(This is a contributed post)
Construction is a notoriously expensive industry to run a business in. After all, the cost of materials and labor are usually through the roof, meaning that the cost of most jobs often end up at the top end of the original budget. The only consolation is that you will be able to pass on this cost to your clients and customers. However, if the quotes that you give out on construction tenders are higher than what most people expect, you could find that it is difficult to get hired for certain projects.
So, as you can tell, you need to make sure that you run your construction company very cost efficiently. Part of that is trying to budget as well as possible. As well as having an overall company budget that will help you manage your monthly expenses and costs, you will also need to draw up detailed budgets that cover the costs and expenses for every project that you carry out for clients. Not only will this help you come up with a quote to pass onto them, but it should also prevent you from overspending on each project.
Once you then have a clear budget for a new project, it’s important that you try to figure out how you can get as much out of it. That means, being able to afford more materials and contractors for your overall budget. It might seem a bit too good to be true, but it can be possible, especially when you use your own full-time employees to their full potential.
Here are a few tips that should help you to get a lot more from your construction company’s budget.
Be Thorough With Project Budgeting
When you are drafting up a budget for a new project, it is essential that you map out every single cost that you might possibly face. This will help the budget be a lot more detailed, and you will be able to see exactly what kind of expenses might come your way. That means that there won’t be any hidden costs or surprise expenses that you weren’t expecting. By removing the possibility of any hidden costs in this way, you then have a specific cost for the project and there is no way any surprise extra costs will end up pushing you over budget.
Always Work With The Experts
Some companies try to work with fairly new contractors who don’t have that much experience behind them, because they will be able to hire them for quite a cheap price. However, it’s fair to remember the saying that you will only get for what you pay for in this situation! After all, they will be cheap for a reason! It’s always better to work with experts who have plenty of experience behind them. This counts for engineers who will advise on construction site selection, plasterers, electricians, and plumbers. Basically, any tradesman who you work with needs to be knowledgeable about their trade and have a lot of experience behind them. They may charge slightly more, but at least you know that they will be able to do the work to a high standard and there won’t be any chance of you needing to redo the work because of mistakes or poor craftsmanship.
But Try To Keep Jobs In-House If Possible
Of course, if you don’t need to outsource any of your project jobs and tasks to any contractors, then you will find that you save quite a bit of money. However, most construction companies aren’t able to keep every single job in-house as they don’t have enough employees with all of the various skills and knowledge needed to carry out some more niche tasks, such as plumbing and plastering. If you can afford to hire a large team, then it would be worth hiring as many people with a wide range of skills as possible. Even though paying so many full-time salaries can be a hefty expense, you will find that it gives you a lot more freedom with each individual project, as your budgets won’t be taken up by contracts’ costs.
Invest Well In All Of Your Employees
You will also find that investing well into your employees’ training will also be beneficial from a financial point of view as well. That’s because it will give them the chance to hone all of their skills so they can keep on getting better at their job. Once they improve, you will find that your employees are a lot less inclined to make mistakes and errors. That will mean that work won’t need to be redone. Not only that, though, but the work will last a lot longer and will be of a much better quality so you won’t need to worry about any complaints or further call outs from your clients. It’s also worth giving your employees plenty of training in estimates. If they know how to correctly and accurately estimate how much materials are required for a job, there is little chance of them overestimating, which could result in you paying too much for far too many materials.
Buy Your Own Materials
When you work with contractors, they will likely want to buy their own materials for the work that they need to carry out for you. However, if they will let you, it’s generally best to source your own materials. This will give you the chance to shop around for the best prices so that you can see if you can buy some materials for a really great deal. It also gives you the chance to buy your materials from different for each project if necessary. As prices for construction materials tend to rise and fall naturally over time due to a change in demand, you could end up paying different prices for each project even if you go with the same supplier. So, one way to save money on each project is to get quotes from various supplier to see who works out the cheapest option this time.
Hire Staff With Transferable Skills
When you need to recruit for an open position, it’s important to try to find staff who have transferable skills. In fact, it’d be even better if they had two specialisms that they could use in your company. For instance, you might want to try someone who is qualified to work as both a builder and a plasterer. That way, you won’t have to hire two people to fill two open positions, as this one employee will be able to take care of both building and plastering needs for your company.
Update All Your Technology And Machinery
If you use a lot of technology and machinery in all of your construction companies, it’s necessary to make sure that they are always working as efficiently and safely as possible. Over time, as heavy machinery and some tech devices age, they start to become a little less efficient. That could cost you more money to run them. Not only that, though, but they also might be a little less safe. If an employee were to hurt themselves using your machinery, they could be well within their right to sue, which could cost you dearly. So, it’s important to get any piece of machinery serviced at least once a year. This will help figure out when it is time to replace a piece of aging machinery for something that is going to be a little more efficient.
Build More During The Off Season
Every industry has an off season when things aren’t quite as busy. For instance, the tourist industry is always at its busiest during the school holidays when families are able to travel on vacation together. The building industry also has its busy periods, which tend to be when the weather is better in spring and summer. As the weather is usually good throughout these periods, it can be easier and quicker to get most construction jobs done. However, it could be worth looking into building more during your off season as well. That’s because it could work out a lot cheaper for you. That’s because most contractors are able to get lower prices from their subcontractors during this time. So, you should find that the cost of labor is generally lower during the off season.
Plan For Problems
You certainly don’t want anything to go wrong with any of your projects, but there will be times when errors and issues arise that are completely unavoidable. Even though you will no doubt want to prevent anything like this from happening, it’s still necessary to plan for these surprises. In fact, you might want to draw up a complete risk-management plan. This plan should have some pointers that can help you deal with any potential risk that could affect your project. You’ll find that following this type of plan can help you get your project back on plan with minimum cost to the business.
If you use all of these tips, you should find that you can get a lot more from your construction company’s budget!