Want a More Profitable Construction Business? Start Here.
Most contractors don’t fail because of poor workmanship. They fail because they don’t have a strong financial plan.
Nearly 20% of construction businesses close within their first year, and by year five that number rises to over 44%, according to analysis from LendingTree.
These numbers highlight a recurring challenge. Businesses need forecasts, goals, and consistent tracking. Without that trifecta it’s easy to lose money.
That’s why JobTread created the Financial Playbook. This step-by-step guide will help you build a stronger, more profitable business.
The playbook focuses on three core areas:
- How to create an annual budget
- Tips for tracking the results
- Using key performance indicators to check your progress
Here’s a deeper dive into each section.
Build Your Annual Budget
The budget is the cornerstone of every strong financial plan. JobTread’s playbook guides you through projecting revenue, expenses, and profit month by month.
- Set realistic sales and profit goals
- Forecast revenue based on leads, conversion rates, and average job size
- Estimate job costs and overhead expenses
- Calculate profit, and key margin percentages
With a clear budget, you can make decisions with more confidence and stay focused on your financial goals.
Free Construction Financial eBook
The ultimate guide to setting the right company annual budget
Tracking Results
Once your budget is in place, the next step is tracking the results. The Financial Playbook explains how to close your books each month and compare your actual numbers to what you planned.
This includes how to
- Review key financial variances
- Understand gaps in revenue, job costs, and overhead
- Make adjustments based on data, not guesswork
This habit of conducting a monthly close builds discipline and helps you stay ahead of potential problems.
Use KPIs to Check Progress
Tracking the right KPIs transforms your budget from a fixed document into an active management tool. It allows you to make adjustments before issues begin to affect your bottom line. Your KPIs should be clear, straightforward metrics that reflect the most important areas of your business and give you real-time visibility into your performance.
The playbook highlights the most important metrics for construction businesses, including lead volume, conversion rates, average job size, gross and net profit margins, revenue per employee, and overhead as a percentage of revenue.
These KPIs give you a real-time view of business performance and help you identify what is driving results.
Start Building Your Plan
The Financial Playbook was created to simplify financial planning for contractors. Whether you are just getting started or looking to improve your existing process, it gives you the structure and tools to move forward with confidence.
It also includes a free downloadable budget template you can start using today. Download the full playbook
You do not need to be a financial expert to run a profitable business. You just need a plan. This playbook will help you build it.
Elevate your company to new levels of success!
Let one of our experts show you how JobTread will get you organized, save your time, and increase your profits.
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