The construction industry is perhaps the most volatile industry in all of the economy. Before any economic downturn, it’s the first to crash, and even when the rest of the economy is enjoying growth, the construction sector lags behind.
As a result, it’s important that construction businesses do everything they can to reduce their overheads and maximize their profits in the future. So what can they do?
Outsource IT
In the past, most construction businesses did their own IT, either from head office or from demountable on site. But now there are cheaper alternatives elsewhere.
One option is to outsource your IT to a specialist, third-party company. This company will provide you with IT services through the cloud, meaning that you can access the services you need from any location. What’s more, all your sensitive information is stored remotely, meaning that it’s no longer your responsibility to maintain the safety and security of your digital assets. That falls to the IT company itself, along with the responsibility to make sure that your services are maintained 24 hours a day.
IT outsourcing means that construction companies are able to reduce their capital expenditures too. Rather than paying a fortune for their own servers, construction businesses can simply pay a monthly fee and get the server space they need provided remotely.
Repair Machinery, Don’t Replace It
That shiny new digger might look good, and you might imagine that it’ll help your workers be more productive on site, but it’ll also cost you a small fortune to buy. What’s more, you probably don’t need to replace your old equipment anyway. Often problems can be sorted out by installing new engine parts, allowing you to make the best use you can of the capital stock you already have at your disposal. Also, make sure that you regularly inspect the parts of your vehicles which are subject to the most friction, including the bearings and wheel hubs.
Train Multi-Skilled Employees
If you’ve been in construction for any length of time, you’ll have noticed that many workers spend a lot of their time just waiting around until the site is in a state where they can perform their next task. The problem with this is that it is wasteful.
Construction Business Owner, the online construction magazine, offers a solution. It says that innovative site managers and construction companies are now training their colleagues in a large number of skills so that when they are unable to perform one particular task, they can help with another. According to the data, this helps firms avoid paying for underutilized labor.
Narrow Your Supplier Base
When times are difficult in the construction industry, it’s a good idea to strengthen your alliances with particular suppliers. Often focusing on one or two suppliers, and buying in bulk can help to reduce your wholesale costs, leaving more money left over for your business. Some businesses come to agreements with their suppliers that they’ll both maximize their margins during the boom times so that they have a cushion for when the bust inevitably arrives.
