July 28, 2017

Keeping Prices Down: How Construction Companies Remain Competitive

There is a lot of competition in the construction world at the moment. House building is on the increase, but there still isn’t enough work to go around. That means some professionals are struggling to make a decent income. So, what are the successful firms doing that those operations aren’t? Well, today we’re going to look at some of the ways in which people in that industry keep prices down. They do all these things to remain competitive and ensure they win decent contracts. Firms that don’t follow the moves outlined below will almost always lose out to companies that do.

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Getting materials from abroad

A lot of the most successful construction experts now source their materials from other countries. According to Building.co.uk, that is because timber and other items purchased from within the UK are always more expensive. Companies can make a saving of up to 50% by buying what they need from suppliers abroad. That’s even the case when they have to pay for delivery too. The UK manufacturing industry needs to work hard to turn that around. Every construction boss we spoke to said he would much prefer to buy from British suppliers. It’s just that the prices they charge make it impossible.

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Using subcontractors from abroad

Foreign workers are everywhere in the construction industry these days. That is because people from Eastern Europe are happy to work for a lower wage than most UK specialists. Those people tend to have the same skill level, and so it makes sense that companies offer them contracts. Again, that helps to keep costs down so the company can charge their clients less money. Bosses just have to make sure the tradesperson has all the necessary paperwork. If the person doesn’t have permission to work in the UK, the firm employing them tends to get into trouble.

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Opting for red diesel in all vehicles

For many years, red diesel has been the fuel of choice for the construction industry. According to specialists from New Era Fuels, business owners in the agricultural field are legally allowed to use it too. It’s a cheaper solution that helps to keep costs as low as possible. Those cranes and diggers need a LOT of fuel to function every day. The bosses would have to pay thousands every month if they used regular diesel from the pump. So, the use of red diesel has made a significant difference in the industry over the years. Indeed, it still does.

The information in this post should have highlighted some of the ways in which construction firms remain competitive. We hope our article will help those of you who plan to join the industry in the future. Competitor research is necessary, and you now know how to drive prices down. Of course, there are lots of others ways to achieve that goal. So, you’ll need to keep your eyes peeled for new techniques and strategies. For everyone else, we hope this post provided a fascinating insight into the lives of construction bosses.

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