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Contractors Are Selling Their Time First, Skill Second

 

Value of Time – Your time as the Contractor is the most valuable. I hope you are doing the tasks that only you can do. Yes, you can do your contractor bookkeeping. My question is: Why Would You?

Your answer – I have a cash flow problem. Spending hours doing your bookkeeping will not solve that.
In fact, doing contractor bookkeeping yourself will be painful, take time away from the things you do that make you money and take a lot longer than having someone else do it.

Why, because every piece of paper has a story and your brain wants to replay the story (fast or slowly depending on the story). Say for example you waste an extra minute on every piece of paper. How long will it take you to finish all of the bookkeeping chores for the day, week, month or longer? This is after you have QuickBooks setup for your construction company and you know exactly what to do with that piece of paper.
 
As a Contractor who is serious about their business. There is only one answer to cash flow issues.  
Sell Your Way Out of A Problem (author unknown). With money in hand, you can make better decisions.

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Making Decisions Never Ends For Construction Contractors Like You

One of the basics of good decision making is being adaptable

Think of decision making is being in a bumper car. You are constantly driving and trying to avoid the other bumper cars. If you hit one you back up and go again (reminder this is the only safe place to hit other cars). Rest of the time life as a contractor feels more like the Indy 500. You are driving as fast as you can, passing other cars, making pit stops, and scrambling to make it to the finish line.

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Contractors Need Help Understanding Role of Accountants

Contractors should have two primary accountants. One is the Tax Accountant the other is your Construction Accountant. Tax Accountant who does the Annual tax return for your business and your personal tax return.

These are two of the Five Board Of Advisors Successful Highly Profitable Contractors Use To Operate And Grow Their Contracting Company Cash Flow And Profits.

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Contractors Want Paperless Bookkeeping Services To Avoid Hiring A Bookkeeper

The horror stories about bad bookkeepers (in-house or as 1099 contractors) are never ending. For this reason, Contractors are reluctant to interview or hire an outside bookkeeper. Many Contractors are frustrated that the person they hired costs too much appears to know less about bookkeeping than the contractor themselves. Contractors I have talked to mention they know very little about accounting and do not want to know more.

You Want Someone To:

• Take over the bookkeeping
• Leave you alone
• Not ask a lot of questions
• Have everything ready for the Annual Tax Return
• Provide Financial Statements when you need them

YOU WANT TO KNOW IF YOU ARE MAKING MONEY

NOT THE MIND-NUMBING PROCESS OF ACCOUNTING

EVERYTHING SHOULD AUTOMATED AND PAPERLESS 

YOU SHOULD NOT HAVE TO DO ANYTHING!

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As A Contractor You Want Reports To Effectively And Efficiently Run Your Business

You are not trying to make decisions by looking in the rear view mirror. You want to get a sense that there is “light at the end of the tunnel and know it is not an oncoming train” (author unknown)

The question is How Much Detail is too much detail? If you are trying to track a job down to the number of 2x4’s, boxes of nails, joist hangers then I would politely suggest that is too much detail. Think in terms of a more broader scope.

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Excited that you are busy and hiring employees. How do I know this is true?

The number of emails I receive about continuing education that reference employees are increasing. The topics you are sharing include wages, access to company funds, providing employee warm and fuzzies and you want to know what is the true cost including payroll taxes of having a Construction Worker on your payroll.

 

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Price And Value

 

VS.

 

 

 

 

 

A Cheap Price does not always give you the “biggest bang for the buck” as the saying goes (author unknown). One of the reasons that we all like unit pricing in the grocery store is that it helps us determine which is the best value when deciding between sizes and between the store brands.

Take for example ice cream. There are several main types: Labeled as Non-Fat, Low Fat, Reduced Fat, Sugar-Free, Creamy, Deluxe, Premium. A quick search on the web shows over 100 flavors is available. 

We all have our favorite brands. I am a Creamy, Deluxe, Premium double chocolate fudge or dark chocolate usually costing a zillion dollars per ounce and an equal number of calories.

Randal and I have brands and flavors we both like, and some flavors only one of us like. Thankfully our Ice Cream budget increased over the years. A low price was important back when we were “starving students” going to college.          

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As A Contractor You Are Either Getting Paid, Paying Someone Or Both

Contracting Is All About The Money And Taxes

Which is better for you, Employees or 1099 Contractors? In the world of the State and Federal Agencies. Someone who works for you is either an Employee (on W-2) or a Subcontractor. You need to be issued 1099 at the end of the year, and you need be able to prove they are legitimate Subcontractors!

What we sometimes forget is the personal side of our life and do not realize we have employees. Nanny tax is for any household employees that you have for yourself, the obvious is the Nanny who provides childcare. It also includes a Housekeeper (unless using a licensed maid service).

Reminder from Tax Accountants is the Elder Care market. If you have an individual who is caring for an elderly parent (they are subject to Nanny tax unless you are using a licensed service.)

Do you have support people? Are they making your life easier or are they a risk to you and your Contracting Company?

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Every Construction Contractor Has Clients Who Want To Help

Part of the reason is that they want to be sure the project is moving and things are being done. Other times the goal is to hopefully save money.  

In many cases, the most helpful thing a client can do on a project is keeping the area clean, pets under control and children out of the way. Anything other than that and you, the contractor could be at risk of losing everything you own or ever will if your client or customer is injured while working on your construction project even though it was their home or business.

There is a reason why most automotive repair shops have a sign like the one shown below and as a construction contractor, you would be wise to have signs professionally made and use them on every construction site.

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Every time the phone rings you need to be willing to question what do they need are how far are you willing to drive to bid the job and do the work. Some types of work accepted or rejected may be based on the location of the job or by the state license.

When starting out one of the first decisions to be made is “What Type Of Contractor Am I?” This decided during the process of the contractor talking to the Bonding Company, Insurance Company and The State Licensing Board who approves the company’s Contractors License.

The Primary Questions to be answered are:

• What level of exposure, risk and your skills?
• How do you want to do these projects?
• Are you most comfortable being a Handyman?
• Are you most comfortable being a Trade or Specialty Contractor?
• Are you most comfortable being a General Contractor?
• Are you most comfortable being a Remodel Contractor?
• Are you most comfortable being a Home Builder?

The Four Types Of Contractors...

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