First, we always ask our clients to decide what they want from their construction company. Do you want to get rid of the boss? Do you want to work in a more structured environment? Are you sick and tired of working for the boss's son or daughter? Do you want to make much money? Do you wish to make enough money to pay the bills and enjoy a vacation now and then? There are no wrong answers, whatever is right for you is the correct answer; however, you need a reason to do it otherwise when the going gets tough, and it will, you will either win or lose depending on your purpose. With a big enough reason, you will find a way to win.

 

For many small construction companies, the best way to improve profitability is to increase turnover, as there's no limit to sales, but there is a limit to how much you can reduce your costs.

 

Let's look at how you can focus on each of the five ways in our profit increase calculator to achieve your goal of improving profits.

 

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Topics: Construction Profits, Construction Accounting, Profitable Leads For Contractors, Customers, Contractor, Contractor Tips, Contractor Operating Tips

Customers are disloyal price buyers who purchase commodities and services with cost as their primary consideration. Clients are loyal value buyers who purchase goods and services with suitability as their primary consideration.

 

Every businessperson knows that customers and clients are not created equal. Clients are loyal, while customers will stray if they're offered a slightly lower price elsewhere. Some customers are demanding, while clients only call when they wish to hire you right away.

 

Every business must deal with a variety of customers and clients. But there are certain types of customers who do more harm than good to your construction business - they drain your resources while adding little to your revenue. 

 

 

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Topics: Construction Accounting, Clients or Customers, Customers, Contractor, Contractor Tips, Contractor Operating Tips

The pains caused by an economic downturn can be excruciating, which is why most of us dread it.

A recession can mean massive layoffs, jobs becoming harder to find, and wages frozen, which means consumers hunker down and spend less-- often worsening the slowdown unknowingly. 

For most businesses, especially small businesses, recessions can be brutal. Just take, for example, the Global Financial Crisis (GFC) that struck the world in 2008. Between December 2008 and December 2010, approximately 1.8 million small businesses shut down. When Investopedia looked into the financial crisis's impact on small businesses after a decade, they found out that business creation has not yet returned to pre-crisis levels. 

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Topics: Be Do Have, Cash Flow, Construction Marketing, Business Plan For Your Construction Company, Contractor, Contractor Tips, finance, Construction Business After COVID-19

Operating at a loss means you’re spending more money than you’re making. And while it’s not uncommon, especially for new businesses, it’s still not an ideal situation and shouldn’t continue in the long term. Otherwise, you will eventually run out of cash reserves and be out of business.

So the first thing you need to identify is why you’re operating at a loss. If it’s because you’re still in the start-up phase, then you might not need to worry too much as long as you’ve got enough cash to meet your costs. But if the losses are due to a decline in sales, then it’s time to review your construction business and, if necessary, get professional help.

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Topics: Profit And Loss Reports, Construction Marketing, Contractor, Contractor Tips, finance, Contractor Operating Tips

(Note: Celebrate Independence Day with a coupon code found at the end of this post)

 

As small business owners look to operations after reopening, there are some critical business questions to ask. These questions will help you determine what adaptations you want to keep, whether your construction business model is working, if there are additional changes you want to make to keep your company operational through future economic downturns.

 

It's not always fun to do this sort of examination, but the answers to these questions will help you make the best possible future decisions.

 

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Topics: Construction Accounting, Contractor, Contractor Tips, Contractor Operating Tips, Reopening, Construction Business After COVID-19

The tax deadline is postponed to July 15, 2020. If you just started your construction business last year and haven't filed yours yet, this post would be helpful. 

 

Your tax bill is based on reports produced by your accounting system. Want to avoid paying more than you should come tax time? Or a frantic last-minute search for missing financial records? 

 

New construction business owners have a lot on their plate, and can quickly lose track of an approaching tax deadline or financial data needed to submit their return.

 

Organization is key when preparing for tax time, as is taking advantage of the many tools and resources out there to support new entrepreneurs.

 

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Topics: How To Lower Your Tax Bill, Construction Accounting, Annual Tax Return, Income Tax Preparation Checklist, Contractor, Contractor Tips

If you're serious about getting the best value you can for your marketing budget, you'll need to develop a marketing plan. Many contractors are having challenges adapting to this ever-changing economy. Trade contractors who rely on the same general contractors they did a few years ago to supply jobs to bid on are finding it more difficult to recover and find work.

 

It appears that history is repeating itself. Instead of yellow pages, I see many well-intentioned people with their minds and hearts in the right place with a lot of really great ideas on what works and fails in social media. I certainly don't know what works for every contractor; however, what I do know is that every construction company is unique, and what works for your competitor may not work for you.

 

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Topics: Marketing Tracking, Construction Marketing, Construction Accounting, Marketing, Contractor Marketing, Contractor, Contractor Tips, Contractor Operating Tips

We've said it before, and we'll say it again – this has been a challenging few months for all of us, but there is no better time to think seriously about your business. 

 

We all understand the economy has been tough for construction owners. I know you have made severe adjustments in your lifestyle and your businesses; however, remember this too shall pass because there is nothing new under the sun.

 

The key to building value in your construction business is to plan the process in a systematic way, whether you're aiming to grow your business in any economy or groom it to get a better price from a buyer. In this article, we have compiled a few tips to create value in your industry.

 

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Topics: Construction Accounting, Business Process Development For Construction, Contractor, Contractor Tips, Contractor Operating Tips

Managing cash flow is a vital part of running a successful construction business. Some contractors think managing cash flow means keeping track of how much money enters and leaves their business, but there's actually more that goes into it. 

[Starting Cash + Cash In - Cash Out] = Cash Flow

Contractors and sub-contractors know there is more to profits than what is shown above, and most of you rely on your "gut feel" to see when the project has made a profit or not.

 

Cash flow forecasting is an incredibly valuable tool that helps you anticipate cash flow issues, plan for days when your cash flow is limited, and show the bank that you are prepared. It's a necessary process that you shouldn't ignore.

 

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Topics: Construction Cash Flow, Construction Accounting, Contractor, Contractor Tips, Contractor Operating Tips, crisis

“How much should I spend on marketing?” Most construction business people ask me this question at some stage. Many small company owners find working out how much to spend on marketing a tricky exercise to calculate. 

 

Generally, there are five ways to work out a marketing budget for the year. Remember that these are marketing budgets, not advertising budgets. Marketing covers everything you do in your business that creates awareness, including such activities as advertising, brochures, competitions, trade shows, demonstrations, travel, direct mail, email campaigns, your website, and sponsorship.

 

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Topics: Construction Accounting, Contractor, Contractor Tips, Contractor Operating Tips, millennial contractors, boomer contractors