Five tips to help measure the performance of your construction business

*Article sponsored by MNP

The construction industry faces many challenges in 2024 — from supply chain disruptions and labour shortages to high interest rates. To help your business address these challenges, here are five areas to monitor to measure your performance:

1. Cashflow monitoring

Construction projects often tie up cash, impacting your ability to pay expenses. Monitoring cashflow helps identify gaps, optimize payments, and improve liquidity. To track cashflow, make sure you have the financial systems in place to provide real-time data to make informed decisions.

2. Performance metrics

Tracking metrics like project costs and profit margin can help you understand the performance of each project. Meanwhile, company-level metrics — like revenue — can help you assess the performance of your business. By implementing the right systems, you gain a clear view of key performance indicators (KPIs) to spot bottlenecks and improve operations.

3. Workplace culture

Due to labour shortages, creating a positive workplace culture is essential. Measure employee engagement, development, and turnover to help enhance recruitment and retention efforts. The right HR systems can track data to help you make confident decisions to improve the employee experience, reducing the cost of hiring and training new employees.

4. Scenario planning

Prepare your business for its next steps by mapping out what-if scenarios, like shifts in material costs or housing demand. Scenario planning can guide your strategic decisions — like mergers and acquisitions — and help you identify risks and growth opportunities. This valuable tool helps you decide where to invest and informs the future direction of your business.

5. Digital solutions

Leverage technology — like enterprise resource planning (ERP) platforms and project management tools — to monitor cashflow, project progress, and employee metrics. Regularly evaluate your digital maturity by assessing how well your systems support your business goals and adapt to emerging technologies.

Take the next steps

Staying competitive means monitoring your business performance across these five areas. This can help you identify areas for improvement and invest in the digital solutions that can support your goals and enhance your agility in this changing industry.

To learn more about improving the performance of your construction business, reach out to Nicole Asselin, Partner, or Dean Leesui, Partner, today.