The bidding process at the beginning of a construction project might put a big smile on the owner’s face upon seeing the profit margin, however; at the end of the project, that smile may have slowly transformed into a frown projecting a noticeable look of confusion. Why? Because profit fade, the difference between the perceived profit and the actual profit, can be significant.
There are a variety of reasons why the estimated profit and the actual profit fluctuate. Maybe the initial plans were bad and the owner wasn’t willing to approve necessary change orders. Maybe the project manager miscalculated the estimate to complete during the project. Maybe weather delayed the project more than expected. Maybe the estimator missed an item on the bid.
Sound familiar? Get a firm grasp on preventing profit fade by reading my article that recently appeared in Modern Contractor Solutions, “Prevent Profit Fade: Three Ways Technology Can Increase Job Profitability.” Click here to read the full article!
