Reduce capital expenditure and improve money in the bank for future project opportunities for your business.
Are you wondering where all your money is going?
Keeping an eye on your expenditure is vital for business management and growth, but even more so when you’re looking to save money in a particularly high capex business such as construction.
“Construction companies ensure they are operating as economically as they can,” advises construction consultant Bill Turner.
Get your construction business in the best financial position by controlling your expenses and limiting your administration needs to boost your profit margins.
Related: The rise of redevelopment within the concrete jungles of the world
If you want to save money, doing the bare minimum when it comes to financial controls is simply not good enough. You need to start examining each and every line item. Make it your business to understand the details of your company’s financial situation.
Here are three ways to save on expenses with cheaper and equally efficient alternatives, according to industry experts and construction business owners:
1. Evaluate your insurance and payroll systems
Employ more tax efficient payroll methods as insurance and payroll are usually the costliest expenses for a construction company.
Also, because your projects may change regularly, find out if your insurance can be adjusted to cover the job or jobs you are currently working on.
“The economy may struggle but if you plan ahead and make smart choices your construction company will see more green in the long run,” says Tom Hancock, owner of Hancock Staffing. He suggests using a staffing agency, but also research the systems you are currently using.
2. Hire equipment for specialised jobs
Even as an established company, you may not have all the necessary specialised equipment to get some jobs done. This is where you can be thrifty. Renting equipment is an option, especially if you don’t work on certain projects regularly.
“If you are a larger contractor or feel that you will use the equipment on more than one job buying the equipment outright is always a less expensive than renting,” suggests Hancock. “You can also sell the equipment after you are done, research to make sure you get your money back.”
Hiring freelancers that are qualified to run the equipment can also save you some money from one project to the next.
Related: How the experts in your field see the future when it comes to succession
3. Be smarter with your utilities
With the current economic state, it’s crucial that SME owners prepare for the tough times ahead. Electricity crises and water restrictions will be a strain on businesses, especially construction. Keeping your data backed up, installing the latest software and investing in generators saves you time and money during power outages.
Water restrictions have now become the norm and we, as a country need to accept this as a way of life, notes Entrepreneur. Install water efficient fittings, detect and fix leaks as and when you see them are just some of the things that you can do to ease the disturbance and still be comfortable, while saving water.
Some of the options out there are more costly but will be worth the investment of saving over time.
Even great systems can be inefficient when you take a look at the details. It may seem as if you’ve cut costs in every way conceivable, but there are almost definitely other expenses that can still be cut.