Technology, Time and Efficiency

Contractors are increasingly using specialized software and AI for estimating, job cost reviews and project management. Technology is helping, but accurate estimating is instrumental to the success of a project. You have to win the work at a price that makes sense, maintain cash flow, manage the project and complete it on time. It all comes down to time and cost.

They are also finding ways to protect themselves from material price volatility. One electrical contractor I know deals extensively with copper. He may submit a bid based on the current copper price but includes language in the contract addressing what happens if that price increases before work begins. Contractors are using expiration dates on bids, such as making a price valid for 60 days, or structuring contracts so that owners are buying materials directly. With both strategies, the goal is the same: avoiding committing to a price for materials that could be drastically different six months from now.

There are also opportunities to control costs by operating more efficiently. One contractor who performs rigging and installation work established smaller satellite locations near areas where he has significant projects. Rather than sending employees and equipment back and forth from one central location every day, equipment can remain closer to the job, and some employees can report directly there. When you consider labor, fuel, transportation and the time involved in moving people and equipment, those savings add up over time.

Financial Flexibility and Wise Advisers

Equipment itself is another area contractors should evaluate carefully. The decision to rent or buy equipment depends on the job, your company’s cash flow, project length, upfront costs, maintenance requirements and your balance sheet. If a piece of equipment will be used occasionally, renting probably makes sense. But if it can be used on numerous projects throughout the year, it’s worth comparing the ongoing rental expense against the cost of purchasing or financing it.

I’ve watched that calculation change as contractors grow. One concrete masonry customer initially rented equipment at different job sites. As his business expanded, we helped him finance a mobile concrete plant that he could move from project to project. Today, he owns three. Renting made sense when his company was starting; with greater volume and consistent utilization, ownership made more sense.

Just as important is maintaining adequate working capital. Contractors often have to pay employees, suppliers and other expenses before they are paid for the work themselves. Increasing material costs and project delays can widen that gap. That’s why access to a line of credit can be valuable, but the important thing is to establish that financial flexibility before you need it. You don’t want to find yourself with a cash flow problem in the middle of a project and then start talking with your bank.

I also jokingly tell clients they need the “three wise men”: a good accountant, banker and attorney. Specialization matters. You want advisers who understand construction, its financials and the particular contractual and operational issues contractors face.

There will always be outside factors you cannot control. The contractors who will weather the volatility best will be the ones who prepare for it before it happens through careful estimating, embracing technology, maintaining cash reserves, establishing credit and making strategic decisions about equipment and debt.

At the end of the day, the point is simple: Don’t wait until you’re feeling the financial pressure to start preparing for it.

About the author: Patrick Smith is Senior Vice President, Senior Relationship Manager, Construction Industry Banking at Orange Bank & Trust Company.

Published: September 17, 2026.