When the bottom fell out of the economy a few years ago, individual remodeling contractors were hit harder than practically anyone. No one had money to spend to fix their homes up, and those who did decided to go the do-it-yourself route in order to save big. Though the market has bounced back significantly, many individual contractors are still suffering. Jobs are fewer and typically pay less. This forces contractors to bid lower and to make cutbacks.
One great way to keep afloat in today’s economy as a contractor is to implement money-saving methods in your business. With the right tactics, you can save on tools, supplies and even on labor costs.
5 Tactics to Save Money as a Contractor
1. Shop Wholesale
Purchasing wholesale puts you in the proverbial driver’s seat in terms of earning a profit. Though you may need to stockpile and subsequently sit on products until you can ultimately install them, it still beats having to buy per job. Purchasing things like cabinets, windows, doors, flooring, etc., will allow you to receive items at a great discount while allowing you to charge full market value plus the price of installation when you find clients.
2. Buy Used
Whether circular saws, miter boxes, table saws, nail guns, compressors, or any other materials that you may need as a contractor, there is no rule which states you must buy new. Craigslist, eBay and Amazon are just a few of many locations you can go to in search of discounted used items. Seek out qualified sellers with good ratings and competitive rates. You can purchase tools for your entire business for a fraction of the cost of buying brand new.
3. Network Socially
Social media is free to use and may equal big returns. For instance, a site like LinkedIn is easy to set up and a breeze to maintain. You can network on that site and build real connections. A lot of small contractors are networking with real estate development businesses and even government agencies needing to hire remodeling contractors. You can also use sites like Facebook and Twitter to create some local buzz and a solid reputation without having to spend a penny. Any referral or work you receive is all profit.
4. Salvage in Your Spare Time
Contractors aren’t handymen and often dislike being labeled as such, but being “handy” does have its benefits. Picking up salvaged window boxes, doors, cabinets and other items gives you a great opportunity to earn some extra money. With a little elbow grease, you can turn one person’s junk into another person’s treasure. You could even add demo to your contracting business and refurbish items from house X to use in remodel Y.
5. Pay a Percentage
Remodeling contractors certainly aren’t gold miners, but a contractor can use an old mining trick to get high-end labor for a low-end cost. A mining foreman would offer crewman a percentage of the gold rather than a flat rate. The miners’ money was subsequently based on what they found. This increased their production while greatly benefiting the boss. The same can be applied to remodeling. Find a good crewman and pay out a percentage rather than an hourly or daily rate. A crew member making a percentage is going to push harder for you, from working to networking. It’s like having a partner without paying 50%.
A penny saved might just equate to a business saved in the remodeling realm. This is a highly competitive industry where even established businesses go bankrupt frequently. Saving money as a contractor allows you to bid competitively while still earning substantial profits. Use the money-saving tips listed above and watch as those profits start to pile up.
Another great way to save money as a contractor is to contact your past remodel clients for new renovation jobs.