The current economic climate is having an impact on individuals and businesses alike. The trades are no different and contractors are facing hard times as inflation continues to soar.
Increasing costs for supplies are forcing businesses to tighten their belts but customers are having to do the same, making it difficult to balance profitability with competitiveness. How, then, can contractors look to cut costs and bolster their financials?
Boost your efficiency
Efficiencies can be attained throughout your operations, often with simple changes or small investments. For example, upskilling and developing your workforce can help you to rely less on other contractors to complete jobs and boost the quality of your output. Investing in your people may just give you the edge over competitors and boost your chances of success in the long term.
Another area you can look to optimise is your processes. Streamlining practices helps to reduce wastage of time, money and resources, all of which add up to more effective and efficient operations. This could involve the automation of ordering processes or innovative new approaches to building such as modular construction, for example.
Technology continues to redefine construction methods and approaches but it’s playing an equally important role behind the scenes. Project planning and budgeting software help contractors forecast and monitor budgets to ensure that as little investment as possible goes to waste. With a better understanding of outgoings, you can optimise your spending and enhance competitiveness.
The same goes for materials and supplies – accurate forecasting helps to predict shortages and limit waste which can drain resources quickly. This allows for greater versatility and better decision-making based on data and forecasts.
Hire instead of buying
In the current economy, investing funds wisely is so important. Cash tied up in costly capital equipment can really weigh down your business and limit your flexibility. Demands are changing constantly in construction settings and contractors need to be as fluid as possible.
That’s why hiring could be a better option than buying for your venture. Equipment, facilities and tools are much cheaper to hire than buy, and you won’t have to worry about reselling if they become redundant. If you’re on top of what the correct plant hire insurance looks like for your requirements, you can get the exact solutions needed for jobs without making long-term financial commitments.
Nurture supplier relationships
Your network of partners and suppliers is key in determining your competitiveness. Not only do they have a significant influence on your finances but they help you to deliver to project timelines and quality standards.
Nurturing your supplier relationships and making use of economies of scale where possible is one of the best ways to secure bulk savings on materials, suppliers and equipment. If your suppliers aren’t quite cutting it for you, compare quotes from other providers.
What cost-cutting strategies are proving successful for you?