The construction industry has many upfront costs, including materials, equipment and payroll. How Do You Control Cost in Construction Management? If your costs were much higher than expected, you should investigate the potential cause. Then, on a monthly basis, you should compare what you expected to happen to what actually happened. You should define your expectations for revenue, gross profit (what you have left from sales after taking out your direct costs) and operating profits (what remains from sales after taking out direct costs and overhead). What Is Cost Control?Īccording to Investopedia, cost control is “the practice of identifying and reducing business expenses to increase profits.” For business owners, this process begins with budgeting. It can help ensure you have the resources you need when and where you need them and can help you increase profits. Practicing efficient cost control, however, is a core aspect of running a successful construction business. Considering these hurdles, cost control in construction management is likely just one of your concerns out of many. As a construction business owner, you’re probably all too familiar with the challenges facing the construction industry - like finding work for your business year-round or keeping skilled laborers on the payroll.
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