Construction is a great industry to get into because people are always in need of construction companies so, even during times of economic difficulty, you should still be able to find work. Most small construction companies tend to rely on a solid base of repeat customers, especially if they’re working on residential properties. That means, once you’ve got things up and running and you’ve done a few jobs, word of mouth in the local area should be enough to keep you in work. But it’s that first part, getting things up and running, that is often difficult. The overheads in a construction company can be quite high because you’ve got a lot of tools and materials to buy and that can lead to a bit of financial trouble if you aren’t careful. If you’re going to make a success of your new construction company, you need to follow these simple rules to cut costs.
Only Take On Jobs You Can Afford
Nobody likes turning down work and you want your construction company to grow but it’s important that you don’t overstretch yourself. If you take on a job that requires a lot of new equipment that you don’t have, you’ll end up paying out a lot of money and the profit that you make from it will be next to nothing. In some cases, you might even lose money because you can charge the customer for the materials but you can’t expect them to pay for any equipment that you need. It’s important to buy that expensive equipment slowly over time when you can afford it and then you can start taking on bigger jobs. For now, stick to the small stuff.
Spend More On Tools
Spending more on tools doesn’t seem like a great way to save money but in the long run, it is. Cheap tools are only going to break and you’ll have to keep replacing them. For example, if you buy a cutting tool with a carbide head, that’s going to last you a long time. But if you go for a cheap one, it’ll do you for a couple of jobs before it’s worn out and you’ll have to keep replacing it. Splashing out on quality once is better than buying cheap stuff over and over again.
Calculate Material Costs Accurately
When you give a customer an estimate for a job, that’s going to include the cost of the materials. It’s important that you calculate it properly because, once the price is agreed on, you can’t go back and start asking for more because you made an error and the materials cost more than you thought they would. That means the extra money is going to have to come out of your profits and you won’t earn much from doing the job in the first place.
If you follow these 3 rules from the start, you can reduce your overheads and make your construction company a lot more profitable.