Whether it’s increasing profit margins, creating cash flow to place bids, or having working capital to manage a project, contractors must always consider fiscal strategies and ways they can generate more success and financial growth for their companies. Of course, saving money on projects is never a bad thing either. In this six-part series, our Memphis construction attorneys are discussing several cost-effective strategies to incorporate into your construction business.
Financial Strategies That Help Construction Companies
In the first section, we stressed the importance of making effective bids and creating payment clauses in your contract to ensure you have working capital to spend on projects. In the second section, we discussed cost-saving techniques to incorporate into the design stages of a project. In the third section, we offered advice on ensuring you have a productive workforce. In the fourth section, we provided you with tips on ways you can mitigate expenses on materials and workers’ tools. In the fifth section, we discussed the benefits of not overspending on new equipment by financing instead.
Other Fiscal Benefits
In this final section, we will offer you some parting advice on other ways you can save money on construction projects. Here are three other ways that contractors can benefit their business:
- Tax Savings: It’s important to work with legal and financial professionals that understand the construction industry. For example, you can work with several government-funded research and development programs that create tax savings for your company. One example is if contractors design LEED/green initiatives, they can enjoy a variety of tax benefits for this work.
- Retainage: Retainage fees are a portion of the contractor’s contract that is withheld until the project is nearing completion. This makes certain that the contractor will perform their tasks before they are compensated. When drafting a contract with an owner, a Memphis construction attorney can negotiate favorable terms for the contractor including with beneficial retainage fees.
- Loan Agreements: Loan agreements with banks can always be stressful for contractors. The bigger the project, the greater the chance that the loan may not reflect upon the approved budget after a portion of the work is completed. If the loan agreement cannot be met, it’s critical to work on a solution with the bank and create a strategy that provides a way to alleviate this issue.
If you are interested in saving money on your construction projects, speak with Cotney Construction Law today. From drafting contracts to navigating through the bid process to defending against OSHA citations, we are dedicated to helping professionals in the construction industry.
If you would like to speak with one of our Memphis construction attorneys, please contact us today.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.