Planning for project costs is a key part of running a construction business as a sole trader. When operating with slim margins, unnecessary spending can make a significant difference between turning a profit and barely breaking even. Thankfully, there are many ways that sole traders can save money during the project management and building phases, whether doing carpentry work, masonry, or any other part of the construction.
When it comes to cost saving, do not be tempted to reduce your insurance coverage. If you’re a subcontractor, you may assume that you’re covered by the insurance policies of the primary contractor you work with. However, this may not always be the case, and it’s important to have your own subcontractor insurance to ensure that you’re fully protected. Subcontractor insurance can cover you against property damage, injuries, and other risks associated with your work.
Here are six ways your construction business as a sole trader could save money during projects:
- Work with the architect
A cost-effective design can help decrease your expenses before a project even begins. Working closely with the architect could help minimize costly changes being made during construction. It also allows you to suggest affordable building materials before groundbreaking.
- Comparison shop
No matter what materials are being used, shopping around may help you lower your costs. Small savings on materials and equipment can add up and help you stay at or under budget. You may have a list of suppliers that you regularly work with, but it’s smart to keep an eye on their competitors. Your suppliers might be willing to price match or offer a discount.
- Invest in quality tools
Cheap tools and equipment might save you money upfront, but they could end up costing you in the long run. You may end up wasting money and time sorting out replacements, repairs, or loans if the cheaper option breaks. Investing in quality equipment from the beginning could help you avoid these issues and potentially have tools you can carry over to future jobs.
- Inventory your equipment
Tools and equipment can easily go missing on a job site. To help prevent loss and theft, create an inventory of your assets and require yourself to sign them out and in after each use. Using an app or shared document for this task could give you real-time updates on where your tools and equipment are each day.
- Reduce waste materials
Jobs rarely go to plan, so sole traders typically order extra materials to avoid delays or increased prices. However, overordering is wasteful and can unnecessarily increase your budget. Carefully calculate how much of each material is needed and order a reasonable amount of extra on top of that.
- Schedule smart
Construction expenses can also be increased by wasted labour. Effectively scheduling your work can help ensure that the right people are on site each day. To do this, you may need to consider the weather, your work speed, project delays, and other events that can impact the project timeline.
Building a profitable business
Controlling costs is an essential part of running a construction business as a sole trader. When budgeting for a project, you must weigh many factors. Finding savings, wherever you can, could help you make money in construction and build a more profitable business.
Sole trader insurance could help you protect your small business. Compare and buy policies online with a qualified insurance broker.