Does this construction project worth the risk?

Risk management

Schleifer, Ph.D., is a former professor at Arizona State University and wrote that “many construction professionals believe they can design or build anything". When presented with a project opportunity, many contractors quickly respond with enthusiasm like Bob's before thoroughly considering whether taking on the project makes sense for their business.

If profit potential is not already a criterion in a contractor's business development efforts, it should consider incorporating a risk matrix into the discussion before saying yes to the next opportunity.

While there are many criteria that can impact project profitability, the most important ones relate to how well the project aligns with your previous project success.

For example, a design/build contractor is asked to bid on building a new 50,000-square-foot, $5.5 million athletic complexes in a nearby suburb. For this scenario, project size and type are the two key considerations because they differ from the contractor’s experience. A standard rule is that a project up to 10 percent larger than past profitable projects is low risk.

Using the same example, but changing the project size to $3 million dollars (closer to the 10 percent acceptable increase), a different analysis occurs. While there are many factors to consider when pursuing a project, evaluating the risk of the four critical experience criteria should be part of the process.

Want to enhance your online marketing?
We can help!

Automated Marketing Solution
Social Media Marketing & SEO

START NOW

Comments

No Money to Start? No Problem. Try These 5 Options to Fund Your Business.

Ready For Anything Opinions expressed by Entrepreneur contributors are their own. You might be limited to a strict budget to start a business, but that doesn’t mean you don’t have any options. It is possible to start a business with very little money, if you have the right combination of skills, work ethic and marketing know-how. According to Chris Guillebeau, author of The $100 Startup , “To succeed in a business project, especially one you’re excited about, it helps to think carefully about all the skills you have that could be helpful to others and particularly about the combination of those skills.” Related: How to Start a Business With (Almost) No Money Follow these simple guidelines to fund your business when you have little to no money. No Money to Start? No Problem. Try These 5 Options to Fund Your Business. Yes, making something does take an initial cost in supplies, but often, these products can be sold...

The Morning After: 'Sonic the Hedgehog' got rescheduled

Employees and partners are already testing its streaming capabilities. Every Xbox One title will be playable on Project xCloud When Project xCloud debuts, it'll be capable of streaming any of the system's games (including backward compatible ones) out of the gate without developers needing to make any changes. Microsoft also says when a developer updates an Xbox One game, those changes will automatically apply to Project xCloud versions. However, changes to the developer's kit let a game know when it's being played from the cloud to adjust for different types of displays or run multiplayer games on a single server. The teeth, the legs, the teeth, the eyes, the teeth. 'Sonic the Hedgehog' movie delayed to fix nightmare-inducing design Following a statement by director Jeff Fowler that changes are "going to happen," Paramount pushed back the release date three months to give the filmmakers "a little more time to make Sonic just right." No...

10 Powerful Ways to Master Self-Discipline

Opinions expressed by Entrepreneur contributors are their own. It may be hard to believe when you’re facing a hot-fudge sundae or the prospect of sleeping in versus hitting the gym, but studies show that people with self-discipline are happier. People with a higher degree of self-control spend less time debating whether to indulge in behaviors that are detrimental to their health, and are able to make positive decisions more easily. They don’t let impulses or feelings dictate their choices. Instead, they make level-headed decisions. As a result, they tend to feel more satisfied with their lives. There are things you can do to learn self-discipline and gain the willpower to live a happier life. If you are looking to take control of your habits and choices, here are the 10 most powerful things you can do to master self-discipline. 1. Know your weaknesses. We all have weaknesses . Whether they’re snacks such as potato chips or chocolate chip cookies, o...

ProsConnected.com

Search This Blog