As a construction contractor and business owner, you know how much your costs can impact the company’s bottom line, image and performance. In fact, construction projects across the nation exceed their budget by 16% at a minimum, and often much more, according to data found by the International Journal of Innovation, Management and Technology.
You’re often so consumed by costs that you can forget about planning for long-term growth – you’re sometimes just trying to survive a project and move on to the next.
Cutting constructions costs is a must, but making decisions that compromise the quality and integrity of the performance is immoral, and can hurt your reputation and your future. It also could show up down the road and keep you from growing your business.
At SBS Accounting & Advisors, we’ve worked with construction companies for more than a decade, coming up with key solutions to meet your challenges head on, and help your business survive and thrive. We have a passion in helping you meet your everyday needs, while doing the heavy lifting for you to take the stress and burden off your shoulders.
With that in mind, here are some insights and tips we’ve gathered for cutting construction costs without compromising quality and integrity – along with ways we can help.
Button Up Your Hiring Practices
As a business owner, I’ve learned that SBS is nothing without a strong team alongside me. Their genuine care for you – our customers – and passion for helping you grow and reach the next level makes me very proud. At the same time, your unwavering support and trust in us allows us to be in business today, and for that I am forever grateful.
In construction, it’s hard enough finding people to work that it’s tempting to make rash hiring decisions. But doing so can lead to far more problems, as poor performance or the inability to show up on time can send your costs and project deadlines spiraling.
If this happens, you’re often left looking for subs and desperate for them to come in quickly and get the job done. In doing so, they may also not show up, provide little paperwork and only do the bare minimum.
That’s why it’s so important to check a potential employee’s credentials/licenses, do background checks and cross references, and train and oversee their effort and performance. Of course, you can’t be everywhere at once, but you can have people in place to look over these things and report back.
Buttoning up your hiring practices from the get-go will go a long way towards finding the people you need to get the job done in the best and most efficient way possible.
Strategize Around Materials
Material costs can add up quickly and cut into your profit, but if planned properly, you can actually save money on materials. Here are some simple, yet powerful strategies for cutting costs on materials.
- Shop online and go wholesale. When buying your materials, shopping online by wholesale offers the best price comparisons and cost savings that add up fast.
- Buy in bulk. Ever run out of materials mid-project? Buying in bulk not only takes care of this, but also reduces costs through bulk discounts. If planned properly, you’ll have materials on hand to get the project done, and even some for future projects.
- Store bulk items properly. Materials need to be in a clean, dry storage area. This provides easy access for workers, while also keeping paper products and other materials from getting damaged.
- Order only what you need. While buying in bulk is a great strategy overall, you sometimes need to just order what’s necessary for certain projects. For custom orders involving 300 tiles, for example, you can order a little more than that in case some break. Just make sure you don’t overspend. In doing so, you can store them better, cut costs and reduce work time spent by subcontractors. Remember, extra materials can mean more construction waste and more time spent cleaning up.
Commit to Quality Tools and Weather the Storm
In an effort to cut costs, it’s tempting to get cheaper tools. Don’t! Your tools need to be quality because they need to do their task correctly every time, and hold up for the long haul as more projects come in.
These tools also need to be used smartly. Take inventory of what you have and what you need. Label the tools you own to avoid confusion for workers on-site. And don’t let them take home equipment tools or devices if you can help it. That’s when things can get damaged or broken, leading to extra time and money. Human errors exist, but there are ways to plan for it!
On the other hand, bad weather and natural disasters are out of your control, but you can proactively plan to limit the damage if one occurs. Make sure you get insurance to lower the impact of a disaster or storm. You can also put info into your contracts to account for the extra time and order changes you’ll need to make after a disaster or storm strikes. And make sure workers stay efficient. If they can’t work outside, they can be doing indoor tasks to remain productive.
Get Your Finances and Construction Business in Order With SBS Solutions
While the areas above are ways you can strategize every day in the field, there are a number of financial areas you’ll face that SBS can help with.
These include not knowing your true profitability on a job until it’s over, poor recordkeeping and systems/processes, poor cash flow management, invoicing issues that stem from not having a back office team in place and slow, or no, customer payments, and more.
At SBS, we put in specific strategies in place to sure up these things, turn your data into actionable plans for strategic growth, and take you and your business to the next level and ahead of your competition.
So, if you’re ready to see what this looks like or simply have any questions, don’t hesitate to reach out to us today. We are very passionate about helping construction owners meet their demands, overcome their challenges and transform their businesses.