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Construction Company Budget Vs. Cash Flow

Posted by Sharie DeHart on Fri, Nov 10, 2023

Finding some certainty can make all the difference in the unpredictable construction business world. While the future remains a mystery, budgeting and cash flow forecasting tools can significantly reduce uncertainty, allowing you to anticipate challenges, learn from past events, and enhance your ability to navigate your business.

Budget vs. Cash Flow: The Crucial Distinction

A common misconception is that a budget and cash flow are interchangeable. A budget is a projection of future possibilities, enabling you to consider various sales and expense scenarios. On the other hand, a cash flow provides a record of actual expenses and sales revenue that flow into and out of your business each month. Although they often deal with the same data, their applications differ.

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Topics: Cash Flow, Construction Accountant Who Listens, Construction Company Cash Flow, Contractor Tips, Construction Business Budget, Budget Vs. Cash Flow

The True Value Of Networking To Contractors And The Community

Posted by Sharie DeHart on Fri, Nov 03, 2023

The ability to network is a fundamental part of running a business. Running a business in isolation is difficult, so it helps to have expert partners and acquaintances available to share ideas with.
 
If you're looking to network with construction industry professionals, there are several ways to do so.
 
1. Attend industry events: Look for construction industry conferences, expos, and trade shows in your area. These events often have networking opportunities, such as meet-and-greets or after-hours social events.
 
Conferences are a way to actually meet in person, so the results can be hard to beat. Most conferences have time set aside for networking, allowing you to meet everyone in your niche. More work might involve getting to a conference, but the networking opportunities alone are often worth it. Best results can often be gained by creating a good impression in person, followed by an online contact.
 
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Topics: Leveling Up, Networking, Construction Accountant Who Listens, Contractor Tips, small business connections

Leading Causes Of Stress For Contractors And How To Counter Them

Posted by Sharie DeHart on Fri, Jun 09, 2023

Construction business owners face various sources of stress that can negatively impact their well-being and overall business performance. Some leading causes of stress for construction business owners include financial pressures, tight deadlines, workforce management, safety concerns, and regulatory compliance. If not adequately addressed, these factors can lead to burnout, decreased productivity, and even business failure. 

Many entrepreneurs believe hard work and determination are all it takes to build and sustain a successful business. But when you consider the pressures of running a company, it seems wise to add effective stress management to the list. Left unchecked, stress can erode your passion and undermine performance – not to mention a severe toll on your health.
 
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Topics: Cash Flow, Construction Accountant Who Listens, MAP vs. PAM, Contractor Cash Flow Problems, Do What You Do Best And Outsource The Rest, Contractor Tips

How To Increase Your Construction Business Profit In Three Months

Posted by Sharie DeHart on Fri, May 19, 2023

Sales and profit are two very different things – as a construction business owner, you can find yourself without the cash to pay bills despite making sales you knew were profitable. You may also be startled to discover that solid cash flows from sales deliver little profit.
 
A cash flow forecast tracks cash flowing in and out of your business. The timing of these flows enables you to identify cash-rich and cash-lean periods. This helps make the right decisions, such as buying assets or preparing for cash shortfalls.
 
Cash flow is essential to the survival of your business – arguably more so than profit in the short term. Profit may be necessary for the longer term, but cash is needed to pay bills and operating costs quickly.
 
For example, if you're a plumber with reasonable cash reserves, you can survive until your business becomes profitable. However, if your business runs out of cash, you'll need to find a solution quickly to avoid going bankrupt.
 
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Topics: Construction Cash Flow, Cash Flow, Construction Accountant Who Listens, Contractor Cash Flow Problems, Contractor Tips, Improve Construction Cash Flow

Unlocking The Secrets Of Small Construction Business Cash Flow

Posted by Sharie DeHart on Fri, Apr 28, 2023

Cash is king! Construction Company cash flow is the movement of money in and out of your Construction Company; these movements are known in accounting circles as inflow and outflow. Inflows for your Construction Company primarily come from selling goods or services to your customers, but keep in mind that inflow only occurs when you make a cash sale or collect on receivables. Other examples of cash inflows are borrowed funds, income derived from sales of assets, and investment income from interest.

Outflows for your Construction Company are generally the result of paying labor, material, other direct and indirect costs of goods sold, and overhead expenses.

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Topics: Construction Cash Flow, Cash Flow, Construction Accountant Who Listens, Contractor Cash Flow Problems, Contractor Tips, Improve Construction Cash Flow

How To Protect Your Construction Company From Bankruptcy

Posted by Sharie DeHart on Fri, Apr 07, 2023

Starting a construction business is not for the faint of heart. A certain level of stress comes with ensuring your company's success. If things go wrong, it all falls back on you. That said, the freedom and sense of accomplishment of running your own business make the challenges well worth it.

With good planning and strong business practices, you can avoid the pitfalls and drive your trade business to financial success. Learn the top reasons why small businesses end up in bankruptcy and what you can do to prevent that from happening to you.

1. Poor cash flow

Not bringing enough money in is the main reason why businesses fail. You must have more money coming in than is going out, or you're on the express train to bankruptcy. This might mean increasing your prices, decreasing costs, or combining the two. There might also be different service models you can offer (such as subscription services) or ways to branch out your income. 
 
Work with an accountant or bookkeeper to help you identify issues with your cash flow as soon as you know there's a problem–or to prevent one before it happens. The earlier you catch a cash flow problem, the better.
 
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Topics: Construction Accountant Who Listens, Contractor Tips, Bankruptcy, Construction Company Bankruptcy

Construction Business Growth Through Networking And Having A Mentor

Posted by Sharie DeHart on Fri, Mar 24, 2023

Most business owners receive plenty of well-intentioned advice and 'helpful opinion' from family and friends. However, good business advice spoken from commercial experience is another matter entirely.

That's not to say it's hard to find, but finding a reputable source in the Internet age is sometimes less than straightforward – especially if you have a specific problem to solve and limited time.

This is why, for good times or bad, developing a network of peers or seeking out a business mentor can be a great idea.
 
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Topics: High Profit Repeat Construction Clients, Construction Accountant Who Listens, Clients or Customers, Contractor Tips

What Every Trade Business Owner Should Know About Raising Prices

Posted by Sharie DeHart on Fri, Mar 17, 2023

Raising prices can be a sore subject. Many construction business owners like you assume doing so will spell the end of your competitiveness. But by not raising prices, you're simply letting inflation and your suppliers' maintenance of your margins quietly eat away at profitability. The bottom line is that costs will always rise long-term - at least with inflation.

That means you have to pass on the costs to your customers or consume those costs yourself to the point where one day, you'll have to either suddenly raise prices or accept the eventual failure of your business.


The worst thing you can do is avoid measuring your costs by sticking your head in the sand. Cost rises will catch up with you eventually, so take action to maintain your margins.

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Topics: Marketing Tracking, Construction Marketing, Construction Accountant Who Listens, Contractor Marketing, Contractor Tips, Pricing Jobs, How To Raise Prices

How To Attract Profitable Construction Clients

Posted by Sharie DeHart on Fri, Mar 10, 2023

A USP (Unique Selling Proposition) is a compelling reason for your target market to choose your construction business over your competitor's. Examples range from cutting-edge service and product features to simply being more convenient and easier to find for the target market.
 
But it all boils down to meeting your local market's needs in a more accurate and improved way than the competition and being able to market these points more effectively.
 
By doing this, your business can stand out in the marketplace with a strong reputation attracting more clients.
 
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Topics: High Profit Repeat Construction Clients, Construction Accountant Who Listens, Clients or Customers, Contractor Tips

Seven Ways Your Construction Business Can Market Its Services

Posted by Sharie DeHart on Fri, Mar 03, 2023

When you go into business as a tradesperson, you often focus on performing your trade to the best of your ability – as it should be. With time, the quality of your work will speak for itself, which is the most valuable testimonial of all.

Before the internet was commercially available, just as many experts advised contractors about the layout and design of yellow page ads and which books to spend money on, I say you spend money because that is what it was - Marketing.

Many of us who owned and operated construction companies spent thousands of dollars on these experts. Based on their recommendations, we spent tens of thousands of dollars annually in full-page yellow page ads as close to the first position.
 
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Topics: Marketing Ideas For Contractors That Work, Marketing Tracking, Construction Marketing, Construction Accountant Who Listens, Contractor Marketing, Contractor Tips, Inbound Marketing For Contractors

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