How a house builder doubled sales and moved from breakeven to €200,000 profit

The starting point

This Leinster house building company was struggling to attract business and generate profit. When Tommy became involved in 2024, it had 15 staff, annual sales of approximately €2 million and was operating at breakeven.

The initial request was to help secure investment in the business.

The advisory approach

1. 01

   A broader business review

   The company implemented the Net Profit Planning Programme, addressing management development, sales and marketing, financial management, and business planning and control.

2. 02

   Margin and payment terms

   Tommy focused on gross profit margin and changed client payment terms, addressing both the profitability of the work and the timing of cash coming in.

3. 03

   Management structure

   He established a board of management and became Chairperson, setting the agenda, chairing monthly meetings and bringing accountability to the senior team.

4. 04

   People

   Tommy helped recruit senior staff as the business developed. The team grew from 15 people to 20.

What changed

Annual sales increased from approximately €2 million to approximately €4 million. Gross profit margin rose from 20% to 30%, and the business moved from breakeven to approximately €200,000 in net profit.

Revised client payment terms meant the external working capital investment originally sought was not required. That relates to the original funding need, not a claim the business will never need finance to grow.

Asking for investment

The house builder was struggling to win work and make a profit. It had 15 staff, sales of about €2 million and was at breakeven. The first request was help to secure investment. That is a natural instinct when cash is tight, but outside money can be expensive and can mean giving up part of the business.

Looking at margin and cash first

Tommy looked at two things before any talk of investors. First, how profitable the work was. Second, when customers paid. Changing client payment terms meant cash came in sooner, which eased the pressure that made investment seem necessary.

At the same time, gross profit margin rose from 20% to 30%. In building, where costs are high and margins can be thin, that change makes a big difference to what is left at the end of each job.

Structure and people

The Net Profit Planning Programme is the structured approach Business Answers uses with owner-managed companies. It covers management development, sales and marketing, financial management, and business planning and control, so that growth is planned rather than left to chance.

Tommy set up and chaired a board of management, bringing monthly accountability to the senior team, and helped recruit senior staff as the team grew from 15 to 20.

What Irish owner-managers can take from this

If you think you need investment, check your margins and payment terms first. You may find the cash is already in the business. This result relates to the original funding need, not a promise that a business will never need finance to grow.

Frequently asked questions

My business is short of cash — should I look for investors first?

Check margins and payment terms first. This house builder asked for help raising investment, but revised client payment terms and a margin gain from 20% to 30% removed the need for outside money. Outside investment can be expensive and can mean giving up part of the business.

What are client payment terms and why do they matter for cash flow?

They set when customers actually pay you. In construction, waiting weeks or months for payment ties up working capital. Shortening the terms here meant cash arrived sooner, which eased the pressure that had made investment seem necessary.

How can construction businesses improve gross margin?

By pricing work on the margin it needs to earn and watching direct costs job by job. Gross margin here moved from 20% to 30% while sales doubled from about €2 million to about €4 million, turning breakeven into about €200,000 of net profit.

When does a business genuinely need outside investment?

When growth genuinely outruns the cash the business can generate, even with healthy margins and payment terms. In this case the funding need disappeared once margin and cash collection were fixed — that is not a promise that no business ever needs finance to grow.

How does a board help a business that is struggling to win work?

It forces regular, honest review of pricing, pipeline and costs instead of month-to-month firefighting. Tommy set up and chaired a board here and helped recruit senior staff as the team grew from 15 to 20.