How to increase the margin in the construction industry?

Managing margins is essential for the sustainability and growth of any business. It can be decisive in times of crisis. Here are concrete methods to improve your processes for tendering, site monitoring and cost control.

Reminder: what is margin in construction?

Standing out in the market is necessary for any construction company to attract new customers. One of the keys to achieve this is to Define a fair selling price : offering a price that is too low could damage the reputation of your business and your profitability. Another too high would prevent you from winning contracts due to a lack of competitiveness.

The margin is the difference between the selling price and the cost price, that is to say: Cost price + gross margin = Sales price excluding VAT.

The cost price includes several elements:

• Overhead expenses,
• The total disbursement (Dry payout and construction costs).

So the margin depends directly Dry disbursement and construction costs. The lower they are, the more important it is.

Tips for increasing margin

Here are some tips to improve the profitability of your business.

Write quotes carefully

Precision in writing quotes (which include dry expenses and construction costs) is fundamental to securing and increasing your margin. Here's how to make this process more efficient:

• Detail and clarity: each quotation must be comprehensive and clear. Precisely detail the work to be done, the materials required and the estimated time for each phase of the project.
• Cost accuracy: Carefully assess all costs associated with the project. This includes the materials, materials, and labor of each work, as well as overheads. A fair estimate of expenses prevents budget overruns and guarantees the profitability of the project.
• Conditions: detail the terms of payment, delivery times (they should be realistic), and terms of the agreement. This reduces the risk of conflicts and secures your future income.

Make a quote accurate and detailed minimizes the risk of misunderstandings. They not only improve customer satisfaction but also increase your chances of achieving a greater profit margin on each project.

Do not neglect the preparation of the construction site

Each of construction site preparation steps is important for minimize unexpected costs and reduce the risk of problems during the project. This includes:

• Optimized planning,
• Good use of resources (human and material),
• The selection of appropriate materials,
• Optimal supply management.

These considerations contribute to the fluidity of the project, but also, directly or indirectly, to the increase in the company's margin.

Do not hesitate to negotiate prices with suppliers

Negotiating with suppliers can help lower your cost price. This has a direct impact on increasing your margin.

Consult several suppliers and put them in competition. Negotiate firmly to get the best prices.

Improve the efficiency of your teams

Improving the effectiveness of teams in the field contributes to optimize labor costs while increasing productivity. Here are a few ideas:

• Trainings: ensure teams are always up to date with the latest techniques and industry standards.
• Technologies: integrate tools and software that make work easier and increase efficiency.
• Communication: Encourage clear and ongoing communication between team members and departments to avoid misunderstandings and mistakes.
• Scheduling tasks: organize the work so that each employee is in the right place at the right time to optimize intervention times on each work.
• Performance monitoring: Put systems in place to monitor the progress of work and identify areas for improvement.

Improve your monitoring of the construction site

Rigorous monitoring of the site makes it possible to ensure that everything is going according to plan and that resources are used optimally. It also helps to anticipate potential problems and to respond to them quickly.

The adoption of software like Alobees can significantly improve your site supervision and increase the profitability of your business.

Alobees helps you increase your margin

Alobees is a construction site monitoring application specifically dedicated to SMEs in the construction and public works sector. It integrates the tools necessary for accurate and real-time monitoring of your construction sites.

Here are some of its features:

• Centralization of documents: get quick access to all your important documents. They are grouped together in one place to facilitate your decision-making.
• Off-road access: stay connected and informed whether you're on the job site, in the office, or on the go. This allows for continuous management without interruption.
• Communication: share information easily. Alobees helps avoid misunderstandings and delays to optimize workflow (Learn more).
• Scheduling and organization of tasks: precisely plan and monitor the work. Improve the use of resources for better management of time and expenses (Learn more).
• Management of interventions and timesheets: monitor the agenda of your employees in real time. Control labor costs through detailed monitoring (Learn more).
• Payroll variables: easily retrieve the payroll variables of your employees in the field. In this way, simplify payroll management and avoid mistakes (Learn more).

Alobees meets the requirements of construction professionals by offering precision, efficiency, and optimized management of construction sites. Try the software free for 14 days and measure for yourself the effect it can have on the profitability of your projects.