With 85% of projects going over budget, construction managers are always looking for ways to cut spending without reducing quality or punctuality. Reduced job site costs increase profit margins while allowing companies to bid for projects more successfully by offering competitively low rates. Instead of searching for things to cut, project managers should focus on improving productivity and limiting inefficiencies. Follow these 5 tips for saving money on your next project.
1. Compare quotes from various wholesale providers.
Shopping wholesale is a must when sourcing materials for your construction project. When dealing directly with suppliers, you’re cutting out the price hikes leveraged by middlemen. Plus, you’ll have greater control over the quality and selection of materials. You can take the savings even further by comparing prices from different providers to see who offers the best deal. There’s a good chance that the first business you work with isn’t offering the lowest price. Identify a handful of providers who can supply the materials you need within your desired time frame and request quotes for the amount you need.
2. Rent equipment you’re not going to use regularly.
The vast majority of the time, it’s more cost-effective to purchase equipment than it is to rent it. However, when projects demand the use of uncommon, hyper-specialized equipment that your team won’t ever use again, it makes fiscal sense to rent instead of buying. There’s no reason to invest in something that’s going to sit around and collect dust after being used just a few times. A good rule of thumb to use when judging the usefulness of equipment is asking yourself how many projects in the past and how many currently lined up for the future require it. If you don’t see a compelling uses case, renting might be the smartest choice.
3. Outsource hiring demands to staffing experts.
Hiring costs eat a massive chunk of a project’s overall budget. On average, project managers spend $4,129 to bring new craftsmen aboard. And these direct costs aren’t even the only financial drain of recruitment. The time costs – which hover around 42 days per hire – translate into significant losses in productivity. Working with a committed staffing agency is the most effective way to avoid these costs while still getting the talented craftsmen you need. Make sure to hire a staffing agency specializing in the construction industry to get all of the advantages that come with outsourcing this key aspect of project management.
4. Improve the on-site efficiency through better management.
Cost reduction is an ongoing effort throughout the project timeline, not just something that happens at the beginning. Construction managers need to remain on the lookout for ways to reduce inefficiencies, avoid costly mistakes, and increase productivity. This requires a comprehensive approach to project management focusing on various areas including:
Communication – Optimizing job site communication is key for creating and maintaining a smooth workflow that results in streamlined output.
Organization – With so many moving parts, it’s essential to keep everyone on the same page so your team operates like a well-oiled machine.
Safety – Keeping your team safe needs to remain a top priority not only for the protection of your craftsmen but also for the timeliness and budgeting of the project.
5. Pay close attention to the numbers.
Budgeting is non-negotiable when looking for ways to save money as a project manager. When you have a clear picture of spending limitations and project costs, it’s possible to make accurate and effective financial decisions. This requires ongoing and precise communication with clients to keep track of any changing demands or funding adjustments. Estimations and quotes are another major loss of revenue due to their impreciseness. Make a note whenever an expense is estimated and make sure to update the cost when the precise numbers are available.
Struggling to find the talented craftsmen you need to deliver on your construction projects? Not anymore! At Madden Craftsmen, we specialize in hiring craftsmen for northwest construction companies. We’ll find the best people for the job so you can focus on running your business. Contact us today to get started. Let’s build something together.
