This first microblog in the Profit and the Construction Industry series examines why we should talk more about Profit.
We don’t like using the word’ profit’ in the building trade. There is a misconception that making a profit is being ‘greedy’ and that Profit is gained at the expense of others. While this misnomer persists in this sector, the reasons for the need to make a profit are overlooked.
Profit is essential for the sustainability and growth of a business.
It is important to realise that making a profit is broader than the one-offs of “buying a boat” or “going on a trip”.
Profit is the steady, balanced margins while delivering value for money to our clients.
Let’s look at the broader effects of making a profit.
Business Resilience
When continued work is less secure, setting aside some money is essential to ensuring your business’s success until the next contract.
Economic safety for your employees
Making a profit also safeguards your employees. Having a profitable business means knowing you can pay your staff even if one contract doesn’t yield the expected returns.
Enables investment
Profit returns enable you to invest in tangible and intangible resources to expand and improve your business. Tangible resources include vehicles and equipment, and intangibles include software and staff training.
Your Family Benefits
Your family benefits from your business’s profitability. While money isn’t everything, it sure does help with football lessons and family holidays!
Gives you time
Running a business takes time away from other activities you enjoy. Being more profitable enables you to employ consultants to do some of the work, reducing the time spent on your business ‘after hours’.
Profit needs to be discussed more in the building and construction industry to ensure a viable industry. Profit is within reach for any business.
Summary: The effects of making a profit are more than just business security. A responsible business owner delivers quality projects on time and plans for and implements measures to achieve profit.
This microblog is part of the Profit and the Construction Industry series. The next microblog examines ‘What is Profit’.
Registered Quantity Surveyor, Vice President of the NZIQS (New Zealand Institute of Quantity Surveyors)
Stu’s mission is to help build a more resilient construction sector that will deliver increased supply and value for money and improve the lives of New Zealanders both within and outside the industry.
