Cost-Cutting Tips For Those In The Construction Industry
Saving money is something every business owner will be keen to do, but it’s particularly important in the construction industry. With high overheads to cover for every project, there needs to be an element of cost-cutting somewhere to increase profitability.
The question, of course, is where can savings be made? They shouldn’t come at the expense of employee safety or building regulations, so the construction manager needs to operate wisdom.
Here are some suggestions that should prove useful to those in the industry.
#1: Make better estimates
Underspending is bad enough in the construction industry but overspending can prove problematic too. Buying too many materials is not only bad for the environment if they are later discarded, but it can also be a waste of money. To save money then, it is important to make better financial projections before the project begins. This can be done by using Candy or other specialist software, or by getting together as a team to discuss in detail the costs that will and won’t be involved.
#2: Don’t discard waste materials
As alluded to above, waste materials can be problematic if discarded, so it makes better sense to keep hold of them. They can then be used for another project if stored correctly, and this will negate the need to buy extra later. Alternatively, the materials could be sold to others in the industry, as the business owner would then recoup their spending.
#3: Invest in high-quality tools
In an effort to cut costs, there may be the temptation to buy cheaper tools, but this will work against the business owner. Cheap tools are rarely designed to last for a long time, so they will have to be replaced down the line. High-quality tools should never break, however, so they are a worthy investment. Long term savings will be made as a consequence, so this needs to be taken into consideration.
#4: Hire rather than buy
For those tools and pieces of equipment that will be used frequently, it makes sense to buy. It’s common sense. However, for anything that will be used infrequently, it might make more sense to hire them. This saves money in the short term, and in the long term too, as there will be fewer maintenance costs to cover for equipment that deteriorates while sitting dormant. The alternative is making money back by hiring out the items not being used, which is something the business owner might do anyway to make more money.
#5: Shop around for a new supplier
Construction managers will have their go-to place for equipment and building materials. However, there is no harm in changing suppliers, especially when another firm offers the same things but at a cheaper price. Of course, care does need to be taken. A long term relationship with one supplier can sometimes be profitable, as they might offer discounts. And cheaper suppliers might sell items that are poorer in quality. Still, it is worth looking at what different suppliers offer, especially when it makes better sense to do so.
Thanks for reading!
Categories: Outside Contributors