If you want to start your own business as a contractor, the upfront costs can be a considerable investment. Before you make the financial commitment to start your business, there are ways you can reduce costs until you can make a profit.

Consider A Mobile Office

Since you may spend little time in a traditional office setting and most of your time on-site, creating a mobile office can translate into lower start-up costs and less overhead. You may want to compare the costs of maintaining a physical location versus purchasing or financing a small trailer or camper. Smaller supplies used at your job sites can be stored in the vehicle and it is easy to compensate for office features by using broadband internet connections and mobile devices.

Without a traditional brick-and-mortar location, you will need to consider where to store heavy equipment. Heavy equipment is a hot commodity for thieves, who often sell the equipment for parts. You can rent storage space for your machinery, especially if your needs fluctuate based on the job. Finding a secure location to keep your equipment for the duration of the project can be easier than needing permanent storage. You may choose a heavy equipment storage facility that allows you to rent space on a monthly basis.

Purchase Used Trucks And Trailers

There is little reason to purchase new trucks for your business. Since any vehicles for your business can serve many functions, buying used is a better investment than leasing or renting. You may want to choose trucks that can serve multiple purposes. If you wanted to create a mobile office, but wanted a larger vehicle, many used semi-trailers are large enough to store heavy equipment for workers on your job site.

The trailers can be used for your employees to take breaks or to seek refuge in bad weather. If you and your workers need to stay at a job site overnight to meet your deadline, the same trailer could be used temporarily for sleeping. Your trucks can also serve as a storage location and way to transport heavy equipment if you cannot rent space. It can be safer to keep your equipment inside a semi-trailer since the equipment can remain out of sight when you are not at the job site. When you are looking for used trucks, consider participating in auctions to save money.

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Lease Your Heavy Equipment

When you are in the early phases of your business, you may delay taking on new clients or take out a larger business loan to cover the initial costs of equipment. Since it is difficult to predict every piece of equipment you need for future jobs, it is likely you will overspend on equipment you may not need immediately to avoid losing a contract.

Leasing your equipment ensures you are only paying for the equipment necessary for the current job and only for the duration of the project. Unlike owning the equipment, you are not stuck with used equipment that may have little or no resell value. As your business grows and you gain more experience, you can determine which pieces of equipment are more cost-effective to buy for long-term use.

Leasing also helps you save in maintenance costs. When your contracting business is new and has a limited budget, you may buy older equipment to start. Unfortunately, older, less expensive equipment may come with expensive maintenance costs. If there is a problem, it is much easier and less expensive to have equipment replaced or repaired under your leasing agreement than if you purchased your equipment. Although failing equipment is a problem for any contracting business, it can be detrimental in the initial phases of your business.

Cutting costs when purchasing equipment and not being tied down to one location are among several ways you can lower initial business costs. Once your business begins earning a sizable profit, you can consider purchasing new equipment or investing in a traditional office location.