Benchmarking and Averages

What’s a good number? What are others doing?

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As the leader of a contracting business, you must be constantly focused on the basic scoreboard metrics of customer satisfaction, profitability, and cash flow.

Scoreboard: Averages Only Tell a Partial Story. Benchmarking Averages example for 2022 showing Civil, General Contractor, MEP, and Other Specialty


Let’s dive into something simple like profitability and quickly talk about the “benchmark averages.”  

  • Reports such as CLA’s and CFMA’s are valuable and always worth reading.
      
  • There are lots of different ways to account for expenses. Look at higher-level measures, such as net profit before taxes.
      
  • Realize that average means just that. If the average is 3%, then for every contractor who reported a 1% year, there was one that reported a 5% year. For every contractor who reported a break-even year, there was one that reported a 6% year.
      
  • These will be distributed across a bell curve, and you want to be on the high-side of this bell curve.

Your market strategy, business development capabilities, and operational discipline are huge variables.  

How close are you to the average?  

What would it take for you to be above average? Contact us for a conversation.


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