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7 Profit-Killing Mistakes to Avoid on a Project

Insights

3 Minute Read

11/27/2023

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Sometimes projects go off the rails for various reasons. The end result can be reduced profit, or heaven forbid, an actual loss. But why does it happen? Here are the seven profit-killing mistakes to avoid.

  1. Inefficient Technicians – There can be a multitude of reasons why your technicians are not efficient on a project. It could be a newer product that they are unfamiliar with. They could be feeling ill and it is slowing down their performance. They may not have stocked the truck correctly before heading out to the job. They just might not be adept at their job. Using software like D-Tools enables you to assign specific tasks to technicians and monitor their progress daily, so you can see early on if you are running behind. It can also be a solid management tool to see which particular technicians have a history of working on projects that are not as profitable.

  2. Poor Estimating by Sales – One of the most common errors is underestimating the amount of labor required to complete the installation. D-Tools software intelligently references past labor needs for individual products as they are built into the proposal. This function can minimize the risk of underestimating the labor hours needed.
  3. Improper Implementation of Change Orders Change Orders occur on almost every project. D-Tools recent Change Order Special Report notes that typically Change Orders will add 2% in revenue to a project and that Change Orders are five times more likely to add revenue to a job than to be a negative Change Order that reduces revenue. Whether it is a positive or a negative Change Order, integrators still must implement them properly. Some common mistakes include ordering the product before getting the sign-off from the customer, who then decides they don’t want it, or waiting too long to get the client’s sign-off, which delays getting the product on time.
  4. Inaccurate System Designs – Integrators sometimes miss profit on a project because they created an inaccurate system design. While D-Tools cannot prevent imprecise design, both D-Tools Cloud and D-Tools SI have functionality to help with system design. SI produces advanced engineering drawings via tight integrations with Visio and AutoCAD. Today, D-Tools Cloud offers only browser-based drawing mark-ups and a Visual Quoting feature that allows system integrators to place symbols on floorplans or images.
  5. Product Selection Error – Building exact proposals is vital to helping a job go smoothly, and that includes selecting the right products. Incompatible controls for lighting are among the more common mistakes, especially as more integrators spec lighting fixtures. Intelligent software that can look back at your historical product usage for particular systems can help reduce this mistake.
  6. Poor Communication between Sales and Installation Teams – The “handoff” from the sales team to the installation team is vital for clarity. If the salesperson erroneously promised a certain level of functionality, or if the customer mentioned to the salesperson they wanted a particular element and it is not communicated to the project manager or lead tech, it can be a disaster.
  7. Lowering your Standards to Get the Job – This profit-killer is really more of a cultural mistake. As customers aim to value engineer projects to reduce the cost, integrators need to make sure they have a “line in the sand” in which they will not go below. Often, if that line is crossed, it hurts profit.

Unfortunately, the most common reasons an integrator misses profit on a project are due to unavoidable circumstances that are out of your control. Sadly, there is not much you can do in these cases. Some of the common unavoidable problems are:

  • Poor weather. There is not much you can do if a blizzard hits or it is pouring rain. Bad weather can especially wreak havoc on new construction and outdoor projects.
  • Delays or mistakes caused by the general contractor, homebuilder, or other trade. If the job site is not ready for the integrator on time, there is nothing to do but wait. Likewise, if the contractor did not leave enough attic space for wire runs or in-ceiling speakers, it means you have to change product selection or wait for the GC to rework the space.
  • A homeowner who cannot make decisions in a timely manner. This often occurs on high-design projects that require hundreds of decisions to be made.
  • Delayed product delivery. With all the recent supply chain problems and microchip shortages, projects are many times held up for a prolonged period of time waiting for deliveries.
  • Defective products. This is a rarity as most manufacturers tout very low defect rates, but there is the rare instance in which a product is a lemon out of the box.

Both D-Tools System Integrator (SI) and D-Tools Cloud are designed to assist integrators in every aspect of their business. At the initial customer relationship management (CRM) stage, the software accelerates the sales process by visually managing leads, tracking activity, and guiding the sales process. For estimating and proposal creation, D-Tools helps craft polished, personalized, and accurate proposals using dealer-specific pricing from a vast product library with more than a million SKUs.

In the field, the software allows integrators to manage project workflows from start to finish including scheduling, purchasing, task assignments, field communication, change orders, timekeeping, and more. Once a project is complete, D-Tools manages service contracts and service calls. Finally, D-Tools helps optimize invoicing and the collection of payments, while integrating directly with third-party accounting solutions.

Built-in business intelligence dashboards and reporting allow integrators to track all major KPIs including sales forecasts and results, project performance, backlog, revenues earned, labor utilization, and more. All in all, using an all-in-one, end-to-end software solution, like D-Tools, keeps team members all on the same page and strengthens the bottom line.