We are coming into the busy time of year for many construction companies. It’s tempting to hire more people now. Don’t bring on more employees just because you are busy. Instead, first make sure you can generate enough business to support them.

Our coaching clients continue to prove that the graphs in the Markup and Profit book are right on the money. These graphs detail the volume of sales required per employee. If you have more employees than your sales can support, you will start having cash flow problems almost immediately. And letting someone go because you hired too soon is painful for you and especially the new employee.

The cost of an employee must be on the estimate sheet before they are hired. Don’t put anyone on a job unless there is money on the estimate sheet to cover his or her wage, and you are confident there is enough business coming in to keep them on the payroll.

Take care now – you’ll be grateful at the end of the summer.

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Tom Reavey
Tom Reavey
March 18, 2006 10:22 pm

I find it uncanny how accurate the graphs are in the “Markup and Profit” book. I have referred to them many times before to check myself on whether my company is accurately producing a good return based on number of employees to total gross receipts. Everytime I have checked I am glad to say we are doing fine, usually doing exactly what the chart says I should be doing. It always make me feel relieved to know I am not over burdened with too many people in relation to gross receipts and that the people and the whole operation is… Read more »

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