Many of you may begin with the thought; I am just a contractor.
I don’t want to be the business owner; I just want to do the work.
That is what is important. Yes, doing the work is important. Keeping track of your hard costs, soft costs, general expenses and overhead is the difference between making a profit or having a loss.
Ignoring the costs do not make them go away; it just avoids putting them on the tax return. Any missed expenses make your profit on the job look higher than it really is and causes you to pay more income taxes because all net profit is taxable.
All businesses need to keep track of their company expenses, including the material and much more. Contractors usually go from one extreme (doing nothing) to the other (trying to count every bean, every paperclip, all the nails and, the scraps of 2x4’s). The balance is somewhere in the middle.
Labor is the biggest cost you will face. As an owner / operator, you're entitled to the same wages your construction company would pay for having another construction worker on the payroll. Otherwise, why not go to work for someone else?Read More