6 Ways To Save Time And Money As A Contractor
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It's a contractor's life for me!
Working job sites and running machines can be extremely rewarding, but while you're embracing the good life, it can also be hard to keep an eye on how much time you spend on a job, and how much money you're making.
So we put together some tips in 6 areas to help you save some time and money while you work.
Planning & contracts
We put this area first because it's SO important!
I can't count the number of people that have been done out of money because they didn't take a deposit, or ended up doing more work than what they originally agreed to on a job.
Having a clear understanding with your customer on exactly what is going to happen throughout a job, and more importantly, what happens if plans change, is extremely important!
You have to make sure what work you're going to do and how much you'll be paid is clearly set out, otherwise, you may end up getting roped into other jobs that you never see a dime for.
This doesn't necessarily mean you need a written contract. Those can often waste you more time and money than they gain. But it doesn't take long to have a chat about expectations and draft a quick email afterward. Having this written record is key, so you don't end up in a 'your word against mine' situation.
Now most of the time, things will never go how you originally thought they would. You might run into problems with weather or workers and have to rearrange things. That's why you should plan for changes before setting out the work you're going to do and what you'll be paid.
You can't control the weather or a sick worker affecting the timeline of your job, but you can pre-plan for what will happen if you have a hiccup like this. This way if something is likely to change your plans, you can account for that in the expectations you set with your customer.
Machinery and equipment
For a lot of contractors, machinery is at the core of their business. On a good day, your machine could be printing you money, but on a bad day, it could be the source of many headaches; holding up your job and costing you money in parts.
Trying to source a part or arrange servicing with an unreliable manufacturer or dealer is the last thing you want to deal with during a contract when you have customers waiting for you! That's why you should consider using a reliable equipment and servicing companion, like Machinery Partner.
We have a team of experts in our customer success team ready to connect you with our nationwide network of servicing and repair partners. We'll take the pressure off so you don't need to worry about sorting out your machine, and can focus on the rest of your job.
As a cherry on top, we also let you buy directly from the manufacturer. So you have more choice and better prices on machinery and equipment.
If you're looking to boost your income, you could also consider renting out your machines when you don't need them. Often you can claw back the monthly cost of financing your machine by renting it out for 1 or 2 weeks a month.
This is also why it can be beneficial to buy more of a multi-purpose machine, or one that can be used in multiple industries; like a screener. Screeners are used for a range of tasks from removing large stones in soil to sorting mining aggregate. So you can always be guaranteed that there will be demand somewhere to rent your machine.
Much like your equipment, tools can make or break a day of work. As the old adage goes, it's usually better to "buy once, cry once" and fork out for some good quality tools. There's nothing worse than trying to loosen a bolt only to have a low-quality wrench slip or bend, leaving you stuck fiddling for an hour to figure out a way to get it out. Save yourself the time and get some good quality tools. It will save you a lot of time and will actually be cheaper in the long run!
While having good tools is important, having the right tools can save you even more time! Maybe that wrench really bent because you should have been using a crowbar. You'd be surprised at the difference the right equipment for a job can make. Just try drilling into some steel bar with a masonry bit and you'll know exactly what I'm talking about! You may as well be trying to catch fish without bait.
At the same time, we all love our tools. So you should be wary not to get carried away with having every version of every tool. Buying a specialized but set that you'll only use once a year might seem like a good idea when you have those shiny metal pieces in your hand, but the price tag isn't worth it, and it will just add clutter to your workspace.
Saving money on a job all comes down to how much money you spend vs how much money you earn. So one of the obvious places to start when trying to save money is to look at your costs, a big part of which can be materials!
The most important thing to remember here is to weigh up all of your options. Don't just straight to your local hardware store, a quick Google search can throw up a range of local wholesalers or even some online options to choose from.
Aside from being cheaper off the bat, these options might also give you an opportunity to buy in bulk or even haggle for a few minutes to bring your costs down further. A lot of people don't like to haggle but if you can rack up small savings here and there on your materials, you'll quickly see an improvement to your bottom line!
It's worth saying that sometimes your hardware shop is the best option. If shopping online means you'll push a job back a few days, or the price difference is only a few pennies, you're probably better off just taking the hit to save yourself the hassle and time! This leads us to our next section...
As well as saving you money, buying in bulk can also save you a lot of time, with fewer runs to the store! Ideally, you'd have an unlimited stock of material and would never need to spend time ordering what you need for a job, but we're not all made of money! So planning ahead to buy materials means you can avoid those last-minute diversions from your plans.
But beware! Some products might have an expiry date, or might be susceptible to wear from moisture or weather. Buy smart, and don't risk saving on a bulk order that might cost you a lot more in the long run.
This next one is a bit counterintuitive. You should spend MORE on parts or material if they're easier to install. For example, if you can buy material that is pre-cut to what you need, you'll save on chopping time on site. This might seem like a small detail, but if you break your contract down to how much money you're making an hour, you'll see that even a few minutes here and there can make a big difference!
Now hold on, don't just jump past this section! Technology can be a big annoyance or the source of a lot of frustration, but if you can tame the beast, there are a lot of uses for it! Imagine not having to worry about running payroll for your staff? Or not having to fiddle with a calculator to work out your job cost? Got your attention now, huh?
We'll ease you in with something simple that can have a lot of benefits if you work with a team. Consider starting a work group chat using Whatsapp or Facebook messenger. Most people use these popular chat apps these days and they're a quick and casual way of keeping everyone in the loop or checking who is free to fill in some hours. A quick message to a few people is better than 5 missed phone calls!
A little more on the complex side, but will save you more time and headaches than you could imagine. If you're not using one already, get yourself a decent accountancy software like Xero or Quickbooks. These systems automate most of your bookkeeping and can make life easier for you while reducing your accountancy bill.
Get this, most of them will even let you take photos of your receipts using your phone to keep a complete record of all of your spending! No more ruffling in coat pockets to find that month-old slip from Home Depot!
Last but not least, take a look at a few budgeting apps. If you're trying to cut down on costs it's great to map out all of your spending, and apps like YNAB and Pennies will let you keep a record of it all. You'll be on top of your costs in no time!
Last but not least, here are some tips to save you a headache or two and a lot of $$ where it matters, your bottom line!
It's easy to get lost swimming when the water is muddy, and by mixing your personal and business finances you're making the water mighty muddy! A lot of guys start contracting by themselves before building a business out of their profession.
But at some point, it's important to draw a line in the sand with your finances and set up a separate bank account for your personal life and your contracting business. This will make dealing with your finances much easier as you'll have fewer expenses to wade through.
When you do separate your bank accounts, it can also help you create a healthy habit of setting aside money to pay yourself regularly. It's easy to fall into the trap of spending high when the money is rolling in and skimping by when things are quiet. But relying on your up and down income from jobs is never a good idea.
Once you separate your business and personal account you should treat yourself like an employee and pay a regular amount into your account for your living expenses. This will force you to prioritize getting paid and also keep you watching that ever-important bottom line!
This next one can be a real saver if you remember to do it regularly. Did you know you can claim money back on your taxes for mileage on the job? All you have to do is keep a track of the distance you drive while you work. So for every mile you drive while working you could be claiming somewhere in the region of $0.58 off your tax bill. You can even claim for driving you do for medical or charitable reasons.
Well, that's the tip jar empty for today, but if you found these helpful be sure to check out the other posts on our blog for more!
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