Organising a construction company: the 4 steps of management control

Problem: the business has work, but the owner never knows exactly how much they're making on each project, and at the end of the year the profits aren't as large as expected.

Solution: a 4-level management control system (opportunities, project costs, cash flow, regular reviews) that can be run in 3 hours a week.

Result: clear numbers, informed decisions and a business that genuinely works for the owner.

Everyone's working, but nobody knows how much they're making

In many construction businesses it's always the same picture: full construction sites, busy staff, packed diaries. And at year-end, the owner wonders: "Where did all the profit go?"

The problem is management control, or rather: its absence. Not because the owner is poor at their job or bad at planning. But because in the day-to-day, putting out fires always takes priority over monitoring. And when nothing is monitored, you're driving blind.

Why management control is essential in construction

In most other sectors, management control is a well-known concept. In construction, it's often something unknown or reserved for "big" companies.

Yet in construction, management control is especially important because:

• Every construction site is a unique project with its own specific costs
• Unforeseen events can destroy margins within weeks
• Costs (materials, labour, subcontracting) change every day
• The gap between the quote and reality is often large

Without management control, you never know whether you're making money on a project until it's too late to do anything about it.

The 4 steps of management control

Step 1: track opportunities

Before a project begins, there's an enquiry, a quote, a negotiation. This phase is the one most businesses don't track. Result: you don't know how many quotes you send, how many you win, or why you lose some.

Opportunity tracking is simple: a spreadsheet (or a simple CRM) with:

• Date of enquiry
• Type of work
• Quoted amount
• Status (open, won, lost)
• If lost: why

These data points tell you in 3 months which type of work you win most often, what your average closing rate is, and whether you need to adjust your prices.

Step 2: analyse costs per project

This is the heart of management control. For each active project there's a project file that's updated weekly:

Each week: 30 minutes to update. At the end of each project: comparison between actual and expected costs.

There's no long-term improvement potential unless these data points are saved. If you know you always lose hours on small projects, you can adjust the price. If you know that a certain type of material always generates overruns, you can increase the margin in the quote.

Step 3: monitor cash flow

Profit is not the same as cash. You can be profitable and still have cash flow problems if clients pay slowly and suppliers need to be paid promptly.

Cash flow management requires a simple but regular tool:

A cash flow squeeze can kill a healthy business if you don't plan ahead. Knowing early is power.

Step 4: regular reviews

All the monitoring in the world is useless if you don't periodically review the data you've collected to make decisions.

A monthly review of 60 minutes:

• What's the average margin on active projects (actual vs expected)?
• Are there projects running more than 10% over cost expectations? Why?
• What does cash flow look like for the next 30 days?
• Are there opportunities I should follow up on or drop?

These 60 minutes a month replace hundreds of hours of uncertainty and guesswork.

BAU Gest

Automated management control with BAU Gest

BAU Gest tracks quotes, project costs and cash flow in real time. The Monday report shows you the 5 numbers that matter. 30 minutes to set up, permanent visibility.

See how it works

Swiss
Made

BAU Gest

Net margin24,2%

Active jobs8

Hours deviation+12%

Early warning signals: when to act immediately

Management control isn't just looking back. It's also an early warning system. There are signals that need to be picked up immediately:

These signals require immediate attention, not deferral to year-end.

The time investment needed

The most common objection: "I don't have time for management control, I'm on site all day."

Here's the time investment for a minimal but workable management control system:

6 hours a month to know whether your business is genuinely profitable. Not guessed, not "roughly." Genuinely.

If you want to understand how to set up management control in your business

Book 30 minutes with us. We'll show you which numbers to monitor weekly and how to build the system to fit your reality. No commitment, no cost.