As the demand for commercial construction across the United States continues to rise, the contrasting skilled labor shortage in the industry has made growth difficult for builders and contractors alike. In attempts to overcome this shortage, contractors are looking for ways to cut costs now more than ever. Here are five smart, easy ways builders and contractors can start saving money today:
1) Don’t Overlook Your Overhead
It’s easy to let some of the everyday details slip through the cracks — but that’s one easy way to lose money without even realizing it. There are plenty of ways you can save on monthly fees, such as switching to a new payroll service, fine-tuning your inventory practices, cutting down on your utility bills, or even finding a better deal for your company’s phone plan. Continuously analyze your monthly expense to see where you could cut costs effortlessly.
2) Take Cover(age)
Construction-related lawsuits and worker’s comp are always a lingering risk for contractors, so make sure you’re regularly reviewing your insurance policies with an agent to keep your coverage up to date. Always make sure any hires you bring on for projects are also insured, and that you won’t go down for any lapse in coverage on their end.
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3) Review your Revenue
After you complete a project, make sure you review the financial outcome — did you stick to the original budget? Were there any major changes that affected the actual cost? Try and pinpoint the cause for any profit loss, or consider reviewing your process for estimations in order to make more accurate bids.
4) Be a Payment Pacesetter
Stay as far ahead in the billing process as you can in order to give yourself enough time to adjust if your client runs into any payment problems, and be willing to work with clients who start to fall behind to obtain at least partial payments. It’s important to remain persistent without being too forceful as you work toward acquiring your payment in full.
5) Adapt to change
Make sure to estimate the costs of any change orders quickly — and don’t overlook the importance of conveying the situation clearly to your client! Keep the lines of communication open and work together in approving any changes as quickly as possible to avoid taking on any extra costs as a result of a last-minute change.