How General Contractors Can Increase Long-Term Profitability

Fierce competition, tight timelines, and tighter margins; that’s the life of a general contractor.

The average profit margin for general contractors hovers around 10%, but can often fall to just 3% to 5% because of preventable mistakes. That means even small errors, delays, or miscommunications can make the difference between profit and loss.

The pressure is even heavier for small and mid-sized GCs. With fewer available projects, intense competition, and rising costs, securing long-term profitability requires more than just winning a few bids. It calls for smarter estimating, tighter collaboration, and a willingness to embrace technology that reduces errors and drives efficiency.

Here are a few helpful strategies GCs can use to build sustainable profitability for the long haul.

Nail Estimating Accuracy to Protect Margins

The estimating process is where profitability is often won or lost. Underbidding leaves money on the table, while overbidding prices you out of contention. Even a small number of inaccuracies in material quantities or labor costs can quietly erode margins over the life of a project.

One of the most effective ways to protect profitability is to ensure estimates are both accurate and efficient. Manual takeoffs and outdated tools consume valuable hours that could be better spent elsewhere.

An independent study by the University of Kansas compared Onscreen Takeoff against Togal.AI. The result? Togal.AI was 76% faster than OST while maintaining a high level of accuracy. What once took estimators over 2.5 hours could be completed in just 30 minutes.

That efficiency saves time, absolutely. Beyond that, an AI-backed takeoff tool creates the opportunity to chase more work, sharpen bids, and deliver more consistent profitability. It’s all about automating repetitive takeoff tasks so your estimators can focus on the “why” behind the numbers, not just the linework.

Streamline Collaboration to Avoid Costly Delays

Miscommunication is a productivity killer. Communication breakdowns between owners, project managers, estimators, and preconstruction teams often lead to rework, unnecessary changes to orders, and schedule delays. All of these eat into margins.

Even the best estimate can’t protect profitability if collaboration breaks down once the project is underway. So, avoid relying on scattered email threads or siloed spreadsheets. They slow down decisions and increase the risk of critical details being missed.

Instead, strong internal collaboration means information flows clearly, and decisions are made quickly. Externally, clear communication with trade partners and clients helps keep expectations aligned, reducing the risk of disputes.

Here’s a great example of streamlined collaboration: UrbanCore integrated Togal.AI’s AI-backed takeoff software with Zebel, a cost estimating tool that leverages historical cost data. The result? The project team reduced errors, accelerated workflows, and eliminated redundancies.

UrbanCore’s Togal.AI and Zebel integration saved time. But better still, it prevented the kind of mistakes that shrink profits and erode client trust.

Submit More Bids, Faster — Without Burning Out Your Team

When competition is this tough, speed is everything. Missing a bid deadline means losing out on revenue; sometimes to a competitor who can complete the same work more efficiently. But simply asking estimators to work longer hours isn’t sustainable.

The solution is to work smarter, not harder. By leveraging AI-backed takeoff tools, estimators can complete bid packages in minutes instead of hours, freeing up bandwidth to pursue more opportunities without sacrificing accuracy.

One Togal.AI user noted that what previously required an entire day of manual takeoff could now be accomplished before lunch. This shift in workflow allowed their team to submit multiple additional bids each week.

Another tip to save time and energy is standardizing a bid/no-bid framework. This helps teams to focus on projects that align with your strengths and profitability goals, rather than chasing unlikely opportunities. 

Adopt Technology as a Profit Multiplier

Technology adoption is no longer optional: It’s a profitability multiplier. McKinsey reports that digitization in construction can boost productivity by 14-15% and cut costs by 4-6%. For contractors operating at thin margins, those numbers are game-changing.

AI-powered takeoff software, cloud-based project management platforms, and digital collaboration tools all play a role in helping GCs work more efficiently and win more business. The key is not to adopt technology in isolation. It’s about selecting solutions that integrate smoothly into existing workflows.

Building a More Profitable Future

For general contractors, long-term profitability isn’t about cutting corners or squeezing subs. It’s about building smarter, more resilient processes. Accurate estimating, streamlined collaboration, faster bidding, and thoughtful technology adoption all work together to protect margins and position GCs for sustainable growth.

The firms that succeed will be those willing to adapt, integrate, and embrace innovation. By making small improvements across estimating, collaboration, and bidding, GCs can build lasting competitive advantages and healthier profit margins.

Ready to take the next step? Book a custom demo of Togal.AI to perform faster takeoffs, submit more bids, and win more business.