Minimum Bottom Line Profit Should Average 9.4%!
For Trades & Subcontractors, at Least 11%
After Income Taxes Are Paid!
As an owner of a construction company, your profits should average 9.4 percent per year after taxes. This profit is net of your personal salary of $100,000 to $140,000 per year. Therefore, if you are contracting around $1.5 million per year, you should be generating no less than $180,000 per year in take home compensation for your efforts. If not, you are not in the upper half of performance within this industry. You are doing something wrong and this section of the website is designed to educate you about the proper organization, systems, policies and procedures you must incorporate in your construction company’s culture.
This section of the website is solely dedicated to contractors. There are over 70 articles covering key aspects of operations and accounting in the construction industry. There is a wealth of knowledge available here. All of the articles are written to help the contractor discover how to improve the bottom line and achieve financial success in this industry. Good modeling measurement tools are taught here; use them to increase overall performance and ultimately the bottom line. Use my experience and learn from my errors and successes to improve your business operation.
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I spent 28 years learning about construction accounting and implementing systems and processes for over 40 different kinds of construction companies. I have spent almost 4,000 hours of time drafting, reviewing and publishing these informative articles. If you wish to subscribe:
The articles below are business related, they are in-depth and educational in nature. The primary goal of each article is to educate and provide insight, guidance and knowledge to the contractor.
If you need help, I’m here to assist you. I have deep knowledge about how to set up cost accounting (project accounting) and tie it to financial accounting. Allow me to identify your needs and render solutions. The changes will greatly impact your bottom line and reduce your stress from the increases with cash flow. Contact me email@example.com; I usually respond within a few hours. My rates are reasonable and I’m very responsive.
How to Use Class Accounting in Construction
Implement Cost Accounting in Construction – Document Flow System
Implement Cost Accounting in Construction – File Structure
Implement Cost Accounting in Construction – Processing Documents
Implement Job Cost Accounting in Construction
Job Cost Reports – Balance Sheet Set
Key Performance Indicators With Construction – Backlog and Pipeline of Work (Part 2 of 3)
Key Performance Indicators With Construction – Production Reports (Part 1 of 3)
Labor Burden in Construction – Proper Rate Formula
Legal Structures for Contractors