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Today's Guest Article Is From Tom Reber Of The Contractor Fight

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Trying Something New Part 1 Of 2

When I first became a contractor many years ago I did what everyone else did when the phone rang: I ran out and gave an estimate.

That’s what we do as contractors, right?

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The year has almost come to an end. Just a handful of things left to do. The term “Burning The Midnight Oil” comes to mind. Some things need to be done and date stamped on or before December 31 of each year or it does not count for the current year.

Payroll – Did you take any personal payroll (S-Corp) If not, it may impact your personal deductions.
IRA – 401K Making those final payments before midnight on December 31. (Do not wait until 11:59 PM)
Some plans allow you to make payments until April 15th (double check the dates– do not assume)

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It's the Holiday Season which means everyone is so busy thinking of everyone else.

Wrapping up the end of the year, getting one more thing done that makes sense. I want to be the person who says Merry Christmas! You have earned it. Many of Holiday movies are variations of “Scrooge” based on “This Is Good” and “That Is Bad.” Anyone who has not had any challenges in life has been either extremely lucky or in a very protected bubble. 

Congratulations To You Construction Contractor On Your Success!

Please send me all your extra four-leaf clovers. If your favorite Happy Leprechaun is not too busy, I will take a little extra Magic. I can never have too much Magic or Sunshine.

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What is that old saying? “It Is Always Greener On The Other Side Of The Road”(author unknown)

It is always easier to look in hindsight and think “I should have done this” or “I could have done that”

All the advice from others about what you should of, could of, did do didn’t do is easy for the person who did not actually make any of the decisions. Some people excel at “Advising Not Actually Doing.”

You can’t change yesterday; only do a review and think about What Can I Do Today? And How Can I have a better tomorrow? Tiny changes can make a big difference. You can FIX SOMETHING and do nothing is a decision. (Sometimes taking a pause is the right decision to make)

The answer is Think, Plan, Do Something (Make a Plan, Work the Plan) or (Be, Do, Have)

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Basics of Starting Your Handyman Company

Sometimes it hard to know where to begin when starting any Construction Company including a Handyman Company.

• First Place to decide what type of contracting business do you want to start.
• For many contractors, the Place To Begin is to choose to be a handyman.

Why do I suggest a Handyman?

• No one expects a Handyman to have the skills of a High-End Finish Carpenter.
• It will give you an opportunity to try many things.
• Learn how to make simple repairs.
• Determine what you like to do and learn the skills associated with that trade.
• Many states have a basic license for the Handyman.

The best place to learn about starting up and operating a highly profitable Handyman Company is Dan Perry Handyman Startup. Here is a link to his online course that is only open twice a year. Get on the list.

The next steps are all about Company Structure. We recommend being an S-Corp because it has several benefits over any other structure like LLC, C-Corp, and Partnership.

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Successful Contractors Improve Processes All Year Long

As the end of the year approaches it is time to see about loose ends in paperwork and forms. Ask employees to review their taxes withheld to date. Do they want to make any adjustments for the current year?

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Successful Contractors Find Keys To Growth And Profit In Their Accounting

Wait, let's not forget Thanksgiving with Turkey, Dressing, Yams, Mashed Potatoes, Gravy, Fruit Salad, Pumpkin Pie, Ice Cream and lots of Egg Nog. All of this leads to us in January wishing we ate less and exercised more in hopes to keep the pounds on and matched by the pounds off for a net gain of Zero.    

Software and the desire to do everything with our phone is the “Grownup’s Version” of the Candy Store all year long.

• With a couple of clicks on my phone, I want to Buy Something
• Pay For Something
• Get Paid Immediately From My Customer
• Have all of the money go in or out of my bank account
• Now how do I then make all the transactions magically go to an accounting system
• Give me nice detailed reports
• Help me make simple and complex decisions

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Construction Accounting Basics For Construction Contractors

Construction Accounting is not a natural mindset for Construction Contractors. Construction Accounting has own language. Regular Accounting the language is Income Minus Expenses Equals Net Profit.

Construction Accounting is Income Minus Cost of Goods Minus Overhead Equals Net Profit. That simple little thing called Cost of Goods Sold is the primary difference between Regular Accounting and Construction Accounting.

Understanding that difference and how it relates to Job Costing and Job Profitability can get contractors like you firmly on the road to financial freedom.

 

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Contractors Reflect On This Year's Results As The Last Quarter Begins

Going into the last Quarter of the year. Time for some basic reflection about taxes. Officers in S-Corps tend to take payroll later in the year. Now is the time if you have not already been taking payroll. Don't wait until it is time to prepare your Construction Company tax return.

Next review your Estimated personal Taxes paid to the IRS. How much did you pay in taxes for the current year? Internal Revenue expects that you have paid a percentage Federal Taxes before the end of the year.  

Reviewing Federal Withholding for yourself and your employees to avoid surprises when your annual taxes are filed. Contractors who file as a Sole Prop or as an LLC fining as a Sole Prop tend to forget that payroll taxes on their net income is due. I call this “Chef’s Surprise” as it is based on Net Income. Everyone wants the last few jobs to pay before the end of the year.

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