Over the past five years, the construction industry in the United Kingdom has ranked third in terms of business growth. Employment in the construction sector in the United Kingdom has increased by 2.6 percent per year on average between 2015 and 2020, reaching 1,519,911 total employees, placing it in sixth place in terms of employment growth over the past five years.
However, despite these figures and the promise it is showing for growth within the industry, cutting excess from the budget can help construction companies to increase their profit margins and improve profitability. If you want to avoid financial troubles or climb back out of a hole you are in, it is vital to assess how you can cut costs without cutting quality and improve how you work to save money.
Use Online Tools
Investment in and effectively implementing an online organisational tool that allows you to keep track of multiple jobs simultaneously is a smart way to manage both your time and your project when it comes to reducing project turnaround time and reducing the risk of human error.
With the help of an online piece of software or app that allows your employees to communicate with one another on a real-time platform, you'll be able to keep up to date on the progress of your project minute by minute and ensure that you're always in the loop. As a result, if an urgent job comes through, you can rest assured that the appropriate people will be notified in a traceable chain from the moment the update pops through the system.
Online tools and software can help you improve efficiency in all areas, including daily activities such as maintaining a construction site diary, booking jobs, managing employees, keeping track of supplies and ordering, identifying recess and optimising spending by giving more occurring cost projections and helping to identify areas that waste money.
Improve Planning Processes
Nearly enough construction companies do not take a strategic approach to plan. Many construction companies operate within strict time constraints with little or no margin for error and find they are then thrown when something unexpected occurs. Better planning will not only result in fewer surprises, but it will also improve the organisation's ability to deal with unforeseen events.
Every stage of the construction process, from conception to completion, requires improved planning. Consider various scenarios for how the project might proceed during the design and commissioning phases, rather than focusing on a single optimal template during the design and commissioning phases. Consult with potential subcontractors and suppliers such as companies you use for Earthmoving Equipment Hire about their requirements as well as any problems they expect to encounter.
This level of detail planning should be carried over into the procurement process as well. Prepare ahead of time to manage risk effectively – for example, determine who will be responsible for key deliverables. Who will suffer if these objectives are not met, and how will you ensure that the interests of all parties involved in the project are aligned?
Is there a plan to ensure that work proceeds on schedule day after day during the project execution stage – for example, that labour, materials and equipment will be available in the right place at the right time – when it comes to project execution? Construction companies that develop robust planning procedures at every stage of the project will repeat the process repeatedly with little difficulty.
Use Technology In Projects
Any construction project will involve using tools and equipment to facilitate safe and productive work. As technology advances, construction workers and companies have even more opportunities to use it to their advantage. For example, you can use drones in construction to further streamline your work and reduce your expenses, saving money in the long run.
A common way to use drones is to survey land quickly and efficiently. As long as someone is trained in the use of the drone, they can thoroughly survey a site in a fraction of the usual time, allowing you to get to work as quickly as possible.
Finding new and inventive ways to use equipment and technology will boost efficiency on and off the site, allowing you to complete projects to a high standard and in much less time. Investing in technology can pay dividends multiple times over.
There are a few different ways construction companies can streamline their payment processes to save money. Many older firms still use traditional payment collecting methods; however, looking into updated ways to settle bills and provide invoices can be hugely beneficial.
Begin by embracing change and asking internal accounts payable (AP) personnel whether there is a better way. Keep what works and get rid of what doesn't to become more efficient. This frequently leads to an automation debate. Automating AP allows for more collaboration on invoices and speedier payment execution. However, learning about payment automation and trusting the system requires education. Knowledge brings peace. Using electronic payment methods gives a business owner better control over cash flow and funds release. They may rest easy knowing their data and transactions are safe.
AP software is designed to eliminate the need for paper in the approval process. Getting invoices and payments digitally eliminates numerous processing processes. Invoices are sent directly to the project manager or approver utilising configurable procedures and criteria. Treasury regulations can be used to ensure that invoices over a specific amount are approved. Utility and other simple bills can be automated.
Find a reputable partner who can help you identify the correct tools. Not as easy as it seems. Even experienced contractors and businesses need a partner to help them automate. Let partners handle processing payments, moving vendors from paper checks to electronic payment methods, and following up if payments are not cleared within a specified time frame. Paying late can damage a company's reputation and push its projects to the bottom of a subcontractor's priority list.
Even though meetings are generally regarded as a vital management tool for setting project goals and processes and reviewing timetables, they may also waste a significant amount of time and be useless in the long run if they are held too frequently.
To save time and make briefs less complicated, hold fewer meetings and fewer unscheduled conferences with multiple departments. Begin by putting together a meeting schedule and suggesting strong start and completion times for each scheduled meeting. These steps will ensure that people who will be required are well prepared and understand precisely how long it will take them to investigate any concerns or provide updates within a specific time limit. Aside from that, at every meeting, make sure to delegate responsibility and appoint a DRI (directly responsible individual) to follow through on a task and take ownership of completing tasks mentioned in the meeting.
If meetings can't be adhered to, consider emailing essential topics and using collaboration tools to allow others to leave their input when they can so you have all the information you need in one place. Virtual meetings are also a bonus, and if you are having logistical issues allowing attendees to attend from their current location saves everyone time and money.
Use High-Quality Materials
Another essential factor to consider when constructing both residential and commercial structures is the materials used to ensure the long-term viability of the construction in question. If it is within your power to influence the materials used in the construction process, depending on your position in the process, make it your purpose to emphasise the necessity of employing these materials as a long-term plan as much as possible.
Cutting corners on product quality can initially provide you with savings to increase your margins. Still, in the long run, you could be faced with an increase in repairs during installation or shortly after as a cost to your company, a loss of trust and respect from clients and subcontractors and damage to your reputation. Buy cheap, buy twice, as the saying goes, and this applies to pretty much everything.
Keeping your team motivated and focused on the end goal is arguably one of the most critical factors in achieving efficiency. Providing sufficient conditions for your staff will enable them to strive for a smooth, productive operation.
Assist workers with personal belongings, provide durable workwear and provide a resting place that encourages workers to take breaks. This will keep your coworkers pleased and foster a great team spirit to keep the project goals front and centre.
It's essential to ensure your employees feel appreciated and happy at work and monitor natural elements out of your control. For example, if unexpected snowfall prevents a job from being completed, you must be prepared to immediately change processes and job roles.
Also, critical materials and machinery that can delay a project if not supplied are immediately available and stored in a protected area, ready to be employed no matter how far away their initial deadline is in the process. This means that even if delivery is delayed due to bad weather, the construction process can go ahead.
Don't stop there. Ensure that employees are well-prepared for unexpected situations by providing appropriate gear and a safe area to rest during breaks.
Streamlining Your Construction Company
You need to pay close attention at all times when it comes to maximising your profit margins. With costs rising and the profits being squeezed at every opportunity, you need to cut costs without cutting quality and efficiency to avoid losing your competitive edge.
With many companies likely in the same boost, the construction company faces some of its harshest competition in all sectors as companies vie for business. Make it a point to regularly assess how you are working, what isn't working, and issues that crop up repeatedly.