Randalism: A Partnership is the only ship designed to sink.
However, we understand your preference, so I would like to talk about it in this blog post.
Joint ventures are a bit like change orders. They can be an incredible opportunity to make or lose much money very quickly. Almost as quick as betting money on a roulette wheel in a casino.
Joint Ventures have their own accounting rules. The devil is in the details. How costs and profits are shared among the participants depends on how the joint venture is structured and the terms of the agreement.
Contractors with annual sales of less than $10,000,000 often get together to work on a specific project. They find a friendly competitor to supply labor and equipment for a percentage of the job, hourly fee, or a flat number. This could technically be a "Joint Venture"; however, the time and scope are generally short and sweet. For example, a concrete contractor may have a large project requiring more finishers than on staff.
The construction manager is conditioned to avoid emergencies by being proactive. It is necessary to have systems in place to deal with emergencies when they arise. After the crisis has passed, the effective project manager evaluates the root cause of the trouble and implements change in the system to avoid a repeat performance.
It’s also one thing to manage workers when they’re all in the same place at the same time. However, when you run a construction business with field workers, things can get a lot more challenging. Not only are you typically not on the same job site as them, but you might also have workers scattered over a variety of sites and projects.
Moreover, Construction Companies have unique bookkeeping needs. Some bookkeepers and bookkeeping systems may cost you more than they are worth in salary, fees, and loss profits because you cannot get QuickBooks reports and financial reports when you need them. Chances are, you are suffering from bookkeeping pain, and your bookkeeper or accountant is overwhelmed trying to figure out how to do construction accounting.
Good bookkeeping leads to informed decisions. Avoiding your bookkeeping is dangerous, however. For example, not knowing your construction company's financial situation can result in a series of missteps that could ultimately cost you your business.
Hiring or not hiring employees is one of the few optional things the business owner chooses, changes their mind, or changes direction as needed. With so much discussion about employees, payroll, and payroll taxes, you may feel that you miss out on not hiring many employees. The reality is that as a small business owner, you do not have to hire employees.
The two extremes in any business are "Too Many People" (with many looking busy) and "Too Few" (a handful are overloaded). An example of Too Many People is for a midsized firm having everyone with access to the accounting. I mean everyone from the "Shop Guy," Warehouse, Outside Salesman to Accounting Staff.
Depending on the size of the construction business, this might be necessary. However, for most companies letting everyone have access to the balance in the company checkbook creates "White Noise" and causes friction.
Every business experiences slow periods when the market for their goods or services lessens and sales drop. Construction business owners like you might be tempted to view downtimes as unproductive or wasted, but there are ways you can make the most of your business during these seasons.
Here are five ways to ensure this time isn't wasted:
1. Take a good look at your business
When things are busy, it gets easy to fall into a habit of taking care of day-to-day tasks and forgetting your overall business picture. However, slower times are an excellent opportunity to step back from the daily grind and ask yourself if your business is still moving towards its goals, what opportunities or challenges are on the horizon, and whether it's time to try something new.
Sales are about addressing your customers' needs and problems. By understanding the issues clients face, you can show them how your service solves their problems.
Here are some tips for asking the right sales questions to better understand and help your customers.
1. Don't jump into sales questions right away.
Sales aren't just about making a sale, although that's certainly part of it. Instead, sales are about building relationships. That's how you make a sale today and encourage repeat business tomorrow.
When you start asking questions, don't begin by asking questions about the sale specifically. Instead, ask questions that develop a relationship and give you a chance to get to know the client better.
For example, ask questions about their long- and short-term goals. After that, move into questions about the issues they face and what solutions they currently use. Then, find out what does and does not work about those solutions. That will help you understand your potential customer, which allows you to meet their needs right now and anticipate future needs.