100 Ways to Cut Costs in a Down Economy

RALEIGH, N.C., March 16, 2009 – Now more than ever, contractors are searching for ways to cut costs. How you go about cutting costs is just as important as where you look for those cuts. For example, too often the immediate reaction to the need for cutting costs is to eliminate positions. Unfortunately, eliminating people usually means stifling your company’s ability to do more work.

Another typical cost-cutting move is to charge out overhead to projects or to require job-site offices to do work previously done in the home office. While this may make the home office look more profitable temporarily, it rarely saves money in the long run.

Glenn Matteson, senior consultant with FMI Corporation, offers 100 tips to generate thinking on possible new areas for cost reduction to help contractors survive this downturn.

Some cost-cutting tips include:

• Be specific in contracts; include late penalties. 
• Reduce working capital needs; reduce inventory, work in progress, accounts receivable, retainage; negotiate improved accounts payable. 
• Use an accountant who understands contracting (not necessarily a CPA). A local accountant can be just as good as a national firm, and you might get more individual attention by a senior accountant at a lower cost. 
• Pay moderate salaries; pay bonus for extraordinary results.
• Pay bonuses to field first, executives last.
• Overhaul existing equipment or facilities instead of purchasing.
• Institute quality control program.

Click here to view all 100 tips

About FMI 

FMI is the largest provider of Management Consulting and Investment Banking to the worldwide construction industry.

Founded in 1953 by Dr. Emol A. Fails, FMI delivers innovative, customized solutions to contractors; architects and engineers; construction materials producers; manufacturers and suppliers of building materials and construction equipment; private owners, managers, and developers; residential builders; utility companies; surety companies and industry trade associations.

FMI creates value through enhanced performance of companies, teams and individuals and by mitigating risk. FMI is headquartered in Raleigh, N.C., and has offices in Denver, Phoenix and Tampa, Fla. For more information, visit www.fminet.com.