Contractors, by nature, are tenacious, resilient, and have a tremendous amount of "Grit And Determination To Succeed," which means they are not easily disturbed or prone to react hastily or rashly at the first sign of trouble. This is just one of the many qualities I sincerely admire about these remarkable men and women.

 

Like you, we have callouses on our hands, having owned and operated construction companies, and some of us have served an apprenticeship in one of the construction trades. In other words, when it comes to owning, managing, and making a substantial amount of money with construction and contractor service companies, we know what we are talking about.

 

Incompetent bookkeepers can destroy your construction company and your finances. Unfortunately, until a contractor has gotten to know us, they tend to think of us as just another contractor's bookkeeping service. This means some contractors think we are crazy to suggest that any trusted employee, especially an in-house bookkeeper, would steal money from their company, so they ignore us until it is too late.

 

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Topics: Builders Bookkeeping Services, Accountant, Bookkeeping Services, Construction Accounting, Contractor, Contractor Tips, Contractor Operating Tips

Starting a construction business means you'll compete with other companies that already exist. It's a good thing if you have a competition to go up against. Competition pushes you to be innovative. It also means there's an established community for your services.

 

What about if you're considered a veteran at this stage? Understand that you cannot outwork your competition forever because you will grow old and tired in time, and there will always be someone else who is newer, younger, and works cheaper than you can.

 

Being aware and mindful of what others in your industry have developed and provided leads to a newfound motivation and belief in making an impactful difference, whether within your company or your community.

 

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Topics: The Contractors Account, Construction Bookkeeping And Accounting, Systems And Processes, Business Planning For contractors, Contractor Tips, finance

You started your construction business with plans of earning a living and being successful, but an unfortunate fact of business life is that companies suffer financial hardships. Whether those hardships are pandemic-related or linked to other urgent situations, the effect is still the same. Your finances are negatively affected, and it's up to you to lead the recovery.

 

Almost all business sectors have experienced declining profits, liquidity that is drying out, and even bankruptcy. Although the short-term outlook varies depending on your industry sector, all business leaders need to set up a strategy to guide their way towards recovery. 

 

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Topics: The Contractors Account, Systems And Processes, Construction Company Cash Flow

Have you been in business as a construction contractor or specialty contractor for a while, and now you are wondering what your construction company is worth?

 

Nothing is ever as good or as bad as it appears. If you are like most contractors, you learned a trade, skill, or craft, and after a while, you decided to go into business for yourself and make "The Big Bucks," which was one of the happiest days of your life. I've heard It said that boat owners experience two of the happiest days in their lives; the day they bought their boat and the day they sold it.

 

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Topics: Builders Bookkeeping Services, Accountant, Bookkeeping Services, Construction Accounting, Contractor, Contractor Tips, Contractor Operating Tips

One classic mistake construction business owners make when money gets tight is stopping marketing or cutting their budgets. At first glance, it seems logical to cut down your expenses during harsh economic conditions. However, in reality, it's the opposite of what you should do.

 

When your construction company is struggling, cutting your marketing budget will further hurt your business. During this time, you should go the extra mile to be at the forefront of the minds of your clients and prospects. With an effective marketing strategy, you should be able to increase sales.

 

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Topics: Increasing sales, Systems And Processes, Contractor Marketing, Contractor Tips

Solid cash flow management is vital to ensuring your business survives, but not everyone understands what cash flow is or how to manage it. That's likely what makes it a leading cause of stress for construction business owners.

 

Cash flow refers to the movement of money into and out of your business. It's based on the amount of money you bring in minus the amount you spend. A positive cash flow means you're bringing in more than you're spending. A negative cash flow means you aren't bringing in enough to cover your expenses. Your company can run into problems by not charging enough for goods or services, having late-paying clients chronically, growing too quickly, or simply spending too much money.

 

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Topics: The Contractors Account, Systems And Processes, Construction Company Cash Flow

Every business needs a financial plan. Your financial plan gives you a way to monitor and review your cash flow, make adjustments to your spending, and anticipate any upcoming economic issues. It can also make you more prepared to request funding or find investors so you can bring more money into your construction business.

 

Although many business owners are aware that financial planning is essential, it is often overlooked. Without a financial plan, however, you could find your business doesn't make the money you expected it to—or you could wind up with unanticipated expenses and no way of paying for them.

 

If you are a contractor, you are most likely a "doer," someone who gets things done, not now but right now! When you see anyone not swinging a hammer, drilling holes, pouring concrete, laying carpet, putting paint on the walls, or a thousand other construction tasks, the first thing you think is they are wasting time and money, and you want no part of that nonsense!

 

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Topics: The Contractors Account, Construction Bookkeeping And Accounting, Systems And Processes, Business Planning For contractors, Contractor Tips, finance

Owning a construction company and being an employee requires different mindsets and attitudes or paradigms. Both positions are natural enemies and generate tension, leading to various diseases; mental, physical, emotional, and spiritual.

 

Construction workers live in the real world, where everything can be seen, heard, felt, tasted, and sometimes smelled. They can look around and see evidence of their activities. Their long-term time horizon in years past was two weeks, which is why most payrolls are paid every two weeks. With various check cashing and payday loan outlets, their long-term time horizon has been replaced with now and right now!

 

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Topics: The Contractors Account, Contractors Bookkeeping Paperwork, Construction Bookkeeping And Accounting, Systems And Processes, Contractor Tips

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.

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Topics: Construction Bookkeeping And Accounting, Contractor Tips, construction business partnership, business partnership

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. 

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Topics: Systems And Processes, Construction Project Managment, Project Management, Contractor Operating Tips, accountability, Construction Accountability