Would you like to improve the performance of your construction company? There are key performance metrics that will measure or calculate elements that indicate either on-track results or a need for improvement in certain areas. In addition, use this construction business plan to provide a solid structure for your growing business. It’s time to build your company to new heights.
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1. Lead Conversion Ratio
How many of your leads decide to purchase your services? Consider the quality of products, customer reviews and on-time completed services. Calculate by dividing the number of new leads per month by the number of new customers per month. The result will be the lead conversion ratio. To improve, increase sales training and customer satisfaction overall.
2. Customer Referral Rate
Referrals are crucial in the construction business and a key indicator of performance. Measure the number of customers who refer your company to others upon project completion. If needed, use incentives to increase word-of-mouth referrals.
3. Sales Revenue
To calculate the sales revenue, subtract any returned or defect material costs from the total sales income. The result will indicate how well your company is performing in the marketplace.
4. Net Profit Margin
This “bottom line” number is the actual profit realized from a construction project. It indicates the ability of the company to generate profits in contrast to general revenue. Calculate by subtracting all sales expenses from the monthly revenue. Increase profit by raising pricing or decreasing production costs.
5. Employee Satisfaction Rate
This metric is an in-house review of employee satisfaction, which will inform the quality of your finished projects. Use anonymous surveys to quiz employees and make improvements, as indicated.
To enjoy customer referrals and strong profits, measure your metrics every six months and make improvements to create long-term growth and success.
