Want to discover the competitive advantage of small contractors?
It doesn’t start with the biggest fleet or deepest pockets. It starts with smarter equipment decisions.
Equipment costs are eating contractors’ profits and the winners are the ones who learn how to control them.
Today there are secrets your competition isn’t talking about.
Equipment Costs Are Eating Small Contractors Profits (& How To Fight Back)
Construction isn’t easy right now.
Material costs are through the roof. Hiring qualified labour is near impossible. And equipment prices have never been higher.
Construction equipment prices are projected to be over 30% higher than they were in 2020. For small contractors already operating on razor thin margins, cost increases like that can be the difference between success and failure.
Luckily there are strategies you can implement today to keep equipment running without going bankrupt.
What you’ll learn:
- Why equipment costs are killing small contractors
- How to intelligently maintain your diesel engines
- Cut equipment costs without sacrificing quality or uptime
- Win at growing your small contractor business
Why Equipment Costs Are Killing Small Contractors
Contractors of all sizes are struggling to stay afloat.
Between skyrocketing material costs. Insane inflation. And stubbornly high equipment prices. It doesn’t matter if you’re a giant franchise or a one-man operation… somebody is taking your lunch money.
Big contractors with fleets full of equipment can absorb price increases. Small contractors can’t.
Remember when your key piece of equipment breaks down on a job? Everything grinds to a halt while you wait for the repair. Deadlines are missed. Penalties pile up. And then you get the ridiculous bill to get your machine working again.
These kind of headaches are why small contractors go out of business. But it doesn’t have to be that way.
One of the most frequent (and expensive) heavy equipment failures is the diesel injection pump. If your diesel injection pump goes out you may think you need to purchase a new one straight from the dealer.
But that’s not necessarily true. There are quality used & rebuilt CAT injection pumps that can save you thousands without sacrificing on performance.
Goldfarb Inc. is one of the many suppliers that offer this service.
Think about how much that money could impact your bottom line.
How To Smartly Maintain Your Diesel Engines
Every single piece of heavy construction equipment runs on diesel. From excavators to dozers to loaders. If it moves… chances are it’s powered by diesel.
Diesel engines are extremely reliable but when components in the fuel system start to fail… productivity comes to a grinding halt.
Most engine issues come on suddenly. But that’s not always the case. Many diesel engine failures are caused by little issues that go unnoticed during routine maintenance.
Things like:
- Fuel filters not being changed during regular service
- Water in the fuel tank
- Old injectors leading to loss of power and efficiency
According to the Construction Industry Institute, maintenance makes up 15-20% of total equipment ownership costs. So properly maintaining your equipment can definitely add up. However most contractors don’t realize…
Maintaining your equipment BEFORE it breaks down is far cheaper than reactive repairs.
The successful contractors know this and have strict maintenance schedules they adhere to. They understand that going by a maintenance schedule is the best way to reduce overall equipment costs.
Catch small problems before they snowball into a $10,000 repair. Monitor your machines and address issues when they’re cheap to fix.
Here are a few symptoms of a bad diesel injection pump:
- Loss of power when putting load on the engine
- Excessive black or white smoke coming from the exhaust
- Rough or hard starting
- Unexpected increase in fuel usage
Cut Equipment Costs Without Sacrificing Quality or Uptime
When you’re a small contractor every dollar matters. You can’t afford to waste money buying new equipment every time something breaks. At the same time you can’t let money-minded decisions cause you to run ancient equipment into the ground.
There has to be a happy medium.
The smart contractors know how to balance these decisions to keep their equipment costs low while still running dependable equipment.
Here are a few tips to help you save money on equipment:
- Buy Used/Rebuilt When You Can – You don’t always have to buy things from scratch. Things like diesel injection pumps, turbochargers, and hydraulic pumps can often be bought rebuilt for a fraction of the price of new.
- Keep Detailed Maintenance Logs – Keep your equipment running longer by tracking every maintenance service. This ensures that small issues don’t turn into giant money pits.
- Operator Training – Did you know equipment abuse is one of the leading causes of equipment costs? Training your operators to use equipment properly can reduce abuse and increase lifespan significantly.
- Buy Equipment During Off-Peak Seasons – Wait for the right time to buy equipment. Equipment prices go up and down based on the time of year. Buy when demand is low and you could save thousands.
These are simple strategies that won’t blow your mind. But they can also add up to big savings if you stick with them.
Winning Strategies For Growing Your Small Contractor Business
If you want to win the long game of growing your business, you have to start by maximizing the efficiency of your equipment.
If you have a fleet of idle equipment that isn’t being used often… you’re losing money.
Small contractors should be evaluating their equipment every year to determine if it’s worth hanging onto. Things change and you might find you don’t need that picker any more. Sell it and recover some of those losses.
Another thing you can do to gain a competitive advantage over larger contractors is to develop relationships with trustworthy suppliers.
You never know when you’re going to need to get an engine fixed. And waiting weeks for a part to come in… is not an option.
Here a few more ideas to help you grow your business:
- Specialize in a niche where your equipment knowledge will shine
- Develop a reputation for being on-time by keeping your equipment reliable
- Reinvest the money you save from equipment into marketing and business development
- Join trade and dealer associations to take advantage of group pricing discounts
Conclusion
Equipment costs are not going to decrease anytime soon. But that doesn’t mean you’re powerless to stop them from eating away at your profits.
Small contractors can gain a competitive advantage by making smart choices with their equipment.
Here’s a quick recap:
- Equipment costs have risen more than 30% since 2020
- Buying a replacement diesel injection pump doesn’t always mean new from the dealer
- Performing maintenance on your equipment before things break will save you money
- Buying used/rebuilt equipment parts can save you thousands without losing quality
- Equipment shouldn’t be an afterthought of your business. Use it as a strategic advantage.
