The construction industry gets influenced by external factors like the economy and even the time of year. The sad truth is that a lot of construction firms go bust each year. Even firms that people had assumed were profitable and not in any financial trouble go bankrupt!
There are plenty of reasons why those unfortunate firms can’t survive the tides of change. Do you run your own construction company? If so, you should spend a few minutes reading this article. You never know; it might give you some ideas on how best to prepare for any bad times!
Don’t hire people direct
The thing about hiring employees is that they cost businesses a lot of money. You have to pay various taxes and costs on their behalf. And employee liability insurance can often get expensive for construction companies.
If business becomes a bit slow, it can be hard to lay off your workers. Most of those issues go away when you only use contractors. You can hire contractors that deal with specific areas. Examples include electrical wiring, laboring and plant machinery operations.
Your contract with them can specify that you don’t need to give them a lot of notice to end any agreements. And the best part of all: you save lots of money! Hiring contractors gives you plenty of flexibility in your construction company. In fact, you will find that successful construction companies only hire contractors to work for them.
Consider using secondhand machinery
For some reason, a lot of construction firm owners feel they should only use brand new machinery for each project. But as long as used models work well and have no faults, what’s wrong with using those instead?
The biggest benefit to using secondhand machinery is cost. Your construction company can save thousands of dollars by doing this. You can then use the money saved towards other areas of your business, or to ensure that there is adequate cash flow.
There are plenty of reputable used plant machinery firms out there that you can buy from. And all those firms will offer good guarantees and warranties for anything you buy from them. Check out some of their websites to learn just how much cash your construction company can save!
Diversify your operations
One major downfall for any business, not just one in the construction industry, is being inflexible. In order for any firm to survive the tides of change, it must adapt and evolve with the times.
Let’s say that your construction company only focuses on large-scale projects. If the public sector and companies no longer wanted to spend money on such projects, your firm will soon go bust!
That’s why it is important to diversify your operations. You could also offer your services on small-scale projects, and even for domestic customers too. You might even hire a landscaping contractor! They could then work on landscaping projects.
Customers these days prefer to work with firms that can offer a “one-stop shop” of services. Rather than having to hire many companies for various tasks. When you diversify your operations, you are creating new opportunities.
Those new opportunities will lead to extra revenue. And even repeat business from customers you might not otherwise have had!
Cut down on your costs
When you run a construction company, it’s important that you focus on reducing your costs as much as possible. If your firm ever has a “quiet” period, having fewer costs means that you will plenty of money in the bank until things pick up again.
One area that you can make significant savings with is plant machinery insurance. A lot of construction companies pay way too much money for their insurance policies. But did you know that it’s quite easy to pay less for that insurance whilst keeping the same levels of cover?
For example, check out the prices of plant insurance at AutoTrader. I can pretty much guarantee you’ll find better deals there than what you’re paying right now!
We’ve already covered the benefits of hiring contractors instead of employees. But what about your support staff? In your office or headquarters, you will doubtless have many computer systems to support.
Information Technology is an important aspect of any business. And it’s one that is especially useful in the construction industry. Does your company hire one or more in-house IT staff? If so, you should consider outsourcing your support requirements.
Not only is doing so cheaper, but you can tailor your support needs and gain useful information from the company you use. They can even check your systems from a remote location 24/7. That way, any server problems can get fixed sooner rather than later.
Another thing your company can do is lease equipment rather than buy it. The same thing also applies to company cars and trucks. Leasing offers many benefits over buying, one of which is that you save lots of money each month.
When you buy something, you will often cause a negative impact on your company’s cash flow. Leasing is an affordable way to have the things you want without suffering any financial problems.
You can even include maintenance and servicing plans on any equipment or fleet vehicles you lease. That means you will have one less thing to worry about in your business!
Sponsor charitable events
I know that sponsoring a charitable event involves spending money, but it’s a great way to network and raise your company’s profile. For example, you might consider helping on a building project in a third-world country.
People are impressed with companies that help others with no obvious financial gain involved. If your construction company is new, sponsoring a charitable event can be good for marketing your brand.
The event you sponsor doesn’t even have to be overseas. It could be a local event, or you could even help out a good cause. Just make sure that the event you take part in gets a lot of media coverage!
Thanks for reading today’s article. See you later!