15/04/2018
Construction Headaches and Tips on How to Cut Big Expenses
The Construction industry had a lot of headaches that every contractor facing and need to manage.
You cannot figure it out until you haven't yet experienced it.
If you're a start-up company you need enough capital for the first months of your operation.
Why?
You have expenses that need a small amount of cash.
Consider the following:
1. Office Rental (If you're going to rent your office or warehouse).
A construction business needs an office for all their inside and outside transaction.
Tip # 1 - The best way not to pay monthly rental is to build your office in your own home.
Consider a space in your house and design it as your dream office.
Or place your office in one of the corners of your living room.
2. Gasoline
If you're going to attend a meeting, visit a site or any travel that needs a gasoline, then the amount is already an expense.
Tip # 2 - If you attend a meeting or submit a bid consider commuting especially if the area is accessible.
You cut the toll fee's and save part of your gasoline expenses.
3. Office supplies
You need office supplies in your daily operation. When you write or print a document, you use paper.
Tip # 3 - Re-use scrap paper, the back of your paper can be used to print a document for your personal need.
4. Utility bills
Every business consumes electricity, water, internet and telephone bill.
Given that these payables are your regular monthly dues, you can cut your expenses in every bill.
Tip # 4 - Your office design should be using natural light comíng outside.
Natural ventilation prevents you from using an aircon, use a fan instead.
Use bundle promos to lessen your internet and telephone bílls.
If you're using mobile phones go to the nearest phone dealers and purchase a phone paying only the load for 2 years.
5. Representations
You need representations just like other companies doing. This is ímportant when you're dealing with your clients.
Tip # 5 - When you're dealing with your client you have to invite them to meet at a resto.
When your client's stomach is full the more chances they will award you the project.
When you're submitting billings, make sure you've already phone called a pizza delivery (lol).
6. Gov't permits and licenses
These Gov't mandated permits and licenses should be secured if you want your company to grow and prevent headaches in the future.
In my experience, I didn't qualified for a certain project because of lack of PCAB.
Regrets incurred but still, even if our company doesn't have yet a PCAB, we make sure that we will secure in the near future.
Tip # 6 - You can borrow a PCAB license to your contractor's friend who has it.
You only have to give them a certain percentage of your contract as payment of let say service of givíng you the chance of using their license.
The headaches come in when you're billing isn't being paid at the right time.
Probably even if you have enough cash to use, you begin to worry and think of so many what if's.
But you can prevent this through transparently telling your client that they need to pay you for your billings to avoid delay in procuring materials.
Construction billings are evaluated by your client or client representative.
One headache here is they incur deduction in every of your billing.
Why?
I don't know (lol)...
But this is a usual practice in the construction industry.
There's are a lot of construction tips and headaches that I can't elaborate right now but you can mention it in the comment box.
P.S. You can send us a message if you have a requirement in civil, structural, design, estimate, Engineers.
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