The Construction Business Blueprint #038 - Stop Letting Summer Kill Your Construction Profit

Summer can be one of the busiest times of year for construction business owners but busy doesn’t always mean profitable.

The diary is full, the lads are flat out, jobs are moving, invoices are going out… then September comes and you look at the bank account wondering where all the money went.

That’s the summer profit trap.

In this episode of Construction Business Blueprint, we break down why construction businesses can lose thousands in margin during the summer months, even when everything looks busy from the outside.

We cover the hidden profit leaks that show up through labour allocation, unpriced variations, material increases, delayed invoicing, staff holidays, supplier delays, school holidays, poor planning, and a lack of white space in the diary.

You’ll also learn how to use a simple weekly anchor to stay on top of your jobs, protect your margin, check who’s available, make sure variations are priced, and avoid finding out in September what went wrong in June.

If you’re a construction business owner heading into a busy summer, this episode will help you protect your time, profit, and control before the season runs away from you.

Subscribe for weekly videos helping construction business owners get more time, more profit, and more control.

Chapters

00:00 - Introduction to Construction Business Blueprint

00:10 - What is the summer profit trap?

00:27 - Why being flat out doesn’t always show in the bank

00:41 - Busy does not equal profitable

00:56 - Why summer disappears so quickly

01:31 - Protecting profit while staying present

01:41 - The danger of assuming activity means profit

02:05 - Four project examples that quietly kill margin

03:07 - How small issues can cost thousands over summer

03:24 - Why turnover is vanity and profit is sanity

03:44 - The importance of tracking losses and variations

04:11 - Why weekly numbers matter in summer

04:30 - Labour allocation: the silent profit killer

05:26 - How a simple labour allocation sheet protects margin

06:17 - Why white space is not a luxury

06:44 - Planning around holidays, delays, and family time

07:34 - Why white space stops the plan collapsing

08:15 - Setting client expectations in advance

08:58 - Why it’s not too late to plan the summer properly

09:35 - Checking suppliers, clients, payments, and holidays

09:55 - The weekly anchor every owner should use

10:13 - Five questions to ask every Friday

10:42 - Why summer is often busiest, but not most profitable

11:01 - Final advice and how to get help

Transcript

Welcome And The Summer Trap

SPEAKER_00 0:00

Welcome back to another episode of the Construction Business Blueprint YouTube channel. The only channel where construction business owners can come to learn to get more time, more profit, and more control in their business and life. Today we're going to keep everything relevant like we always do. This week's episode we're going to talk about the summer profit trap. Summer arrives fast. One minute you're chasing work in March, the next it's June, and the diary's absolutely rammed. The teams are flat out and everything's moving at 100 miles an hour. I'm sure that sounds familiar for everybody. Then September comes, you look back in the bank account and think, where did it all go? We were flat out all summer, but the bank account doesn't reflect it. This is the what I call the summer profit trap. I like to put a bit of a title on everything to make it a bit more catchy for the channel. Busy doesn't always mean profitable. I say it almost every single week. If a pound for every time is set, it'd be a millionaire. And it sounds obvious, but when the sites are full and the invoices are going out flat out, it's very easy to assume the money follows the activity. That's not always the case. So here's the other thing about the summer that nobody talks about. It absolutely flies in. It goes in so quickly. So between the work, the family commitments, the school holidays, you know, the all week away with either you or staff or team or whatever, summer is gone before you've properly even had time to think about it. You know, if you haven't planned for that, then you spend three months wondering, you know, why you feel like you're always behind. So you're behind, you're reactive, you know, you're pulling from one thing to the next, and then you get to August or September wondering what the hell even happened. Like it literally goes in in the flesh.

Busy Work That Loses Profit

SPEAKER_00 1:32

Today's episode is about two things protecting your profit and staying grounded enough to actually be present through the season rather than just surviving it. Number one, like I always say, busy does not equal profitable. Let me paint you a picture, and this is the same conversation I hear all the time. Like I get I see notifications coming up my phone all the time where the team are talking to, you know, leads coming in, prospects wanting to work with me, and the same thing pops up time and time again, you know. Oh, I'm absolutely flat out, but you know, the bank balance just doesn't reflect it. I'm not getting rewarded for the level of effort. So let's paint a picture that you've all seen a thousand times. You've got four projects running, four jobs running, all moving, all roughly on program, everything's going well and it feels good. But one job is running about five percent over on labour because the subbies are slower than quoted. Job two has maybe a few variations that the client has agreed verbally. Nobody's put a number on it yet. That conversation hasn't happened, or the lads that don't, you've forgotten about it and just went, I can just get on with it. You know, everything's going well, there's good money on the job, we'll leave it. Job three, you priced materials three months ago, four months ago, five months ago, and the material prices have gone up 12%, and you haven't accounted for that in the in the price. Job four, you're finishing it, you know, slightly early, but you haven't invoiced the final stage because the client wants one more walk around, or he's still nitpicking on a couple of wee bits and pieces, so you haven't quite got that cash in the bank yet. Yet everybody's been paid, materials have been paid, and again, it's just you that's been left there. None of those things are disasters on their own. That's kind of just day-to-day stuff that happens. I'm sure most of you think, yeah, that happens to me all the time, and it's no big deal. But together, they've just cost you 60 to 80 grand in margin on a busy summer, depending on the size of the project. Obviously, we're talking some of an average decent sized project here. Activity is not profit. Just because the lads are busy, everybody's working, doesn't equal profit, you know. Again, turnover is vanity, profit is sanity. Most most new clients that come to me, you know, they almost, and I shouldn't maybe say this, but they almost don't enjoy the initial realization of where they really are in business because they've been ignorant to the fact for so long. So they've never really tracked what those losses are, they've never really tracked what that damage is to the business. But when you're tracking everything and you can physically see it, it is a real eye owner. It's a bit of a sickener. So most of you here now aren't logging the variations, aren't logging the runover on labor, you're not logging the fact that you know somebody the material increases on price, you're not actually seeing what that job ended up with. You're just seeing money coming and going into the bank and going, Yeah, we're grand, we can pay the bills. But what has each of those mistakes or things that have crept in actually costing you? Profit is all about what is logged, what is tracked, and you know, managed revenue. You know, you need to make sure that you're actually really looking at that and really dialing it in. Most guys aren't doing it. So if you're not looking at the numbers weekly through the summer, you're finding out in September what went wrong in June. Or maybe not at all. Maybe you're going more flat out in the summer, but still you get to a different part of the year and you're still no better off. And I know I know that that's a fact because that's the majority of the conversations I'm having week on week with guys all the time.

Labour Allocation And Margin Leakage

SPEAKER_00 4:31

Let's talk about labour allocation. This is the kind of like this silent killer. Labour is where most money disappears in the summer, and there's several reasons for it. So there's jobs overlapping, there's lads moving between sites to kind of plug gaps. You know, one site waiting on materials because maybe there's a delay with something going on. Like the summer holidays bring strange things. You know, things are slow because there's staff shortages because people are on holidays, you know, places are closed for bank holidays and certain different things going on throughout the year. So sometimes you'll be waiting on materials, or just stuff isn't organised. So there's guys kind of standing around doing a wee half day here or there because things aren't maybe in place. Maybe you have your best tradesman on a job and the job's not ready, doesn't really need him yet, and he's there filling the gap, doing labour and work or doing other bits, it's not really what he's there for, so you're not really getting the most out of them. Every hour of misallocated labour is a cost with a kind of no corresponding value. You're paying for a man on site and the site's just not ready for him, or it's just not where it needs to be. So a simple, like you know, labour allocation sheet or a simple way to track that, you know, who's where, who's doing what, doesn't match the program. It literally takes 30 minutes on a Friday or a Sunday. Have a chat over the lads and see who's going where. It saves hours of margin leakage across the whole summer because if you don't know where the lads are or where they should be going or what they should be doing day by day, then you're guessing, and guessing is very, very expensive. So it's kind of usually done back to front. It's kind of like just putting lads where they're needed the most. But are you getting the most out of the lads? And are the like the lads aren't going to say, no, we're okay here, we don't need an extra man or whatever else, or Susie's away on holiday this week, so the job's been put back, or the materials haven't been ordered because they were closed last week and they're not ready yet, or there's a supplier coming in from somewhere you know across the water and it's not here, so the job is not ready, and you're finding something to do. So because you're not one step ahead planning the labour, checking everything's there, then the labour bill usually racks up

White Space And Holiday Disruption

SPEAKER_00 6:17

very, very fast. So another profit leak in the summer is white space. So white space is not a luxury. So, what is what is white space to put it in layman's terms? It's just time for nothing. So allocating time for things running over, downtime, time out for certain things like planning or whatever, you have to block in white space. It's like leaving a few hours of the week for an unforeseen so you can fill that gap with something. And it's not a luxury. This is one thing that most construction business owners will skip over. Planning for white space in the summer is crucial. So school holidays are coming, kids will be off, your partner will want a week away, you know, your team will want time off, clients will be harder to get a hold of, deliveries could be slower because your suppliers are having the same issues you're having with team and staff. Decisions that normally take a day are now taking a week. You know, things are just getting stressed out, they're slower, they're longer. So if your summer program or if your calendar doesn't allow for that, for any of that, then you're building a plan that's already wrong before July arrives. So you you could be having staff and team off here, there, and everywhere. Subcontractors, you may not have checked in with them to see if they're always available. You're just assuming everybody is where they should be and they're always going to be there and they're always going to be available. But the summer that usually changes, so it's important to make sure, you know, check the diary, check the calendar, and check in with everybody involved to make sure what's happening and when, you know, be one step ahead. So white space is not a wasted time. It's breathing room that stops the rest of the plan from collapsing. Build a family weekend of the diary, you know, sit down with the wife, with the partner, and plan for that time. What have the kids got coming up where you need me to be? Not this kind of, and I was near near there this morning myself, like it's sports day in the morning, you're going, shit, I need an eye, take a half a day off. Now you're a half a day behind. But if you if you had planned for that week, if you'd planned for that, sorry, if you'd planned for that, you know, a few hours away, then you could have got something in place so you weren't actually behind. So planning in for the white space, planning in for the downtime in the summer is crucial. It means when you are stepping in and you are doing those things or you are taking time off, that you're not then a half a day or a day behind or a week behind. Another thing to do is tell your clients in advance. So, you know, be clear and say, you know, we're gonna be slow on this period, we've got guys off on this period. Set the clients' expectations, let them know when you're not gonna be available, let them know when things are gonna be slower, let them know, like build it under your program that okay, there's gonna be a few weeks here in the summer where we're not gonna be running at full capacity. Who needs to know? The team needs to know, you need to know, clients need to know, suppliers need to know, let everybody you know, keep everybody up to date of what's going on, block it in. You have to allow for that time. So a week that arrives or a week that happens that you're just completely firefighting, that's unplanned and unmanaged, that will cost you a lot more than you think. So the owners who get to September feeling like they have a good summer, they plan for the

Weekly Anchor Five Questions

SPEAKER_00 8:56

disruption. They just didn't, they don't they didn't just hope that it would happen. So, look, if you're in the middle of projects right now, if you've got projects planned, it's not too late. Really sit down and review things, draw a line in the sand and see in your business during these next few months who's gonna be off. Let clients know, let the team know who can you bring in to you know subsidize that or or or fill in the gaps. You know, if you're gonna have time off, plan for it now. Don't wait until the week before and scramble like hell, or worse, I've had other people who have came to me and said we have to shut the business down for a week while I'm while I'm gone. So put the plans in place now. You know, it's it's it's June now, but you know, say in July or August when you're taking time out, now is the time to plan for that. Also check with suppliers, check when they're closed, check if they're gonna have slow periods, check with clients, make sure that the payments are gonna be there, they're not gonna be disappearing on holiday, hard to get, or not able to pay because they've committed to to go on holiday or something like that. So set the expectation, get it all clear now, have the conversations, draw a line in the sand and get it sorted. It is not too late. Another wee tip you could do is just do the weekly anchor. Like there's so many things that we've talked about here during the episodes over the last lot of months. We've been doing this for a long time. You know, we've got weekly check-ins, we've other things we've spoken about, but if you have nothing in place right now or you you've let other things fall away, in the summer, just do one thing, which would be like a weekly anchor. Take 15 minutes on a Friday through the whole summer, just build one habit, 15 minutes every Friday, and ask five questions. Which jobs are ahead on programme and which are behind? Are all approved variations priced and submitted? Have I invoiced everything that I'm entitled to this week? You know, are jobs running over on labour or

Plan Now And Get Help

SPEAKER_00 10:32

are they where are they versus the estimate? Are people available or are they not? Like who's off and who's in? Ask yourself those questions. So just 15 minutes, five questions, and it'll save you a world of pain. So summer is usually the busiest time from for most construction business owners. You know, it's usually the busiest period, but it's usually not the most profitable. And that gap is the trap. So do yourself a favour, draw a line in the sand, plan the next three months, check who's off, check who's in, check what's going on, and really draw a line in the sand and get it organized because it's not too late. If you need help with this, please, as always, feel free to reach out and we could do it together.