- failure to set performance goals
- failure to give them the right equipment
- failure to keep roadblocks out of their way such as poor material access
- failure to train them how to perform their jobs efficiently
- failure to stay ahead of them with information requests, shop drawings and change order approval.
A far smaller impact on field costs is material waste. Often, through improved material management waste can be minimized. However, do not sacrifice worker productivity in pursuit of reduced material waste. This is a common mistake made by bean counters.
Finally, make sure that you have the right equipment for the job. If you need a bigger machine than you own, rent it. Or go the other way. If your standard equipment is too large to do a project efficiently, rent a smaller one.
The first approach to raising margins is, quite frankly, the most difficult to implement: sell effectively.
Nine times out of 10, when we hear about a contractor who is running a legitimately profitable business we discover that his business has a highly effective sales strategy. Not marketing strategy. Sales strategy. Either the business is small and the owner himself has an "uncanny way of getting clients to hire him" or the business is fairly good sized and the owner has hired a high performance sales staff.
Find profitable niches. Hire motivated, skilled salesmen who will create their own leads and close deals at elevated margins. If you have those skills, put them to use and backfill your operations management role.
Do not underestimate the benefits of being able to sell your work at higher prices. Nothing improves your financial outlook faster.
Bringing It All Together
If you manage to bring all three approaches together, you will see a tremendous increase in both your gross margins and your bottom line. Your business cannot be all it can be when one of the three is lacking.