Using The BCG Matrix Is One Of The Tools Fast Easy Accounting Uses To Help Construction Contractors Increase Profits


Fast Easy Accounting Helps Contractors Find More Cash Cows

Developed By Bruce Henderson - For the Boston Consulting Group in 1968 to help corporations analyze business units or product lines. It helps companies allocate resources and is used as an analytical tool in brand marketing, product management, strategic management.

No Two Construction - Companies are alike. Every construction company has a unique blend of ownership and management philosophies, tools, equipment, staff, field employees, geographic location, and relationships with suppliers, vendors and professional service providers. 

This Means - That if construction company "A" earns a better than average profit percentage on residential remodel it does not follow that company "B" will be able to do the same.

Get Rich In A Niche - By finding your company's sweet spot, that particular thing you are good at, that people want and will pay good money for and that you are best suits you. Then you spend the majority of your time and effort developing your Business Process Management (BPM) to be the best and only company to service those clients and preferably dominate that market in your target geographic area.

The BCG Matrix - Is one of the many tools in our BPM tool chest. We do Job Profitability and Job Costing reports from a properly maintained QuickBooks file to map out a specific construction company's target markets.

  • Cash Cows - Are construction projects that generate the highest gross margin. These projects typically generate cash in excess of the amount of cash needed to maintain the business. They are regarded as stable and boring and every contractor would be thrilled to own as many as possible. They are to be "milked" continuously and add more of them whenever possible.

  • Dogs - Are construction projects that generate the least gross margin. These projects typically "break even" or lose money. Though owning a break-even unit provides the social benefit of providing jobs for your employees and possible synergies to assist other construction projects from an accounting point of view they are worthless because they reduce profits and the construction company's return on assets ratio which many investors, bankers and bonding companies use to decide how well a company is being managed.

  • Question Marks - Are construction projects in new markets or a different type of work than the company has been doing which shows potential because they are growing rapidly. Beware of the fact they could consume a lot of cash while you are putting the processes in place to manage these projects. A question mark could prove itself and become a star, and eventually a cash cow. If the question mark does not prove profitable within 90 - 180 days, it may be wise to re-evaluate those projects. 

  • Stars - Are construction projects with high gross margins in a fast-growing area like aging in place for seniors. The hope is that stars become the next cash cows. Sustaining your construction company market leadership and increasing the profit picture. When growth slows, stars become cash cows if they have been able to maintain their category leadership, or they move from being a star to a dog.

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Need A Mentor? - Someone who has been where you want to go and can guide you. We would like to be that person for you. Fill out the form on the right or call Sharie 206-361-3950 or email and schedule your no charge one-hour consultation.

For Construction Company Owners who do not need the full power of QuickBooks for contractors and want 24/7 online access we offer Xero Accounting Online and we have custom setup for construction companies. Click Here For More.

This Is One More Example of how Fast Easy Accounting is helping construction company owners all across the USA including Alaska and Hawaii put more money in the bank to operate and grow your construction company. Construction accounting is not rocket science; it is a lot harder than that and a lot more valuable to people like you so stop missing out! Call Sharie 206-361-3950 or and schedule your no charge one-hour consultation.

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Profitable Contractors and Construction Company owners have known about the value of outsourced bookkeeping services and contractor coaching services like ours for a long time and now you know about it, too! 

We Scan Your Receipts And Invoices link the appropriate transactions to QuickBooks or Xero Accounting Online depending on the construction accounting service you are using and provide ongoing Cloud Based Contractors Bookkeeping Services by accountants who understand construction.

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About The Author:

Randal DeHart, PMP, QPA The Construction Accountant Randal DeHart, PMP, QPA is the co-founder of Business Consulting And Accounting in Lynnwood Washington. He is the leading expert in outsourced construction bookkeeping and accounting services for small construction companies across the USA. He is experienced as a Contractor, Project Management Professional, Construction Accountant, Intuit ProAdvisor, QuickBooks For Contractors Expert and Xero Accounting Specialist and Bill.Com Certified Guru. This combination of experience and skill sets provides a unique perspective which allows him to see the world through the eyes of a contractor, Project Manager, Accountant and construction accountant. This quadruple understanding is what sets him apart from other Intuit ProAdvisors and Xero accountants to the benefit of all of the construction contractors he serves across the USA. Visit to learn more.

Our Co-Founder Randal DeHart - Is a Certified PMP (Project Management Professional) with several years of construction project management experience. His expertise is construction accounting systems engineering and process development. His exhaustive study of several leading experts including the work of Dr. W. Edward Deming, Michael Gerber, Walter A. Shewhart, James Lewis and dozens of others was the foundation upon which our Construction Bookkeeping System is based and continues to evolve and improve. Follow Randal on Google+