5 Ways of Reducing Business Expenses at MEP Companies

The pandemic created a global health crisis, and the construction industry was not exempted. 

Following the onset of the COVID-19 outbreak, construction projects worsened, and many MEP companies suffered.

Given the ongoing situation, finding ways to reduce costs is indispensable.

Below are five proven ways MEP companies can reduce their business expenses:

Invest in the Right Technology

We live in a technology-savvy world, and it’s hard to keep up with the competition without embracing digital transformation.

For MEP companies, incorporating technology isn’t limited to investing in modern tools and equipment that get the job done quickly and efficiently. It also involves integrating tools and software to optimize processes.

For example, if you are doing AHU manufacturing, go beyond traditional and use proper AHU selection software.

You can also use simulation technologies that allow for an effective design-build model instead of a traditional design-bid-build model.

Use Software To Automate Collaboration

Behind every successful project are a team of different individuals, teams, and vendors who work together to achieve a common goal.

The use of collaborative software helps facilitate different aspects of project management, from budgeting to scheduling, resource pooling, and planning. It can also be used to select project participants and set performance requirements.

Such software systems enable real-time collaboration. Individuals can connect with anyone in the team in real-time, no matter where they are. This allows field and office employees to work on a project.

Through the software, employees can add notes, photographs, and post progress reports to keep everyone else on track.

Furthermore, site construction management software allows employees to transmit field notes and photos instantly so they can get real-time feedback from supervisors or project managers.

Manage Overhead Expenses

Salaries and overhead expenses can take a huge chunk in your company’s budget. Many MEP companies pay too much attention to the cost of materials and labor that they often forget about the overhead expenses.

What counts as overhead? These include admin costs like salaries for your non-construction staff, business fees, taxes, rent and utilities for your office, office equipment, and software subscription.

To save on overhead costs, make sure you’re updated with your quarterly taxes, transition to paperless data entry and bookkeeping, and consolidate software platforms.

Manage Salaries

Your company can save on labor by paying moderate salaries and bonuses for extraordinary results.

Speaking of bonuses, consider providing stock bonuses instead of cash. These are deductible, and there is no cash outlay.

Additionally, you can cross-train your staff to eliminate temporary employees. Schedule time-off or vacations during slow periods and give compensation increase based on merit.

Instead of cutting pay, you can also cut back on employee benefits. Shop around for less expensive health insurance plans and assess your current benefits program to see which things can be removed or replaced with a cheaper alternative.

Lastly, if you have a high turnover, you know that it can cost you a lot of money. It takes a lot of resources to find, hire, and train employees. You can manage employee turnover by taking the following initiatives:

  • Provide growth opportunities.
  • Have a comprehensive hiring process to hire the best people for the job.
  • Keep employees engaged.
  • Promote a healthy work-life balance among your employees.

Manage Equipment Depreciation Costs and Expenses

MEP equipment and machinery are costly. To prevent their costs from depreciating fast and promote increased profitability, it’s important to keep equipment well-maintained.

Here are some tips to save on equipment use:

Overall existing equipment instead of repurchasing.

Keep records of use and maintenance to keep track of the equipment’s health.

Certain types of software systems can help you determine the most efficient course of action concerning older assets.

There are many ways to reduce business costs at MEP companies. Among the most effective strategies are investing in the right technology, using software to automate processes, and managing overhead expenses and employees’ compensation.

By taking steps to lower your costs, you can increase profitability and concentrate your sales efforts to drive more revenue.

TIME BUSINESS NEWS

TBN Editor

Time Business News Editor Team