How to Manage Your Construction Overhead and Profit
Anyone involved with the daily operations of a construction business understands that it is crucial to manage your expenses wisely. Essentially, this means your production costs, payroll, and other expenses will need to be calculated with the utmost accuracy. However, managing your business finances is no cause to feel overwhelmed.
With the right technology, you can easily manage your construction overhead and profit. Modern tools allow you to streamline your estimations, account for change orders, incorporate markup strategies, and calculate your profit using simplified processes.
Maintaining Accurate Data for Estimations
Keeping a close eye on your business’ overhead costs and profit is essential for success in the construction industry. It can be challenging to determine how much you should charge while accounting for materials and labor expenses. To get started, determine your direct costs, including labor, machinery, and equipment. Then, there are indirect costs, including office equipment and expenses, taxes, business insurance, legal costs, and more. With advanced construction management technology like the Pre-Construct Module by BlackVector, business owners can easily create accurate estimates, transition them seamlessly into the build stage without data loss or manual re-entry, and share all relevant information with their staff using cloud technology.
Managing Change Orders
In the construction industry, 35% of projects experience at least one significant change throughout a project. However, many contractors neglect to adequately plan for these change orders, making them one of the most common causes of cost overruns. Luckily, modern technology like Project Manager by BlackVector makes it simple for general contractors to handle administrative tasks, including submittals, change orders, and progress reports. It even allows your trade partners to access this information and create their own reports, as well.
Implementing Markup Strategies
Professionals in the construction industry work hard and must ensure that their estimates will earn them fair compensation while still appealing to potential clients. This is why BlackVector has incorporated line-by-line markup capabilities in Pre-construct’s Estimator. This feature allows you to price some items in your schedule of values at an attractive discount while adding slightly higher margins on other items or labor costs. With line-by-line discretion to manage your budget, you can maintain reasonable profit margins while still giving stakeholders a sense of good value for their money.
Streamline Your Process with BlackVector
It can be time-consuming to monitor your construction overhead and profit while trying to keep up with daily business operations. But if you’re interested in streamlining and simplifying your project management, BlackVector is here to support your efforts.
BlackVector’s software solutions were designed by experienced construction engineers to address and solve the most significant pain points in the industry. Our revolutionary project management system will help you weather the unpredictable nature of construction projects by eliminating the need to track project information using multiple, incompatible softwares. Instead, use our integrated modules to smoothly transition the vital data from your construction estimates straight into the building phase — no human error, no data loss, and no conflicts.
With BlackVector, make sure your plans are always current, accurate, and accessible in-office or on-site. Ready to learn more? Contact us today to get started!
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