Industry
Construction Services
Challenge
Despite strong sales growth and a backlog of jobs in 2022, Olmsted Construction—a group of three integrated construction-related companies—faced internal inefficiencies that were threatening profitability. Specific challenges included an underperforming division, declining margins, and rising G&A costs. Without timely intervention, these issues could have undermined the group’s long-term financial stability.
Results
By closing an underperforming division, addressing outdated costing practices, improving job costing and management reporting, and introducing process automation, Teel+Co helped Olmsted improve gross margins, reduce G&A costs, and increase operating profit. These efforts not only strengthened Olmsted’s financial position but also enhanced employee morale, leading to reinstated bonuses and a more engaged workforce.
Key Services
Electrical Contracting, Excavation, General Contractor
About the Client
Olmsted Construction is a privately owned group comprising Taylor Excavation Corp., Fife Construction Inc., and Otis Electrical Co.Operating under a single shareholder-president, the group employs 135 people and generates $20 million in annual revenue. Olmsted experienced strong post-pandemic sales growth but was struggling with operational inefficiencies, rising costs, and declining profitability.
The Challenge
In late 2022, Olmsted’s leadership engaged Teel+Co to address three primary challenges:
1. Underperforming Division
Otis Electrical operated under three divisions: Altoona, Bixby, and Mayberry. The Altoona division was suspected of operating at a loss. However, poor financial visibility made it difficult to assess the division’s true impact on the company’s bottom line.
2. Declining Gross Margins
Fife Construction’s gross margins had fallen significantly compared to previous years, attributed to outdated job costing and estimation practices.
3. Rising G&A Costs
General and administrative (G&A) expenses were increasing steadily, placing financial strain on the organization. The suspension of bonuses in 2022 had also negatively impacted morale, adding to management’s concerns.
The Solution
Teel+Co adopted a hands-on approach, assuming control of and revitalizing the finance function while conducting comprehensive operational and financial assessments. This effort resulted in the following strategic solutions:
1. Closure of the Underperforming Division:
After identifying that Otis Electrical’s Altoona division lacked a competitive sales pipeline and had unsustainable fixed costs, Teel+Co recommended its closure. This move immediately stopped further financial losses.
2. Modernization of Job Costing Practices:
For Fife Construction, Teel+Co introduced a modernized job costing and estimation system. This improved accuracy in project bids and helped restore healthy gross margins.
3. Automation of Administrative Processes:
Rising G&A costs were addressed through the implementation of automated accounts payable and corporate credit card systems. This significantly reduced manual processing time and administrative overhead.
4. Enhanced Financial Visibility and Communication:
Consolidated accounting practices were introduced, providing management with real-time financial insights. Additionally, Teel+Co facilitated regular management meetings, improving cross-departmental communication and coordination.
The Results
Teel+Co’s strategic partnership with Olmsted resulted in:Improved Financial Performance
- Gross margins increased by 3.4%, contributing an additional USD 1.723M in profitability.
- Operating income grew by 7.0%, equating to an increase of USD 1.247M.
- G&A costs were reduced by 2.7%, saving the company USD 387K annually.
Boosted Morale and Employee Engagement
By mid-2023, Olmsted had reinstated employee bonuses, contributing to a significant improvement in workforce morale and engagement.
Sustained Operational Improvements
With new processes and tools in place, Olmsted is well-positioned for continued growth and long-term profitability. 
Confidentiality Disclaimer
In presenting this case study, we are committed to upholding the confidentiality and privacy of our clients. To protect their identity and proprietary information, we have altered certain details, including names, locations, and specific financial data. These changes are solely intended to preserve anonymity and do not impact the accuracy or substance of the case study. Our modifications ensure compliance with our confidentiality agreement and safeguard our client’s business interests.
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