Are you starting or restarting your construction company? Either way you have made an important decision to own and operate a construction company.
Most of you came from the skilled craftsman trades, some of you were working as a manager for a construction company. A number of you have experience with owning and operating a construction company and for a variety of reasons it was sold or closed down and now you are ready to begin again.
Going forward you have several choices open to you, some easy and some hard. The path that will work best for you depends on your mindset. Let's relate mindset to the story of Goldilocks and The Three Bears.
Goldilocks was wandering in the woods and was hungry when she found an unoccupied home with three bowls of fresh food sitting on a table. One bowl of was too hot, the next too cold and the third one was just right.
Contractors are a lot like that, some are too hot, some are too cold and some are just right.
Hot headed contractors like to do figure everything out for themselves and learn by experience. If you fit that category, you will not listen to anything we have to say so we can't help you.
Cold and immature contractors believe everything should be FREE and the world should take over where their parents left off. We can't help them either since we believe in a hand up, not a hand out so if you are in this group we can't help you.
Just right contractors have the drive and determination to do what it takes to operate and grow a successful construction company that will provide a decent living for them and their families. These are the contractors who serve THE RIGHT homeowners, realtors, landlords, commercial tenant improvement needs. They seek out "Clients" who respect them and pay a fair price for their services, not "customers" who want to chisel, negotiate and try to get something for nothing. They value and respect professionals so if you are in this group We can help you!
We are a lot like you because we have the drive and determination to do what it takes to operate and grow a successful construction accounting firm serving contractor clients like you.
To that end we have developed the only dedicated contractors bookkeeping services system with several modules including a construction business process management system to serve three of the four types of contractors listed below.
This Wonderful Soul - Has a heart as big as the outdoors and likes working alone. They are easy to get to know. They usually have either a pick-up truck or a van with a dog sitting in the passenger seat hanging his head out window watching and occasionally barking hello to folks and other dogs while feeling the breeze as the contractor zooms down the road.
They Do Not Think About - Retirement and when asked about it the reply I get most often is something like “Retire, nope, I don’t need new tires yet”.
These Contractors - Enjoy being their own boss, doing what they want when they want, how they want and works hard. They typically do not feel the need or desire to grow the business or hire employees since they would only get in the way.
Most Of Them - Run their business as a sole proprietor
They Generally Earn - $20K to $40K a year after all expenses
If This Describes You We Can Help You
This Wonderful Soul - Also has a big heart; just not quite as big as all outdoors. They like having employees because they do not want to work alone. As their business grows they like to take time off and enjoy travel and vacations.
These Contractors - Have one, two or three employees because when the employees get out of line the contractor can hold two of them by the throat; one in each hand and eyeball the third one! This is called “Construction Management”
This Group Will Usually Invest - Some money to build a retirement nest egg.
Most Of Them - Operate their business as a C-Corporation, LLC or Sub-S
They Generally Earn - $40K to $60K a year after all expenses
If This Describes You We Can Help You
This Wonderful Soul - Also has a big heart; they just tend to keep it under cover. This group tends to have more employees and have a structured approach to their construction business treating more like a firm.
These Contractors - Tend to have 1-20 employees with formal organizational charts, processes and systems in there contracting businesses including a formal documented business plan which is updated and reviewed regularly with a board of advisors as outlined in my article on the subject.
They Invest Heavily In Marketing - Their businesses. They understand their target market, they use The 80/20 Rule to understand the demographics and psychographics of their prime customer, the ones who generate 80% of the cash and income. And they seek to acquire more of them and will do whatever is economically feasible to turn those customers into lifetime repeat business.
This Group Usually - Engages the services of a competent financial planner, banker and accountant to work together in helping plan and develop a financial estate that can take care of them in their senior years and provide be passed on to future generations.
Most Of Them - Operate as a C-Corporation, LLC or Sub-S or Partnership.
They Generally Earn - $100,000+ a year after all expenses
If This Describes You We Can Help You
These Construction Firms - Have 100+ employees and generate enormous revenues. Most of the owners and managers earn about the same as a well-run professional contractor.
If This Describes You We Cannot Help You
If You Are A Contractor - It is not about the type of contractor you are, how many employees you have or how much money you earn. It is all about life, liberty and the pursuit of happiness. Be the type of contractor that suits you, do the work, you will have results and enjoy yourself.
Some Of You Believe Competition - Is the burden you must bear to be successful and that is a trap that I hope you will avoid because if you understand and apply the 80-20 rule you will not have competition.
A Lot Of You Graduated From The University Of Hard Knocks - And have wasted a lot of time learning by experience. Maybe you began your company with a few friends and relatives and thought your overhead expenses would be low since you worked out of your home.
As Time Went By - You made a decent living for yourself, hired a few employees, paid your suppliers and you earned a profit. At least that is what your tax preparer said.
Then It Happened - Things begin to change and the reality of the construction industry begins to dawn on you as those early customers who were your friends because you could get faucets, fixtures and material at wholesale prices are now telling you they were happy with your work and they want your construction company to do all their future work as long as long as your price is lower than the other bids they are getting, just to keep you honest and dirt poor.
The Problem Is Your Construction Company - Has experienced taken the first step in the expansion isoquant path.
This Means You Have Overhead - Not just office overhead, you have field overhead too. Office overhead includes expenses like shop rent, office rent, common area management fees, bookkeeping, insurance audits, quarterly tax returns, office payroll, utilities, a computer, an administrative assistant, insurance, contributions, associations dues, etc. Field overhead includes tools and equipment, cell phones liability insurance, contributions and more. You have to juggle all these things at once to keep your company going and you have to keep your prices competitive.
Now You Are Ready - To back off from the long days swinging a hammer and long evenings meeting with prospects and staying up late to crank out a bid only to be told you need to "sharpen your pencil if you want the job". That means if you will do the job for the hard cost of labor and material plus 10% (which is means by the time you add overhead, truck and equipment costs you are losing money) the customer (someone who buys everything at the lowest possible price and expects quality service, has a never ending punch-list and demands a 100 year warranty) will award you the job. No wonder construction is the only game on earth where the person "Winning The Bid" is all too often "The Loser"
Fast Easy Accounting Has A Step-By-Step Process - To help emerging contractors. We can help you discover and use Business Process Management (BPM) tools to plan your business strategy and implement the processes and procedures into a comprehensive Business Process Management system that can turn your construction company into well-oiled, lean, mean money making machine. It is simple but not easy. In the long run it is worth it and you will be glad you did.
Take The First Step - And contact Sharie 206-361-3950 or sharie@fasteasyaccounting.com for a conversation. The call is free and it is a way for us to get to know each other.
The Final Observation - I will share is that you deserve to be wealthy because you bring value to other people's lives and do not let anyone tell you differently.
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