Regularly comparing job estimates with actual expenses seems like a no-brainer. But after years of training hundreds of contractors about finances, I suspect that many contracting businesses don’t make this type of comparison, at least not in a systematic way, and I’m certain that means they’re losing money.

How do I know this? The answer is that I’ve run my own custom building and remodeling business both ways — with and without checking estimates against actual costs — and have seen the difference. Once I developed a system for reviewing these numbers and got disciplined about following it, my company became significantly more profitable.

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