Apr 12, 2012

How to Reduce Overhead Costs on a Construction Jobsite

Both private and public construction projects aren’t cheap. In fact, Mortgage News Daily reported that $827 billion was spent on construction in the U.S., as of 2012. This included private nonresidential, private residential, and public construction projects, causing construction spend to rise 6.5% from the previous year.

If you own a construction company, it’s clear that the only way to save money on a day to day basis is to be strategic about where your money goes on the job. In most cases, the best way to save money on a construction site without compromising quality or employee safety is to reduce overhead costs dramatically.

Reducing overhead costs effectively could literally save you thousands of dollars per job. Fortunately, there are several steps that you can take to reduce overhead and still maintain productivity.

Understand Your Finances

It’s no use trying to reduce overhead costs on a construction site if you don’t have a clear understanding of the reality of your financial. If you are working with an accountant, set up a meeting immediately to go over your books. However, you may also want to consider the alternative of using simple accounting software instead of employing an accountant on staff for your company.

If you have a head for numbers, using accounting software will allow you to input daily numbers through a program like QuickBooks, specifically designed to help small businesses manage financial records. Using accounting software instead of a staff accountant can save you thousands of dollars in yearly salary fees.

Vehicle Operating Costs

If you have a large fleet of vehicles, including forklifts and box trucks, it’s important to accurately assess the total operating costs of your vehicle use. Based on the quantity and size of your vehicle fleet, you can determine if it would be beneficial to sell used vehicles or replace older, rundown forklifts with more efficient new forklift models.

For example, 71% of construction owners who were looking to purchase forklifts wanted to buy used, with the hopes that this would keep their costs down.

In addition, if you do have employees that use company trucks on a day-to-day basis, it may be worthwhile to enforce a policy that all employee vehicles must be parked at the construction site overnight. This will help to cut down on the overhead costs of unauthorized use of vehicles for personal reasons.

Green Alternatives

The construction industry has changed dramatically within the past decade to place more focus on raising environmental standards in all building projects. In the same manner, having a “green” mindset could help you to save even more money on overhead costs by reusing items like paper, folders, and other office supplies.

It’s also worthwhile to consider using electric machinery, such as forklifts. This can especially be beneficial for indoor warehouse purposes, as it will cut down on the cost of fuel and reduce harmful emissions that are released into the environment.

If you want to increase your profit as the owner of a construction company, the best place to begin is by reducing overhead on the job site. Paying attention to detail in your finances and making smarter, Eco-friendly choices in your construction materials will help you to cut down on unnecessary expenses to save money each year.

Author: Sylvia is an online writer who enjoys writing articles about how business owners can save money. Whether it’s buying tips on how to purchase forklifts or budgeting tips, she enjoys writing about it.

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