ForConstructionPros.com

In the big picture, John has a good pavement maintenance company. He's hard working, has a normal mix of long-term and short-term workers, but he can't quite seem to break through the profitability ceiling, or "PC." As much as he works and re-works his estimating efforts he still is falling 3%, 5%, even 9% short of the gross profit that he should be realizing on most jobs. His frustrations led to his asking me to come alongside for the rest of this year to get him over the "PC" barrier.

Too many good contractors are struggling today with getting that next 3%-5% of gross profit. Some contractors are literally approaching double-digit shortages from what they should be experiencing on their gross profit. After reviewing the work processes of John's crews I'm convinced that he can realize greater gross profit - but it's going to take planning, execution, and commitment.

First, most pavement maintenance contractors do a horrible job of pre-planning their projects. Preplanning, especially preconstruction, is a specialized effort among general contractors and our industry could learn much from them.

Preconstruction, with an emphasis on preplanning, begins when a field leader takes the collected information from the estimate and reviews what he and his crew can do to maximize the production effort. This means recognizing where trucks, equipment, materials, etc. should be delivered, loaded, unloaded, and stored. When not done this can cost a contractor thousands of dollars a year in accidents and damaged materials.

Second, set out the next week's schedule by each Friday. Many years ago I introduced the "Next Week Look Ahead" to our industry at our annual conferences. The contractors who have embraced this tool confidently share that this process of planning will add 2%-4% almost immediately to their gross profit, often more. The big objection I hear for not doing this is that "the schedule will always change." The schedule does change periodically, but by having the plan in place the alternative decisions can be made faster and with more foresight. There is absolutely no excuse for not planning!