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Improving Profit: Using Contribution Metrics to Boost the Bottom Line by Keith N. Cleland

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Multi-Home Contractor Discovers a New Way Home

From the design to the completed house, all looked good on paper, but slippage was occurring. Figuring a way to make the supervisors more accountable turned the situation around

The contractor was angry. “I sold and built 75 homes last year, all selected from one of our designs, all subcontracted out to the trades, and all, in ­theory, giving me a 10 percent margin. At an average of $13,300 for each home, I should have made a million to cover office overhead and profit.”

“What did you make?” I asked from the other side of a very large teak desk.

“Nowhere near enough to keep the bank off my back! ...

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