Construction Monkey

Construction Monkey Blog

As 2009 closes, most of us are in the process of deciding what we think about 2010.  If you have done your job right you already have this answer and if you have been lucky 2010 looks like a great year.  For the rest of us, we need to start crunching the numbers so we can let our partners, bankers, and other stake holders know what we think about the coming 12 months.

So how do you go about figuring out where you are going to be?  First let's look at the easiest part to the puzzle, Flow Work.  Flow work is simply defined as the revenue you are going to churn each and every month and is not so dependent on project or Cost-to-Complete work.  A simple definition of this work is T&M service calls for your mechanical or electrical subcontracting business.  Every year in a typical subcontracting business, there is a certain amount of revenue that "just happens".  This is the Flow work.

In order to get a good number on this, you should sit down with your controller or Accountant and pull numbers from the past few years.  Try and get these broken down so you can pull out this Flow work.  Please note that this work will be cyclical and not every month will show the same amount, depending on the climate and more importantly your clients funding cycles.  Try to lay these numbers out over the next 12 months taking into account specific differences from your sample data and your next 12 months.  These differences could be marketing campaigns, new clients, or clients with frozen budgets.  Make the appropriate adjustments and now you are done with the Flow Work part of your projections.

The Flow Work is only a part of the traditional subcontracting business.  In future installments, we will be looking at the other parts: current Project Backlog, current Project Pipeline, and future Project Pipeline.  If done properly at every stage, you should be able to accurately project not only the Revenue and manpower for the coming 12 months, but also the net profit.  Any good look into the future, can also provide you time to make changes to your actions, so you can win in this very difficult economy.

About the Author

Craig Pierce

Craig Pierce has been working in the construction industry for the past 25 years helping subcontractors master their trade. Currently he is President of Atalanta Enterprises which provides consulting services to contractors And software solutions through