A Plan is Only Good if You Use it
The past couple of weeks we’ve discussed how important the Production Tracker tool is and how it can help you see the future of your business.
Building a construction business is no different than building a building. If you don’t have a plan, you won’t know what to do. You will just be guessing.
If you don’t have the right tools and know how to use them, it will be a lot harder to build anything.
The Production Tracker is one of those business building tools.
So far, we’ve discussed how…
- Creating and recording project numbers can help you focus your attention on the right kinds of projects.
- Tracking project bid amounts will give you a clear picture of where you are in relationship to meeting your financial goals for the year.
- Tracking dollar amounts of signed proposals will give you the rest of the picture of where you are financially in relation to where you want to be by the end of the year.
- Tracking dollars collected from projects will give you a clear comparison of your signed amounts with your collected amounts.
- Percentage of jobs signed will let you know if your pricing is too high or too low.
- Percentage of dollars signed per dollars bid will let you know how you’re doing in relation to reaching your financial goal for the year.
- Percentage of dollars collected per signed simply lets you know if you’ve collected everything that was bid.
Now, let’s look at the final five areas of this tool and how they can help you build a successful construction business.
Average dollar amount of projects bid – This number (cell I-30) is just what it sounds like. It’s the average dollar amount of all the projects you have done proposals for. It can be helpful to know what this information is. It can help you determine if you should make changes to the sizes of proposals that you should be doing.
Average dollar amount of projects signed – This price (cell J-32) lets you see what the average dollar amount of your projects are and how it compares with the proposed amounts. Like the average bid amount, this number tells you the size of projects you normally do. You can then make changes to what proposals you should focus on.
Average dollar amount of projects collected – Like the percentage of dollars collected, this number (cell K-34) lets you know if you’re increasing or decreasing the dollars you collect after proposals are signed. This gives you a critical piece of information: knowing how accurate your proposals are.
These next two areas are instructive when it comes to production planning as it relates to achieving your revenue goals.
Projected timeframe for doing signed projects – This information (cells I-23 and J-23) tell you how long it should take you to do the work of the proposals that you currently have signed. This is determined by dividing what your gross revenue goal for the year is by 52 weeks. Then dividing the current total signed amount (cell J-22) by that weekly revenue target will give you the number of weeks needed to do that work.
Projected date work should be done – This information (cell K-23) converts the projected time needed to do the work of the currently signed proposals (cell I-23) to a calendar date. This is achieved by adding the number of weeks (cell I-23) to the starting date (cell H-23). This then gives you a target date on the calendar that the work should be done to stay on task and achieve your dollar goal for the year.
I find these last two pieces of information to be the most revealing and helpful when it comes to staying on target.
This information can increase a sense of urgency and focus. This information is critical to building a successful construction business.
I hope you’ve found this series on the Production Tracker, as a tool for building a successful construction business, helpful.
You can learn more about the Production Tracker by joining us for the Production Tracker Workshop at 10:30 AM CDT this coming Saturday, May 11th.
If you would like to know about some of the other business building tools we offer, take a peek in the Business Building Toolbox.
If you would like some help building your construction business check out the 5 steps here, or schedule a free 30-minute coaching call.