Reducing overhead costs can save you thousands of dollars. There are multiple ways to reduce your overhead costs and still be productive. Overhead are accountable for large money quantities that can make the difference in your operational costs. Here we present some ideas on how to cut or reduce your overhead costs.
If you have a large vehicle and truck fleet, you need to study their consumption and how operating costs are getting larger. Analyze the quantity and size of your fleet and determine if you need to sell those unused vehicles or trucks in the other hand if you need to replace those old vehicles with newer or more efficient ones. In addition, for those employees who need a company pickup, parking it at the contractor's place of business overnight is now becoming commonplace to discourage personal use of company assets.
The same rigorous environmental standards that people are beginning to use at home could be applied on the business premises. Any item that can be reused--disks, paper, folders and so on--should be reused. Items that cannot be reused should be recycled whenever possible. This will not only cut your purchasing costs, it could also reduce your trash collection bill.
If an employee comes to you with a savvy solution, credit him for coming up with a cost-cutting idea that saves your company money. Creating incentive plans for beneficial ideas such as employee discounts, added time off, free lunch for a week in the company cafeteria, or even a cash bonus may win greater favor and support than just an honorable mention in the company newsletter.
Times are difficult for everyone in the construction industry. Develop stronger relationships with fewer suppliers who are not focused on maximizing current margins, but on creating long term relationships. Also try to contact that old friend that you can really talk with him with open books. A good friend sometimes can get better and discounted prices for you.
Investigate ways that your company can do things faster at a reduced cost. Make sure your practices and procedures are up-to-date and look for streamlined processes. Incorporate energy-efficient lighting and cleaner ways to operate into the plan.
In difficult economic market times, we are all trying to do more with less. Maximum productivity from each employee is the goal. Identify, look or hire workers that can serve in multiple roles and eliminate downtime while they are waiting on another key task in the critical path of construction to complete.
Contractors love to build! Prior to get that extra work or change order done, analyze the circumstances and why that change is occurring. Invest in a tightly controlled change order process to ensure that work done beyond the scope of the contract will be well-documented and approved prior to incurring additional costs.
Construction materials can be purchased tax-free and then warehoused until needed for a construction contract. Transaction taxes are not due until they are transferred to the entity performing the construction, normally resulting in an immediate cash saving by delaying the payment of tax. A side benefit to a purchasing company may accrue to the contractor by allowing a more centralized approach to inventory management.
Spend Money? Key employees need to be cared for and kept happy. Look at long-term compensation and retention programs to make sure that your key employees stay with you during tough times. Invest in safety programs to lower workers compensation costs. Sit down with employees and getting their opinions as to how overhead can best be trimmed.