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Saving money is a challenge — especially in the U.S., where GOBankingRates’ 2019 annual survey revealed that 69 percent of Americans have less than $1,000 in savings. The numbers aren’t out yet for 2020 but in light of economic uncertainty, shutdowns, and job loss, savings accounts may not be top of mind for the average customer. For the average business owner, however, a haphazard saving attitude could be detrimental. There is plenty of advice on how to save money in a company. Here are three suggestions to help contractors improve their saving stance.


1. Make a Plan

Saving money doesn’t just happen. It takes a concerted effort to direct funds into an account — and sometimes as much of an effort to leave it there. In a training seminar titled “Savings Plans for Small Businesses” from the U.S. Small Business Administration (SBA), business owners are encouraged to plan savings that will ensure a steady and adequate flow of income.

Plan to save money.

PLAN HOW TO SAVE: In planning how to spend and save money for a business, the SBA recommends that owners consider life events, retirement, and taxes.

“Even a small amount saved every week can provide a beneficial security and fallback safety net that would outweigh the initial investment of time and money involved in creating a savings plan upfront,” stated the training document. “Some people use automatic deductions to manage their savings investment, as this removes the temptation of spending money before they have a chance to invest it.”

In planning how to spend and save money for a business, the SBA recommends that owners consider life events, retirement, and taxes. The life events especially can bring about unexpected cost. Emergencies, government shutdown, lawsuits, and a lack of credit all constitute life events that could have an impact on a company’s viability.


2. Cut Costs

It has been said countless times by numberless business experts that the quickest way to increase the bottom profit line is to cut expenses. More work, products, or services won’t affect profit like knocking off dollars and cents for every expenditure that is excised from the company.

Matt Michel, Service Roundtable president, is in favor of cutting expenses, but he warns that they should be cut with wisdom as opposed to panicked slashing. In a recent column for The ACHR NEWS, he explained that contractors can’t simply save their way to prosperity, but they can make surgical incisions to trim the fat of their business.

“If you accidentally cut into the business’ muscle, you cut its strength,” said Michel.

He goes on to suggest 82 ways to reduce expenses. Below is a sampling.

  • Look at your inventory as a stack of cash that is not working for you. See if you can return any inventory that is not absolutely necessary to your suppliers.
  • Sweep cash from your checking account to an interest-bearing account whenever cash exceeds a predetermined level.
  • Use a voice over Internet protocol or VOIP phone system. These cost less, have more functionality, and can be used from any location with Internet access, such as a home office.
  • Sell or dispose of items in storage units to eliminate storage rentals. If you cannot eliminate the items in storage, change to a rural storage unit with lower rental costs.
  • Contact radio, cable, and TV stations to see if you can purchase remnant advertising. This is unsold advertising time that is frequently offered at the last minute at 50 percent of the normal price.

Melissa Ural is the vice president of Human Resources at HB McClure Company, an employee-owned HVAC contractor in Harrisburg, Pennsylvania. The company has found several ways to cut expenses as it endeavors to protect its bottom line and its employees’ investments.

“It is important that contractors pay attention to leveraging their buying power when they are looking to cut expenses,” she said. “Outside of that, contractors must make sure that they know and foster a relationship with the vendors and suppliers they're using. Combining these two strategies helps a business fully realize its purchasing power potential.”


3. Reconsider Health Care Expenditures

Another way that HB McClure Company is saving money is through a direct healthcare program from Benefits Design Specialists Inc. (BDS). The company has helped the contractor reduce its healthcare expenditures by more than $500,000 in three years.

Direct Care.

DIRECT CARE: With direct arrangements, HB McClure Company could have saved $50,000 on the knee replacements insurance claims made through a traditional system.

“As a self-insured company, we pay our claims as they happen,” said Ural. “When it comes to surgical procedures —like knee replacements, for example — our former insurance program charged us approximately $70,000 dollars. If we had done it through the KISx Card program, it only would have cost us $20,000 for the same two knee replacements. We would have saved approximately $50,000 with direct arrangements with surgical centers.”

TJ Morrison is a benefits advisor and the president of BDS. The company has always been a traditional benefits broker and has taken an interest in the future of the self-funded space in regard to healthcare.

“Instead of just going your traditional routes of sourcing insurance, we decided to build a plan based upon an independent third party administrator,” said Morrison. “What always really intrigued me was the fact that if you're a self-funded employer, 70 to 80 percent of your costs for your plan is associated with claims. So if you're not doing anything to control that claims cost, you're just going through the same renewal cycle year over year.”

It was then that he started to build a network that could accommodate companies with 100 or more employees. What began as a local endeavor is now a national program serving contractors with over 1,600 surgical centers and over 2,600 imaging locations.

“Our focus on a near care approach to doing business in the local market and steering to local providers has helped our customers feel comfortable using this direct care system,” said Morrison. “We negotiate on behalf of HB McClure Company to get the best care and the best rates.”

When Ural talked about the program, she stressed that employees are not only receiving the same level of care, but they are also being incentivized to participate.

“We’re cutting out the middleman from an insurance perspective,” said Ural. “Our employees are going to the same doctor that they would have normally. The difference is that they are filling up their empty surgical suites and being paid within 24 hours of service. It’s a win, win, win.”