No matter what anyone else tells you, the main priority will always be the bottom line. A construction company will worry about making money and losing it. In keeping with this logic, let’s look at how construction companies like Frank Haney keep their overhead down, especially during developmental times.
A construction company needs to reassess its contracts every year. The life of your contract should not go past one year. Keep your inventory down. Many construction companies assume that multiple year contracts are the way to go. This usually only benefits the vendor. Going over a new contract each year will start a bidding war. Companies will look for the lowest and most profitable bidder.
This might mean more work for you guys, but it will pay off down the road.
TALK TO YOUR CUSTOMERS
When you have a big job coming up, ask your client what he/she thinks. As your client what he or she feels needs to happen cost-wise. Your clients are a part of the equation too. Too often, companies will leave their customers out. The cost does have an impact on the clients too. Try to keep this mind.
LOOK AT YOUR INVENTORY
There are some construction companies who rely on inventory which is a one-size-fits-all. You can keep these costs down my match the needs on a “terms for turn” basis. Do you need the item right now? Will you be using some of your inventory in the next 6 weeks? Will you be able to buy it for less later?
Your construction company will lose money by housing products that are not going to be used. Only keep in stock what you need at the moment. You can always get something later on.
JUST IN TIME INVENTORY
Don’t rely on a vendor who doesn’t own their own stuff. Why would you own someone else’s inventory in your stock, especially if it’s not being used? This is just bad business.
TAKE A HEADCOUNT EVERY SO OFTEN
If you can replace your low 10% with a new top 10%, then do it. Always get …