Why Fit-Out Projects Lose Profit During Execution
The quotation looked profitable, the client was happy, the project was completed on-time but where did the profit go?
Winning a fit-out project is always exciting. You've spent days preparing the BOQ, checking supplier prices, calculating labour costs and negotiating with the client. Finally, the quotation is approved.
According to your calculations, the project should generate a healthy profit. Then the execution begins, the client changes the ceiling design, some electrical points need to be relocated, a material delivery arrives late. Your team spends another three days on site. A subcontractor submits an additional claim.
Nothing seems particularly serious at the time. But when the project is completed and you calculate the actual costs, the numbers tell a different story.
The project that looked profitable on paper has barely made any money. Sometimes, it has actually made a loss.
This happens more often than many fit-out contractors would like to admit. And the problem isn't always poor estimation, very often, it's what happens after the estimation.
Masarek Editorial Team
Editorial team
Articles prepared by the Masarek team at Futurosoft Technologies FZCO, focused on practical construction management for GCC contractors.