In the mechanical trades of the construction industry, plumbing, electrical, HVAC and related fields of irrigation, low voltage and audio / visual equipment companies there are lively discussions happening regarding "Repair Versus Replace."

 

Most of the time, the participants are more fixed in their positions and intense with passion than any political or religious discussion I have ever seen.

 

The primary question involves a deep-seated paradigm regarding the definition of honor and integrity. Is it more honorable and better for the client to treat every mechanical part as something that must have every last bit of use squeezed out of it before replacing it? Or is it better to replace it at the first sign of breakage? Or lastly is there a middle ground?

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Topics: Contractor Challenges, Contractor, Contractor Tips, finance, Contractor Operating Tips

Construction company cash flow is the movement of money in and out of your contracting business; these movements are known in accounting circles as inflow and outflow. 

 

Inflows for your construction company primarily come from the sale of goods or services to your customers, but keep in mind that inflow only occurs when you make a cash sale or collect on receivables. Cash is king! 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: Payment Collect, Contractor, Contractor Tips, finance, Contractor Operating Tips

Estimating and submitting bids are one of the most stressful and nerve-wracking sides of your construction business. It is essential to keep in mind that "break-even" in the construction business is challenging to calculate because most projects are one-of-a-kind custom jobs. Proactive contractors have systems and cost libraries with pre-priced assemblies for bidding, which works in conjunction with Strategic Construction Accounting to provide management with progress invoicing, job costing, and job profitability.

 

With poor bookkeeping, misguided judgment, and clerical errors come bad decisions on what projects to bid and not to bid on until eventually, you'll run out of time and money. This is why some construction projects fail or worse, construction companies get bankrupt. 

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Topics: Payment Collect, Contractor, Contractor Tips, finance, Contractor Operating Tips

Perhaps more. 

 

An alarming number of construction company owners are being ripped-off and driven into bankruptcy. That sounds harsh, but it's true. Whenever we see a contractor heading towards a problem, an issue, or a big disaster, we immediately raise the alarm. We are cautious about doing it so when we say there is a potential problem, our clients know we are serious.

 

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 wonderful men and women.

 

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Topics: Payment Collect, Contractor, Contractor Tips, finance, Contractor Operating Tips

Today's Guest Article Is From Lynsey Ken

Apparently, there have been several approaches to ethical-related issues in recent years, and the approaches have played an integral role in representing the foundation of different lifestyles and religions in the world today. Ethics should be upheld in almost all aspects of human activity. There is a consideration that ethics represents a systematic mental process that identifies and evaluates the differences that exist in social behaviors. The main objective of ethics in human life is to improve the responses of human beings in the global society.

The entrepreneurial world has also embraced ethics as firms and organizations are today under pressure to seek out more ethical and ecologically accepted ways of doing business. Embracing ethics is good and bad for business. The right side is evident when there are higher revenues, improved brand, and business awareness, better employee motivation, and new sources of finance i.e., from ethical investors. Conversely, the bad side is evident as ethics is accompanied by higher costs, higher overheads, and danger of building up false expectations.

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Topics: Payment Collect, Contractor, Contractor Tips, finance, Contractor Operating Tips

If you are the typical construction contractor trying to keep track of your construction projects, meetings, tasks, and conversations without the tools and technologies you could be living in a nightmare. You can either keep on "Powering Through"- spend your life endlessly chasing details, missing appointments, suffer untold losses in cash flow and profits; or you can start developing a plan and work on your business.

 

You may be getting your construction projects done with sheer will-power, but the lack of processes, business plan, and strategy will eventually wear you down.

 

Successful contractors improve processes all year long. Your construction company can benefit from this system that other successful contractors are using now, which means there is no need to "Reinvent The Wheel." As your construction company grows and evolves, your processes can support the controlled and planned expansion.

 

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Topics: Payment Collect, Contractor, Contractor Tips, finance, Contractor Operating Tips

Today's Guest Article Is From Sawailal Jangid

Are you running a construction business and want to succeed faster?

If yes, then a well-thought growth plan may help.

A ‘growth plan’ is essentially a long term vision for a business, a game plan to meet its set targets and ways to plan constant growth for the company. It does not just make the objectives of a business clearer but also the means to achieve them.

It necessarily involves the following:

● The mission of the business or the organization
● Strategic goals towards achieving that mission
● Methods to attain the strategic goals and the ways to fund them

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Topics: Payment Collect, Contractor, Contractor Tips, finance, Contractor Operating Tips

When my partner, Sharie DeHart and I, were running construction and plumbing service and repair businesses beginning in the early 1970s until 2000 we felt we did not need to pay anybody to tell us what to do because we knew exactly what to do.

 

After several very painful and extremely costly mistakes, we found the adage "Experience Is The Best Teacher...And The Most Expensive" to be oh so true!

 

We found ourselves, our family, employees, and suppliers were all riding on our Roller Coaster of Surprises, some good, some bad. On occasion, we would wake up screaming bloody murder only to discover it was the middle of the afternoon, and we were not asleep!

 

After a while, we decided perhaps there was truth to "If you think education is expensive, try ignorance." I will admit I was a bit arrogant thinking since I was raised in a family of contractors that I knew a lot about construction. In fact, I knew quite a bit about what Michael Gerber calls "Working In The Business But Not On The Business."

 

At that point in the late 1970s, we decided to move to The Merry-Go-Round of a business with a Strategic Plan that could grow-up and provide us with a more predictable result.

 

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Topics: Payment Collect, Contractor, Contractor Tips, finance, Contractor Operating Tips

The one burning question contractors want to know: When is it income?

When money comes into the business, at some point it turns into income. " Money goes in and out of my business and I don't understand when it is income and when it is not ". Without proper tracking and matching of income and expenses, most construction companies never know if they made a profit until the job is over.

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Topics: Payment Collect, Contractor, Contractor Tips, finance, Contractor Operating Tips

Are you getting resumes and applications from bookkeepers who worked for a construction company that went bankrupt and now they are so desperate for a job, so they offer to work for minimum wage or less? What they are not saying in some cases is"And everything I can embezzle, steal and sell online."

There could be a pattern, and it is may be evident that you could be missing it. 

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Topics: Payment Collect, Contractor, Contractor Tips, finance, Contractor Operating Tips