b'Business ManagementGeographic area type of work the company has profitably completed Project owner in the past.ConsiderthefollowingexampleofhowtouseWithoutprofitableexperiencewithprojectsof the matrix to evaluate the potential risk of a newcomparable size and kind of work, this project has a opportunity. A roofing contractor is asked to bid onhigh risk of being unsuccessful or highly unprofitable a new 60,000 square foot, $7.5 million shopping(see Figure 3).complexinanearbyChicagolandsuburb.TheUsing the same scenario as above but changing the majority of the contractors project experience isproject size to $4 million (closer to the 10% acceptable negotiatedhigh-endmanufacturingconstructionincrease) results in a considerably different analysis. (average project size of $3.5 million) with an areaWith the change in the project size, it is much lower general contractor, who is the driving force behind thein risk (see Figure 4), and other factorssuch as new complex. This is a perfect win-win opportunityrelationship with the owner, project complexity, and for both the client and the company. Now is the timeavailable resources (manpower, equipment, etc.)for the company to ask itself, can we build it? Beforecan be taken into consideration when making the saying yes, it is important to evaluate the risk. go/no-go decision.To evaluate the 4 aforementioned critical experienceWhileyoushouldconsidermanyfactorswhen criteria that compare profitability and risk, use the riskpursuing a project, evaluating the risk of the 4 critical matrix. Based on the previously described scenario,experience criteria should be part of the process. It project size and type are the 2 key criteria to consideris always exciting to think about new opportunities because they differ from the contractors experience. for your company, but keep Tom Schleifers advice Project size: In volume, this opportunity is almostin the back of your mind: Rather than considering doublethecompanysaverageprojectsize.Awhether or not you can build it, consider if you can standard rule is to consider a project high risk if it isbuild it at a profit.more than 10% larger than past profitable projects.Organizational Structure that Supports StrategyThe key word here is profitable. A project twice as large as past profitable experience is high risk. It is critical to have your strategy mapped out before Project type: This project is not comparable to theyou determine the best structure for your company. Continued on page 24www.mrca.orgMidwest Roofer 23'