We have been busy! Up at 4:30 most mornings, and doing paperwork until 10!
Started a Park job with the 75G For a local City. Building about a mile of trail around a new wetlands area.
I have been attempting to do a thorough study, as to wether any large companies are making a profit in this market.
While it's possible I'm Drawing false conclusions, I have been unable to find even a single example of a medium to large size contractor turning even a modest profit. It's my conclusion, that with the recent low cost of capital, an over saturated market, and legacy competitors, even a 10% net margin is Unachievable.
As such, we've layed off a majority of the crews, and sold most of the equipment we owed money on. Our New strategy involves a few key Component's,
1) Low Debt: Keep payments and leverage to a minimum. better to have fewer machines earning there keep, than a large fleet operating at a loss. We were around 35K a month in payments, I've got it down to about 9K Now.
2) Big jobs: Despite downsizing, the size of work we are bidding is getting much bigger. Bigger work, traditionally built by bigger contractors, usually has much more overhead, and inefficacies bid in as a cost. We can do work others are bidding at 3%, at 30%. So far this is working out to be true. As the owner, I can do the job of Project engineer and estimator myself, while running a crew. It's terribly un-sexy, but it's turning out to be Quite Profitable. Average Job value used to be 250k-600k, Now we are doing 1-3M dollar Jobs. An added benefit is only need to win 2-3 of them a year, instead of 20.
3) Trucking: It seems one of the big profit levers is getting the equipment utilization, and Project performance speed up. Being able to move my own equipment, and do a lot of our own trucking, has helped hugely in this department. Despite cutting the labor force by 3/4, revenue has stayed remarkably, High.
4) Technology: Following in the footsteps of others on here, Doing more with less, we've been investing in tech. Putting triple 3D in the Huddig and 315, and doing all my own layout with the rover.
if you made it this far, thanks for reading my rant. oh the joys of business.
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