ways to reduce construction costs

ways to reduce construction costsManaging a construction site is expensive. With multiple people, materials and processes to oversee, contractors are constantly looking for ways to reduce construction costs.

While job site professionals face pressure when it comes to finishing their projects on time and within budget, greater efficiency is possible by focusing on these six tips:

Bid strategically

Bidding on the right construction jobs is important. Only bid on projects you have a high probability of winning, otherwise you could be wasting precious time.

If a project is outside of your capabilities, not likely to be very profitable or is one you’re not overly interested in, don’t bid. Additionally, make efforts to reduce the time spent preparing any bids you are interested in. Less time spent on bids means more time dedicated to current projects.

Here are some additional questions to ask when bidding for jobs:

  • Which prospective clients are most profitable?
  • Who pays well?
  • Are these prospects easy to work with?
  • Is there anyone who is willing to refer my construction business?

Bidding strategically is one of the first steps toward a profitable construction job.

Boost your crew’s productivity

If your workers aren’t meeting project timelines or expectations, you could go over budget and fall behind. However, there are steps to take to avoid this possibility. It’s all about addressing issues early on.

Happiness matters to workers, so it’s important to take every chance you can to let them know they’re valued. Listen to them and help them solve job site challenges. Remind them that they’re a team with a mission. When you do this, employees will gain a greater sense of purpose and appreciation and will likely be more productive and efficient.

To keep from paying more for labor, avoid overtime hours when possible. Studies have shown workers often become less productive when they work overtime because they’re fatigued and not overly excited about more work hours (except for the opportunity for increased pay, of course).

Make sure your workers have access to the proper tools and equipment. Additionally, maintain good communication on the job site. This leads to better planning and greater efficiency for your crew. Poor communication can lead to a project phase redo.

Spend carefully on tools and equipment

You don’t always have to spend an arm and a leg on tools and equipment. If a more affordable tool will do the same job as a more expensive version, why spend more?

Additionally, it’s important to consider the long-term cost of your tools, including operating costs. How will those costs affect your business?

Avoid cheaply made tools that will break or fail easily. It’s much better to invest in materials that will last.

To protect your investment, tool inspection and maintenance is crucial. If you take care of your equipment in the immediate term, you’ll likely have lower repair and replacement costs down the road. This also leads to increased safety.

Generate accurate job estimates

A mistake many contractors make is failing to calculate the true cost of a project. This is usually due to miscalculating the labor and overhead costs. (Overhead includes costs that remain even if your crew didn’t do any work for a week, such as paying insurance, rent and utilities.)

Additionally, more construction companies are beginning to use drones to create preproject models of landscapes, which helps improve project efficiency. It’s important to analyze as many details as possible before starting a project.

Use new technology

Construction companies have access to a lot of helpful technology these days. Mobile devices and apps, for one, are being utilized by crews more and more.

Technology is especially helpful when it comes to communicating, record-keeping and information-modeling on the job site. Using technology is all about helping you work more effectively and efficiently, as well as saving you time and money.

Making investments in things like electronic payment systems and cloud software can improve accuracy and profitability.

Seek expertise from material management professionals

In today’s business environment, successful contractors know that maximizing productivity and efficiency – all within tight deadlines – is key to a profitable job site. That’s why having access to quality material management professionals is important.

According to the National Electrical Contractors Association (NECA), up to 40 percent of a project’s labor cost can be consumed by material handling – and that’s just labor costs. Learn more in this video:

Recap: Ways to reduce construction costs

Reducing construction costs and increasing profits is possible for your construction business. If you focus on bidding strategically, boosting crew productivity, spending carefully on equipment, estimating accurately, adopting new technology and working with material management professionals, you’ll have a much better chance of saving time and money on your job site.

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