Assessment of strategies for maximasing profitability in small and medium construction firms in Abuja.

Abstract

This study investigated profit maximization strategies by small and medium-sized construction firms in Abuja with a view to improving the construction organization’s profit margins. The data for the study was gathered using a questionnaire. The questionnaire were administered to two hundred and twenty four (224) respondents, and one hundred and fifty five (115) were retrieved, representing a response rate of 69%. A purposing sampling technique was adopted for the story. Analyses of the data were carried out with the use of percentage, mean item score and T-test. The study identified sixteen (16) factors affecting the profit maximization of construction firms, which are the supplied costs, the degree of competition faced by a firm, time and the strength of demand. The findings revealed that the majority of the hypothesized measures of profitability are perceived as statistically significant (p<0.05 by the respondent using the one – sample t-test value of 3.5). The average barrier scores ranges between 3.20 and 4.36. These measures of profitability ranged from “investment” (mean=3.20 and 4.36; SD=0.66; t (155) = 16.16; p=0.00<0.05), which is the highest rank, to “liquidity” (mean=3.20: SD= 0.63; t (155) = -5.78; p=0.00), which is the least ranked). The findings also revealed that time, supply cost, unexpected problems, project overhead, weather, and rate of return are the most important challenges faced by the contractors that affect the realization of profit maximization. The study also revealed that of the seven strategies of maximized construction firms’ profit margin, the minimization of waste is the most effective strategy. It was, however, concluded that minimizing waste, setting profitable goals and improving productivity skills were the most effective strategies for maximizing profitability in small and medium sized construction firms in Abuja. The major recommendation from the study is that the government at all levels should put in place favorable policies that will allow small and medium sized construction firms to thrive in the study area and in Nigeria at large.