turnaround

How To Achieve A Successful Turnaround For The Building Industry

There is a looming crisis in the Australian building industry. The slowdown in construction and building projects continues to intensify in Victoria and also in Queensland. 6,895 jobs or almost a third of the industry’s full time staff in Victoria will be cut by June as businesses attempt to reduce their costs. The downturn is being blamed on decreased demand for new homes, consumer confidence and stricter credit requirements. Many building companies are giving large discounts to encourage customers to purchase new homes, but even potential first-time home owners are holding off due to poor perceived job security across all industries.
It has been predicted that the building industry will make a steady recovery by 2013, but the crisis currently continues to build. If your building and construction business is in trouble, it is crucial to act straight away. You can still save your business. Below we discuss how a successful turnaround can be achieved by introducing accountability measures in the areas of sales, operations and financial management.
Operations
First and foremost, implement a systems approach with accountability measures. All aspects of your business must be measured, with links back to financial measures so performance can be determined and process problems identified. As part of this, you must have strong site supervision to ensure delays in construction and project progress are swiftly dealt with. A project manager should be regularly on-site to take responsibility for the function and success of each project.
If you are trying to reduce costs, it isn’t enough to simply get the best rates from your suppliers. You must also have efficient ordering and scheduling of materials in place, wherein you are able to pay suppliers on time and deliver the materials to the site without delay.
Your operations pipeline must function like clock-work. Drill down to find any bottlenecks in the system, where operations are measured and performance is driven by financial accountability measures. As an example, do not wait until the time of final claim to deal with any building defects. If defects are handled sooner, closer to when they are first reported, the return of trades to make repairs is more effective than handling defects 3 months later when repair work is costly and time-consuming.
Performance
Your staff must have daily, weekly and monthly performance measures, especially including weekly turnover targets. To let your staff know what you expect from them, implement individuals KPIs and performance criteria. Also, measure their performance daily to see if they are on track to meet the criteria set. Non-performers need to improve or be moved on to allow your business to grow and get the “right people on the bus”.
Sales force
Just like in operations, your sales force need to be highly focused on accountability to sales targets. Appropriate recruitment processes must be in place to ensure that you are employing effective and experienced sales people. Efficiency gains can also be achieved by breaking up existing sales portfolios into geographic regions to reduce travel time.
Introduce …

Tips On How To Turnaround Your Building And Construction Business

The Australian building industry is in crisis. It has been reported that 6,895 jobs will be cut by June in Victoria as construction companies try to reduce their costs. The crisis is also prevalent in Queensland. If your building and construction business is feeling the effects of the building industry trouble, it is vital to take immediate action and seek professional help from a building industry turnaround expert who can work with you to turnaround your business.
You can save your business, and the jobs of your employees, by focusing on the areas of sales, operations and cash flow management. In this article, we share Construction Project Start Up Procedures some tips from turnaround specialists on how you can drive profitability, cash flow and operations to achieve a successful recovery for your business.
Review your current cost structure and level of profitability
To drive profitability, the initial step is to review your current cost structure and level of profitability. Set a target level of net profit which will never be less than 10% of sales after Directors’ benefits, but can be 15% of sales in some sections of the building industry. Having done this, determine how to restructure your business to achieve your target profit and immediately set about driving implementation. Monitor your progress and make sure that end of month accounting is accurate and completed by the 7th of the following month.
Set weekly invoicing targets
Focus on driving weekly invoicing by setting weekly invoicing targets from progress claims and driving the achievement of these targets. These should always be higher than what the business is currently achieving and may result in increased weekly sales with no increase in overheads. Combine this with managing costs and gross profit margins.
Set up detailed weekly cash flow
A well organised and managed cash flow is a powerful tool to drive operations and sales performance. However, cash flow management often becomes more difficult when the business is in financial distress. To start organising and managing your cash flow, set up a detailed weekly cash flow forecast for the next 8 weeks. Include all payments you expect for each job and all payments you have to make for the next 8 weeks. Prioritise payment for payroll followed by suppliers, and subcontractors essential to keeping your jobs going and then followed by ATO payment plan and other creditors’ payment plans.
Schedule weekly progress House Plan 4382 claims in dollar figures
To ramp up operations, schedule a dollar figure in progress claims each week e.g. $100,000 per week. This may reflect 4 claims on average per week, split between 2 supervisors so that each supervisor is scheduled to complete $50,000 of claims each week on average. This can quickly expose which supervisor is performing and which supervisor is not delivering on target. Keep in mind that you should have the best staff on board so do not hesitate to replace a non-performer with a top supervisor.
Schedule a job in advance
Disciplined job scheduling several …