(Akiit.com) Working as a contractor is a great way to make a living in many ways; you can make decent money doing a job that’s engaging and involved, and it’s pretty easy to find work – people always need work done. However, it isn’t all roses, and since there is so much competition, contractors need to do whatever they can to cut their costs so that they can offer more attractive tenders and continue to not only stay in business but also make a decent profit.
If you’re a contractor who’s in this position right now, here are some things you could do to cut costs now and in the future:
Cut Your Staff
One of the most common ways of saving money as a contractor is to cut costs, and it’s definitely something worth considering. However,
when you cut your staff numbers, that often means you can’t take on as much work as you would otherwise be able to. So, you should think very carefully before choosing this option as a matter of course.
Compare Fuel Costs
Another, arguably much better, way of cutting costs, which is also very common is comparing red diesel prices, so that you can get a better deal on your fuel. If you run a lot of equipment, machinery and vehicles, you can make significant savings by switching to a cheaper provider and doing so regularly. Loyalty is important, but not as important as your bottom line.
Enforce Late Payment Penalties
Okay, so this isn’t exactly a cost-cutting measure, but one of the most common causes of cash flow problems for contractors, and pretty much any business person really, is late payment. If a client doesn’t pay you on time, it can really hit your business hard. One way of solving this particular problem is by including late payment penalties in your contracts and actually enforcing them. At the very least, this should see you get paid on time.
Buy Used Equipment
Used construction equipment, providing you buy it from a reputable source, is pretty much as good as new equipment, with the added benefit that it is thousands of dollars cheaper on average.
Re-Negotiate with Suppliers
If you have been a good customer, most suppliers will be only too happy to negotiate with you if you are willing to ask for a better deal. After all, good customers are few and far between, and no supplier wants to lose them for the sake of a few dollars.
Install GPS Tracking Systems
If the cost of insurance is getting to be too much for you to bear, installing GPS tracking vehicles in your trucks is a great way of bringing them down. It’s also a good way to ensure that your employees are behaving on the road and that they’re using the most fuel-efficient routes too.
Cutting costs can be difficult when you’re a contractor, but the above ideas are good places to start. Of course, they are not the only ways to save, and you should explore every avenue that is available to you if you want to stay competitive and make good profits.
Staff Writer; Lisa Ford