100+ Ways to Cut Costs out of Your Construction Firm

by Matt Stevens
Across the country, contractors report “hitting the wall” of minimal cash in the bank and minimal project prospects. Look no further than last month’s job gains, which excluded construction payrolls; business expansion did not include the contracting community. It’s times like these when the basic rule, “Don’t Run out of Cash,” takes on a whole new urgency.

As you fight the cash flow battle, we offer 100+ ways to cut costs. Ten of those ways are highlighted below. To get the entire list, send an e-mail to the address listed below.

10 Ways to Cut Costs:

  1. What gets measured gets managed. As a start, measure your waste, planning and compliance to processes.
  2. Pay employees mileage for use of their vehicles, whiling keeping “gray” travel minimized and disciplined.
  3. Use trailers instead of vans or pickups.
  4. Send Form 1099 to bad debtors. This may not force collection, but you will feel better. In addition, the IRS will know the debtor received a benefit (construction service) that is ultimately taxable.
  5. Be ruthless when it comes to collections, even if that means sitting in someone’s office to collect money.
  6. Ask your phone company to analyze your cellular and other communication costs. Better yet, ask a competitor of theirs to analyze your costs.
  7. Review with a qualified CPA the opportunities in the new American Reinvestment and Recovery Act (ARRA) stimulus plan and follow-up on legislation.
  8. Consider a reduction in volume (dropping work of marginal profitability) to reduce working-capital needs and, if applicable, associated interest costs.
  9. More lawyers than ever. You may want to review your current arrangement.
  10. Cut managers first, trust the field more.

Matt Stevens is a management advisor who works only with construction contractors. He has been doing so since 1994. Matt has more than 30 years of experience in the construction industry and has authored two books on the subject. His book, titled Managing a Construction Firm on Just 24 Hours a Day, was published by McGraw Hill in 2006. Matt’s latest book, The Practical Construction MBA, is now available. Both books can be found at www.Amazon.com. To learn more about Matt and his firm, Stevens Construction Institute, Inc., visit www.stevensci.com.

To get “100+ Ways to Cut Costs out of Your Construction Firm,” send an e-mail request to [email protected] We will forward our complimentary newsletter containing the complete list.