Peek-a-boo: Hidden Costs?
If you’ve been feeling like your construction business should be more profitable than it is, but you haven’t been able to quite pin down what’s in the way, it’s probably time to dig into the drain of hidden costs. Underutilized equipment, unnecessary repairs, and miscommunications are notorious in construction, and the costs add up. Read on for pointers on these and other expenses that you may be able to curtail.
Less Headaches, More Profit
Every business owner could do with less stress and more profit, and short of a magic wand, achieving those goals generally requires more than hoping for a sudden big win. In most businesses, including construction, habits that are absorbing profits tend to get into the “kool aide,” and addressing them, as Allyson Sherrier of For Construction Pros points out, takes concerted effort: “While some expenses are impossible to avoid — fuel, materials, insurance — others creep into a business unnoticed until they become a pattern.” Toward running a stronger, leaner business, Sherrier advises uncovering “those small and overlooked expenses” that add up, and suggests starting with these three sources of hidden costs:
Underutilized Equipment
…Even when a dozer or skid steer isn’t turning a track, it’s still costing money in payments, insurance and depreciation….Look at utilization hours and be honest about what’s earning its keep….Selling, renting or sharing equipment across crews might make more sense than keeping it….
Avoidable Maintenance and Repairs
There’s never a good time for a machine to break down, but emergency repairs hit twice as hard … .Catch up on inspections, software updates and those small issues everyone’s been ignoring. A little preventive work now can save a lot of headaches (and money)….
Miscommunication Across Teams
Rework is one of the biggest and most frustrating hidden costs in construction. A missed detail, an unclear change order or a half-heard conversation can send crews back to redo work that should’ve been right the first time. A…reset on communication expectations, job kickoff processes and documentation can save time, money and headaches….
As you consider communication shifts that would help your business, be sure to also assess your own habits. Are you as clear as you think you are? Do you cause confusion? When you own a construction company, providing clarity is essential for the success of every project, and ultimately the business. Avoid the cost of confusion by taking the time to break goals down into specific tasks, as Kate Zabriskie at Construction Business Owner emphasizes:
Imagine a team starting a project with energy and optimism. Ideas are flying, everyone’s ready to contribute and the excitement is high. But a few weeks in, the team is struggling, and the wind is out of their sails. People are frustrated, deadlines are slipping and, despite all the effort, they’re behind….When teams aren’t clear on goals, roles and tasks, even the most talented group can lose direction…..When roles and responsibilities are unclear, accountability fades. If something goes wrong, the response becomes “not my job”…..Blame circulates, and soon the team is more focused on defending actions than solving problems … .Clarity isn’t just nice-to-have — it’s what keeps teams aligned, productive and, yes, drama-free. When everyone understands the bigger purpose behind their work, their unique role and the tactical steps needed to get there, teams don’t just function — they thrive….
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