Why Consistency Matters in Construction Profit Forecasts

If you’ve ever managed a construction project—or even just sat in the meetings—you know one universal truth: before a single shovel hits the dirt, someone’s asking, “So how much profit will we make on this job?”

And honestly, it’s fair. Construction companies exist to make money. Pre-bid profit forecasts help decide which projects are worth chasing and shape all kinds of big-picture business decisions, from how much cash is available for new equipment to which markets the company wants to enter next.

But here’s where it gets fun (and sometimes painful). Once a project is secured, profit forecasts become less about which job to pursue and more about how well the job is tracking against those early expectations. Now the focus shifts to monitoring how close the team is to hitting that original profit target.

Here’s the tricky part. Throughout the project’s life, management expects regular profit forecasts. There’s value in maintaining a relatively consistent story about what you think that profit will be.

Let’s say your original plan showed a $45 (thousand, million, whatever) profit margin. One month, your team reports that things are going even better than expected, and now you’re forecasting $55. High-fives all around. Management updates its reports, everyone looks like rock stars.

But fast forward one month. Suddenly there’s an accounting correction or an unexpected cost, and you’re back to the original $45. Now, instead of praise, you’re dealing with disappointment and questions like, “How could you guys be off by $10?!”

This is why some teams choose the opposite approach—they sit tight and don’t report any extra profit until the end of the job. That way, there’s no risk of getting burned by a reversal. When the dust settles, they hand over the surprise extra profit, hoping for a hero’s welcome.

But here’s the problem with that tactic: it makes you look clueless. If your forecast was $45 all along, and suddenly at the end of the job it’s $55, the logical question from management is, “Did you really just figure this out? Or were you flying blind the whole time?”

My two cents? Update your profit forecasts—but only when you’re sure. And definitely not every month just because the numbers are wobbling a bit. Constantly changing your forecast up and down makes it look like you’re guessing instead of managing.

It’s better to build in some buffer accounts to absorb the routine noise—the minor cost swings, the small wins or losses that happen on any job. Then, if you have a legitimate, sustainable improvement in profit, announce it. If your forecast goes from $45 to $47, and a few months later creeps up to $50 because things are continuing to go well, that’s a controlled story. You look like you’ve got a solid handle on your job.

Ultimately, it’s about credibility. Consistency in profit forecasting builds trust. Wild swings or last-minute surprises only invite skepticism and second-guessing.

So keep your story straight, make changes only when you’re sure, make them incrementally, and not all at once at the end.  That’s how you keep both your projects—and your reputation—on solid ground.