The construction industry has taken a slight hit over the glory years of the housing bubble, but these businesses feeling the downturn are also exactly the same companies that built infrastructure over the last 200 years. They will prevail over any short-term drop in overall construction desire; having said that there is always attention that could be given toward the profits on return that your construction resources bring to bear. In this type of case we are discussing construction tools and equipment.
My history is in the rental market, in that industry we were return on investment orientated by understanding each resources contribution to the bottom line by having a real-time understanding over time utilization and dollar utilization. After beginning my own construction business several years ago, it became obvious that although I did so not have exactly the same measurement tools available with owned construction equipment, the focus on return from equipment investment nonetheless would have to be there. Construction companies are in different degrees of understanding the go back on invested fleet dollars. I have seen large construction companies that not track costs per tools piece. I have seen small companies do an extremely good job of focusing on how their assets will work for them. Nowadays all companies should job toward a tightening of the belt by comprehending how exactly to get yourself a better return on equipment expense. First and foremost, construction companies need the capability to create a genuine measurement of outflow of cost with regards to their construction equipment. Fleet managers, operations managers and accountants have to have a kind of tracking that contributes specific cost to individual equipment items. Amount ways to collect, store and utilize the data that tells you what is taking place together with your construction fleet. It’s important that you understand asset utilization and profits on return by analyzing both your utilization and ROI quantities, you can identify key areas within your operation that require improvement, and take the appropriate steps to adjust the way that business is conducted.
Once you start tracking and measuring you will begin to develop the needed data to create informed decision on your construction fleet mix. In terms of decision making it is all driven by possibility cost which is the expense of any activity measured in terms of the best alternative forgone. It is the sacrifice related to the next best choice available to someone who has picked among several mutually special choices. Whenever we analyze opportunity cost as an operations manager we have to understand about other opportunities available. As marketplaces change so do opportunities. Regarding construction equipment you must understand current market value of the equipment and measure that against some other available fleet options.
Power Tools and Construction Equipment
After careful analysis you will probably find that your equipment isn’t providing the needed return where in fact the value of the machine could possibly be placed into higher return areas for the business. If that is the case you should look at your true cost of keeping the machine by a careful analysis of other business opportunities. In lots of of the markets equipment rental rates have fallen to a level that will not warrant for contractors to own a good amount of certain equipment types.
If you find that you need to change fleet mix or raise the return generated on a particular piece of equipment there are several marketing opportunities out there.
1) Fleet share – Search for a venue that contractors can list devices for sale and in addition let other construction professionals know that they would be ready to lease or rent the item during the interim. This can allow contractors to generate additional local revenue while they market the equipment for sale.
2) No cost to advertise venues – Find an attractive venue that allows you to list your fleet with little or no listing cost, no settlement service fees. Generate interest on the equipment over time and don’t be subject to inflated expenses to take the piece to advertise.
3) Look for industry deals on New Gear from the Manufactures. Several manufactures are offering deferments in cash outflow for all those with qualifying credit.
4) Do not settle on new or used equipment pay for until you have really viewed the offering of the entire market. Ensure that you are informed on the overall opportunity available. This occurs in both utilized and new equipment markets and may be remedied by spending enough time to not only know very well what the machines offer but understand all of the pricing opportunities for the gear type you are looking to obtain. Bottom line is usually informing yourself on the leads of the market.