Managing a residential construction company is a monumental task because it involves a million moving parts, each of which can directly impact how successful and profitable you are. That’s why it’s important to accurately track your financials at all levels. But there are as many financial metrics as there are moving parts in your business, so learning which ones are the most important to track is key to your success.

Estimating the cost of renovating or building a home isn’t a one-time event. It’s an evolving process that changes as contractors learn more about their clients, the site and the scope of work. In fact, creating a residential construction estimate can take several rounds of investigating and editing before arriving at a accurate total. Explaining that to clients, however, can be tricky, because they’ve been conditioned to think the first number they hear is the final number they should hold you to.

When you’re taking on the risk of remodeling or custom building a home, you need to ensure you’re protected against unforeseen costs that can quickly push your project over budget – and erode your profit. That means ensuring there are contingencies in place for accessing additional funds needed. But how you handle those contingencies – both internally and with clients, differs between fixed-cost and cost-plus builders.

What is cost-plus pricing, how does it work and what do you need to know before you decide to use this pricing mode for your residential construction business? Cost plus contracts have some unique benefits, but they aren’t a one-size-fits-all option. Here’s what you need to know about cost plus and how it differs from fixed price contracts.

If you’re a cost plus builder, finding financial management software that understands and adapts to your business needs can be challenging. That’s because cost plus accounting is unique, and most available software options follows the generic fixed cost model. That’s why it’s important to understand what makes cost plus financial software different and why you need to find the right solution for your cost plus business.

Using financial management software is a critical step in ensuring that you are accurately tracking all your financial tasks so that your residential construction business is organized and cash-positive. But with so many options available, how do you know which one is the right fit for your remodeling or custom home-building company’s needs?

Construction change orders happen for a multitude of reasons. And all these situations can impact the original contract price and, in turn, your bottom line if you're not managing them properly. That means using change orders to capture project changes and add them to the overall project cost.

No two remodeling or custom home building projects are the same, and because of that, you can’t apply a “one size fits all” approach to estimating them or compare their costs to other similar projects. Which is why estimating a project using square foot pricing is never a reliable method for ensuring a profitable job and successful client outcome.

Both mark-up and margin play a role in making your business profitable, so it’s important to understand the differences between them. If you aren’t charging the right mark-up, you won’t hit the correct profit margin, choking your company’s cash flow, and selling work at a loss.th an idea.

It's a great question and is one that many remodelers and custom home builders must consider for their business. You need to weigh the pros and cons of both these two pricing structures and then decide which type of contract makes sense for your remodeling or construction business.

We all have the same 24 hours in a day, 168 hours a week, and 8736 hours a year, which means we need to use schedules to ensure we're using those hours as efficiently as possible. Since you can't add hours to the day, a construction project schedule helps you use the time you have to maximize productivity

Anyone who has experienced life on a job site knows that it’s never free from distraction, and tasks will always take longer than you planned. Learn how to recognize the pitfalls of estimating on a ‘best-case scenario’ and ensure you’re using the right tools to estimate jobs accurately.