I nearly derailed my construction career just as I was getting started. Fresh-faced and confident, I walked into my first cost-to-complete meeting as a project manager ready to announce how we'd doubled our project's margin to the executive team. Thank goodness a senior PM pulled me aside first.

"Mind if we review these numbers together?" he asked, his eyes scanning my carefully prepared forecast. Within five minutes, my confidence crumbled. He found eight major issues I'd completely missed. Basic things, really. Unpaid invoices I hadn't accounted for. Change orders I'd counted as if they were signed when they were still pending. Production rates that made little sense given our actual performance. 

That day taught me something about being a project manager: financials for every construction project boil down to just three numbers:

1. Final Revenue

2. Final Cost

3. Final Profit

The best contractors I've worked with check these numbers every month, for every project. They have learned, often the hard way, that monthly reviews catch small problems before they become expensive disasters.

I remember a project where monthly reviews helped us spot a concerning trend in our excavation costs. The numbers were creeping up, just a little each week. In the past, we might not have noticed until quarterly reviews. By then, we would have been hundreds of thousands of dollars over budget. Instead, we caught it early, adjusted our approach, and kept the project on track. Jobs will lose money. There will be fade, claims, overruns and disputes. The best reviewers will call out fluff budget being stashed or overlooked items. The more of these you participate in as an observer, the quicker you begin to recognize internal and external trouble early.

This taught me another lesson: good PMs are like careful drivers - they check their gauges regularly and adjust before they run out of gas.

The really successful PMs share another trait: they stay conservative with their estimates in CTC’s. Not because they lack confidence, but because they've learned that it's better to deliver good news than explain bad surprises. Some call it sandbagging. I call it being smart and reserving contingency. A mentor told me, "Nobody ever got fired for bringing in more profit than expected."

But perhaps the most important lesson came from watching how great contractors handle problems. They don't blame the estimators when costs run high. They don't point fingers at the weather when productivity drops. You hear a lot of “We” and not a lot of “Them”. They get to the facts fast. They own the issues, fix what they can, and learn from what they can't. 

When training new project managers, I tell them this story. Then I share what that senior PM taught me: monthly cost-to-completes are how we keep our promises to our clients, our companies, and our field teams. 

Over time, patterns emerge. A job that was bid at 8% and brought in on budget that could have made 12% is not a success. A job that was bid at 5% and made 3% that should have been at 0% deserves praise. Stuff happens and it’s not always purely bid versus actual.

So here's my advice: do your cost-to-completes monthly for every job. Be conservative with your estimates. Own your mistakes. Give credit to your field teams. And remember - those three simple numbers tell the story of your project. Finally, it’s easier to explain why we made an extra two percent at the end than fade. Save some for the finale.

Talking Dirt

I had a blast joining my friend Aaron Witt recently on the Dirt Talk Podcast.

If there's anyone who thinks about construction more than I do (and trust me, that’s saying something), it's Aaron. At BuildWitt, they are making the Dirt World a better place with their training, marketing, hiring and networking software and services. Their Dirt World Summit is a kick ass event.

We dove into my construction journey - from learning the ropes in a family business to scaling projects and eventually founding Edgevanta. Plus, I shared some lessons about estimating and bidding that I wish I'd known years ago.

Whether you're running crews, managing bids, or just curious about building things, there's something in this episode for you!

🎧 Listen now on YouTube or Spotify:

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In Case You Missed It:

The Edge Podcast with Patrick Nelson

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About the Author

Tristan Wilson is the CEO and Founder of Edgevanta. We make software that helps contractors win more work at the right price. He is a 4th Generation Contractor, construction enthusiast, ultra runner, and bidding nerd. He worked his way up the ladder at Allan Myers in the Mid-Atlantic and his family’s former business Barriere Construction before starting Edgevanta in Nashville, where the company is based. Reach out to him at [email protected]