As the construction industry changes, so will the way you run your business. You might find yourself inching toward technology; perhaps you’ll test out new and better ways to work with homeowners or discover ways to more efficiently operate on the job site. If you’re finding yourself stagnant in your operations on the job site or at the planning desk, though, you could be costing yourself time, money, and clients. Worried you’re stuck in your ways? Here are three mistakes some general contractors will make in 2020 — make sure you’re not one of them.
1. Not properly factoring labor into job costing
Job costing is the most accurate way to calculate the true cost of your work on any given project. As you’ll know if you’ve undertaken the process of job costing before, the process involves looking closely at each phase of the project step by step to better understand ground level costs. Job costing takes into consideration obvious expenses like cost of materials as well as overhead — but if you’re not including the real cost of labor on-site, you’re slicing your own profit margins.
Determining the true cost of a job means taking into account labor: wages, but also workers’ compensation, insurance, potential overtime, and even taxes. If you’re wise enough to job cost, make sure you’re considering what it’ll really cost you to get a project from demolition all the way through to the finish line.
2. Relying on outdated software
Construction has long been an industry slow to adapt to technology, but that’s beginning to change. Today’s popular project management systems are increasingly as sophisticated as they are user-friendly — which is why sticking to an old-fashioned, out of date software system is a big mistake. Here’s a few ways to know if you can count yourself in the “outdated” bucket:
If your project management software isn’t a program you can access away from your desk , consider looking for a system that’ll grant you more flexibility on job sites and through the project process. Rule of thumb: if you can’t find it on the app store, start shopping for new software.
The right (modern) project management software should be multifunctional. When it comes to technology, we can empathize: here’s an obvious draw to the simplicity of one-trick systems that focus explicitly on single items, like budget or blueprints. But working within multifunctional software doesn’t mean you’ll be plunged into complexity: it’s about working smarter, not harder. If you’re still reliant on siloed systems (i.e., one for project budget, another for storing electronic documents, yet another for communication across teams and to owners) consider yourself out of date. It’s time for an upgrade. Consider something like Punch List, a project management system that also allows for digital payment (more on that in a moment) and is available on the app store.
3. Not accepting digital payment
Digital payments have become a pillar of most viable industries — that is, most any that provide goods or service, a category that definitely includes construction work, remodels, and renovations. Digital payment technologies like Square and Cash App have made it easy for the smallest of retail businesses to accept instant digital payments. Then there’s apps like Venmo, which have made digital payment accessible at the individual level for payments between peers and friends.
Digital payment is not only more secure than traditional payment methods (think the security a credit card would provide, as opposed to cash), it’s appealing to a wider demographic of consumers and potential clients. It’s 2020: there’s an influx of millennial consumers destined for the real estate market. That group will prioritize speed, convenience, and security — three things digital payment indisputably provides.
Punch List, the app-based management system, is an excellent way to begin accepting digital payments. Homeowners can approve completed work through the app, which will then generate an automatic invoice. That invoice can then be completed and paid instantly — again, all within the app. There’s a plethora of reasons to start accepting digital payment, including a roster of benefits for your business and the industry at large. And with technology like Punch List, there’s no reason not to start now.
The construction industry is one that’s seen expansive change over the last decade: technology booms and trends have made managing projects infinitely more accessible to contractors than ever before. If you’re turning a blind eye to ways to boost your business, ignoring things like proper job costing, updated software systems and accepting digital payments, now is the time to change. And with the accessibility of new technology (like Punch List, available on the app store) “now” can be any time you’re ready.