Dealing with unexpected cash-flow difficulties, even if you're working hard to avoid shortfalls, is hugely distracting. A formerly reliable client might take much longer to pay than anticipated leaving you out of pocket. If you're starting a construction business, it could simply be taking longer than expected to turn a profit in these trying times.
Red light warnings
Develop red light systems to warn you automatically if something needs querying:
- Check as early as possible if leads, orders, or sales, fall below a certain threshold, or a substantial customer ends their subscription (recurring service).
- Pay attention to your Key Performance Indicators. Make sure you have regular feeds of how your business is performing.
- You also need to know about any substantial invoices that are in dispute, particularly overdue debts and clients exceeding their credit limits.
Building productive relationships with your key suppliers is important, so they are prepared to extend extra credit to you when you need it.
If you have a properly set up accounting software, then it should be relatively easy to view your red flags weekly, monthly (or any period you set).
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Topics:
Construction Cash Flow,
Construction Accounting,
Contractor,
Contractor Tips,
Contractor Operating Tips,
crisis
These days, it’s inevitable that a diverse group of older and younger workers cross paths in the construction industry. After all, the young, tech-savvy, socially conscious demographic known as Gen Y (Millennials) and Gen Z are currently the largest living generation in the U.S., navigating the workforce in record numbers. And the boomers may be retirement age, but that doesn’t mean they’re ready to stop working. Many baby boomers are choosing to enjoy “encore careers” – jobs that allow them to continue to apply their skills and experience to personally meaningful projects.
Here are a few ways to help these two groups work together, so your construction business benefits from their unique and complementary skills.
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Topics:
Construction Accounting,
Contractor,
Contractor Tips,
Contractor Operating Tips,
millennial contractors,
boomer contractors
At some point, every business owner needs outside help to improve efficiency – or to free up their time so they can take steps toward future growth.
The trouble is, the cost of hiring regular staff, even on a part-time basis, can eat up a company's budget – especially in the early years when you're still just finding your feet.
The rise of the remote freelance worker (otherwise known as the "gig economy"), especially during this time, can offer construction business owners a simple, cost-effective solution when they need extra help with a one-off "gig" or short-term contract.
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Topics:
Contractor,
Contractor Tips,
Contractor Operating Tips,
Construction Productivity,
Construction Workplace
It's natural for small business owners to think that they won't be victims of cyber attacks. Most of the news surrounding hacking and data breaches involve large corporations, but that is because that's where a high number of victims are affected. Hackers may find they have an easier time going after small businesses and start-ups that aren't prepared for a security breach.
So while they might get less information from a small business, thieves will have an easier time accessing that information. If your construction company keeps any time-sensitive information on a computer network—whether that is personal information, credit card details, or other vital data—you need to ensure your cybersecurity is top-notch, so you, your business and your clients are fully protected.
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Topics:
Construction Accounting,
Contractor,
Contractor Tips,
Contractor Operating Tips,
security,
cybersecurity
Having a family-owned construction business in times of uncertainty, we spent many sleepless nights wondering how we were going to make payroll. Where would our next job come from? Would it be profitable, or would something terrible happen to cause us to go bankrupt?
If your company relies on material suppliers in various geographic locations, it's likely that at some point, your construction business will face a supply chain disruption. Whether that disturbance is caused by a virus, regulatory lockdown, international tensions, changes in local laws, or a natural disaster, there will probably be scenarios in which your suppliers or transporters face obstacles that affect your company.
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Topics:
Contractor,
Contractor Tips,
Contractor Operating Tips,
Project Management For Construction
(Note: We are tracking the latest construction industry news and online resources for contractors in time of COVID-19)
The success of any business, large or small, depends considerably on nurturing an efficient, productive workplace.
Some contractors and construction company owners believe in maximizing production by driving everyone from the laborers to the Project Managers to work harder, longer, faster, hustle, and run. And if they are giving less than 110% to the company, they are not doing enough.
While improving employee productivity should always be a priority when the ultimate goal is a sustainable and profitable business, the process is easier said than done.
Below are some of the most effective methods of managing a productive, happy workplace while increasing output:
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Topics:
Contractor,
Contractor Tips,
Contractor Operating Tips,
Construction Productivity,
Construction Workplace
Business dashboards are a valuable business intelligence tool, offering an "at-a-glance" big picture view of a company's performance.
Some construction business owners use a dashboard to track KPIs (Key Performance Indicators) relevant to just one aspect of their business, such as sales growth, marketing, or financial data. Others rely on an executive dashboard for an overview of data culled from various sources (e.g., their accounting software, CRM tools, and website analytics).
The great advantage of a dashboard is that it presents and compares complex data drawn from several sources using visual tools (i.e., tables, line graphs, and bar graphs). With access to this consolidated data – information that would take hours to compile and analyze on your own – business owners are empowered to make more informed real-time business decisions.
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Topics:
Construction Accounting,
Key Performance Indicators,
KPI,
Contractor,
Contractor Tips,
Contractor Operating Tips
If you're a small business owner whose construction company hasn't gone through hard times, that's great, but it's likely to happen at some point. As much as we dream about being brilliant enough in this industry that we'll never face slow times, there are many things beyond our control that can negatively affect our organization.
Here are six tips for getting your business through difficult periods so you can look forward to many more years of construction business ownership:
1. Take care of your employees
Workdays lost to sickness are a considerable cost to the company and a threat to productivity. Regardless of health threats and virus spread, the workplace itself is a source of infection, and you can reduce the risk of causing absence in your employees by implementing control measures to ensure the environment is clean and safe.
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Topics:
Construction Accounting,
Contractor Challenges,
Contractor,
Contractor Tips,
Contractor Operating Tips
Preparing for tax season is a year-round endeavor. Well-organized small businesses are better positioned to minimize their tax bill while avoiding penalties associated with missing or inaccurate information.
Tip number one for construction company owners is to update financials every month, using a streamlined software or cloud-based system. This way, come tax time, everything you need is all in one place.
Second - The Profit And Loss Balance Sheet is what Tax Accountants use.
The numbers on these reports offer a summary snapshot of your business. They are referred to and reviewed over and over by banks and others.
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Topics:
Networking,
Construction Accounting,
Contractor,
Contractor Tips,
Contractor Operating Tips,
small business connections
Making a few good local business connections can go a long way in helping your construction business grow. Networking can spark mutually beneficial partnerships, lead to new opportunities, and attract more clients through word of mouth.
In the age of social media, small business owners may think networking isn't as valuable as it used to be. On the contrary, it's just as crucial for people to get to know your face out and about in the community as it ever was. And fellow business owners are much more likely to refer you once you've met in person or have worked with you in the past.
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Topics:
Networking,
Construction Accounting,
Contractor,
Contractor Tips,
Contractor Operating Tips,
small business connections
