Overview
This commercial construction company grew rapidly, achieving $200M in annual revenue with 81 customers and 1,100 employees. While enjoying three consecutive years of 20% annual revenue growth, the leadership team faced plummeting profit margins, which fell to less than half the industry average. Despite strong top-line performance, operational chaos and unmanaged costs created a profitability crisis.
Business Goals
- Reverse declining profit margins and recover lost value.
- Standardize operations to eliminate chaos caused by inconsistent processes.
- Focus on profitable projects within the company’s core capabilities.
Key Results at a Glance (Powered by Profit Inc.)
- 36% of Customers: Identified as unprofitable, costing the company $551K in profits.
- $2.8M in Lost Value: Attributed to hidden inefficiencies and cost misallocations.
- 9% Decline in Value: Demonstrated the financial impact of unmanaged growth
Original State
- Rapid Expansion Chaos: Aggressive hiring and expansion led to fragmented workflows, with 700+ execution permutations due to the absence of standardized processes.
- Core Expertise Ignored: Projects outside the company’s core competencies resulted in costly mistakes and overruns.
- Hidden Costs: Operational expenses obscured the true costs of unprofitable customers, masking the root issues.
- Cultural Issues: A lack of accountability and reliance on personalities over systems undermined profitability.


Post-Engagement Success
- Disciplined Pricing Models: Implemented a detailed pricing configurator to account for all direct costs and ensure project profitability.
- Operational Standardization: Developed the “Company Way,” a framework for standardized quoting, execution, and team behaviors.
- Employee Alignment: Immersed employees in the “Company Way,” fostering a culture of accountability and operational discipline.
- Profit-Sharing Incentives: Introduced a profit-sharing plan tied to specific performance outcomes to align team goals with company profitability.
Key Takeaway
Without disciplined processes and proper cost allocation, growth can erode profitability. Creating a culture of accountability, backed by standardized systems, is essential to maintaining margins during expansion.
The Profit Optimization Program
Program Details:
Phase 1: Analysis
- Uncovered that 36% of customers were unprofitable, costing $551K annually.
- Highlighted $2.8M in lost company value due to inefficient operations and project misalignment.
- Identified cultural and leadership gaps as key contributors to profit erosion.
Phase 2: Implementation
- Introduced a comprehensive pricing strategy to ensure profitability for every project.
- Standardized workflows and execution through the “Company Way,” reducing inefficiencies.
- Aligned incentives with profitability, creating buy-in across teams.
- Focused exclusively on core projects to eliminate costly specialty work.
Process Highlights:
- Allocated direct costs accurately to uncover true customer and project profitability.
- Designed and implemented a company-wide operational framework for sustainable growth.
- Conducted leadership training to build accountability and support cultural transformation.
Ready to unlock profitability in your business? Discover how a tailored profit optimization program can drive your success.
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