Managing costs is crucial for contractors in New Zealand who want to make a profit. Projects with budgets of six, seven, or eight figures require careful planning and consideration of multiple factors. Using integrated construction software can simplify the process of managing costs and staying within budget. In this article, we look at seven ways contractors in New Zealand can cut costs.
Please note, while cutting costs can be a great way to increase profitability, insurance for contractors is an essential investment to ensure that you’re protected against any potential liabilities or losses that may occur on the job. As an independent contractor, you’re responsible for your own insurance coverage, which can include general liability, professional liability, workers’ compensation, and commercial auto insurance.
- Start with smart design: When working on design, it’s important to find someone who can create a design that is both efficient and cost-effective. This means designing with the budget in mind and looking for opportunities to use less expensive materials or to simplify the construction process. By identifying potential cost savings during the design phase, you can avoid expensive changes later on.
- Compare prices: It’s important to shop around for the best prices on supplies and machinery. Even if you have established relationships with certain vendors, it’s still a good idea to periodically check prices and compare them to the competition. This can help you identify areas where you can save money without sacrificing quality.
- Invest in high-quality tools: While it can be tempting to save money by purchasing lower-quality tools, this can actually end up costing you more in the long run. Cheap tools are often less durable and can break more easily, leading to additional repair and replacement costs. Investing in high-quality tools upfront can save you money and time in the long run.
- Keep track of equipment: Keeping track of all equipment and tools on the job site is essential for reducing loss, theft, and disarray. By having staff sign equipment in and out at the conclusion of each use, you can ensure that everything is accounted for and that nothing is missing. This can save you money by reducing the need to replace lost or stolen equipment.
- Minimize material waste: Timing material orders properly and scheduling subcontractors effectively can help prevent material loss and labour waste. By ensuring that materials are delivered when they are needed and that workers are not sitting idle waiting for materials to arrive, you can reduce the amount of waste on the job site. This can help keep costs down and improve overall efficiency.
- Schedule effectively: Proper scheduling is key to avoiding unnecessary labour costs. By monitoring progress, weather, and worker speed, you can adjust schedules as needed to avoid paying staff to wait around. This can help keep the project on track and prevent delays that can drive up costs.
- Invest in technology: Technology can be a powerful tool for reducing costs and improving profitability. Whether it’s a simple electronic payment system or a more complex project management software, investing in technology can help improve accuracy, streamline processes, and reduce errors. By staying up-to-date with current reports and tracking expenses, you can identify areas where costs are increasing and take steps to address them.
