To cut costs, split the money
To encourage my employees and subcontractors to be aware of costs, I offer them half of any money-saving ideas they propose. Even if the suggestion only saves ten dollars, I give them five. A few pennies saved here and there can add up to a few hundred dollars by the end of the year for me and extra earnings for my employees and subcontractors. Here’s an example of the benefits of this program.
My electrician suggested moving a doorway 12 in. to eliminate the need for one plug. The plug costs $55. Therefore the suggestion was going to save me $55, but also lower the electrician's earnings on the job by that amount. However, he knew that because of my savings-sharing plan he was now going to make $27.50 on each job for doing nothing.
That was five years ago. Since then, I have built this particular plan about 15 times each year. Therefore this simple suggestion has earned each of us nearly $2,000 to date. If you multiply this kind of savings by each trade, you’ll understand how even the smallest cost-saving suggestions can add up to big bucks.
Of course not every suggestion is a good one. The idea has to be practical, measurable and reproducible on future projects. The incentive, however, is enough to keep my help vigilant.