Profit Drain #1 In-House Bookkeeper
Until Your Construction Company - Reaches at least $5 million in annual sales you cannot afford to hire a qualified bookkeeper or construction accountant.
For Example - You Hire someone with bad habits who is a Cheap Bookkeeper part time at $15.00 an hour for 10 hours a week thinking you will save money. The problem with that is you may not understand the true cost to have them on your payroll, including overhead, is closer to $25.29 per hour. See the chart below:
Every Ten Minutes Your Bookkeeper Is Costing You $4.21
Could Cost Your Company $273.93 Every Year
At 10% Profit You Need $2,739.30 More Sales To Maintain Profit Margin
In Some Cases - We can do more work for less money by providing you with real construction bookkeeping and accounting + payroll processing + monthly and quarterly tax reports + year end W-2, W-3 + profit and growth management consulting + financial and job costing reports + paperless data storage and more at a lower overall cost and as an added bonus show you how to make more money than you are now!
Profit Drain #2 Cheap Tools And Equipment
Cheap Tools And Equipment - Cost a lot of money that you cannot see; out-of-sight means out-of-mind. Invest in the best tools and equipment you can afford because in the short run you will save money. Construction workers who take pride in their work produce better results faster with fewer repairs if they have quality tools and equipment.
Make More Money Faster - With productivity gains. See the chart below:
Every Ten Minutes Your Construction Worker Costs You $5.94
Every Ten Minutes A Day Of Unproductive Construction Worker Labor:
For Employee #01 Could Cost The Company $1,544.42 Each Year
At 10% Profit You Need $15,544.20 More Sales To Maintain Profit Margin
For Example - Your best construction worker asks for a tool:
Highly Profitable - Construction company owner's will ask their construction accountant to calculate the projected the Return on Investment (ROI) is and then consult their Strategic Business Plan to make an informed decision.
In This Example - It may make sense to finance the purchase even if it means using a credit card at 12% interest because the net return is $3,289.36 which is 245% ROI. See below:
Two Contractors Doing Similar Work - For similar customers with the similar direct and indirect construction costs will have massively different KPI Reports including the Profit and Loss Statements. Size matters when it comes to piles of money and bigger profits!
Construction Success is a few simple disciplines practiced everyday
Construction Failure is a few errors in judgment repeated everyday
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