General Contractors

Business Consulting for General Contractors

General contractors orchestrate complex construction projects while managing subcontractors, clients, budgets, and timelines. You’re the quarterback coordinating every trade, managing client expectations, and somehow keeping projects profitable despite constant changes and challenges.

The KPS Group specializes in trades businesses. We understand the operational complexity, financial pressure, and coordination challenges that general contractors navigate every single day.

The Complex Challenges General Contractors Face

Multi-Project Coordination & Resource Allocation

General contractors typically manage 5-20+ active projects simultaneously, each at different stages with unique requirements:

• New construction projects follow predictable sequences
• Renovation work uncovers unexpected conditions
• Commercial builds have strict deadlines and penalties
• Residential projects face emotional clients with changing minds
• Labor and equipment must be allocated across competing priorities

Our Solution: We implement project management systems that provide real-time visibility into every job’s status, critical path, resource allocation, and profitability. You’ll know exactly which projects need attention, where bottlenecks exist, and how to deploy resources for maximum efficiency.

Subcontractor Bidding & Contract Management

General contractors succeed or fail based on subcontractor relationships and management:

• Bid solicitation needs competitive pricing without burning relationships
• Contract terms must protect you from scope creep and delays
• Performance issues cascade through project schedules
• Payment applications require verification before funding
• Insurance and bonding compliance creates administrative burden
• Change order coordination with multiple trades

Our Solution: We establish subcontractor management systems that track certifications, insurance currency, performance ratings, payment schedules, and change orders. You’ll have standardized contracts, clear accountability, and documentation that protects you when disputes arise.

Project Profitability Tracking Problems

Most general contractors know their overall revenue but struggle with project-level profitability:

• Job costing systems are incomplete or non-existent
• Overhead allocation uses arbitrary percentages
• Change orders lack proper tracking and approval
• Direct costs (supervision, equipment, permits) aren’t captured
• Retainage distorts cash-basis profit analysis

Our Solution: We implement comprehensive job costing systems that track actual costs by project and phase, compare to estimates, and flag variances in real-time. You’ll finally know which project types are truly profitable and which are hiding losses.

Client Communication & Expectation Management

Construction projects create anxiety for clients who often don’t understand the process:

• Change order discussions feel confrontational
• Schedule delays from weather or material issues frustrate clients
• Daily updates become overwhelming without systems
• Budget concerns require transparent communication
• Punch list expectations exceed contract scope

Our Solution: We help you establish client communication protocols: project updates, budget reviews, change order processes, and milestone celebrations. Clear communication prevents disputes and generates referrals.

Cash Flow Management with Progress Billing

General contractors face unique cash flow challenges:

• Retainage (typically 5-10%) isn’t released until project completion
• Material purchases required before payment applications
• Subcontractor payment expected within 7-14 days of receipt
• Payment application cycles (usually monthly) create timing gaps
• Front-loaded vs. balanced pay schedules affect cash

Our Solution: We build 13-week rolling cash flow forecasts that account for payment application timing, retainage, and subcontractor payment schedules. We help you structure payment terms, establish appropriate credit lines, and avoid the cash crunches that kill otherwise profitable contractors.

Risk Management & Insurance Coordination

Construction carries significant risk that must be actively managed:

• General liability insurance premiums vary by project type
• Workers’ comp rates depend on accurate job classifications
• Builder’s risk policies for projects over certain values
• Subcontractor insurance verification and certificate tracking
• Waivers of lien and lien releases documentation

Our Solution: We establish risk management systems that track insurance requirements, verify subcontractor coverage, document lien releases, and ensure you’re not over-insured (wasting money) or under-insured (risking catastrophe).

Estimating & Bidding Challenges

Winning profitable work requires accurate estimating and strategic bidding:

• Takeoff accuracy determines baseline profitability
• Labor productivity assumptions often prove optimistic
• Material pricing volatility (especially lumber, steel)
• Overhead allocation varies by project size and complexity
• Competitive pressure tempts underbidding

Our Solution: We help you track actual vs. estimated costs for every completed project, analyze variances by phase and trade, and refine your estimating factors. We also help you understand your break-even on overhead so you know your bidding floor.

Why General Contractors Choose The KPS Group

We understand construction business models. We know how progress billing works, why retainage creates cash problems, how to structure subcontractor payment terms, and the difference between bid bonds, performance bonds, and payment bonds.

We’ve solved these challenges before. Multi-project tracking, subcontractor performance management, job costing accuracy, client expectation management—we’ve helped general contractors systematize all of it.

We build systems that last. You don’t need another consultant who delivers a binder that sits on the shelf. We implement weekly leadership rhythms, financial dashboards, and accountability structures that keep working after our engagement ends.

Common Questions from General Contractors

What’s a healthy profit margin for general contracting?

Target 8-12% net profit on most projects. Custom residential work can yield 12-15% with strong client relationships and controlled scope. Commercial projects typically run 6-10% due to competitive bidding.

How do I handle retainage without cash flow problems?

Establish a line of credit equal to 3-6 months of typical retainage holdback. As projects complete and retainage releases, pay down the line. Don’t try to fund retainage gaps from operating cash—that’s how contractors end up missing payroll or payments to subs.

When should I hire a project manager?

Most general contractors need dedicated project management when they’re running 8-10+ concurrent projects or annual revenue exceeds $5M. Until then, the owner typically handles coordination—but needs systematic project tracking tools.

How do I protect myself from subcontractor non-performance?

Use clear contracts with defined scope, schedules, and payment terms. Track performance on every project. Maintain relationships with 2-3 subs per trade. Never be completely dependent on one subcontractor. Document everything when problems arise.

Should I markup subcontractor bids?

Yes. Standard practice is 10-20% markup to cover your coordination, supervision, risk, and profit. Don’t feel guilty—you’re providing value through project management, client interface, and risk assumption.

Our Approach to General Contractor Consulting

Discovery Phase (Weeks 1-2): We review financial statements, analyze project profitability data (or identify gaps), interview key team members, and assess current systems. We identify 3-5 high-leverage opportunities that can drive immediate improvement.

Implementation Phase (Months 1-6): We build your custom systems: job costing dashboards, project tracking tools, weekly leadership scorecards, subcontractor management, and cash flow forecasting. We train your team and integrate with existing software where possible.

Optimization Phase (Months 6-12+): With systems operational, we refine processes, coach leadership, track KPIs, and prepare for scale. We help you make data-driven decisions about which project types to pursue and which to avoid.

Transform Your General Contracting Business

Stop juggling project spreadsheets and guessing at profitability. Build the systems that let you scale with confidence.

Call us at (469) 773-4000 or schedule a strategy call to discuss your specific challenges. We’ll show you exactly what’s possible when you have the right systems in place.