As a contractor, if you repeatedly demonstrate the ability to reduce project costs, you’ll likely win more jobs than less-efficient competitors.
That’s the principle Dr. Thomas Sowell, an economist and senior fellow at Stanford University’s Hoover Institute, alluded to in a column he wrote for Town Hall. According to Dr. Sowell, costs are associated with the time and resources needed to produce a product or deliver a service, whereas prices are sums imparted on clients or customers that allow businesses to cover their costs and receive a return.
So, if you can find ways to reduce the costs associated with your operation, you’ll be able to submit more attractive bids to project owners. Using construction management software can help you identify excessive costs and eliminate them. However, it’s going to take the following tactics to reduce those expenses:
- Assign capable employees to the right tasks
According to Chris Hendrickson’s “Project Management for Construction”, a builder may incur cost overruns if workers in charge of particular job components are not adequately trained.
Of course, you want to invest in your employees’ skill sets. Enabling laborers or other personnel to work on more complex, technically oriented tasks provides them with experience, which is valuable to you as a business owner. However, that doesn’t mean you should assign tasks to personnel who would be overwhelmed by such responsibilities.
To develop workers’ skills and ensure tasks are conducted within budget, leave complex duties to skilled employees and let less experienced staff assist them.
Assessing equipment on a regular basis can reduce the chances of downtime occurring.
- Proactively maintain equipment
This may just be common sense to you, but it’s a point worth mentioning. Instead of running machinery into the ground, take basic measures to reduce the chances of failures occurring.
Proactive upkeep, also known as preventative maintenance, can help contractors save 12 to 18 percent in machinery costs, according to the US Department of Energy.
In regards to project costs, proactively maintaining equipment can help you reduce the chances of unexpected downtime occurring while work is underway. Therefore, you don’t have to suffer the financial consequences associated with delays.
To support proactive maintenance programs, you could schedule machine inspections through your project management software, ensuring your employees complete these tasks on a regular basis.
- Pay attention to the weather
Receiving forecasts on a regular basis will help you determine whether or not using certain equipment will be a productive investment. For example, attempting to dig a culvert with an excavator during heavy rains is likely to be a lost cause as mud will keep sliding into the trench.
- Keep an open line of communication
Sharing information with project stakeholders is imperative to keeping costs low. Doing so will allow you to better navigate construction variations, assign responsibilities and even anticipate cost overruns.
Between the employees, you assign to particular jobs and the suppliers who deliver the necessary materials, knowledge should be distributed across multiple parties. It’s unrealistic to expect you to know everything, so allow project participants to share information.
As opposed to communicating over the phone or via email, it is much more efficient to use technology that allows you to manage all job documents and messages through a single platform
