Smart Funding Tips for Your Construction Business

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Business

Construction is an expensive business. Add in rising costs and sub-contractors demanding more in order to compete with the increase in living costs, and all businesses are feeling the strain. Knowing how to more effectively manage the costs of each construction project you work on is essential, particularly moving forward in this uncertain economic period. 

Use Smarter Management Tools 

When it comes to managing your team effectively, a management system is a great place to start. This isn’t because it makes your workers physically get their work done faster, but rather it cuts down on admin time on your side. It makes it easy to ensure everyone is paid on time, that you take into account sick leave, and more. Being able to manage your books, your sub-contractors, and your taxes will help you be more aware of your funds and help you save. 

Use Hard Money Loans 

Short-term loans are paid off fast and can help keep your project flush with cashflow. New construction loans, in particular, are of interest. These private money loans can help you cover up to 90% of the cost of the project, minus the cost of acquiring the land. Having this money up-front can make a massive difference in getting the project finished on time. The last thing anyone wants is for a project to be put on hold indefinitely, particularly if it’s stopped at a delicate stage in the construction process. Leave a wood frame for too long in the elements and you are going to have to tear the entire thing down and start again. 

By ensuring efficient cash flow, you secure your site and give it the greatest chance at getting the project done and everyone paid. 

Negotiate with Your Suppliers 

Getting discounts on your supplies and being in the know for any good deals or unique opportunities (like reclaimed wood) will always make a massive difference when it comes to improving your cash flow and improving the overall output of your work. By working out unique discounts for specific materials, especially if the material in question needs to be cut in a non-standard size or shape, will make the entire project more affordable. 

Combine Purchasing Power 

Sometimes you won’t qualify for a bulk discount. In these instances, see if any other construction projects in your area are, by any chance, using the same materials in their own project. If you are, then you can make a purchase together so that you both qualify for the discount. 

Quality Check Sub Contractors 

It is smart business to regularly quality check the work your sub-contractors are doing. Doing a check at the end of the day or week can help spot issues before they become massive problems. This should be done for everyone regardless of how long they have been working for you. People have bad days all the time. Someone might have had a terrible night’s sleep and their work has suffered for it. 

Having a system where everyone checks over each other’s work ensures everything gets done correctly the first time without singling anyone out. 

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