Process Delineation Leads to Major Increase in Profits for Construction Company

construction company increase profits

The most fundamental goal for any business owner is growth. But when a business grows, it’s vital for procedures and documentation to develop along with it. Otherwise, there will always be a limit to how far your company can go. We worked with a commercial construction company to build out solid processes for the entire organization and significantly increased their profitability.

challenge

This Florida-based commercial construction company had been in business for 40 years. They were profitable, but hadn’t reached the level of profitability they wanted. Not only that, but the business was not a turnkey operation. So the owner did not have the option to sell the business if he wanted to, and he had to be physically present at all times for the company to function.  

We quickly realized the core problem was a fairly common one: lack of process delineation. The business lacked guidelines and clarity about how things were done. As a result, they suffered from bottlenecks, inefficiencies, missed profit opportunities, and lack of continuity. Additionally, the absence of a strong communications protocol meant problems were not addressed efficiently. Together, these challenges were holding the company back from achieving a higher valuation. 

solution

We systematically worked our way through every function in every business department to flesh out processes and procedures. We also focused on building out a robust communications protocol to escalate and solve problems efficiently.  

  • Used swim lane diagrams to create visual depictions of all processes across every business department (marketing, accounting, operations, etc.) 
  • Created Standard Operating Procedures (SOPs) that supported the execution of all business processes on a daily, monthly, and annual basis. 
  • Revised processes and SOPs to maximize profitability throughout all business functions. 
  • Developed a custom tool to automate the calculation of overhead costs, profit estimates, and other key variables. This solution replaced a manual process that was not only less efficient, but was also causing the business to miss out on additional revenue. 
  • Developed a second tool to streamline and automate the bidding process, cutting down on the time needed to make a sale. 
  • Instituted daily escalation meeting to expedite problem-solving and improve quality control 
  • Drafted a company-wide communications protocol using SQDEC board (Safety, Quality, Delivery, Employee Empowerment, Cost). 

results

  • Total projected revenue over a 6-month period increased from $250K to $1.7M
  • Employed automation to reduce time needed to compose a bid, from approx. 10 hours to approx. 2 hours.
  • Went from having a maximum of 6 jobs at various points in the construction process, to being able to engage with 29 jobs at a time. 
  • Business became a turnkey operation, positioning the owner to sell in the future.

“A vision cannot be realized without the ability to execute.”

Khris K. Bhattan
President, RTG Solutions Group
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