7 Ways to Save More Money as a Home Builder
As a builder or contractor, you always want to save more money and expand your margins to expand your business.
The good news is that you can do it with some smart and practical tips that we’ll cover in this article. The tips will range from dealing with things such as handling your waste to negotiating terms for your purchases.
Let’s head on to the post.
1. Handle all your waste efficiently
Everything that you do in construction project from the foundations to finishing the work, will produce a lot of waste and excess materials during the process.
It’s not just limited to excess wood and bags of cement, you should also consider the food and drinks that you and your workers will (inevitably) consume during work; all of it has to go somewhere.
Skip bins are a solution to waste but they can get very expensive quickly if you get someone to do the waste disposal job for you. To save money, get someone from your team or do it yourself to dispose of waste.
It is a bit of work but you’ll be saving a lot of money from not having to pay extra fees for waste disposal.
Speaking of waste disposal, it is a good idea to reduce waste all the time during a project.
Remember, the more things that you are trying to dispose of, the more that you are going to pay in fees for extra work. If you are doing it by yourself, you’re going to waste more time by disposing of more things.
Here are some effective tips to reduce the amount of waste at the work site:
- Estimate accurate measurements and make accurate cuts to reduce waste
- Accurately identify the amount of materials that you need for the project
- Find a way to store your materials safely for multiple day projects to prevent theft or damage
2. Make sure that everything is included in your accounting statements
Getting your account books right is a tried and tested way to save money as a business owner.
If you don’t have one, you will be surprised at how much small expenses (buying screws, one-off drinks for employees, etc.) add up at the end of a fiscal year.
If you have the means to hire a credible accountant, do so as they’ll be able to help you figure out what you are spending on and where you can save more money on.
Handling your finances correctly also allows you to budget your projects accurately. This means you won’t encounter situations where you’re over-spending on a project or worse, underestimating your budget which could lead to issues with your client.
Besides, having a detailed accounting history will also help you a lot with tax deductions which is the most effective way to save money as a builder.
3. Motivate your crew to do their best
Pushing your crew to the limit doesn’t mean you have to become a dictator-like figure at the work site. Your workers are extremely important to your business so you have to treat them well.
It’s also no secret that happiness is a strong driver in improving work efficiency. When your employees hate their job or you, their work quality suffers and they may not even turn up to work!
Keeping your employees happy is not expensive; here are some things that you can do in your next project:
- Offer to buy lunch or dinner for your crew
- Give your crew time off if they really need it for things like their anniversaries, important school events with their children, or time off after a long period of work
- Hosting parties of BBQs with your crew after a project
Avoiding overtime is also a way to save money for your business. Business owners think that working overtime brings more money to the business but you are actually losing money.
Working overtime means you’re paying more for labor, and workers are tired and less productive when working overtime.
When you have a happy crew, your work quality improves which leads to better clients with bigger checks. You can also work more quickly which gives you a higher profit per hour compared to slow projects.
4. Find the sources of your materials and try negotiating
You’ll burn through a lot of material during your build, and a great way to save money is to get your materials from your source directly and maintain a stock instead of getting materials right when you need it.
Often times, going to the source of the materials is cheaper than buying from a retailer as you avoid the additional costs of dealing with multiple parties.
Dealing with sources also allow you to get things such as custom materials or access to materials that are not available at retailers.
Usually, you can head into showrooms to find what you want. With the help of the Internet, you can then search for the best price online or try to find the manufacturers of the materials.
Multiple dealings with the same source can also help with negotiations. For example, if you’ve been dealing with Bob the woodsman for over 10 years, you can negotiate for lower prices on your next wood purchase.
You can also ask for discounts or special prices on bulk purchases with many retailers. Money is not the only thing that can be negotiated; you can also for faster shipping times or free shipping provided that you have a good relationship with them.
5. Do some of the work yourself
As a business owner, it doesn’t hurt to do some of the work yourself to reduce employee costs.
For example, things, like digging a hole or carrying wood, are things that everyone can do. You can also leave the grunt work to your employees and take responsibility for more specialised tasks.
Basically, if you have time to spend on doing something that you are capable of in the project (such as drilling or wood sawing, for instance), you should do it to save money.
6. Take proper care of your tools
It is not silly to regard tools as your employees in any project.
Proper maintenance of tools makes them last longer as well as reducing repair and replacement costs which add up very quickly.
Maintained tools are also safer which reduces the risk of injuries and accidents which are extremely costly to your bankroll and reputation.
Here is a checklist for you to go through.
Every time you use a tool:
- Brush and clean off dust as it can wear our your tools over time
- Inspect power cords and cables to look out for any signs of damage. Frayed or exposed wires should be replaced as soon as possible.
- Any screws and bolts on your tools should be checked to see if it’s still tight or not. If there are cracks or damage, consider replacing it.
There are also some things that you should do every year as part of your maintenance check:
- Look for cracks in all of your tools especially the ones that require power. Any cracks that are larger than a hairline should be replaced immediately.
- Tools that are used a lot should be lubricated with something like WD-40 to improve its longevity.
- Each tool should be cleaned and maintained according to the owner’s manual
Just like oil changes, you should keep a schedule of every time you perform a maintenance on your tools.
Remember, the longer your tools last, the more money you will save in the long run.
7. Consider higher quality tools that cost more instead of cheaper tools
You might be thinking to yourself: why should I spend more on expensive tools when a cheaper one can do the same job?
Cheaper tools are often made from lower quality parts that need to be replaced more often.
Therefore, a higher quality product may cost more up-front but the average cost is going to be lower than a cheaper product thanks to reduced maintenance costs.
Another important factor is the quality of the results. Some builders argue that the skill of a builder is more important than the tools used. This is true but you can’t deny that a high-quality tool can bring better results to a project.
To learn more about building tools and other articles like this, head over to our blog where we have guides and how-tos for builders and homeowners.
- Teresa Nguyen