Elevate takeoffs for faster bids and increased project success for FREE. See Details Here.

PlanHub’s Q2 Research Reveals Many Opportunities. Register for the Webinar and Learn More

6 Ways to Reduce Operational Costs in the Construction Industry

6 ways to reduce operational costs

Operational costs for construction companies are expenses incurred to keep the business running, whether there are active projects to work on or not. Construction operational costs include the following:

  • Building or office rent or lease costs
  • Utilities
  • Administrative wages
  • Labor costs
  • Insurance
  • Taxes
  • Software and hardware
  • Marketing
  • Benefits and other HR expenses
  • Office supplies

The selling price of a project minus  project costs (fixed costs, variable costs, labor costs, operating expenses) is a project’s profit. Operational costs are paid with these profits. So, reducing any operating cost has a direct relationship to the company’s overall profit.

Construction Change Orders 101

Adopt technology

Construction is a relatively change-averse industry, as practices have crystallized over decades in response to legislative and economic requirements. As such, technology adoption in the construction industry has been slow.

Many contractors still rely on paper documents and drawings in their everyday tasks. However, by adopting burgeoning technology, like artificial intelligence and data analytics, companies can reduce their direct labor costs and avoid unexpected claims and other costs. For example, digitizing the estimating and material takeoff tasks reduces the amount of time needed to complete proposals and improves the accuracy of bids, leading to more work. Increased accuracy also reduces the chances of cost overages and makes for easier cash flow.

Post projects in minutes, drive more business. Find over + 300,000 qualified subcontractors and get to work quicker. Request a demo!

Streamline operations

Diagramming and analyzing business processes can help companies reduce administrative and overhead costs. One of the principles of lean construction, continuous improvement, can be applied not only to project tasks but also administrative workflows. Regular review and assessment of the effectiveness of these processes can lead to a reduction in costs.

Develop a budget – and use it

Contractors should develop a yearly operating expense budget, and track costs against it. Analyze your costs for the past few years and estimate yearly expenses based on your current plans for your business. Include an emergency or contingency fund for unexpected expenses. Throughout the year, assess the budget and make spending decisions based on the funds left to spend. If you continually go over budget, it may be time to reassess your spending and shop for better deals.

Provide in-house training and position advancement

It’s less expensive to train a current employee than to hire a new one. According to the Society for Human Resource Management, the average cost to hire an employee is $4,129. Companies spent an average of $1,071 per employee for training in 2021. In today’s labor market, both skilled and unskilled workers are difficult to find. Providing training and support for good employees encourages them to be loyal to your company.

Make safety and health a priority

When workers are sick or injured, production suffers. This can lead to extended schedules and more overhead costs. The average cost of a lost time injury in construction is $35,000. This includes both direct costs of the injury, including medical expenses and insurance premium increases, and indirect costs, such as accident investigation and lost productivity. By prioritizing employee safety and health, companies can save on potential injury claims costs and maintain productivity.

Go paperless

Shifting to a paperless system to distribute documents and plans reduces printing and postage costs. Digital takeoffs are more accurate than those performed by hand, leading to more accurate estimates and fewer cost overruns. Make sure that employees have access to the infrastructure needed to handle electronic documents. This should include tablets, laptops, and smartphones – all of which are fixed costs that will pay for themselves in savings over time. Digitizing correspondence and document sharing allows for instant access to new information, reducing timelines for addressing changes.

Construction bidding sites like PlanHub help you streamline your proposal process, improve the accuracy of your material takeoffs, increase revenue, and win more work. PlanHub helps general contractors find subcontractors, and subcontractors and suppliers find projects to bid on. For a free demonstration to see how it can help your business, contact us today.

Be the first to know

PlanHub insights, resources, and news, sent directly to your inbox.

    planhub icon

    Data and Deep Insights

    We make construction smarter by connecting with the right people, at the right time, for the right project.

    With our technology and data intelligence, we empower construction professionals to easily build the right business relationships, streamline pre construction processes, and make efficient decisions.

    From competitive intelligence in each project allowing you to know how many other contractors are downloading or bidding to insights as to contractors’ performance, we provide the data you need to lead your business to success.

    By providing faster, simpler, and unmatched data insights in each step of the pre construction process, PlanHub helps your business lay a strong foundation for the success of the rest of the construction process.

    planhub icon

    Bid Leveler & Proposal builder

    Comparing bids to one another has never been easier. Users can now see bids side by side, compare bid amounts, and review subcontractors’ certifications and qualifications all in one place.

    Bid Leveler’s apples-to-apples approach allows you to easily drill down and see detailed, easy-to-scan cost breakdowns. Indicate bid preference, hide bids that don’t meet your needs, and request needed information from subs.

    planhub icon

    Full Bid Management

    From the initial decision to pursue a project to the final bid submission and follow up, bid management plays a central role in pre construction.

    Effectively managed bids during the preconstruction phase set the stage for a successful project execution and satisfied clients.

    Streamline bid management from project posting to estimating, bidding, and awarding in one place with easy project posting, project-contractor automatic matching based on trades, location, and qualification with PlanHub.

    Use bid planner, bid builder, bid leveler, and award tools to always know what’s going on with each project and bid.

    planhub icon

    Estimation and TakeOff

    Let’s face it—time is money. And the more time it takes to perform takeoffs and submit bids, the more you risk losing out on valuable revenue opportunities. Manual methods and locally installed desktop software slow your takeoff process, and many digital solutions currently on the market can be overly complex and not user-friendly. 

    Build faster takeoffs, get more bids out the door, and win more projects. Forget pen and paper, outdated desktop software, and overly complicated digital takeoff solutions. PlanHub’s easy-to-use Takeoff tool helps you and your team build accurate takeoffs faster, minimize errors and material waste, and win more projects that boost your business growth. Performing your takeoffs with PlanHub allows you to:

    • Streamline and integrate your process: Perform your takeoffs in the same platform you use to manage your network and bids.
    • Avoid costly estimating errors: Get better accuracy with digital tools instead of traditional, mistake-prone pen and paper.
    • Collaborate easily: Share and work with your team, no matter where you—or they—are located.
    • Submit more bids and win more projects: Get quality bids in front of general contractors faster and get ahead of your competition.
    planhub icon

    Document Management

    Organize, store, and manage various documents, blueprints, drawings and other information related to projects before the actual construction phase begins.

    This phase is crucial for setting the foundation of a successful construction project, and effective document management plays a significant role in ensuring that all necessary information is accessible, accurate, and up-to-date to all interested parties.

    Access, review, work on, and share large complex documents in one platform with amazing speed. From project definition, drawing management, takeoff, estimation, bid management, and contracts, everything happens in PlanHub.

    planhub crm
    planhub icon


    Be part of a construction professionals’ ecosystem that enhances collaboration, streamlines project management, and fosters smart relationships between companies, construction professionals, and projects.

    Enjoy seamless communication, build strong relationships, and streamlines project management. By leveraging the power of connections and collaboration, we enhance efficiency, save time and resources, and drive collective growth in the industry.

    planhub network
    planhub icon

    1M+ pre-qualified network

    PlanHub is the leading platform that connects companies, construction professionals, and projects in the pre-construction industry, focusing on building and developing meaningful relationships to enhance efficiency and productivity.

    We have integrated general contractors, subcontractors, and material suppliers’ workflows in one platform to simplify the complex back and forth usually present in preconstruction. By allowing all interactions to be done through PlanHub, tracking projects and relationships is much easier, saving contractors and material suppliers time and money. Interactions in the platform are tagged and measured to provide insights to users.

    General contractors create bid packages that are shared in PlanHub as projects. They can include templatized lists of all CSI cost items as part of the new Baseline feature. Baseline allows for faster and more accurate bid requests, facilitates homogenization of subcontractors’ bids, and simplifies the comparison of incoming bids.

    Subcontractors are automatically matched with relevant projects based on their profile, preferences, and pre-qualification information saving hours of research to both sides. They can review project details, documentation, and blueprints.

    planhub icon

    High-quality projects

    Your one-stop job for qualified hard-to-find private project leads in varying stages like pre-planning, bidding, etc., and across different geographies, zip codes, or distance to your office.

    Projects include plans, specifications, bid dates, and other relevant project information.

    You can segment project leads by type of project, status, project building use, trades and sub trades, or create your own list of keywords — and be notified when one of them is found in a posted project’s documentation or plans.

    We make it simple to find projects that match your business — and make sure you are notified right away.

    					<script src='https://planhub.com/wp-includes/js/jquery/jquery.min.js' id='jquery-core-js'></script>
    <script charset="utf-8" type="text/javascript" src="//js.hsforms.net/forms/embed/v2.js"></script>
        region: "na1",
        portalId: "7063061",
        formId: "ced7254f-5c61-49b9-9ce0-6f870b79a958"

    Get the report!

    From the very beginning, PlanHub has been a place where people can do meaningful work and build strong relationships.

    Come grow with us! We’re building innovative technologies that simplify preconstruction for everyone.

    Expand your network and connect with general contractors, subcontractors, owners, architects, and suppliers – not to mention thousands of relevant projects at your fingertips.

    Generate relevant leads, faster and with precision. With access to private, hard-to-find projects, you can connect with architects and owners on projects still in the pre-design and design stages.

    PlanHub’s advanced suite of bid management tools allows you to increase productivity, identify relevant projects using data, build bids with Takeoff, and manage bids through the entire process.

    Create quicker, improved takeoffs effortlessly. PlanHub’s Takeoff Core aids your team in accurate, faster estimates, minimizing errors, and driving business growth.

    Expand your network and connect with general contractors, subcontractors, owners, architects, and suppliers – not to mention thousands of relevant projects at your fingertips.

    Generate relevant leads, faster and with precision. With access to private, hard-to-find projects, you can connect with architects and owners on projects still in the pre-design and design stages.

    PlanHub’s advanced suite of bid management tools allows you to increase productivity, identify relevant projects using data, build bids with Takeoff, and manage bids through the entire process.