Running a construction business is hard enough without realizing at the end of a project that your “profitable” job actually lost money. It happens to more contractors than you think. The problem isn’t always in the field – it often starts with how you estimate, track, and communicate your budget.
Let’s talk about how to fix that.
Know the Number That Matters
When you build a bid, you’re not just creating a price. You’re creating a plan for how the job needs to run. That includes your cost, overhead, and profit margin. The problem is, many contractors think as long as they make some money, it’s fine. But if you planned on 20% profit and only made 12%, you didn’t make money. You lost 8%.
Profit is not extra. It’s the fuel that keeps your business running. It’s how you pay yourself, reinvest in equipment, and cover the slow months. If you’re constantly cutting into profit just to finish jobs, your business is slowly sinking.
Don’t Eat Into Overhead or Profit
Your estimate includes certain buckets of money – cost, overhead, and profit. Each one has a job to do. Don’t rob one to pay for another.
Your overhead pays for the office, the trucks, and insurance. Your profit is what’s left after the company runs. When you eat into those, you’re taking away from the future of your business.
If you use ProfitDig, your bids already break this down clearly so you can see exactly what’s what. That visibility is key to staying on track.
Share the Plan With Your Team
Once you win a project, don’t keep the budget to yourself. Your team needs to understand what you’re aiming for. Sit down with your superintendents and foremen. Show them how you expect the job to go – how many feet or yards per day they need to hit, and what success looks like.
Here’s a trick: don’t give them your exact production rate. Give them a slightly tighter goal. If your bid assumes 100 feet per day, tell them the goal is 85. That way, you build a little cushion. If they hit that, you win.
Reward the Crew That Delivers
When your people come in under budget, make sure they feel it. A performance bonus, even a small one, goes a long way.
Say your team finishes a job with 7% more profit than expected. Keep a portion for the company, and divide the rest among the crew. That kind of reward changes attitudes fast. When the next job starts, everyone’s working toward the same goal.
You’ll also see better teamwork on site. When money’s on the line, your crew will hold each other accountable. Nobody wants to be the reason their team misses a bonus.
Listen to the Field
Upper management might have the big picture, but the guys in the dirt see the details. When they suggest a faster or smarter way to do something, listen.
They might spot a design flaw or a shortcut that saves time and material. If it makes sense, roll with it. You don’t have to have all the answers. You just have to be open to better ones.
Learn From the Data
Every job teaches you something. When a project misses the mark, find out why. Was it bad weather? A bad subcontractor? An estimating mistake?
ProfitDig makes it easy to track each bid item and see exactly where you lost money – labor, material, or equipment. Use that data. Adjust your next bid so you don’t make the same mistake twice.
You Can’t Win Every Bid
If you bid 100 jobs and win 10 or 12, that’s right where you should be. You don’t want to win every bid. That usually means you’re pricing too low.
Losing a job isn’t failure – it’s discipline. It means you know your numbers and refuse to work for less than you’re worth. The guy who underbid you will probably regret it halfway through.
The Bottom Line
Protecting your profit isn’t about being greedy. It’s about being smart. Know your real costs, communicate with your team, and track everything. Reward success, learn from losses, and don’t be afraid to walk away from bad bids.
That’s how you build a business that lasts – one job, one profit margin, and one smart decision at a time.