As a result of the pandemic, today. It forces companies, more than ever to work under accountability schemes. That allows strict monitoring of each of the project. Trying to find ways to increase the profitability of construction projects. And thus, we at Civil Engineering Companies in Dubai ensures that it maximizes resources and achieves the desired profitability.
Difference Between Utility and Profitability
The difference between utility and profitability is that the first is the difference. That exists in the value of what sells less the costs associated with the project. As for profitability, it is the % difference obtained between the value of the sale and that generated the costs.
As an example, we can say that a property with a sale value of $15 million. And construction costs of $14 million, obtained a profit of $1 million pesos and a return of 7.14%.
On the other hand, a property valued at $1.5 million with construction costs of $1 million. Obtained a profit of $500 thousand and a return of 100%.
Profitability Of Projects
That said, organizations should not only seek to make their projects profitable. But also ensure that they are profitable.
There are several ways to increase the profitability of projects:
Negotiation With Suppliers
Knowing what and how much a supplier buys from them over a period of time helps us to have a different basis for negotiation, by showing them our consumption and, where appropriate, future projections for the purchase of products/materials or services.
Accuracy In Purchasing Products and Services
Knowing with certainty. What is going to purchase and when the products and will require services. That can generate significant savings in:
- Freight
- Reduction of internal movements
- Warehouse space
- Low or no inventories, loss of product
- Execution of possible guarantees
Budget Control
Attachment to the budget projection is one of the most important points. Having project management tools or software that allows detailed parameters. Like following:
- Budget control, with
- Real-time information,
- With consumption limits for material and/or money,
- That helps to close items when they already used,
- Among many other things.
- It improves decision-making with every opportunity
To learn more about software for companies based on project operations, check out this article software for construction companies
Income Control
Following up on the fulfillment of the payments agreed with the client and a timely management of the same, allow not incurring costs such as the payment of interest on bank loans. The opportunity to pay in advance for certain purchases, availability of resources to improve negotiations, among many savings that translate into better results (profitability).
Customer Loyalty (Intangible)
Improving our profitability could translate into improving the customer experience, through:
- Investment in infrastructure
- Trained staff
- Use of technological tools
These contribute to providing competitive prices. Offering service levels higher than those of the competition. In addition to helping customer loyalty and recommendation.
Conclusion
After implementing these actions in your construction company. You will surely have managed to increase the profitability of construction projects.
As a culmination to the above. It can ensure that we must not only pay attention to the usefulness of a project. But it also increases its profitability.
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