Management is Ultimately Using Numbers
What is the ultimate number for any business? That is, what number do most for-profit construction firms use to gauge their success? The answer: net profit before tax (NBT). Simple enough.
How to achieve a positive profit number is subject of discussion in many trade and business magazines. Any DuPont Chart shows that interrelation of all the numbers in a construction business and ultimately how the NBT was derived.
After years of operating results, the firm has a track record, clients, personnel, assets, liabilities and other things which calculate into another key number: the value of the firm. Said differently, the market price to buy the firm in its entirety. To a retiring contractor, this is the last important number that they will see as a contractor.
