Boosting Profitability for General Contractors


As profit margins drop past the 2% mark, general contractors are compelled to look for more innovative ways to drive profitability. Recently, I learned of a GC that hired a third party services firm to photo-document its work on a large school project and passed the cost onto the owner with a slight markup. While I see the rationale behind adding value-added services as a way to improve revenue, I find this particular choice questionable.

Construction Photo-documentation firms offer a valuable combination of construction knowledge and photography services to owner/developers who lack the experience and resources to scrutinize the construction of their buildings. Most also offer a deliverable that includes construction photos delivered via the web.

However, does this make sense for a GC? Can these firms offer expertise that the GC doesn’t already have on staff? Do they hold the secrets to construction photography that a GC can’t match with a $500 camera purchase and a basic photography course at a local community college (or even online)? The answers are obviously no and no.

So, therefore, the missing piece of the puzzle must be the ability to deliver construction photos with a web interface offers more than a link to a Sharepoint folder. If a GC could deliver a comprehensive package of photos to an owner that offered a complete record of as-built construction and critical installation details, now that would be valuable.

And now, the GC can offer just such a deliverable. In my next post I will describe how Geedra enables GC’s to self perform the photo documentation of their projects, and in doing so transforms an overhead cost, into a value-add service that boosts profitability.

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6 Responses to “Boosting Profitability for General Contractors”

  1. Quality Door & Hardware Says:

    I think with the real estate economy so soft in some geographical areas everyone is looking for ways to increase profits. Over time I think we will see growth that will lead to much healthier forms of profitability.

  2. Seattle Home Builder Says:

    One of the best ways I’ve found to increase my bottom line is to move away from cost plus bidding to construction management. In this way, I’m guaranteed a set amount of profit, spread over the 4-6 month building process, and I don’t have the income that’s paid to my subs going though my company accounts.

    I then get bids from all my subs, and the home owner can pick the sub he wants, while I manage the work. Also, since the homeowner is paying the sub contractors directly, I’m not liable for payments to the sub.

    I now win many more bids than i used to, since I don’t have to inflate the bid price by 10%-20% to cover my butt. I pay less in tax, less in fees and I’m guaranteed a good profit on each and every job.


  3. Ryan H Says:

    I think that the most important way to protect your profit margin in construction is to properly bid the project to begin with. Obviously, this can be easier said than done, but with experience and patience, you should be able to make some money!

  4. Jim Hogan Says:

    Smartphones are really helping out with production costs of good quality videos but overall, its expensive indeed to be purchasing expensive camera equipment in this time. Good Post.

  5. Building Works Contract Says:

    Most construction fail to properly evaluate the cost involved as well as the profitablity of Home Building Project .This is where Building consultancy services come into figure

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