Contractors live and die by gross profit margin. And if you don’t learn how to control that one element in the bidding stage, you will always be chasing after profits.
The contractors I know who have learned to manage gross margin when bidding, nail project profits right from the start, and the result is a construction business that produces a consistent profit.
Gross profit dollars vs. gross profit margin:
Gross profit dollars are the difference between your bid price and your project costs. Often I see that contractors only look at that number before a bid goes out.
The gross profit margin is your rate of return and is measured as a percentage. It’s that percentage that you want to learn to manage in the bidding stage in order to make a more consistent profit in your business.
So how do you manage gross profit margin? In the video and the post below I show you how.