Efficiency is desired by businesses of all sizes and types. It is the result of maximizing the value of everything that is inputted: time and resources. This becomes essential quickly in construction. The profit margins in the construction industry are notoriously low. For most industries, a 1.5-2% profit margin would be unsustainable and would cause great concern. In construction, this is normal. As such, saving as much money as possible is paramount for construction businesses to survive. Here are 4 tips for keeping costs low for your construction business.
Invest in High-Quality Tools and Equipment
Tools and equipment are a vital part of the construction. A job is made much more difficult if they are not up to standard. It can be tempting to opt for the cheap options, and buy more of the low-cost tools rather than invest in high-cost alternatives. It is more likely that the churn of cheap tools costs more than having one expensive tool for longer, especially as warranties and guarantees often soften the blow of expensive tools breaking. There is also the factor that the high-cost tool will likely perform to a better standard, meaning the job will look better, be better, and be finished faster.
For example, transportation is essential for construction. Buying cheap, second-hand vans which have high mileage and general wear-and-tear is a risky move. Whereas, buying a new vehicle such as the Ford Transit, for example, will have dealer and manufacturer guarantees, will be devoid of baggage from a previous owner, and will have a longer life expectancy.
Insurance
Insurance is a must-have for any business, but for a construction business, it can be a lifesaver. Working in people’s homes or businesses and with potentially harmful tools means expensive and serious accidents can happen, as much as safety precautions mitigate them. The business, without insurance, would have to cover the cost if anything occurred. Insurance is a necessary investment.
How construction businesses can save money on this front with personalized coverage. Insurers offer the ability to select needed policies for construction businesses, which means that they can tailor the insurance to their needs and only pay for what they need to, cutting out the cost of unnecessary extras.
Reduce Waste
Construction projects and jobs require a lot of resources. The number one thing to do is to shop around and find the best deals to save money, which, again, doesn’t mean opting for the cheap option but, rather, seeking the best deal for the best quality available. The product and service you’re delivering shouldn’t suffer because of costs.
Number two is to reuse and recycle resources. From past jobs, there are likely to be offcuts and unused materials. Storing those for future use will help save money. Additionally, there is a chance that resources from the site will be reusable if demolition or remodeling is part of the job.
Selling or donating waste would be a potential option too. As the world turns towards recycling and reusing, more and more construction jobs are being fully accomplished with these kinds of materials.
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Ensuring there is administrative efficiency will ensure that businesses are scheduling and organizing jobs and projects to maximize revenue. Cutting costs is all well and good, but money coming in is still, obviously, important. Additionally, having clear competency in this area will keep employees happy, as it will keep their work hours reasonable – help save on overtime – and will help solve any issues they have in this department.
READ MORE: What Makes a Great Home Builder?