It is not easy running a construction business these days. There are always some expenses that crop up that eat into your profit margin. Add will weather and a pandemic to the mix and these times become especially trying.
Which is why it is so important to have your construction business look like a well oiled machine that runs efficiently and effectively. To get it to this point, you have to be very careful with your money.
Spend it unwisely and you could end up in the red very quickly. If you feel like you are struggling to make a profit, then it is time to take a look at your books to find where the waste is.
In this article, I will go over several ways that you can save money in small ways that add up to significant growth later.
1 – Lower your fleet’s expenses
Your trucks and machinery can take a chunk of your profits without realizing that it doesn’t need to be that way. For instance, the issue with insurance is that rates go up and we just accept it. Instead of just cutting bigger and bigger checks every year, try to shop around for better rates.
Many insurance companies will give you an incentive to leave your current provider. If you don’t want to leave your provider, then ask them if you have the right insurance for your fleet. You may find that you are overpaying by having a policy that is not suited to your business. In other words you’re over insured.
And also shop around for the best prices on gas oil also known as red diesel. You may find a new supplier with better rates, or you could even look into buying in bulk to save quite a bit of money over the course of the year.
2 – Use the latest technology
Sometimes spending money ends up making you money. There is a lot of new software out there and products that use it that will streamline your business. Many times, an upgrade in your systems will end up finding the most efficient way to go about a job. You end up with less wasted material and can trim down your workforce considerably.
Even if you simply add a new accounting software to your operation can help you find areas where you are wasting money. It could be on supplies, labor or other factors but the software will help you see things that you’ve been missing.
3 – Use just in time ordering
A lot of the new software has made some major improvements on supply chains. This means that you can count on deliveries of supplies and material to get to you when you need it. Now, you can simply order what you need for a particular job instead of stockpiling. You’ll increase your cash flow considerably by not needing to have a huge warehouse full of material waiting to be used. Machine learning is quite sophisticated so take advantage of it.