Fear is a natural, emotional response to distress. The evolution of humanity was dependent upon feeling and responding to fear. Unfortunately, for some of us, fear is a stumbling block to unlocking our full potential and becoming great leaders. 

Fear can have a significant impact on business activities. If a business owner is afraid of taking risks or making decisions based on past negative experiences, it can hinder their success. It's important to remember that fear is often based on False Evidence Appearing Real or F.E.A.R. It's crucial to approach business decisions objectively and not let fear cloud judgment. By recognizing and addressing fear, business owners can make informed decisions that lead to success.

The good news is that courage is like a muscle, and when you exercise courage, it often becomes more robust and more natural. Here are a handful of ways to overcome fear, find courage and become a better construction company owner.

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Topics: Success In Owning A Construction Business, Leadership Styles, Contractor Tips, Building a Construction Business

A competitive advantage is something that you offer or have that the competitor does not. There must be compelling reasons for people to do business with you rather than with other construction companies.

The need to identify your point of difference is essential. The more similar your business is to many others, the greater your need to develop competitive advantages.

The key to benefitting from the competition is knowing how to take on competitors so your company earns a profit effectively. Look into your industry and the successful contractors around you not to lose sight of your vision for your construction company but as an inspiration to guide your systems and processes.

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Topics: Contractor Tips, Construction Productivity, Construction Organizational Change, Competition In The Construction Industry, Construction Competitors

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

Taking steps to create a good foundation in the early days of your business is essential for a sustainable and profitable future. 

It's rare these days that your prospective leads happen to find your construction business and become a client with no work. Your company has to grab people's attention, turn curious visitors into leads and then convert those leads into sales.

Keep in mind: Marketing-Accounting-Production

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Topics: Construction Marketing, Construction Bookkeeping And Accounting, MAP vs. PAM, Contractor Tips, Construction Productivity, Construction Organizational Change

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

As a small business owner, you're likely already aware of the importance of keeping your finances in order. Financial management goes deeper than paying your bills on time and collecting invoices (although those are also important). It involves regularly checking your financial situation to ensure your accounts are in order, your records are up-to-date, and you're spending within your budget.

Among those activities, financial reconciliation is vital in keeping your finances and business on track. Force reconciliations can cause your net income to be over or understated, which means you pay too much in taxes now or too little now and the rest later with penalties and interest because the IRS can ask for a copy of your bookkeeping record. 

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Topics: QuickBooks For Contractors Financial Reports, Contractor Tips, financial fraud, Financial Reconciliation

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

Deciding to purchase something to help your construction business is a big decision. It can be challenging to part with hard-earned money, especially in the early days. To understand the right time to invest by purchasing something for your business, you must calculate whether the Return on Investment (ROI) would be profitable.

The cost is the money you spend making the purchase plus any indirect costs (such as training costs) related to the purchase. The ROI is a calculation of financial gains or benefits that you obtain due to that cost.

To determine ROI profitability, there is a simple formula you can use. If the purchase yields a positive return, it can be considered profitable. However, if the purchase does not earn back the money it costs, it would be considered a negative return on investment. 

 

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Topics: High Return On Investment, Clients or Customers, Contractor Tips, ROI for Contractors

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

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