes the type of person/company that is best suited to your construction company.

  • You are profitable doing their work
  • Your sales & marketing resonates with them
  •  Often, you can charge them higher prices

Here are four different examples of an Ideal Client Profile:

  1. Custom home builder that builds $450s to $1.5 million homes where the builder himself is involved in the day-to-day construction of the home. Pays every 2 weeks.
  2. Large, public, production home builder that only builds 16 home plans. Your crews stay in the same subdivision and go from one job to the next.
  3. Homeowner within 10 mile radius of your office that needs a colored, stamped patio in their back yard. Pays upon completion of job.
  4. General Contractor that targets wastewater treatment facilities, which involve complex concrete structures that reduces the bidding competition for concrete contractors.

The profiles above are just examples. You define the ideal client for your own company.

The 4 Questions to Determine Your Ideal Client Profile

#1. Who are your most profitable clients?

Analyze your job cost reports. Which customers are most profitable for you? If you don’t do job cost analysis on your jobs, talk with your accountant and think about what jobs you are most profitable with (not necessarily what jobs you enjoy doing).

#2. Who pays well?

Analyze the payment histories of your clients. Who pays you quickly? Which clients don’t back charge your company?

#3. Who is easy to work with?

Which customers require the least amount of your time? Who do you enjoy working with?

#4. Who refers and sells your company?

Referrals are a critical part of your sales. Who refers the most people to your company? Who is genuinely interested in the success of your company? Who is an advocate for your company?

Analyze Your Answers

Next, look for clients that match many of the answers to the questions above. As you find similarities among your clients, an Ideal Client Profile will reveal itself. Keep in mind that if you work in multiple markets or with different client types, more than one ideal client will reveal itself. That’s OK. You can have one Ideal Client Profile for each division or market within your company. Your Ideal Client Profile for your residential division will be different than that of your commercial division.

Find Prospects That Match Your Ideal Client Profile

Look around in your market for companies that you are not currently working with that you believe match your ideal customer profile. Ask your Trade friends that also work with your current ideal customers who else they work with that are similar. Create a list of these ideal prospects. This becomes your “Hit List.” You now have a highly qualified, high profit potential list of prospects to focus on. Your sales and marketing efforts will be directed to this Hit List. Instead of using a shotgun to target every prospect in your market, you will now use a rifle to zero in on the most profitable prospects for your company. When you add them as clients, the increased profits will reward you for your focused efforts.
Click here to instantly get my FREE "Quick Guide to Determine Your Ideal Client Profile."

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