As a contractor, you probably have a lot of expenses that you’d rather not be obligated to pay. Sound familiar? Well, every business owner would much rather not have to pay any additional cost for upkeep or expenses, but we all live in the real world so this isn’t exactly a viable option.
The funny thing about being in business is, the more you make, the more you seem to have to spend. But, it doesn’t always have to break the bank.
The fact is, as a contractor, there are several ways to cut costs in nearly all aspects of your business model. A few of these might seem obvious. But, a few of the simplest ways often go overlooked or unexplored.
Here, we’ll outline a few simple ways to cut your contracting expenses and free up space for extra cash in your bank account.
Table of Contents
Reducing Equipment Costs
Being in the contracting business, you probably have a variety of costly equipment that you need to use for some jobs. Some of this machinery costs thousands of dollars, and while many contractors like to own their own equipment, spending this kind of money might not be a financially sound strategy.
Consider the frequency that you use heavy equipment. Chances are, most of your expensive equipment sits idle for much of the year. If this is the case, you might want to consider selling that equipment and banking the extra cash.
So, what happens when you need it?
The solution is as simple as renting equipment only when you need it for a specific job. You can even rent ¾ ton work trucks for larger jobs and return them for a fraction of the cost it would be if you bought the truck outright.
The idea here is to cut costs in all areas of your business, including transportation.
Reducing Employment Costs
One of the other problems that come along with running a successful enterprise is that, as you grow, you have to hire extra personnel. While having the business volume that requires additional help is a good thing, paying high wages for experienced labor can be costly.
Now, you do want to have help, but you don’t necessarily need someone who demands a high salary. If your contracting work is largely seasonal, you can cut down on cost by hiring inexperienced workers such as college students interested in contracting work for a reduced rate of pay.
Even high school students who are in vocational programs are perfect when you need to hire additional labor. These individuals already show a genuine interest in the business and will be willing to learn on the job for a reduced rate in pay.
While you don’t want to pay too low of a salary or hourly wage, you will be able to significantly reduce the cost of labor by hiring those willing to learn and work for lower wages.
If you’ve grown to the level where you’ve hired on a marketing team or a management staff, you’re probably paying additional costs for marketing services that might not be giving you much return.
Everyone wants to scale their business through marketing, but in the contracting world, connections are made largely through word of mouth and on-the-job relationship building.
It’s also a good thing to know that most of the marketing duties performed by a management team can be done by anyone with a little ingenuity. Online marketing services are much cheaper than hiring staff, or with what you’ll find in a brick and mortar location. Many aspects of marketing (especially in the digital space) you can do yourself, and not have to worry about paying anyone.
You do need to market your business. But, it doesn’t need to break the bank.
At the end of the day, you’re a business owner. As such, smart business owners know when to cut costs and focus their efforts on different areas of the business.
You want your business to grow, and allowing for some financial breathing room is your biggest asset when it comes to expansion and reaching financial goals.
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