How to Maximise Profit in the Construction Industry


Running a construction business can be very lucrative. A good contractor with a healthy customer base can bring in a large profit every year. Unfortunately there are some things that could damage your profits. Here are some things to watch out for if you are running a construction business.

Supply Costs

The cost of the materials you need to complete jobs will be constantly fluctuating. If you do not factor this into your pricing, you could end up reducing your profit margins drastically. There are a few ways to avoid this; firstly, buy all of your materials for a project at the beginning. It will cost you more upfront, but you might get halfway through the project and find that the supplies you need have jumped up in price. You have already agreed a price with the customer and they can’t be expected to pay more, so you will end up eating into your profits to pay the difference.

It is also a good idea to be aware of price levels at all times. This way, if prices start to creep up, you can buy the supplies for future projects while the price is still relatively low. If prices are exceptionally low on materials that you use often, it may be worth buying in bulk before the prices rise again.

Health and Safety

You might not think that Health and Safety has anything to do with your profit margins. It doesn’t, but only if you abide by regulations to the letter. If you are caught operating outside of health and safety procedures you could be hit with a big fine, and work could be halted. This means you’ve probably lost all of the profit you would have earned from the project, and you’ll be behind time finishing it. Health and Safety is often ignored because workers don’t realise that accidents happen as often as they do.

Every year there are thousands of deaths on construction sites. Nearly forty percent of workplace deaths in 2014 were caused by falling. So, you need to make sure that, when using ladders, scaffolding and aerial work platforms, you are following safe working practices.

If anything were to happen, and you were liable, you could be in store for a huge fine or even time in prison. Depending on the seriousness of the accident, you may be ordered to pay up to $10 million, or spend as long as two years in prison if you cannot pay. It only takes one incident to completely cripple a construction company.  


When giving prices for projects, you aren’t charging by the day or the hour. You’ll get paid a fixed amount on completion. The longer you take to complete a project, the less money you’ll be earning on each one. However, you do need to be careful not to rush jobs as this will increase the risk of workplace injury as well as sacrificing the quality of work. If the work is bad, you will lose custom, regardless of how quickly you completed it. Try to strike a good balance when giving estimates, so everything is done professionally in as little time as possible, then you can move onto the next project and get paid again.

Using these tips, you can maximize the profits of your construction company.


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