BUSINESS SUPPORT PROFIT MARGINS
F or many builders, profit is what’s left over – the money that remains once materials are paid, wages are sorted, and projects are (hopefully) delivered on time. But in today’s climate of tightened margins, rising costs, and unpredictable delays, that mindset can leave your business exposed. It’s important to flip that model on its head and treat profit as a priority, not an afterthought. In a recent FMB webinar, Business Coach Greg Wilkes and Tim Burrow, Hybrid Success Manager at Sage, shared tools and advice to help building companies regain control over their numbers, safeguard their profits, and build a business that doesn’t just survive – but grows with confidence. Their message? Stop leaving profit to chance. Start running your business like a business. “Most builders treat profit like leftovers,” says Wilkes. “It’s whatever’s left once you’ve paid everyone else. That’s completely backwards.” Wilkes knows the industry inside out. Having run his own building company for years, he now coaches other business owners through the highs and lows of growing a sustainable, profitable firm. And the biggest gap he sees? Builders are not paying attention to their numbers until it’s too late. “You don’t need to be an accountant,” Wilkes says. “But you do need to understand the basics: what it costs you to run your business, what you need to charge to be profitable, and how to spot problems early.”
“Too many builders underprice because they forget to include themselves,” Wilkes says. “Then they wonder why they work flat out all year but still can’t take a holiday.” Wilkes is a big believer in systems – especially when it comes to finances. “If your invoicing is late, your cash is late. If your quoting is slow, you lose the job. Every part of your finance process should run like clockwork.” That means having a reliable quoting process, a clear payment schedule built into contracts, and a system for chasing late invoices. “You don’t need to reinvent the wheel,” he says. “You just need to set up something that works – and stick to it.” He recommends using accounting and quoting software, setting aside regular time each week to review the numbers, and outsourcing things like bookkeeping if they’re becoming a drain on your time. “You should know – right now – whether this month is profitable,” Wilkes says. “If you don’t, that’s the first thing to fi x.” Tap into the tools of the trade to boost your profits Make support tools your friend, says Burrow, whose firm specialises in helping business owners and finance
teams get a live, accurate picture of their cash flow and performance, without the tedium of updating spreadsheets. Specifically,
Burrow recommends Sage’s product Futrli. “Futrli links straight to your accounting software,” he explains. “It
Know what your business really costs
pulls in all your customer and supplier data and runs our algorithm to give you a real-time view of where your business is at. Sales, costs, cash flow – it’s all there, month by month, so you can make faster, better decisions.”
Put profit f irst if you want your business to succeed
Wilkes wants to see builders stop pricing on gut feeling and start working from real costs. That includes factoring in overheads, wages, tool replacement, van insurance, admin time, and your salary – not just the day rate for trades on site.
Master Builder 22
www.fmb.org.uk
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