The Contractor Paradigm Shift
Three Steps To A Paradigm Shift:
#1 Unfreeze - Being open to a new idea that is in agreement with your core values
#2 Change State - Arriving at a new understanding about something. Education is the foundation for shifting paradigm. In ancient Greece, Socrates argued that education was about drawing out what was already within the student. "I cannot teach anybody anything; I can only make them think."
#3 Refreeze - Closing the portals of your mind for now.
The only real difference between the success and failure is the answers. "If you know the answers the questions will not bother you" - Randalism
After reading through this we invite you to contact Sharie and set an appointment to chat with her. You will not have to spend any money; you do not have to be a client. However you do have to own or be in the process of getting ready to start a contracting company.
She will spend some time at NO CHARGE and perhaps you will get a mere scrap of information that could help turn your construction company around. We sincerely care about all contractors and want to do our part to help and support you. She can be reached at 206-361-3950 or sharie@fasteasyaccounting.com.
We offer the following list of root causes for the extremely high rate of construction company failure which has accelerated beginning in 2009 and continuing as of June, 2013 when this article was written.
Please read objectively and assess your strengths and weaknesses in each area. You will be a better contractor for it. We do not ask you to change who you are but rather encourage you to do what you do best and outsource the rest.
Some of you will experience a paradigm shift which is something deep inside yourself recognizing there may be another way to do something you are already doing. Others will experience nothing. Whatever is in your best interest will occur.
The list below comes from working with hundreds of construction companies for over thirty years. This is not academic, it is real world experience and I trust you find some value in it. I apologize in advance if anyone is offended by the direct nature of the statements below. Please accept them in the Spirit of friendship, respect and honor as I intend them.
Construction Company Failure Root Causes
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Working for customers instead of clients and not charging enough (The 80-20 Rule)
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Not using Additional Work Orders or Change Orders (Click For FREE Change Order Template)
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Cash flow issues kill contractors even though they have profit
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Changes in their operations due to contingencies beyond their control
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Contractors are subject matter experts in a few areas then believe they know everything
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Sales tax liens against contractors twenty two times higher than any other business
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Poor document management results in overpaying taxes
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Poor scheduling affects production and cash flow
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Management skills are learned in the school of hard knocks
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Lack of understanding of Construction Psychology
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Creatures of habit performing the same mental scripts getting the same bad results
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Contractors assimilate pictures faster and easier than numbers and words
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General distrust of their Board of Advisors until it is too late
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Generally not able to construct BPM Strategy Tools to help them in decision-making
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Generally do not plan from back (end goals) to front (current operations)
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Look at financial data as time allows and in a historical context only, no forecasting
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Operate in the manner that is their organic, natural instinct (it feels right)
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Predominantly not financial managers and do not understand the value of outsourcing
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Work primarily IN the business but not ON the business
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Spend a good deal of time “putting out the same fires” over and over
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Value production over planning
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Want to work less and earn more money but not willing to learn how
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Burn out is high after the tenth year of owning and operating a construction company
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They would like problems solved for them without spending time or money
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They want instant understanding, instant answers and instant results
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Time and money are the commodities that are in the shortest supply
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Work-In-Progress (WIP) report the ultimate gauge for cash flow and least understood
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Working on stuff you are not skilled in by trying to save money
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Ignoring Profit Centers and Key Performance Indicators (KPI)
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Attending the business round table at the local bar which leads to Intellectual Incest
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Contractors don’t plan, they recover
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Do you have lots of “Squeaky Wheels” and do you carry a bucket of grease at all times?
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Every contractor with cash flow problems works too hard, has too many clients and sells to much
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Every contractor’s income is the average of their customers and client’s income
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Good job pays $40K a year whereas a contractor with good financial reports earns $100K+ a year
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Having ten dollar conversations instead of million dollar conversations
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Lack of good accounting records causes 9 out of 10 contractor’s business failures
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Not one contractor’s business failure had meaningful records in the Quarter preceding the failure
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Poor contractors do their own accounting, payroll, and tax reports to save money; and yet they don’t
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The more you know about bookkeeping the less successful you will be in your contracting business
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Wealthy contractors work on building relationships and innovating (faster/better/cheaper)
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Wealthy contractors outsource their Accounting and get timely financial and business coaching
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Thinking you can only create wealth if you are doing the work
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Thinking you can get rich with your head in a ditch
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Working ten hours a day instead of focusing on marketing and innovation
There are simple answers to all complex problems and they are usually wrong. The last thing I leave you with is knowledge is power. You have what it takes to be successful and you deserve to be wealthy because contractors add value to other people's lives'. We stand ready to serve when you are ready to contact us.
Need A Mentor? - Someone who has been were you want to go and can guide you. We would like to be that person for you. Fill out the form on the right or call Sharie 206-361-3950 or email sharie@fasteasyaccounting.com and schedule your no charge one-hour consultation
For Construction Company Owners who do not need the full power of QuickBooks for contractors and want 24/7 online access we offer Xero Accounting Online and we have custom setup for construction companies. Click Here For More.
This Is One More Example of how Fast Easy Accounting is helping construction company owners all across the USA including Alaska and Hawaii put more money in the bank to operate and grow your construction company. Construction accounting is not rocket science; it is a lot harder than that and a lot more valuable to people like you so stop missing out! Call Sharie 206-361-3950 or sharie@fasteasyaccounting.com and schedule your no charge one-hour consultation.
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About The Author:
Randal DeHart, PMP, QPA is the co-founder of Business Consulting And Accounting in Lynnwood Washington. He is the leading expert in outsourced construction bookkeeping and accounting services for small construction companies across the USA. He is experienced as a Contractor, Project Management Professional, Construction Accountant, Intuit ProAdvisor, QuickBooks For Contractors Expert and Xero Accounting Specialist and Bill.Com Certified Guru. This combination of experience and skill sets provides a unique perspective which allows him to see the world through the eyes of a contractor, Project Manager, Accountant and construction accountant. This quadruple understanding is what sets him apart from other Intuit ProAdvisors and Xero accountants to the benefit of all of the construction contractors he serves across the USA. Visit http://www.fasteasyaccounting.com/randal-dehart/ to learn more.
Our Co-Founder Randal DeHart - Is a Certified PMP (Project Management Professional) with several years of construction project management experience. His expertise is construction accounting systems engineering and process development. His exhaustive study of several leading experts including the work of Dr. W. Edward Deming, Michael Gerber, Walter A. Shewhart, James Lewis and dozens of others was the foundation upon which our Construction Bookkeeping System is based and continues to evolve and improve. Check out our Contractor Success Map Podcast on iTunes and Follow Randal on Google+Follow Randal on Google+
Our Co-Founder:
Sharie DeHart, QPA, is the President of Business Consulting And Accounting (Fast Easy Accounting) in Lynnwood, Washington. She is the leading expert in managing outsourced construction bookkeeping and accounting services companies and cash management accounting for small construction companies across the USA. She encourages Contractors and Construction Company Owners to stay current on their tax obligations. She offers insights on managing the remaining cash flow to operate and grow their construction company sales and profits so they can put more money in the bank. Call 1-800-361-1770 or sharie@fasteasyaccounting.com.
