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Are Margins Back?
Bill Palmer / Editorial Director, Commercial Construction Group / July 30, 2013
The newly named ASCC Concrete Executive Leadership Forum (formerly the CEO Forum) in Palm Beach, Fla., in July was another great opportunity to network with new and old friends in the concrete construction business. One of the highlights of this meeting is the contractor roundtables, where a random group of contractors gets together to discuss an issue of interest. One of the roundtables in which I participated took on a topic near and dear to every contractor’s heart: margins—whether they have come back and how to get them a bit higher.
The consensus was that business is better but the threat of another slowdown remains strong. That fact, and the continuing competition from unqualified or low quality bidders, is keeping margins tight. The methods mentioned to increase margins include adoption of technology and maintaining good customer relations. Also, adopting a practice that is related to lean construction techniques: getting production information to the field crews so they always know how they are doing compared to budget, how they compare to other crews, and what their goals are.
Several contractors spoke about the increasing need to stay away from bad projects and customers. “We don’t hesitate to fire bad customers and walk away from bad projects,” said one. Another noted that there are actually two advantages to this: not only do you stay out of a bad situation but you saddle one of your competitors with a project that might keep them from bidding on a good job.
What are you doing to increase your margins?