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Builder confidence fell for the ninth consecutive month in September as elevated interest rates, ongoing labor shortages, and supply chain disruptions continue to impact the housing industry. Although nothing is for certain and even the most experienced economists can’t predict how the next year will unfold, there are steps you can take to help secure your company’s future. Green Building Advisor contributor Laura Dodde recommends the following to put your business in a favorable position to navigate the uncertainty.

Numbers, numbers, numbers
Knowing your numbers is the number one key to a successful business. Having clarity on your company’s target annual gross profit margin and knowing your estimating markups, accompanied by a good estimating tool, and solid job cost accounting practices can make all the difference for you and your business. Not only does this help you accurately project the gross profit needed to sustain your business, but these practices allow you to come within 2% to 5% of your estimates, giving your clients peace of mind and allowing the business to hit its target margins to continue operations.

How do you establish your target annual gross profit margin? By creating and tracking against an annual business operating budget. An operating budget is established by projecting or estimating the annual revenue for expected projects, the cost of goods needed to produce those projects, and the overhead expenses it takes to operate the business. The operating budget should be reviewed and tracked against the actuals on a monthly or quarterly basis and can be adjusted if major changes have occurred.

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