Reducing construction costs should never be about cutting corners.

Estimating the average cost of a construction project is as hard to predict as the build itself. For home building alone, the national average is $286, 546, reaching over $400,000 in a typical range. Construction is an organic process, and unforeseen costs are par for the course. If you address a few key areas, however, you can guarantee yourself some savings.

1. Review your fleet efficiency

Did you know that the environmentally responsible or green construction market is now worth $81 billion? 2018 is the year that a more eco-aware public are leading governments and construction firms to make a fleet change. With so many green homes now being built, the same eco-conscious requirements will apply to the firms who build them.

No one will want a gas-guzzling firm around their new green builds, so consider upgrading your fleet to green vehicles. The initial expense may be significant, but consider the many savings in areas such as:

  • Winning contracts your gas-fueled competitors won’t
  • Saving money on fuel costs
  • Preventing work-based pollution such as oil spills, noise, or employee harm from fumes
  • Avoiding fines from the Environmental Protection Agency and other pollution-preventing motions like the Clean Air Act

It may be hard to get rid of your current gas-powered fleet, but the payback can be well worth it. Besides, think of the extra money you can make by selling of your obsolete models.

2. Upgrade your technology to save money and time

Construction is a hands-on sector of steel, stone, and cement. Even the feel of a paper blueprint or sitemap gives you something to hold onto. This may be why the construction industry is so slow to embrace intangible tech such as digital blueprints and maps.

Let’s consider the cost benefits of moving from paper to digital drafts:

  • Distribution savings. Here is where time is money. Distributing hard copy data requires postage, or you are delivering them personally. Upgrading your technology and delivering data digitally means everyone gets a copy at light speed, anywhere, any time. Sections, plan views and elevations on a digital platform also make cross-referencing three times easier.
  • Weather. On-site hard copies are at the mercy of the weather. The elements can wreak havoc on them unless they’re displayed indoors. Digital copies won’t be affected by any environmental factors.
  • Storage savings. Many parties in a build need a hard copy, from the construction firm to the building department. They all require storage and are prone to damage. Keeping everything online means no storage costs and no hard copy damage.
  • Revision savings. You have two choices as a build progresses: add the changes to the existing hard copy or pay for new ones to be printed and distributed. The first is a mess, the second an extra expense. Online programs save you the hassle of both.

3. Harness the power of drones

Drones are having a big impact on surveying building sites. Their ability to provide continuous survey-grade topographic data has proven to reduce days-long projects to minutes. Time spent taking a site in on foot is drastically reduced while drones can access areas that may be unreachable or even dangerous for people.

Your firm won’t have to pay a surveyor, which is an immediate saving. Faster drone surveys put you one step ahead of competing firms who are still doing it on foot; a second saving. The inefficient use of technology and the information it can provide can lead to a lot of rework on a site. Rework can see you going over budget and over time.

Drones are set to revolutionize global business models to the tune of over $127 billion. If your firm wants in on the action, you’ll need to be in line with the Federal Aviation Administration’s rules.

4. Capitalize on tax-free purchases

Buy now pay later isn’t technically a saving, but it certainly allows you to use the money you would have spent now for something else! Construction materials are tax-free at the time of purchase. Tax is applied when the materials reach the company who will perform the construction.

Like this, you can buy tax-free and store materials until they’re needed. It also makes sense for a construction firm to centralize their storage of materials as much as they can. The fewer places that must be visited, the greater the saving in time and fuel.

5. Review your contracts with your suppliers

Are you getting the best deal possible from your suppliers? More importantly, have you worked on creating positive and mutually beneficial relationships with them? Good relationships can be the lifeblood of any business, and with material costs always a prime concern for construction firms, it pays to be on the best of terms with your suppliers.

A further resource

If you’d like to stay current with the world of construction, refer to the Bureau of Labor Statistics for facts and figures across the sector.

If you’re a construction firm looking to make positive changes, No Boundaries CPA has over 25 years of experience in management consulting. Our job is to help your business gain the competitive advantage. For any questions regarding maximum business growth, visit us on our contacts page.

Leave a Comment