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Contractor Success Map with Randal DeHart | Contractor Bookkeeping And Accounting Services

English, Finance, 2017 seasons, 584 episodes, 6 days, 8 hours, 29 minutes
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Back office support can make or break your contracting company. Let us move your contractor bookkeeping service off the roller coaster of pain onto the merry go round of peace of mind with our U.S.A. based outsourced contractors bookkeeping services and contractor success M.A.P.
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584: Discover The Importance Of A Solid Business Plan For Your Contracting Company

This Podcast Is Episode 584, And It's About  Discovering The Importance Of A Solid Business Plan For Your Contracting Company Starting a construction business without a plan is like setting sail without a compass. While you might eventually reach your destination, the journey will likely be longer and more challenging. A well-constructed business plan is essential for guiding your business toward success.   Here's why   It Clarifies Your Vision   A business plan helps you articulate the vision for your enterprise. It forces you to think through every aspect of your business, including what you want to achieve and how you plan to get there. This clarity is crucial for communicating your vision to potential investors, partners, and employees.   It Defines Your Goals And Objectives   One of the primary purposes of a business plan is to set clear, measurable goals. Whether you aim to acquire a certain number of clients, reach a specific revenue target, or open new locations, having defined goals ensures you know exactly what success looks like for your business.   It Helps You Understand The Market   A solid business plan includes thorough market research. Understanding your target market, competitors, and industry trends is vital for positioning your construction business effectively. This research helps you identify opportunities and threats, allowing you to make informed decisions.   It Guides Your Strategy   With your goals in place, a business plan outlines the strategies you will use to achieve them. This includes marketing plans, sales tactics, operational procedures, and financial strategy. Having these strategies documented ensures that everyone involved knows the steps needed to move forward.   It Allocates Resources Effectively   A well-thought-out business plan helps you determine how to allocate your resources—time, money, and personnel—most efficiently. By identifying priorities, you can ensure that your resources are focused on activities that drive your business toward its goals.   It Monitors Progress And Facilitates Adjustments   A business plan is not a static document; it should evolve as your business grows. Regularly reviewing your plan allows you to track progress against your goals and make necessary adjustments. This ongoing analysis helps you stay adaptable and responsive to market or business environment changes.   It Attracts Investors And Secures Funding   If you need external funding, a business plan is indispensable. Investors and lenders want to see that you have a clear vision, defined goals, and a feasible strategy for achieving them. A comprehensive business plan demonstrates your commitment and capability, making securing the financial resources you need easier.   It Reduces Risks   A business plan helps mitigate risks by forcing you to think through potential challenges and develop contingency plans. This proactive approach lets you anticipate obstacles and devise solutions before they become critical.   Creating a small business plan as a construction contractor, whether you have employees or a one-person company, is crucial for charting a path to success. A well-thought-out plan helps you set goals, identify your target market, and establish the direction for your business.    Here's a guide on creating one:   1. Let's Get Started with an Executive Summary: Kick off your plan with a quick peek into your company, its mission, and the services you offer. Share a brief overview of your target market and a summary of your financial projections.   2. Company Description - Tell Your Story: In this section, share a detailed and friendly description of your small construction business. Share your company's story, the nature of your construction services, and what makes your business unique. Also, describe your target market and discuss the specific construction needs you aim to fulfill.   3. Market Analysis - Understanding Your Playground: Determine the construction industry in your target area. Here, you can identify market trends, assess the demand for construction services, and analyze your competitors. Understanding the market dynamics will help you position your business effectively and identify growth opportunities.   4. Organization and Management - Who's Who in Your Team: In this section, outline the friendly organizational structure of your small construction business. Define key team members' roles and responsibilities and discuss your expertise and experience in the construction industry. On your own? Highlight any strategic partnerships or key contractors you plan to collaborate with or professionals you outsourced to help with administrative work and financials.    5. Services and Products - Showcasing Your Specialties: Let's detail the range of construction services and products your business offers in a friendly tone. Give importance to any unique or specialized services that set your business apart. It's essential to show your services' value to clients and how they address specific construction needs.   6. Marketing and Sales Strategy - Spreading the Word: Develop a friendly marketing and sales strategy to reach potential clients and promote your construction services. Identify your target audience, outline promotional tactics, and define your pricing strategy. Additionally, describe the sales channels and distribution methods you will use to reach your clients.   7. Financial Projections - Let's Predict the Future: Include detailed financial projections for your small construction business. This should encompass your income statement, cash flow projections, and balance sheet. Outline your funding requirements and how you plan to finance your business.   8. Risk Analysis - Preparing for the Unexpected: Evaluate potential risks and challenges your small construction business may face. Identify strategies to overcome these risks and show your readiness to tackle the obstacles in the construction industry.   9. Implementation Plan - Let's Get It Done: Set measurable milestones and key performance indicators to track your progress. Additionally, detail your operational plan, including necessary resources, equipment, and technology.   10. Appendices - Supporting Cast: Include any additional information, such as resumes of key team members, legal documents, or supporting research that strengthens your business plan.   In summary   A business plan is a crucial tool for any entrepreneur. It provides a clear vision, sets measurable goals, guides strategy, allocates resources, monitors progress, attracts funding, and reduces risks.   By carefully considering each aspect of your business and creating a clear roadmap for success, you can position your construction company for long-term growth and success. Remember that a well-crafted business plan not only serves as a guide for your business but it communicates your vision and professionalism to potential clients and stakeholders.    We are here to assist you in creating a plan that sets your business up for profit and growth. Contact us today to learn how we can support your contracting journey. PS  We offer free resources to help you save time and money that you can download and print now.  About The Author: Sharie DeHart, QPA, co-founded Business Consulting And 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 [email protected]  
7/12/202412 minutes, 4 seconds
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583: Building On Solid Ground: Your Construction Bookkeeping Foundation

This Podcast Is Episode 583, And It's About  Building On Solid Ground: Your Construction Bookkeeping Foundation As a construction business owner, you must stay informed about your finances and financial situation. You do this through bookkeeping, the process of recording transactions in your business. This includes transactions, credit card charges, and any other economic activity within your company.   Financial management can easily be overlooked when managing projects, dealing with subcontractors, and ensuring customer satisfaction. However, neglecting proper bookkeeping can significantly impact the growth and success of your construction business. When your construction bookkeeping is set up right It gives you insights into your income and expenses, such as: How much money you've made How much money needs to be paid for bills or salaries  How much money should be put away for taxes or other unexpected costs  Bookkeeping also helps keep track of all your business transactions. A good system will serve as an audit trail showing every transaction that has taken place within your company. This includes purchases from suppliers, sales made to customers, and bills paid out by suppliers or employees (like salaries).  This information will quickly become apparent if there are any irregularities, such as missing items on purchase orders. You get transparency into your business, a way to ensure you remain compliant with laws, and valuable insights to help you make smarter decisions.  While factors such as market trends, technological advancements, and customer demands undoubtedly play a significant role in shaping your business, financial insights are an often underestimated aspect that can substantially impact growth. Understanding the intricacies of your company's financial data and leveraging this insight effectively can be a powerful tool for driving growth in your construction business. When to hire a construction bookkeeper There are many scenarios where hiring a bookkeeper makes sense. These depend on your construction business setup and your abilities.  You should consider hiring a bookkeeper if you have More than one employee Multiple business locations A complex business structure - yes, like a contracting business Concerns about making errors in your books that could lead to fines or penalties Too much work to do, and bookkeeping constantly gets pushed to the side A lack of experience with bookkeeping and still determining how to go about it, so you avoid it. What a Construction Bookkeeper can provide for you 1. Expertise Construction bookkeepers are experts at managing, sorting, and recording your business's financial transactions. They've spent time developing their skills and experience. During that time, they've also seen and resolved bookkeeping-related issues that you may come up against. Their expertise makes them more efficient at managing those issues.  Beyond that, they understand business trends and challenges others in your industry face and can help you move through those. They also know what questions to ask to help you make important decisions and can share best practices with you.  2. Guidance Your bookkeeper not only helps you maintain accurate records but also understands your financial circumstances. They help you assess how to make critical business decisions, such as whether now is an excellent time to grow or when you should hold back. They can also identify trends in your industry and help you take advantage of those opportunities. Finally, they can assist you with budgeting and sticking to your budget. They'll help you develop a realistic financial plan that enables your business to grow while achieving short- and long-term goals.    3. Time savings As a business owner, you likely have many activities to focus on. In bookkeeping alone, there are numerous tasks to be responsible for, such as: Collecting and recording transaction data Sorting receipts Classifying expenses Invoicing customers Paying vendors Managing payroll Bookkeepers take on those tasks, so you don't have to. It's not just about the energy you put into them; it's about the fact that unless you're a construction bookkeeping expert, it'll likely take you longer to complete these activities than a bookkeeper. That can add up to a lot of extra hours.  Hiring a Construction Bookkeeper frees up valuable time for other activities such as marketing, perfecting your products and services, or spending time with family.  4. Money savings There's a time cost to doing your books, but there's also a potential money cost in the form of missed opportunities. The time you spend doing your books is time you could be out creating or taking advantage of new opportunities for your business. Your bookkeeper frees you up, giving you the time and energy to identify potential opportunities. They can also advise whether you're in an excellent financial position to jump on those possibilities.  Additionally, the expertise bookkeepers bring to their activities means they're likely to prevent costly mistakes that could affect your finances.  Final thoughts Prioritizing better bookkeeping practices is fundamental to driving growth and sustainability in your construction business. By proactively managing your company's finances, you can gain a competitive edge, mitigate risks, and position your business for long-term success in the dynamic construction industry. Remember, the success of your construction business depends not only on the quality of your work but also on the strength of your financial foundation. Embracing better bookkeeping practices can pave the way for sustained growth and profitability in your construction enterprise. As a reminder: QuickBooks plans to stop selling several versions to new U.S. subscribers. The deadline to purchase new subscriptions to the listed products has been extended from July 31, 2024, to Sept. 30, 2024. QuickBooks Desktop Pro Plus QuickBooks Desktop Premier Plus QuickBooks Desktop Mac Plus QuickBooks Desktop Enhanced Payroll We do our best to inform you of your options based on your construction company's needs and ensure you are alerted to fundamental software changes that may affect your construction business now or in the future. Although extended, we recommend checking and upgrading immediately to avoid service disruptions and workflow interruptions. Please plan accordingly or reach out if you need help. We are here to help you achieve your definition of success, whether you would like to outsource your bookkeeping to us, buy and use our templates, or learn to do it independently. PS  We offer free resources to help you save time and money that you can download and print now.  About The Author: Sharie DeHart, QPA, co-founded Business Consulting And 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 [email protected]
7/5/202411 minutes, 36 seconds
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582: Dealing With Toxic Construction Employees In The Job Site

This Podcast Is Episode 582, And It's About  Dealing With Toxic Construction Employees In The Job Site Running a small construction business comes with unique challenges, and dealing with toxic employees is undoubtedly one of the trickiest. A single troublesome team member can disrupt productivity, affect team morale, and ultimately harm your business's success.    These individuals can create a hostile work environment, lower morale, and reduce productivity. For the construction industry, where teamwork and safety are paramount, addressing and managing toxic employees is crucial. Knowing how to handle such situations effectively can turn things around.   Let's look at the types of toxic actions, how to address them, and provide practical steps to manage these challenging situations. Read on to transform your workplace or job site into a harmonious and productive environment.   To effectively deal with toxic employees, it's essential first to identify poisonous behavior. This can include constant negativity, gossiping, bullying, or undermining colleagues. In the construction industry, toxic behavior can manifest as disregarding safety protocols, cutting corners, or fostering a culture of non-compliance.   Understanding troublesome conduct   Intentional vs. unintentional   Before you can tackle the issue, it's essential to understand whether the problematic actions are intentional or a result of the other problems. Intentional bad conduct often stems from personal grievances or a desire to undermine authority. On the other hand, unintentional actions might be due to personal struggles, misunderstandings, or lack of awareness.   Understanding the root cause is crucial because it determines your response strategy. For example, intentional troublemaking might require firmer actions than unintentional issues, which might be resolved with support and guidance.   Early recognition   Early recognition of problematic conduct can prevent it from escalating. Look for signs such as frequent conflicts with colleagues, consistent underperformance, or a noticeable dip in team morale. Address these issues promptly to avoid long-term repercussions.   Impact on team dynamics   Toxic conduct doesn't just affect the individual involved; it can spread like wildfire, impacting the broader team. It can lead to increased stress, reduced collaboration, and higher turnover rates. Understanding the wider impact highlights the importance of addressing the issue head-on.   Tackling the problem head-on   Direct approach   Avoiding the problem is never a good strategy. Instead, address the issue directly with the troublesome team member. Start by scheduling a private meeting to discuss specific concerns. Be clear about the actions that need to change and provide concrete examples.   Clear communication   Addressing toxic behavior often starts with open communication. Construction managers and supervisors must create a work culture where employees feel safe to voice their concerns. Encouraging open communication can help identify toxic behavior early on and prevent it from escalating.   Open dialogue   Engage in an open dialogue where the employee can share their perspective. Understanding their viewpoint can offer insights into potential solutions. Ensure the conversation remains respectful and focused on finding a resolution.   Consistent follow-through   Consistency is key when managing toxic workplace conduct. After the initial discussion, follow up regularly to monitor progress. This shows the employee that you're serious about making positive changes and are there to support them through the process.   Detailing specific actions   Communicate the issues clearly by detailing specific actions that are problematic. Vague feedback can lead to misunderstandings and may result in something other than the desired changes. Be precise about what needs to improve and why.   Impact on the team and business as a whole   Explain the impact of their conduct on the team and the business as a whole. Sometimes, employees are unaware of how their actions affect others. Highlighting the broader consequences can motivate them to change.   Setting expectations   Set clear expectations for conduct moving forward. This includes outlining the company's values, code of conduct, and expectations for teamwork and collaboration. By clearly defining unacceptable behavior, employees are less likely to engage in toxic conduct. Outline the standards you expect and the timeline for improvement. This gives the employee a clear roadmap to follow.   Providing support   Sometimes, toxic behavior can stem from underlying issues such as stress, burnout, or lack of training. Providing support for employees who may be struggling and offering training programs to develop their interpersonal and communication skills can help in addressing toxic behavior.   Resources and training   Ensure that the employee has the necessary resources and support to improve. This could include training sessions, mentoring programs, or adjustments to their workload. Providing these tools shows your commitment to their development.   Mentoring and coaching   Pair the employee with a mentor or coach who can offer guidance and support. This relationship can provide valuable insights and help employees develop new skills and attitudes.   Adjusting workload   Sometimes, problematic conduct stems from being overwhelmed. Assess the employee's workload and make necessary adjustments to ensure they can perform at their best without undue stress. Documenting everything   Keeping detailed records   Maintain detailed records of all interactions and steps taken to address the issue. Documentation is crucial if further action is needed and provides a clear history of your efforts to resolve the situation.   Importance of transparency   Be transparent with the employee about the documentation process. This will help build trust and ensure they understand the seriousness of the situation.   Preparing for future actions   Detailed records can be invaluable if the conduct doesn't improve and more serious actions are required. They provide a clear trail of your efforts and the employee's responses. Being prepared for tough decisions when enough is enough!   Despite your best efforts, some employees may not improve. Acknowledging when enough is enough to protect your team's well-being and your business's success is essential.   Making difficult choices   When toxic behavior persists despite efforts to address it, decisive action may be necessary. This can include implementing disciplinary measures, reassigning responsibilities, or, in severe cases, terminating employment. Handling these situations with professionalism, empathy, and adherence to company policies and labor laws is essential.   Be prepared to make difficult decisions; while potential termination is never an easy choice, sometimes it's necessary for the greater good of the business.   Protecting team well-being   Your primary responsibility is to ensure a healthy and productive work environment for all employees. Protecting the team's well-being should always be a top priority.   In summary   Dealing with toxic employees is a challenging but essential aspect of managing a small business. You can transform your workplace into a harmonious and productive environment by understanding the types of troublesome conduct, tackling issues head-on, communicating clearly, providing support, documenting everything, and being prepared for tough decisions.   Remember, the key to success lies in consistent follow-through and a commitment to fostering a positive workplace culture. Recognizing and rewarding positive contributions, fostering a sense of teamwork and camaraderie, and leading by example can all contribute to creating a healthy work environment where toxic behavior is less likely to thrive.   If you need more advice or support, reach out—we're here to advocate for you. Whether you need help with construction bookkeeping or want a listening ear, I am just a phone call or email away. PS  We offer free resources to help you save time and money that you can download and print now.  About The Author: Sharie DeHart, QPA, co-founded Business Consulting And 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 [email protected]  
6/28/202413 minutes, 21 seconds
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581: The Importance Of Having A Contingency Plan For Construction Contractors

This Podcast Is Episode 581, And It's About  The Importance Of Having A Contingency Plan For Construction Contractors In the construction industry, unexpected challenges can arise at any moment. Numerous factors, from material delays to unforeseen weather conditions, can disrupt project timelines and budgets.    From terrorism to fire, from extreme weather or earthquakes to cyber-attacks – how would your business cope if it was affected? Would your staff know what to do? Would you be able to keep working?   That's why a contingency plan is crucial for construction contractors. It is not just a precaution but a necessity. Small construction businesses need to be prepared for a range of scenarios. Your company could avoid significant setbacks or closure with a solid contingency plan.   Why contingency planning is crucial Contingency planning involves foreseeing potential risks and developing a strategic approach to mitigate their impact. For small business owners, this means safeguarding their assets, ensuring business continuity, and protecting their staff and customers. A well-thought-out plan can differentiate between a temporary disruption and a permanent shutdown. It helps contractors mitigate risks and minimize the impact of unexpected events on their projects. Here are a few reasons why having a contingency plan is essential for construction contractors: 1. Risk Management: A contingency plan enables contractors to identify potential risks and develop strategies to address them. By proactively planning for various scenarios, contractors can better protect their projects from cost overruns and delays. 2. Budget Protection: Unforeseen events can quickly eat into a project's budget. A contingency plan allows contractors to set aside funds specifically for addressing unexpected expenses, ensuring that the project stays on track financially. 3. Schedule Flexibility: Delays are not uncommon in the construction industry. A contingency plan allows contractors to adapt to unexpected schedule changes without derailing the project timeline. 4. Client Confidence: Clients appreciate contractors prepared for the unexpected. Demonstrating that you have a contingency plan can instill confidence in your clients and reassure them that you can manage unforeseen challenges. 5. Competitive Advantage: Navigating unexpected obstacles efficiently sets contractors apart in a competitive industry. A well-executed contingency plan can demonstrate a contractor's professionalism and commitment to delivering results, giving them a competitive edge in the market. Emerging issues and regulation changes Ever-evolving regulations demand greater transparency and accountability from small businesses. This is particularly relevant in preventing and addressing financial fraud, which remains a substantial risk. The increased scrutiny from regulatory bodies means companies must have robust monitoring systems and response strategies. Failure to comply not only puts your financial standing in jeopardy but also your business's reputation. Practical steps to develop your contingency plan Risk assessment: Identify all potential risks that could impact your business. This includes everything from natural disasters and cyber-attacks to key personnel suddenly becoming unavailable. Rank these risks based on their likelihood and potential impact. Document everything: Put together an operational guide for your business, outlining everything you would need to know to keep it running, such as who your suppliers are, how and when they are paid, and everything else that happens on a daily/weekly/monthly basis. As part of the same process, outline the roles and responsibilities of every senior staff member and scope out the daily and weekly tasks so a replacement could easily assume those responsibilities. Communication plan: Develop a communication plan to keep employees informed during and after a crisis. Consider using multiple channels such as email, phone calls, and social media to reach out to employees and customers. Develop response strategies: For each identified risk, develop a response strategy. This could involve establishing a crisis management team, setting up temporary operational sites, or creating data backup protocols. Ensure these strategies are detailed and cover all critical aspects of your business operations. Regular review and testing: A contingency plan is only effective if it's current and functional. Review and update your plan regularly, especially after significant changes in your business environment. Conduct drills and simulations to test your team's readiness and the effectiveness of your response strategies. Your contingency plan should be a living document that evolves with your business. Construction Client's Story (edited for brevity): On Sunday, July 27, 2008, around 6:30 p.m., my girlfriend and I had just returned from an overnight hiking trip. When we arrived home, we discovered that we had been robbed. We immediately called 911. As we walked through the house, we discovered that our computer and many other valuables were gone. The computer had all the company business on it. QuickBooks, invoices, all the subcontractors' info, and everything to keep the company books. We were at a loss for what to do. But as luck would have it, we had Randal DeHart as our accountant. He had all our info on a backup system somewhere on a huge server. So we called Randal to let him know that we would get a new computer as soon as the insurance company paid us. Randal called us the next day, July 28, 2008, and told us to come to his office. To our surprise, he had gone to Office Depot, purchased a new computer, loaded it with QuickBooks, and restored all our business information. We are so appreciative that Randal had our backs. We had told him that we would pay him for the computer as soon as possible, but you know what he said, No thanks are necessary; if we just pay forward, that's all he asked." How's that for a Good Accountant? Also, as a reminder that could be helpful in your planning: QuickBooks plans to stop selling several versions to new U.S. subscribers. The deadline to purchase new subscriptions to the listed products has been extended from July 31, 2024, to Sept. 30, 2024. QuickBooks Desktop Pro Plus QuickBooks Desktop Premier Plus QuickBooks Desktop Mac Plus QuickBooks Desktop Enhanced Payroll We do our best to inform you of your options based on your construction company's needs and ensure you are alerted to fundamental software changes that may affect your construction business now or in the future. Although extended, we recommend checking and upgrading immediately to avoid service disruptions and workflow interruptions. Please plan accordingly or reach out if you need help. Final thoughts As a business owner, a lot of critical information exists only in your head. As the founder, you always know what's happening and how to do things, but what would happen if you weren't there? Developing a contingency plan is not just good practice; it's a critical component of your business strategy. By taking proactive steps today, you can secure the future of your small business. Plus, having a plan gives you peace of mind that everything could continue in your absence or without crucial team members. It also makes for a better-run and more organized business. Forcing yourself to have everything documented centrally builds a greater awareness of roles and responsibilities across the organization while making holidays less challenging! We could be a part of your contingency plan; let me know how I could help with yours. PS  We offer free resources to help you save time and money that you can download and print now.  About The Author: Sharie DeHart, QPA, co-founded Business Consulting And 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 [email protected]  
6/21/202412 minutes, 22 seconds
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580: Improving Construction Communication And Workplace Productivity

This Podcast Is Episode 580, And It's About  Improving Construction Communication And Workplace Productivity The success of any business, large or small, depends largely on nurturing an efficient, productive workplace. While improving employee productivity should always be a priority when the ultimate goal is a sustainable and profitable business, the process is more straightforward said than done.    In today's fast-paced construction industry, staying in touch and being productive is crucial for project success. The good news is that technology has made it easier to streamline processes and enhance team collaboration.   One of the most impactful ways technology has improved construction communication is through user-friendly mobile applications and project management software. These tools allow for real-time communication, easy document sharing, and smooth task management, reducing the delays and errors often associated with traditional communication methods.   Moreover, Building Information Modeling (BIM) technology has transformed how construction teams work together. BIM fosters better communication and collaboration by providing a centralized platform for sharing 3D models and project data, ultimately leading to more efficient decision-making and problem-solving. Another astounding technological advancement that has significantly boosted workplace productivity is the integration of wearables and IoT (Internet of Things) devices. These innovations enable real-time tracking of equipment, materials, and the workforce, leading to optimized resource allocation and enhanced safety measures on-site. Would you like to implement better practices while staying on budget? These are some of the most effective methods of managing a productive, happy workplace while increasing output: Embrace Technology While many construction workplaces still see new technology, as mentioned above, as unnecessary or even distracting, the simple truth is that it can significantly impact productivity. Updated hardware, software, and machinery ensure that work can be performed quickly and with minimal error. While it may not seem like a big deal, even minor issues, such as temporary connectivity problems or hardware breakdowns, can quickly add up throughout a fiscal year. Start small, like incorporating better project management software and bookkeeping processes. If this overwhelms you, let me know how I can help. Avoid Excessive Micromanagement There is no denying that management is crucial, but too much of a good thing can adversely affect productivity. Instead of encouraging employees to put forth their best efforts, it results in an eventual dependence on micromanagement that can sink productivity levels. Excessive micromanagement can be detrimental to productivity and morale in a construction workplace. To avoid this, it's essential to focus on Hiring and training competent employees so you can have confidence in their ability to perform their tasks without constant oversight. Clearly defining the project objectives and individual responsibilities can help employees understand what is expected of them, reducing the need for micromanagement. Encouraging open dialogue and feedback can help employees feel empowered and trusted, reducing the need for constant supervision. Delegating decision-making authority and autonomy in their areas of expertise, reducing the need for constant oversight. Implementing project management tools and software can provide real-time visibility into task and project progress, reducing the need for constant check-ins. Providing constructive feedback and support, allowing employees to learn and grow. Recognize Success Just as employees must be held accountable for their actions, they should also be recognized for their success. Even small efforts, such as verbal recognition or occasional awards, can encourage employees and make them feel like their hard work is being rewarded. For businesses that can afford it, more significant rewards, such as holiday parties, improve morale and create camaraderie in the office, leading to happier, more productive employees. Break Out of Ruts While assigning tasks based on an employee's particular competencies is generally advisable, remember that doing the same tasks repeatedly over an extended period can make even a skilled employee feel as if their work has become monotonous. Exposing employees to other tasks and even different departments may be helpful. This renews motivation, offers new skills to learn and apply, and gives employees a broader understanding of the company's operations. Cut Down on Meetings Often, meetings serve as nothing more than temporary breaks from productive work. A meeting needs a specific purpose, an organized agenda, and a plan of action to maintain productivity. Meetings can be a great way to share ideas and establish goals, but keep them from getting in the way of delivering actual results. In conclusion Technology has vastly improved construction communication and workplace productivity. By leveraging user-friendly mobile applications and software, construction teams can communicate seamlessly, collaborate effectively, and ultimately achieve higher levels of productivity and efficiency. Balancing a construction business's needs is never easy, but focusing on increased productivity can positively impact nearly every other facet of the workplace. The above-mentioned techniques eliminate unnecessary pitfalls and ensure employees are personally invested in efficient, quality work output. As a reminder: Speaking of technology, have you made the switch yet? QuickBooks plans to stop selling several versions to new U.S. subscribers. The deadline to purchase new subscriptions to the listed products has been extended from July 31, 2024, to Sept. 30, 2024. QuickBooks Desktop Pro Plus QuickBooks Desktop Premier Plus QuickBooks Desktop Mac Plus QuickBooks Desktop Enhanced Payroll We do our best to inform you of your options based on your construction company's needs and ensure you are alerted to fundamental software changes that may affect your construction business now or in the future. Although extended, we recommend checking and upgrading immediately to avoid service disruptions and workflow interruptions. Please plan accordingly or reach out if you need help. We are here to help you achieve your definition of success, whether you would like to outsource your bookkeeping to us, buy and use our templates, or learn to do it independently. PS  We offer free resources to help you save time and money that you can download and print now.  About The Author: Sharie DeHart, QPA, co-founded Business Consulting And 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 [email protected]  
6/14/202411 minutes, 34 seconds
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579: How To Build Construction Business Systems That Deliver Results

This Podcast Is Episode 579, And It's About  How To Build Construction Business Systems That Deliver Results In the competitive construction industry, implementing efficient business systems can make a significant impact on the overall success and profitability of a construction business, regardless of its size or specialization. From streamlining operations to improving project management, adopting efficient systems can yield tangible benefits that truly pay off in the long run.   Too many businesses fail because the owner needs to establish efficient business systems. This typically happens because the business owner is so caught up in the company's day-to-day running that the fundamentals of good business management are forgotten. Often, it must be said that the owner doesn't like bookkeeping or other administrative tasks, so these get put on the back burner.   The symptoms are familiar, and their results are disastrous: Poor or non-existent record-keeping. Tax obligations still need to be met. Invoices go out late, and debts remain uncollected. There is one cash flow crisis after another. Goods and services should be correctly costed and priced. Any of these factors can lead the construction business down the slippery path to failure, but all are avoidable. The whole point of implementing sound systems is that they free you to spend more time working on your business, not in it. Sound business systems will strengthen, improve, and simplify your business. They will also make your construction business far more attractive to future buyers. If you have developed clear operating and procedure manuals, your business will be seen as an independently viable unit and less dependent on you. Here are five steps to a better construction business: Good record-keeping and bookkeeping will help you keep on-side with the Internal Revenue Department. You'll sleep better at night if you can meet your tax obligations through sensible planning. You won't fear a tax audit, and you'll know how your business is doing. You won't be caught by a 'sudden tax demand out of the blue' because no such thing exists for a well-run business. You should always know which taxes are due and when. You'll suffer less stress. Good business planning will help you set goals for your business and take specific steps to achieve them. Without goals, where do you think you're going? Running a business without goals is like arriving at an airport and saying, "I'd like to go somewhere." The person at the ticket desk would think you're clueless! Good cashflow forecasting will enable you to anticipate a possible cashflow problem (something all growing businesses experience occasionally) and take steps before the situation becomes a crisis. Banks will respect you if you anticipate issues and make plans in advance. Banks will not respect you—and will indeed categorize you as incompetent—if you tell them you've been 'caught out' by a crisis. Banks don't like crises. They want you to go to them well before any possible crisis with a plan. This shows them you're in charge of your business. Good creditor and debtor control will improve your cash flow. Invoicing promptly and collecting debts on time gives you the cash to pay suppliers on time and get more favorable credit terms from them. It is a virtuous circle. Sloppiness in this department is one of the most common (and unnecessary) causes of business owners experiencing stress and anxiety. So pay your creditors on time and don't let your debtors use you as a free banking service. Realistic pricing and costing will ensure you run your business competitively but profitably. Poor skills could mean operating at unrealistic levels—even at a loss. For example, your profits will erode if you let costs (such as overhead costs) get out of hand. There is no point in increasing sales if you're not increasing your profits. One key area where efficient business systems can make a difference is project management. For instance, using project management software that allows for effective scheduling, budgeting, and resource allocation can improve project delivery, increase productivity, and enhance client satisfaction. By having a clear overview of project timelines, milestones, and resource availability, construction firms can better manage their projects and ensure that they are completed on time and within budget. Moreover, integrating technology into construction business processes can save substantial time and cost. Leveraging advanced estimating and bidding software streamlines the bidding process and allows for more accurate cost projections, leading to more competitive bids and improved profit margins. Additionally, embracing cloud-based accounting and financial management systems can simplify invoicing, expense tracking, and financial reporting, providing better visibility into the economic health of the business. Another area where efficient business systems can yield substantial payoffs is communication and collaboration. Implementing collaborative digital platforms and tools can enhance communication among project teams, subcontractors, and clients, leading to better coordination, reduced errors, and smoother project workflows. By fostering transparent and efficient communication, construction businesses can minimize costly misunderstandings and delays, ultimately improving project outcomes. In conclusion Implementing efficient construction business systems can generate significant payoffs for construction firms. In business, you don't have to be an expert at everything. For example, you might hate bookkeeping. Okay—but do get someone else to do it for you; don't rely on a shoebox for your accounts! You should at least understand the processes and the overall accounting picture, even if you don't want to do the 'drudge work' yourself. Poor systems lead to stress and burnout. On the other hand, good business systems enable you to work smarter, not harder. They free you to work on your business rather than in it. That way, you're more likely to avoid burnout, and you'll be able to take time off work because you can train others to follow your clearly documented systems and procedures. PS  We offer free resources to help you save time and money that you can download and print now.  About The Author: Sharie DeHart, QPA, co-founded Business Consulting And 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 [email protected]  
6/7/202410 minutes, 55 seconds
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578: Utilizing The Power Of Financial Modeling In The Construction Industry

This Podcast Is Episode 578, And It's About  Utilizing The Power Of Financial Modeling In The Construction Industry n the ever-evolving world of construction, financial modeling is a game-changer. It drives intelligent decision-making, minimizes risks, and ensures the revenue health of projects. Crafting precise and insightful financial models is a valuable tool for construction companies. It offers a panoramic view of the asset landscape and enables proactive planning and strategic management.   Financial models are invaluable tools designed to help you understand and protect your business's economic health. By simulating different scenarios and examining potential outcomes based on various inputs, such as sales growth, margins, and cash flow, these models provide a comprehensive picture that aids in informed decisions.   1. Precise Cost Forecasting and Budgeting Financial modeling empowers construction companies to predict costs accurately, considering many factors such as material costs, labor expenses, equipment outlays, and overheads. Companies can develop precise project budgets by creating detailed financial models, spot potential cost overruns, and implement strategies to monitor expenses. This foresight allows for proactive cost management, preventing financial surprises that could impact project profitability. Start by creating a base financial model incorporating your current financial data. Input variables such as projected sales, estimated expenses, and planned investments allow you to forecast your financial performance across different scenarios. By simulating best-case, worst-case, and most-likely scenarios, you'll be better prepared to navigate potential challenges and seize opportunities. Action Tip: Develop your initial model using spreadsheet software or financial modeling tools. Regularly update it as new data becomes available. 2. Streamlined Cash Flow Management Effective cash flow management is crucial in construction, where substantial capital outlays are often needed before revenues are realized. Financial modeling enables companies to map out cash flows over the project's lifecycle, identifying potential bottlenecks and ensuring adequate liquidity is maintained to support ongoing operations. By optimizing cash flow through meticulous financial modeling, construction companies can enhance their financial stability and seize growth opportunities. Presenting a detailed financial model can significantly enhance your credibility with lenders and investors. It demonstrates your understanding of your business's financial position and showcases your preparation for future growth. Action Tip: When seeking financing, ensure your model includes comprehensive projections showing how the funds will be used and the expected return on investment. 3. Informed Decision-Making through Scenario Analysis Financial modeling allows construction companies to conduct scenario analysis, assessing the potential impact of various factors on project outcomes. Whether it's changes in material costs, fluctuations in interest rates, or delays in project timelines, scenario analysis helps companies evaluate the financial implications of different situations and develop contingency plans to mitigate risks. This proactive approach to risk management is invaluable in an industry where unforeseen challenges can have significant financial repercussions. Financial models serve as robust decision-support tools. They help you evaluate the economic implications of various choices, whether setting pricing strategies, launching new projects, or considering investment opportunities. Action Tip: Before making substantial business decisions, use your financial model to conduct a cost-benefit analysis. This will help you weigh the pros and cons and align decisions with your financial goals. 4. Assessing Project Feasibility and Profitability By incorporating revenue projections, cost estimates, and financing structures into their financial models, companies can gauge the financial viability of potential projects and make informed decisions about resource allocation. This thorough assessment of project feasibility helps companies refrain from investing in financially unviable ventures and focus on opportunities with the most significant potential for success. It's crucial to create detailed and comprehensive financial projections. This includes estimating costs for materials, labor, equipment, and permits and factoring in potential risks and market fluctuations. Additionally, conducting sensitivity analysis and scenario planning can help assess the project's financial resilience to various external factors. Utilizing industry-specific Key Performance Indicators (KPIs) and benchmarks can provide valuable insights into the project's economic viability. Action Tip: Set up regular financial reviews—monthly or quarterly—to compare projected versus actual performance. Use these reviews to refine your model and strategies continually. 5. Setting and Achieving Goals and Monitoring Performances Defining specific financial goals for the construction business, such as increasing revenue, improving profitability, or managing cash flow effectively, is essential. These goals should be realistic, measurable, and aligned with the business strategy. It involves a detailed representation of the construction company's economic situation, including income, expenses, assets, and liabilities. This model is a valuable tool for analyzing different scenarios, identifying potential risks, and evaluating the impact of strategic decisions on the company's finances. Establish clear, achievable financial goals based on your model's insights. By tracking your progress against these goals, you can focus strategically on growth and profitability while identifying improvement areas. Regularly comparing your actual financial performance with your model's projections is essential. This practice helps identify deviations, assess their causes, and make the necessary adjustments to keep your business on track. Action Tip: Break down long-term goals into smaller, manageable milestones. Regularly review and adjust these goals based on your actual performance and market conditions. Strategic Financial Planning and Risk Mitigation Financial modeling is the cornerstone of strategic financial planning for construction companies, providing a roadmap for long-term financial management and risk mitigation. By creating comprehensive financial models, companies can pinpoint potential financial vulnerabilities, develop risk mitigation strategies, and make informed decisions that align with their long-term financial objectives. This proactive approach to financial planning is essential for navigating the industry's inherent complexities and uncertainties. Construction businesses can make more accurate cost projections and optimize their financial resources by incorporating various factors such as material costs, labor expenses, and overheads (LMOS™) into the financial model. Once the financial model is in place, it's essential to regularly review and update it to reflect changes in the business environment, market conditions, or project parameters. This ensures that the construction business stays on track toward achieving its financial goals and can adapt to evolving circumstances. In conclusion The potential of financial modeling in the construction industry is immense. By harnessing financial modeling tools and techniques, construction companies can gain invaluable insights into their financial landscape, make informed decisions, and proactively manage financial risks. Ultimately, the ability to develop accurate and insightful financial models is a crucial differentiator for construction companies looking to achieve financial resilience, profitability, and sustainable growth in a friendly, competitive, and dynamic industry. PS  We offer free resources to help you save time and money that you can download and print now.  About The Author: Sharie DeHart, QPA, co-founded Business Consulting And 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 [email protected]  
5/31/202413 minutes, 26 seconds
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577: Mastering Construction Business Finances Through QuickBooks Desktop

This Podcast Is Episode 577, And It's About  Mastering Construction Business Finances Through QuickBooks Desktop The power of effective bookkeeping using QuickBooks Desktop - plus an Important Update from Intuit. Keeping track of sales, earnings, expenses, and purchases is fundamental to your construction business's overall health and sustainability. Effective bookkeeping produces the data you need to evaluate your current practices, anticipate challenges, and set attainable future goals. Many business owners dread bookkeeping and accounting tasks despite their proven importance. In fact, 40% of surveyed entrepreneurs claim that bookkeeping is one of the worst parts of running a business! Is it worth the aggravation? Here are three reminders of how effective bookkeeping is the cornerstone of small business success: Keeping track of reimbursable expenses A reliable system for tracking reimbursable expenses ensures you reap all the benefits you're entitled to when filing your taxes. Expenditures sorted into categories, such as "food," "travel," and "office supplies," can be cataloged quite simply with online bookkeeping software. Using a dedicated credit card for business expenses and updating your records every month will put money back in your pocket come tax time. Measuring profitability and planning for the future To grow your business, you must be able to track and compare its finances from one year to the next. In addition to reconciling the books and bank statements every month, effective bookkeeping generates records you can use to gain a comprehensive overview of your business. This data can help you: Measure year-over-year profits; Identify opportunities to cut costs; Plan for major expenses (such as new office space, equipment, or staff) and develop data-based strategies for expansion. Preparing for tax season Few things are more stressful for business owners than scrambling to prepare poorly maintained financial records for tax season. In addition to the panic of last-minute filing, inaccurate or incomplete documentation can lead to severe penalties, fines, and an audit. In the United States alone, 40% of small businesses pay an average penalty of $845 per year for late or incorrect filings! Sound bookkeeping can save you money and give you peace of mind. You'll be assured of compliance with regulations and receive a reliable estimate of amounts owing long before your tax bill is due. If you've been following us over the years, you know that we are raving fans of Intuit, the makers of QuickBooks, and have used QuickBooks since the first version was released in 1992. In fact, in 2005, we moved our entire client base, including our own accounting firm's QuickBooks files, to an Intuit-approved commercial hosting environment so we could offer our clients all of the benefits of the full desktop version of QuickBooks accessible online 24/7, and it has been a huge success! We've always encouraged our contractor clients to use QuickBooks Desktop as QuickBooks Online does not offer the full features of QuickBooks. We know that QB Desktop in the Cloud is one area where you can reduce your overhead and increase productivity quickly and easily.  It is a powerful tool that can streamline your accounting processes and provide valuable insights into your company's financial health. Here are some reasons why using QuickBooks Desktop is crucial for your construction business:  1. Industry-Specific Features: QB Desktop offers industry-specific features tailored to the needs of construction businesses. You can track job costs, create estimates, and manage progress invoicing, which is essential for staying on top of your projects' financial aspects.  2. Robust Reporting: QB Desktop provides robust reporting capabilities, allowing you to generate customized reports to analyze your business's performance. You can track profitability by project, compare actual costs to estimated costs, and monitor cash flow to make informed financial decisions.  3. Integration with Third-Party Applications: QBDesktop integrates with various third-party applications commonly used in the construction industry, such as project management software and time-tracking tools. This integration can help you streamline your workflows and eliminate the need for manual data entry.  4. Job Costing: Job costing is a critical aspect of construction accounting, and QB Desktop offers comprehensive job costing features. You can allocate expenses to specific projects, track labor costs, and monitor overhead expenses to ensure that each project remains profitable.  5. Compliance and Security: QB Desktop is designed to help you maintain compliance with industry regulations and ensure the security of your financial data. You can set user permissions to control access to sensitive information and generate audit trails to track changes made to your financial records.  Using QuickBooks Desktop for your construction business can significantly improve your financial management processes and give you the tools to make informed business decisions. However, change is inevitable, and as someone with responsibilities, I have little time to waste; I have learned that sometimes I have to deliver challenging news. (In case you missed our Tuesday email): For those using QuickBooks Desktop 2021 software, it will be discontinued after May 31, 2024. (You may have received this notice from Intuit through your email). This includes all 2021 versions of QuickBooks Desktop Pro, QuickBooks Desktop Premier, QuickBooks Desktop for Mac, and QuickBooks Enterprise Solutions v21. Other Intuit products are affected by the software discontinuation. If you don't upgrade your QuickBooks Desktop 2021 by May 31, 2024, you won't have access to live technical support if you run into problems or any other Intuit services that can be integrated with QB Desktop. This includes QB Desktop Payroll, QB Desktop Payments, and online bank feeds. Discontinued versions won't receive the latest critical security patches and updates. (More info from Intuit) Final tip: This is the time to ask for help There's a good reason why most small businesses outsource at least one accounting function to help manage tasks like payroll, closing the books each month, and managing accounts receivable. With all the changes coming to QuickBooks software, it would be best and all the more reason to ask for support.  Most entrepreneurs are passionate about developing new business ideas – not crunching numbers. Employing or outsourcing a professional construction bookkeeper, even part-time or as-needed, can help optimize your accounting and increase profitability. It's well worth it. Invest in effective bookkeeping and build a solid foundation for a resilient, forward-moving construction business. Feel free to contact me if you need specific guidance on using QuickBooks Desktop for your construction bookkeeping and accounting needs. And, of course, subscribe to our newsletter so you won't miss out on important industry news, events, and updates. PS  We offer free resources to help you save time and money that you can download and print now.  About The Author: Sharie DeHart, QPA, co-founded Business Consulting And 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 [email protected]
5/24/202413 minutes, 11 seconds
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576: How To Build Up And Stand Out By Delighting Your Construction Clients

This Podcast Is Episode 576, And It's About  How To Build Up And Stand Out By Delighting Your Construction Clients Most businesses understand that customer satisfaction is crucial to their success. Happy clients are likelier to remain loyal, refer others, and leave positive reviews. This trend has only been amplified by social media and online review sites, where negative feedback can spread quickly and damage a company's reputation. In an increasingly competitive marketplace, more than an effective customer service system is needed: you must provide customers with a positive and memorable end-to-end experience at every touchpoint. Creating powerful experiences that exceed consumer expectations can have massive implications for any business — from increasing brand loyalty and trustworthiness among current clients to being highly attractive to potential customers.  It starts with understanding the difference between traditional customer service expectations and modern customer experience strategies. Keep reading as we explore the nuances of each approach and discuss how construction businesses like yours can strive towards offering excellent experiences in their markets. Defining customer service and customer experience When we talk about customer service and experience, it's not just about providing a product or a service. It's about the way you make your customers feel. Customer service is all about delivering the product or service in a way that exceeds expectations and meets the customer's needs.  But the customer experience is entirely different. It's a holistic approach that considers how your customers are impacted from the minute they interact with your brand to long after they purchase or hire you. It's about creating an emotional connection with your clients and leaving a lasting impression.  So, whether you're a small construction business owner, understanding the power of customer service and customer experience can take your brand to the next level. The importance of customer service in the business Have you ever walked into a store and received terrible customer service? Maybe the employee didn't acknowledge your presence or seemed annoyed when you asked a question. It's a frustrating experience and can leave a bad taste in your mouth about that business.  That's why having good customer service is essential in any industry. It's not just about making a sale; it's about creating a positive experience for the customer. When customers feel valued and heard, they are more likely to return to that business and even recommend it to others.  In a world with countless consumer options, standing out with exceptional customer service can make all the difference. Improving customer service is crucial for any business looking to stay competitive in today's market. Strategies for improving customer service Invest in employee training to equip staff with the necessary skills and knowledge to handle customer inquiries and complaints professionally and empathically. Collect customer feedback to identify areas of improvement for products, services, and overall customer experience. Implement technology solutions such as chatbots or knowledge bases to assist customers and streamline the resolution process immediately. The importance of the customer experience The significance of customer experience transcends the essential act of selling products or services; it's about crafting stories and memories that customers carry with them long after a transaction. A superior customer experience fosters an emotional attachment to the brand, transforming casual customers into passionate advocates and vocal supporters.  Where choices are plentiful and attention spans are short, construction businesses that focus on delivering memorable customer experiences will not only distinguish themselves from competitors but will enjoy enhanced customer loyalty, increased satisfaction, and, ultimately, improved business outcomes. What should you look at within your customer experience? How quickly do you respond to customer website inquiries? Do you have a target time, and how do you measure this? How quickly do you get the quote to the prospect or set an appointment date? How do you measure that you meet an acceptable time frame? When do you follow up? How do you do this? Who is responsible for this? How do you make clients feel special the first time they use your services? During the sale process, how do you make the customer feel like they are your most important client? What do you know about them? Has everyone in your business been appropriately briefed about a new client, and has anything in particular been discussed with the client? How do you appreciate the customer after the sale and ensure they have no post-purchase regrets? What system do you have to ensure that customers feel they are unique in the future, not just a forgotten number? How do you thank your customers when they refer to a family member or friend? Lastly, do all your business employees know your customer experience process and why it's essential to follow it every time? We have asked hundreds of homeowners, commercial property owners, landlords, commercial space tenants, and even a few car buyers, computer buyers, ship buyers, and consumers about their overall buying experiences, and one common thread appears over and over: They got what they wanted and were happy repeat customers and clients who referred their friends and family, or they didn't get what they wanted and made the contractors' lives hell. Our Script Book has a list of continually honed, polished, updated, and replaced questions, from which we pick and choose the ones to use depending on the situation. Develop Your Script Book—Record the questions and answers that you find. This will encourage people to open up because when they feel valued, your exceptional service and their appreciation will be far more rewarding than the money you earn. Start by practicing at social gatherings - they are more casual, business meetings are more focused, network events are somewhere in the middle, and focus group events are intense and tightly focused. The Two Most Powerful Questions: What are your most important criteria in making a purchase decision? What is the one thing you remembered about your purchase? Final thoughts Customer service and customer experience are crucial aspects of any business. Without them, companies will struggle to meet their customers' needs and fail to create a positive and enduring impression that ensures long-term loyalty. All businesses should prioritize investing time and resources to provide quality customer service and improve the overall customer experience. Ready to elevate your customer service and create unforgettable experiences? Get started now and reach out if we can help you in any way. PS  We offer free resources to help you save time and money that you can download and print now.  About The Author: Sharie DeHart, QPA, co-founded Business Consulting And 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 [email protected]
5/17/202412 minutes, 13 seconds
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575: A No-fuss Record-keeping Guide For Your Construction Business

This Podcast Is Episode 575, And It's About  A No-fuss Record-keeping Guide For Your Construction Business Managing a hectic schedule and complex projects can be challenging if you're a contractor. You must also ensure that your paperwork, documents, and contracts are in order. It's essential to keep a paper trail of your work and practice due diligence.  Keeping all your working documents in order shows that you treat your business, customers, and subcontractors responsibly. This is a mark of professionalism and can also help if you have an insurance or legal claim. Contractor paperwork documentation and procedures You should develop documentation and record-keeping procedures appropriate for your contracting operation or service if necessary. Once procedures are in place, it is equally important to ensure everyone understands and follows them.  It's good practice to hold a workshop on documentation procedures with your employees and have them sign off that they understand and have copies of the procedures. For construction jobs, some of the documents that may be obtained and maintained as part of your documentation procedure include: Project tenders/estimates Contracts or work orders Duty to perform documents Site inspection forms Tests on work completed Documentation for materials delivered to the site Documentation of your risk services assessment Certificates of insurance from your subcontractors Using Digital Tools and Software Implementing project management and documentation software can significantly reduce the time spent on paperwork. These tools can help track project progress, manage invoices, and store important documents securely in the cloud for easy access from any location.  There are many options on the market, and it's unlikely that a single piece of software will meet all of your project management needs. Companies usually combine a few applications to create a custom solution. Remember, the accounting software you need depends on the level of reports you require. This is why we recommend choosing project management tools that integrate nicely with the parts of your setup that don't need changing. What to look for Real-time reporting capability Effective construction project management requires up-to-date information. With this, you can make important decisions if you rely on guesswork, which is a lousy way to do things. The best project management tools for the construction industry offer instant reporting. Accessibility Your data must be as accessible as possible. The best construction project management tools are cloud/web-based, which makes them accessible from virtually anywhere in the world. Good Support Incorporating even the best construction project management tools will inevitably result in hiccups. That's why you should look for programs from companies with reliable customer support. Security Your data is precious and sensitive, and construction project management tools and techniques should reflect this. Before you incorporate any software into your workflow, research the company behind it, its terms of use, and the security measures it implements to keep your company's data private. Construction project management tool checklist Here are questions to ask yourself once you've narrowed your options using the above criteria: Does the software come with enough licenses for my company? Can I use the tool on multiple devices? Does the software have several positive reviews? Will the company demo its software for my company? Can my current data be easily transferred to this new software? Do partner companies use the same software or a program that integrates well with this one? The proper construction project management tools can make a big difference to your company and its productivity. I hope this helps identify the best picks and what you must consider when evaluating them.  Proper record-keeping helps you manage your finances, comply with tax laws, and make informed decisions about your business.  Now that you've narrowed down what your company needs for record-keeping, here are some tips to help you with bookkeeping or both: 1. Keep accurate records of all income and expenses, including invoices, receipts, and bank statements. 2. Use accounting software to manage your finances. This will make managing your cash flow, tracking your expenses, and generating financial reports easier. 3. Separate your personal and business finances. Use separate bank accounts and credit cards for your business expenses. 4. Track your payroll and tax obligations. Ensure you are withholding the correct taxes from your employees' paychecks and paying your taxes on time. 5. Store your records in a safe and secure place. Keep backups of your financial data in case of a disaster or data loss. If you've reached this point - perhaps you're wondering: Do I still need to implement record-keeping practices when I have already outsourced you as our bookkeeper? That depends. Are you proactive or reactive? Proactive Business Owners have systems and strategic planning to optimize profit and growth and understand the value of construction bookkeeping and accounting, while Reactive Business Owners wait until the taxes are filed to find out what happened and never plan, and worst, haven't sent any paperwork to us. In All Cases, as the construction business owner, you should take a "hands-on" approach, including paying the bills, because we do not touch your money. It is optional for our clients to have 24/7 access to their QuickBooks files and review their Key Performance Reports/financial reports daily. We continually improve processes to make other reporting methods available. With us handling the contractor's bookkeeping services tasks, your in-house staff is free to work on more productive tasks and do what they do best.    Final thoughts By following these tips, you can ensure that your construction business stays organized, compliant with tax laws, and financially healthy. We offer a free one-hour consultation; if it takes a little longer, that is OK! Your relationship with your bookkeeper is one of the most important business relationships ever because we will know what works and what doesn't for you and your construction business. PS  We offer free resources to help you save time and money that you can download and print now.  About The Author: Sharie DeHart, QPA, co-founded Business Consulting And 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 [email protected]
5/10/202411 minutes, 19 seconds
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574: What Every Contractor Needs To Know About Successful Construction Companies

This Podcast Is Episode 574, And It's About What Every Contractor Needs To Know About Successful Construction Companies   Small construction businesses have several characteristics that distinguish them from larger firms. These characteristics include having a limited workforce, smaller revenue streams, and a more localized focus.  They are often run by the owners themselves or a small team of employees. They tend to have a more personal approach to their work, as they are usually more involved in every aspect of the project. Due to their size, they are often more flexible and able to adapt to market or project scope changes. However, they may also face challenges such as limited resource access, difficulty securing financing, and increased competition from larger firms. Over the years, we have had many successful construction clients. The seasoned ones have become lifelong friends and are now retired, living according to their terms. And several are still working according to their schedule with quality, high-paying clients. Is it still possible to succeed in this industry, given the state of the economy? Regardless of government or environment, what I find common among them are these characteristics: 1. Owners leading by example The construction company owner or project manager leads by example. They are usually the first to arrive and the last to leave. The owner knows everyone by name, and their presence is unmistakable. They show a strong commitment, setting the standard where they work. This commitment should be easy to understand. After all, if they don't work hard in their own company, how can they expect anyone else to take their business seriously? 2. Simple business structure They operate a simple and open business structure, encouraging easy access to the owner for every employee. They value the contribution of each employee, many of whom are allowed to influence aspects of the construction business that would ordinarily be denied to them in a large hierarchical company 3. Communication among employees Staff receive information as soon as the owner does. Goals, problems, and concerns are discussed openly. Feedback on issues is encouraged, and staff are asked to contribute their ideas for improving and overcoming difficulties. It is often this aspect of open communication that staff appreciate the most; it is unique to small construction businesses, whether you have only one or two staff. 4. The crew is carefully chosen Staff is recruited very carefully because the contractor owner(s) recognize that they are the lifeblood of any small business. Staff are hired because their knowledge, skills, and abilities will benefit the organization rather than because of friendships or family relations. They are carefully chosen, nurtured, and trained to help the crew members and the organization from the relationship. 5. Staff commitment and loyalty All staff are very committed and loyal. Good performance is rewarded with praise, extra responsibility, and money—poor performance is not. Poor workers are consistently removed as they upset the rest of the team. Organizations whose staff show optimum commitment and loyalty have a source of competitive advantage that is hard to copy or beat. 6. A unique service (or product delivery that goes with the service) Most successful construction businesses have unique products or services, such as designs, products, systems, or some other aspect that sets them apart. This uniqueness is an essential source of competitive advantage and one that many companies work hard to sustain, adapting and innovating their products or services as their competition catches up with them. 7. A specific customer focus Successful small businesses specifically focus on their customers and clients and are geared to supplying them with exactly what they want. This focus means adopting a market-led approach, with the owners and their managers consistently looking for ways to solve their client's problems and improve their products to match their client's requirements. 8. Prompt follow-up On occasions when an inquiry or complaint is received, successful construction company owners actively follow up and solve them as quickly as possible. The results are promptly reported back to the client or customer, and in the case of complaints, measures are put in place to reduce the likelihood of similar issues reoccurring. Successful small businesses view complaints and problems as opportunities for growth and improvement. They work with a construction accountant They hire the best people to do their job in-house or outsourced. There are several valuable lessons that construction business owners can learn from accountants, and the successful ones know and appreciate the value they bring to their business.  Construction accountants are experts in financial management in their industry. They can help trade business owners understand their company's financial health, identify areas for improvement, and develop strategies to increase profitability.  Additionally, construction accountants are skilled at analyzing data and making informed decisions based on that data. They help construction business owners track their progress toward goals, identify trends and patterns in their financial data, and make data-driven decisions to benefit their businesses.  Since delegating their financials to us, our clients have told us that they have more time to focus on what they're good at and love to do. We help them stay compliant with tax laws and regulations, which is one of the common causes of a business's owner stress come tax time. By working with us, you can ensure you meet your tax obligations and avoid costly penalties. You can also gain valuable insights and support that will help you grow and succeed in the long run. Final thoughts Embodying these traits and improving your practice are essential to succeeding in your construction business. A solid plan that clearly understands your target market and competitive advantages and a detailed financial system are also necessary. Focus on building meaningful relationships with clients and suppliers, providing high-quality work, and staying up-to-date with industry trends and technology.  Additionally, it is crucial to have a skilled and reliable team in place and continuously invest in their professional development. You can build a successful and profitable construction contracting business with dedication, hard work, and a strategic approach. And, of course, a construction business accountant who will guide you along the way. PS  We offer free resources to help you save time and money that you can download and print now.  About The Author: Sharie DeHart, QPA, co-founded Business Consulting And 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 [email protected]    
5/3/202412 minutes, 25 seconds
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573: Navigating Construction Cash Flow Challenges, Myths, And Facts

This Podcast Is Episode 573, And It's About Navigating Construction Cash Flow Challenges, Myths, And Facts In the world of small businesses, positive cash flow is king. The driving force keeps your business engine running smoothly, covering all your liabilities. But what happens when outflow exceeds inflow? Cash flow problems ensue, threatening the survival and growth of your construction business. These cash flow problems can originate from various sources, including macroeconomic issues like recessions, natural disasters, wars, and microeconomic problems like business decisions and performance. However, careful planning and smart accounting practices can cushion or even avoid these financial blows. Managing cash flow is a vital part of running a successful construction business. Some contractors think managing cash flow means tracking how much money enters and leaves their business, but more goes into it.  [Starting Cash + Cash In - Cash Out] = Cash Flow Contractors and sub-contractors know there is more to profits than shown above, and most of you rely on your "gut feel" to see when the project has made a profit. Unfortunately, many cash flow myths and misconceptions can lead to poor financial decisions. For a better understanding, how about a mindset shift first? Myth: Profit equals cash flow.  Fact: Profit is not the same as cash flow. A business can be profitable but still have cash flow problems. Profit is the amount left over after all expenses are paid, while cash flow is the amount of money that comes in and goes out of the business.  Myth: Increasing sales will solve cash flow problems.  Fact: While increasing sales can help improve cash flow, it is not a guaranteed solution. If a business is not managing its expenses properly, increasing sales will only exacerbate the cash flow problem. It's essential to focus on controlling expenses as well as increasing sales.  Myth: Cash flow problems are always caused by slow-paying customers.  Fact: Slow-paying customers can contribute to cash flow problems but are only sometimes the root cause. Factors such as overstocked inventory, underutilized equipment, or poor project management can also impact cash flow.  Myth: Borrowing money is the only way to improve cash flow. Fact: While borrowing money can provide a short-term solution to cash flow problems, other options exist. Construction businesses can also improve cash flow by reducing expenses, increasing sales, and negotiating better payment terms with vendors and customers.  Construction businesses can make better financial decisions by understanding the facts about cash flow.  Let's delve into some common cash flow issues and explore how you can manage them effectively. Problem: Lack of cash reserves If your contracting business's revenue drops, having enough cash reserves to cover up to six months of expenses can be a lifeline. Solution: Project your cash flow by estimating your sales, determining payment timelines, and estimating all expenses. Your accountant can help you create cash flow projections in your accounting software so you know where you stand financially. Problem: Expensive borrowing High-interest credit cards and business loans can significantly affect your business's revenue. Solution: Consider supplier financing or refinancing loans to secure lower payments. Term loans with competitive rates can also help improve cash flow. Initiate a discussion with your lenders if interest only or deferred payments on outstanding debts are possible. Request more flexible payment options It never hurts to ask, especially if you've been transacting with your vendors for a long time and you've established a certain level of mutual trust and confidence. You can request more flexible payment options or longer payment terms. Tap into available credit lines Take advantage of available lines of credit and place the funds in interest-bearing accounts. Problem: Decreasing sales or profit margins Offering too many discounts or pricing your products and services too low can result in low-profit margins. Solution: Create a short-term business survival plan and adjust your pricing strategy accordingly. Problem: Outstanding Receivables Late invoice payments can tie up your money and affect your business's cash position. Solution: Review payment terms, send invoices early, accept multiple payment methods, offer incentives for early payment, and, as a last resort, consider selling your debt through invoice factoring. Make invoicing a priority—get paid faster and aggressively follow up on invoices. Small businesses in the construction industry risk having their clients not pay them on time—or at all. Being too passive in collecting unpaid invoices or reminding clients when payment is due will not help you collect the money you need to pay your bills. Sending out reminders of due invoices can speed up getting you paid and encourage clients considering not paying you to reconsider. Reach out to clients if necessary to discuss payment options. Even a payment schedule is better than no payment at all. Problem: Uncontrolled business growth During high-growth phases, cash flow shortfalls occur when expenses exceed working capital. Solution: Slow down and get your finances in order. Implement new accounting measures for a clearer picture of your financial situation. Problem: Inaccurate forecasting or bookkeeping practices Cash management may become more complex as a business grows, leading to forecasting errors. Solution: Hiring a professional accountant or bookkeeping service will help you to avoid accounting mistakes. The financial aspects of a construction business are complex and take much time and planning. That can add demanding responsibility to the business owner. Hiring someone to take care of the financial aspects of your business or even to advise you about the decisions you face can take the stress off you. That's precisely how we can help. Having someone on your side with financial expertise and construction experience to assess your business, advise you about your cash flow, and help you secure funding. With the time and money you'll save, it will be worth it in the long run. Final thoughts Addressing these common cash flow problems can protect your business's health. Cash flow problems may seem overwhelming, but they are manageable with the right tools and insights. We can advise you on comprehensive solutions to suit your specific situation, empowering you to make informed decisions and manage your finances effectively. PS  We offer free resources to help you save time and money that you can download and print now.  About The Author: Sharie DeHart, QPA, co-founded Business Consulting And 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 [email protected]
4/26/202412 minutes, 25 seconds
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572: Budgeting, Forecasting, And Goal-Setting In Your Construction Company

This Podcast Is Episode 572, And It's About Budgeting, Forecasting, And Goal-Setting In Your Construction Company   If you're like many construction business owners, you may need help understanding your finances or how you can use your financial information to make decisions for your business. We often get into business because we love a product or service we want to provide, but it's less common that we love managing the financial aspects of our business.    As a construction company owner, you have the best chances of success when you regularly set budgets, develop financial forecasts, and establish goals. Budgeting, forecasting, and goal-setting are best business practices that can help you stay on track and ensure long-term success.    The M.A.P. Way Budgets are invaluable business tools because they help you manage your finances effectively. A budget is a plan for how you will spend money in the coming year. It's connected to setting goals, such as setting aside money for promotional expenses (Marketing), hiring a subcontractor, or outsourcing tasks (Production). Forecasting helps you look at your finances (Accounting) in the short term to ensure they align with your business's long-term strategy. Goals help you establish your financial priorities and set a plan for moving your business forward.  1. Budgeting - as your roadmap A budget is a plan for how your business will spend its money. It is a roadmap that helps you reach all your business's goals and objectives, including financial ones. Budgeting involves tracking your expenses, revenue, and profits and making informed decisions about where to allocate resources. By creating a budget, you can keep track of your finances and ensure that you are spending appropriately in any particular area.  Having a budget will help you control cash flow. It will also help ensure that your construction business stays on track with spending so you don't pay more than you bring in. A budget also lets you know when you have enough money in your accounts to meet expenses such as payroll, taxes, and bills. If you don't have enough cash to cover your costs, you can revise your budget to free up additional money. Lastly, budgets allow you to understand how money flows into and out of your business, which makes it easier to meet your immediate financial needs while planning a sustainable future. 2. Forecasting - to avoid roadblocks Forecasting is a great way to determine your business's future profit and loss. It enables you to predict future cash flow, sales, expenses, etc. Financial forecasting can help you manage your finances by enabling you to anticipate what might happen and plan accordingly. By analyzing trends and patterns in your construction business, you can predict potential challenges and opportunities. This can help prevent overspending or under-budgeting during slow periods or high-demand seasons.  This also allows you to provide accurate budget projections when seeking funding from banks or investors, which can help you make informed decisions and avoid potential roadblocks.  3. Goal-setting - to help you budget and forecast more effectively Your goals enable you to set a vision for your business and implement steps to achieve it. For example, if you want to bring in 5 new clients in the next two months, you must explore whether your marketing budget can accommodate that and adjust accordingly.  If you aim to hire additional staff, you can look at your forecast to determine the best time to hire–and how long it will take to build up the revenue to bring in new people.  Focus your efforts and increase your chances of achieving your goals according to the SMART guidelines: Specific, Measurable, Achievable (Attainable), Realistic, and Time-Bound. Start by defining your top three business goals for the next four quarters. Then, with those in mind, do some research to help you decide on the best way to achieve them and a reasonable timeline for meeting specific targets.  Setting realistic and achievable goals can motivate your team and measure progress. This helps ensure everyone is working towards a common objective and that your business is moving in the right direction. Additionally, goals enable everyone on your team to know what you're working towards so they can feel engaged and take ownership of progress.  Strategize for long-term growth Practical accounting means managing day-to-day finances while making provisions for future growth. Software and cloud-based solutions offer easy ways to track your financials, but they also generate reports and provide analytic tools construction business owners can use for future forecasting. Familiarize yourself with the reports your software can generate to track long-term trends, identify and mitigate risk, and discover new ways to increase profitability. Talk to your accountant about which reports and metrics are most important for your business and how to utilize them.  Construction business owners like you are rarely trained accountants. Don't try to manage your company's finances alone. Collaborate with a trusted professional, invest in quality IT solutions, and familiarize yourself with relevant tools and trends.  Final thoughts Budgeting allows you to understand how money flows into and out of your business, which makes it easier to meet your immediate financial needs while planning a sustainable future. Forecasting encourages you to examine your records and anticipate the future so you are prepared for fluctuations in your cash flow. Goal setting creates your vision for the future so you can identify financial priorities.  All three are essential to building a sustainable and thriving business, but accountability is critical. Set up dedicated time at least once per quarter to review your progress. You don't have to go through this alone; let me know how I can help. PS  We offer free resources to help you save time and money that you can download and print now.  About The Author: Sharie DeHart, QPA, co-founded Business Consulting And 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 [email protected].  
4/19/202411 minutes, 36 seconds
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571: Practical Tips To Improve Your Construction Marketing Strategy

This Podcast Is Episode 571, And It's About Practical Tips To Improve Your Construction Marketing Strategy Stepping up your marketing game as a construction business owner is always a welcome topic in my client conversations. Often, contractors chat with me about the best way to promote their company, primarily because no one else is running it.    You may focus more on accounting and taxes at times, and at other times, your business may slow down, and sales become more challenging. Given this trend, establishing and maintaining connections with existing and potential customers has become more critical.    So, if you're looking to do some construction business promotions to attract more quality clients, what do you do, especially on your own? Here are some practical tips that I highly suggest to consider:   1. Build a solid online presence: Create a website showcasing your services and experience, and make sure it's easy for potential customers and homeowners to contact you. Plus points if you know how to optimize it by location and keywords, or you can always learn a thing or two when you Google: Local Search Engine Optimization. It's essential to show up first in SERPS (Search Engine Results Page) when someone looks for "plumbing emergency in (city)" or "HVAC installer nearby." As you build and edit your pages, keep in mind your USP (Unique Selling Proposition): What your business does. Whom it serves. Why it's different from other companies? How is it beneficial to your prospective client? Note that some of these elements can be divided into sections and published on one page; for instance, Services and Testimonials can work well together. This gives your visitors much-needed assurance that you have had successful projects and happy clients.  Create informative content: Share blog posts, videos, and infographics that provide value to your target audience and establish your business as an industry expert. Remember to include your Awards and Recognition (if you have any) and place it strategically. Add value to your website footer by including your contact details, policies, and other relevant links. Include appropriate CTAs (Call-To-Action) throughout your site so prospective clients can take the necessary steps and hire your services. For example, a 'Contact Us' button or a 'Request a Quote' form can be effective CTAs. 2. Use social media: Platforms like Facebook, Instagram, and LinkedIn are great for sharing your projects and engaging with your audience. Create posts regularly to update on services or special offers.  Local SEO is mainly about getting listed in local online resources and optimizing your website's and other platforms' online content to reference location-relevant key phrases and regional names rather than generic keywords.  Your construction business listing must be consistent across all platforms you use, mainly because changing it later will be challenging (think about logo placement, colors, and font). 3. Register your business on online directories: This will help increase your visibility and attract more local clients.  Google Business Profile - This is a free tool for promoting your business profile and website on Google Search and Maps. Even if you don't have a website, your Google business profile is the most crucial resource for local businesses. Claiming and verifying your business's listing will help your efforts appear in local search results. Bing Places - Microsoft's version, which might be less popular, still needs attention. It works the same way, allowing you to claim and verify your business's physical location and have it appear in Bing Maps and on mobile devices running the Windows Phone operating system. Yelp. Yelp is an online urban guide that provides local business listings. It recently replaced the relatively unsuccessful Apple Maps app for iPhones and iPads, and these devices now use data from Yelp to display local information with their included mapping apps. Given the enormous popularity of iPhones, the advantages of getting listed on Yelp should be obvious. 4. Attend industry events: Trade shows, conferences, and networking events are great opportunities to meet potential clients and connect with other professionals in your industry.  Remember, networking is about building relationships, not just collecting business cards. Be genuine, be interested in others, and follow up with people after you meet them to continue the conversation. The key here is to stop looking at every person in your networking group as a potential sale. Especially early on, be more concerned about what you can give than what you can get from these meetings. Give materially by sponsoring group events, donating to fundraising, or bringing bagels to the meeting. Give your time and effort by contributing to a service position, or be free with great ideas and a welcoming smile. The long-term value of networking groups lies in building strong trusting relationships that will give you influence beyond the people in your immediate group. 5. Word-of-mouth referrals are the most cost-effective way of gaining new customers because you don't have to spend anything on advertising or marketing. Research has repeatedly shown that referrals have a higher conversion rate (inquiries to sales) and spend more than other customers. People have more confidence in a business recommended by friends or colleagues. Referrals will happen naturally if you provide excellent service and good value, but you can improve your referral rate through an active incentive program. Final thoughts This seems a lot to do, especially if you're single-handedly working and managing your business. But unless your construction company has lots of work stacked up, there will be times when there is nothing to do, and that is the best time to think about Strategic Marketing and following the adage: "Dig your well before you are thirsty." You will only build a loyal client base if you earn your visitors' trust, which is why companies value social proof highly. Proving your construction business's value online takes a unique skill set, but boosting it during your downtime is a great practice.  PS  We offer free resources to help you save time and money that you can download and print now.  About The Author: Sharie DeHart, QPA, co-founded Business Consulting And 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 [email protected]
4/12/202411 minutes, 51 seconds
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570: Construction Business Practices For Getting Paid And Paying Yourself

This Podcast Is Episode 570, And It's About Construction Business Practices For Getting Paid And Paying Yourself Running a small construction business may seem like hopping from one task to another, needing more support and guidance. That can make it tempting to let some to-dos on your checklist slide, especially those related to finances, which can be challenging and are often outside your preferred skill set or experience.    The issue, of course, is that clients can only pay you once you've invoiced them. And as you make your salary a top priority, you can also pay yourself. You need an invoicing system that makes the process less painful—or even removes it entirely from your hands.   There are some tips you can follow to keep your finances healthy and enable you to thrive. Here are some practices to improve managing your financials so you can have the best chances of success in your construction business.. Pay yourself The business owner's salary is the line item most often left out of a small construction company's budget. As a construction business owner, you may be tempted to keep putting every cent you earn back into your contracting business, but paying yourself first is necessary. You need to earn a living; paying yourself can help your business succeed. You need to pay your bills and be financially sound. You'll also need to have money set aside for your retirement.  Ensure you draw a regular income from your business to cover your expenses. Talk to your accountant for guidelines on how much to pay yourself, and always treat yourself as generously as you would your employees. Reward financial milestones met and projections exceeded with a bonus. Raise your salary when your profit shows continuous growth. If giving yourself a raise creates some anxiety, do it in confidence, knowing you can always make adjustments as needed. Have a separate business bank account From day one, business owners should have a separate bank account to deposit their income and pay their business expenses. Keeping your business and personal finances together makes it more difficult to track how your business is doing and how you're doing. Separate bank accounts for your business and personal finances allow you to monitor where and how you spend money more efficiently. It's also crucial to designate a business-only credit card. During tax time, separate statements make submitting claimable expenses quick and easy while reducing painful audit risk. Have separate accounts for your business and finances, and deposit your salary (see the above tip) into your account.  Have a good billing strategy Every business owner wants to make money. Invoicing is typically one of the tasks that contractors like the least. Chores like creating and sending invoices are set aside for other more enjoyable or urgent tasks. Eventually, you'll deal with clients who are slow to pay their bills. Money your clients owe you isn't accessible until it's in your bank account. The good news is that we have developed two solutions that can streamline your client's payment process: Contractor Payment Application The difficulty often comes down to waiting for clients to pay their invoices. Chasing down one or two chronic late payers costs valuable time and money; if reliable clients stay caught up on one month, the result can be devastating. Many contractors use QuickBooks For Contractors to keep track of Job Costs and invoice their clients—it works well if you only have a few simple invoices.  The tricky part is when you get beyond two invoices, add some job deposits, and change orders because there is no "magic button" in QuickBooks to generate an invoice that will make sense to your client. Randal DeHart created this Excel program for complex invoices, which shows the money trail from beginning to end in a way that everyone can understand and appreciate, which means you get paid faster, with less hassle, and your clients will love you for it. Job Deposits In QuickBooks Class Send your invoices immediately when a contract wraps up or it's your scheduled billing day. Automating your invoicing with a cloud-based accounting solution will eliminate the need for time-intensive manual billing and ensure you stay caught up. This class will help you master setting up, requesting, receiving, reporting, and applying Job Deposits in QuickBooks. It will also take the stress out of generating a report to see who has deposits and balances and teach you how to avoid payment problems by offering options to your clients. Remember to invoice immediately and follow up before the payment deadline so you can get started on your client's large companies with their payment terms, find out what those are, and be mindful of them when billing.  Hire a construction bookkeeper Bookkeepers handle your company's day-to-day financial transactions and records. That includes invoicing and following up when invoices aren't paid. A bookkeeper creates the invoices and ensures they're sent out on time. They record all payments that come in and follow up on unpaid invoices. Having a complete view of your company's financials lets them tell you if you're charging enough for your services. Think about how much easier it would be to get paid if someone else was responsible for ensuring that happened. Final thoughts Many construction businesses generate revenue, but it typically takes time to see healthy profits – another reason it can be difficult to pay yourself first. Nonetheless, rewarding yourself for your hard work will motivate you to keep working, even if you aren't able to pay yourself a large salary right away. One of the best ways to encourage customers to pay on time is to maintain a friendly relationship. Encourage goodwill by adding a handwritten note to your invoices, remember your clients' birthdays, and thank them occasionally for their ongoing business.  It's a simple fact: when your customers feel connected to the person behind the business that serves them, they'll be more inclined to take care of their invoices quickly.  Let me know how I can help your business with Invoicing. We can tailor our services according to your company needs - whether you're just starting or scaling up. PS  We offer free resources to help you save time and money that you can download and print now.  About The Author: Sharie DeHart, QPA, co-founded Business Consulting And 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 [email protected]
4/5/202411 minutes, 28 seconds
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569: How Not To Undercharge Your Construction Clients

This Podcast Is Episode 569, And It's About How Not To Undercharge Your Construction Clients Contractors like you know how to pound nails, pour concrete, build homes and commercial structures, bend pipe and pull wire, install roofs, lay carpet, paint walls, and perform a thousand other tasks. So why are you not enjoying the same standard of living as other professionals? Because you are doing all of those things for anybody and everybody who asks you to.   Too many contractors are overworked, undervalued, and underpaid. We seek to change that for as many contractors as possible as we know how almost every sound, solid, hardworking, well-intentioned contractor is going out of business or barely scraping by, and that has to end here and now.   First, I must address how this could be an internal cause, such as how you deem your self-worth. Imposter syndrome is a common problem affecting people in various industries, including construction. For those who don't know, imposter syndrome is the feeling that you're not good enough or don't deserve your success despite evidence to the contrary. This can lead to undercharging clients, which is bad for business and perpetuates the cycle of feeling like an imposter.  In construction, imposter syndrome can manifest in many ways. You may feel like you need more experience or the proper education or training. You may be comparing yourself to others in the industry who seem more successful or knowledgeable. Whatever the case, it's essential to recognize that these feelings are common and don't have to hold you back.  However, when imposter syndrome leads to undercharging clients, it can have serious consequences. Not only are you undervaluing your work, but you're also potentially setting yourself up for failure. If you need to charge more to cover your expenses, you may need help to make ends meet or even go out of business.  So, what can you do if you're struggling with imposter syndrome and undercharging clients?  Here are a few tips:  1. Recognize your value: Remember that you have something valuable to offer your clients, whether it's your experience, expertise, or unique perspective. Feel free to charge what you're worth.  2. Focus on your strengths: Instead of comparing yourself to others, focus on your strengths and what sets you apart. Could you highlight these strengths in your marketing and client interactions?  3. Get support: Talk to others in the industry who may have experienced imposter syndrome. Join a professional organization or mentorship program to connect with others who can offer support and guidance.  Now that this mental dilemma is tackled, let's examine your systems and processes. Working IN your business is a JOB (Just Over Broke) Working ON your business is where MONEY IS MADE What if you could do both? Work in your business and have a higher standard of living.  Because most small construction businesses focus on survival, you pay close attention to the bottom line. This makes sense, but it also leads to being seriously overworked. Contractors like you are under increased pressure to cut their prices to get enough work, which means they need to reduce costs. What to do? 1. Accept that you have to raise your prices at some point It's a daunting task to consider raising your prices, as the danger of losing customers will be front of mind. But the bottom line is this: you can only deliver quality service if you're charging enough. It's that simple. If you're spinning your wheels trying to make up for the difference, you'll lose customers anyway. You won't be able to deliver the excellent service you're known for if you're constantly overworked trying to find profits elsewhere.  2. Understand what's costing you Consider your business costs at least once per year. Check which products or services are making money and which aren't. Then, take it further and pinpoint each area's breakeven position. You will then be able to decide how much more you need to make to be profitable and comfortable. Evaluate all avenues – supplies, staff wages, bills, rent and utilities, training, etc. Doing this regularly lets you see which areas cost you more over time. Those that cost you more will likely benefit from a price increase.  3. Bookkeeping A construction bookkeeper is an expert at managing, sorting, and recording your business's financial transactions. They've spent time developing their skills and experience and seen and resolved bookkeeping-related issues that you may encounter. Their expertise makes them more efficient at managing those issues. Your bookkeeper helps you maintain accurate records and understands your financial circumstances. They allow you to assess how to make critical business decisions, such as whether now is an excellent time to grow or when you should hold back. Your construction accountant can provide insight and advice on how to charge appropriately for your services based on your financial records and industry trends and help you take advantage of those opportunities. Final thoughts Imposter syndrome is a common problem, but it doesn't have to hold you back in your construction business. By recognizing your value, focusing on your strengths, and seeking support, you can overcome imposter syndrome and build a successful and fulfilling career in construction. You work hard as a small business owner and deserve compensation for the time you put into your business. As you work in your field, you gain more skills, experience, and knowledge, which translates to more value. If your construction company is better than it was a year ago, it's time to charge accordingly. Don't undervalue yourself. Remember, as we always say, contractors like you deserve to be wealthy because you bring value to other people's lives. PS  We offer free resources to help you save time and money that you can download and print now.  About The Author: Sharie DeHart, QPA, co-founded Business Consulting And 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 [email protected]
3/29/202410 minutes, 56 seconds
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568: The Power Of Core Values In Your Trade Business

This Podcast Is Episode 568, And It's About The Power Of Core Values In Your Trade Business As a construction company owner, you're the architect of your business's vision and culture. But some of the foundation often needs to catch up in the hustle to improve services, chase sales, and keep the lights on. Core values—those guiding principles that shape your company's identity—are more than words on a wall or a statement in a handbook.   Getting leads and doing the work is only part of the answer. Not answering them and acting on the knowledge is why many construction companies wither and die. They focus on the wrong areas to innovate or improve. They focus on the wrong enemy and threat. As a result, they need to catch up on what they could be doing to succeed and prosper over time.   Is the elevator pitch you used a year ago – even six months ago – still accurate? Unless you are crystal clear on who you are as a construction company, whom you're here to serve, and what you hope to achieve in the next one to three years, it will be hard to come up with meaningful goals.   These aren't just buzzwords to sprinkle throughout your website—your business's core values can act as the compass for your business, sharpening much about it. If your brand needs tweaking to reflect where your construction business is today and where you want it to go, start there.   Let's dive into why core values are critical to your entrepreneurial journey.   1. Core values establish a company culture.   A company without defined core values is like a boat without a rudder—adrift without direction. Sure, you're moving, but where?   Core values foster a sense of identity and purpose   Your core values anchor your company's culture. They define your company's personality. When employees understand and live these values, it unifies them.   Guide decision-making and conduct   Values should be your company's moral compass, setting the course for how you want your team to operate in every situation. From difficult decisions to everyday choices, they help your team stay true to the company's ethos.   2. Attract and retain talent.   In a competitive job market, your company's values can attract like-minded individuals.   Appeal to employees who align with the values   Millennials, and now Gen Z, not only seek employment but also meaningful work. They are drawn to companies whose values match their own. When you promote your business's core values, you'll find it easier to recruit those who are best suited for your team.   Increase employee engagement and loyalty   Employees who connect with your values are more likely to be engaged in their work and committed to the company's long-term success. This engagement translates to higher levels of staff retention, and engaged employees are much less likely to look for a job at other companies.   3. The currency of trust: build trust and reputation.   Consumers want to buy from companies they believe in.   Demonstrate integrity and authenticity   When your core values drive your business practices, you stand out as a company that's not just about profits but about people and principles. This authenticity in business operations builds a strong foundation of trust with your customers.   In a world of cynicism, displaying your core values shows that you mean what you say.   Enhance customer trust and loyalty   A company that walks the talk regarding values will create loyal customers who return for repeat business and refer others to you.   4. Provide a framework for decision-making   One of the trickiest parts of leading a business is knowing which opportunities to chase and which to pass up.   Help plan actions and initiatives   Clear core values make evaluating opportunities easier and aligning them with your company's long-term strategies.   Guide strategic planning and goal-setting   Strategic plans also benefit from a values-driven approach. Your values help you set more meaningful, impactful, and achievable goals that resonate with your business mission.   5. Drive business success.   Ultimately, businesses are run by people. And it is people, working together under common values, that power growth and success.   Create a cohesive and aligned team   When everyone's values align with the company's, you create a culture of respect, understanding, and support.   Set the foundation for long-term growth and sustainability   A business founded on strong core values can withstand market challenges and changes in leadership. It's the foundation for building a resilient, adaptable, and sustainable business.   In the construction industry, where safety, teamwork, and accountability are of utmost importance, having a set of core values can help establish a healthy and productive work environment, build trust among team members, and ensure that all stakeholders are aligned toward a common goal. Core values can also help attract and retain top talent, as employees who share the same values as the company are more likely to be engaged and committed to their work.   In conclusion   Integrity is the overarching essence of core values.  Core values are not mere internal branding nor a dusty document to be rolled out during public relations crises. They are the heart of your construction company.   In crafting core values and integrating them into your business strategy, you're not just creating a checklist of moral standards; you're shaping your company—its culture, impact on the world, and its legacy.   In every action, every decision, and every interaction, your values should be the guide that keeps your construction business on course.   So, if you haven't already, now is the perfect time to sit down with your team and chart the values that will define your business. PS  We offer free resources to help you save time and money that you can download and print now.  About The Author: Sharie DeHart, QPA, co-founded Business Consulting And 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 and 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 [email protected]  
3/22/202410 minutes, 53 seconds
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577: The Secrets To Stellar Client Service In The Construction Industry

This Podcast Is Episode 567, And It's About The Secrets To Stellar Client Service In The Construction Industry Customer service is the heartbeat of any successful business. The unsung hero transforms a potential disaster into an opportunity and a mere transaction into a lifelong relationship. In the narrative of customer loyalty and retention, service is the protagonist.   Your approach to customer service has the power to attract and retain clients. As a construction business owner, client service is critical to your company's success. It is essential to understand what your clients want and how you can provide the best service possible to meet their needs.   Why stellar customer service is key The importance of customer service for loyalty and retention cannot be overstated. Positive experiences build stronger emotional connections with customers, leading to repeat purchases or the client hiring you again, enhanced brand loyalty, and positive word of mouth. Stellar customer service is the hallmark of success in a booming digital economy. If you have a website or are marketing your trade business online, you are part of this, or you use platforms where competitors lurk one click away.  One of the most critical aspects of client service is communication. It would be best if you communicated effectively with your clients to understand their requirements, provide updates on the project's progress, and ensure they are satisfied with the work.  You should also be responsive to their queries and concerns and provide timely and transparent information.  Another crucial factor in client service is managing expectations. It is vital, to be honest and realistic about what you can deliver and to ensure that your clients understand what they can expect from you. This will help avoid misunderstandings and ensure your clients are happy with the result.  Good Customer Experience is Key A recent Zendesk report found that 3 in 4 consumers are willing to pay more for good customer service. This is a clear signal that in a market cluttered with varying product specifications, prices, and services, customer experience can be the factor that differentiates you from the competition. Retention Customer retention is cost-effective (five to 25 times less expensive than acquiring new customers) and promises a more predictable revenue stream. As a business, your job doesn't end at the point of sale—it means nurturing and retaining your customers. Crafting your customer service strategy Mastering the art of customer service requires a well-rounded strategy. Let's break it down: Excellence breeds loyalty When you deliver exceptional service, you invite customer loyalty, which fuels a positive cycle of customer lifetime value. From thank-you notes to responsive support, every interaction is an opportunity to reinforce a customer's decision to choose your brand. Accessibility is vital Clients shouldn't need a treasure map to find your service. Information, contact details, and assistance need to be at their fingertips. Accessibility is paramount through a user-friendly website, a seamlessly integrated app, or a robust social media presence. The power of empathy Empathy is the currency of customer service. It's walking in your client's shoes, understanding their pain, and making it suitable. An empathetic approach can turn a disgruntled customer into a brand advocate. Metrics You can't improve what you don't measure. Customer satisfaction metrics like Net Promoter Score (NPS), customer effort score, and customer satisfaction score are valuable tools to provide insight. Customer Service in Practice: Tools and Techniques It's time to delve into practical customer service applications. 1. Omnichannel Customers are diverse, and so are their preferred service channels. From social media to chatbots and the phone, an omnichannel approach ensures that customer service is available and tailored to meet them where they are. 2. Proactive Service Don't wait for customers to come to you with issues. Be proactive. Send out surveys, ask for feedback, and offer service tips before they ask. 3. Flexibility No two customer issues are alike, just like your projects, and neither should their solutions be. Empower yourself (or staff) to make decisions and resolve problems creatively. Sometimes, the most memorable experiences come from the most unusual solutions. 4. Always be learning Customer service is a moving target. Encourage a culture of learning and evolving. Share success stories and pain points within the team or contractor friends in the industry. This will both boost team spirit and also lead to collective wisdom. 5. Turning service into a marketing asset Quality workmanship is also essential for exemplary client service. Providing high-quality work that meets or exceeds your client's expectations will help to build trust and loyalty. Ensure you use quality materials and employ skilled workers who take pride in their work.  Beyond its immediate role, impeccable customer service can also be a marketing tool. Positive reviews: the ultimate trust signal Good service brings good reviews, which in turn attracts new customers. Reviews are often seen as more trustworthy than a brand's self-presentation. Word of mouth: Satisfied customers are the most effective salespeople. They tell their friends and family about their great experiences, and with the power of social media, they can say it to the world. Customer Testimonials: When accurate, unscripted customer stories take the limelight, the message becomes compelling and human. Conclusion: the end or just the beginning? Remember, every interaction with a customer is a chance to shine, and every problem is an opportunity to excel. You'll retain customers and create loyal brand ambassadors by making customer service a core business value.  It is crucial to show appreciation for your clients. Simple gestures such as thanking them for their business, sending a personalized note or gift, or providing follow-up support can go a long way in building solid relationships.  Your clients will remember your service long after the project is done. PS  We offer free resources to help you save time and money that you can download and print now.  About The Author: Sharie DeHart, QPA, co-founded Business Consulting And 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 and 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 [email protected]    
3/15/202412 minutes, 32 seconds
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566: Marketing Your Construction Business- How To Make It Work For You

This Podcast Is Episode 566, And It's About Marketing Your Construction Business: How To Make It Work For You Marketing your construction business is crucial for its growth and success. You can use various strategies to promote your business, such as creating a website, networking, social media marketing, and advertising. Additionally, sponsoring events and collaborating with other companies can help you reach a wider audience.    I understand how daunting it can feel for construction business owners like you; we've been there. Whether you're new to the game or have been in business for a while and haven't quite cracked the code, navigating the marketing world can be overwhelming. But it doesn't have to be. Your business deserves to be seen, heard, and thriving—with the proper guidance, you can make marketing work for you. Let's unravel the puzzle, starting from square one.   1. Defining your target audience Know thy client: the key to tailored marketing. Before you shout your brand from the rooftops, you must know who you're calling to. Understand the demographics and psychographics of your ideal customer. Are they young professionals, parents, or retirees? What problems do they face that your product or service can solve? The better you know your customer, the better your marketing will resonate.   2. Uncover data gold with market research   Don't rely on guesswork. Dive into market research — it's how you find the "who" and the "why" of your business. This doesn't have to be a complex, expensive ordeal. Start with online surveys or asking family, relatives, and friends in your neighborhood, as well as interviews, social media insights, and competitor analysis. The information you gather here will be invaluable.   3. Set clear goals that spark direction The beacon of your marketing journey Without clear objectives, your marketing can feel scattered, like throwing darts in the dark. Your goals should be specific, measurable, attainable, relevant, and time-bound (SMART). Are you aiming to increase website traffic by 30% in six months? Or boost sales by 15% at the end of the year? These goals keep you focused and make success less vague.   3. Develop a marketing strategy Mapping out your move Once you've defined your target audience and your goals, it's time to set your marketing strategy. Your marketing strategy is the "how" behind your goals. Identify which channels your audience frequents. If you're targeting working millennials, perhaps Instagram is for you. A well-thought-out marketing strategy aligns your business objectives with the most effective messaging and channels.   4. Consistency is king   Branding isn't just a logo or a tagline. It's the sum of all your customer interactions and experiences with your small construction business. Create a content calendar to ensure your brand is visible across all marketing platforms and your message remains consistent. This calendar should include blog posts, social media content, email campaigns, and any other touchpoints relevant to your audience.   5. Crafting compelling content The art of the story Your content should inspire, educate, or entertain — ideally, all three. Write as if you're speaking to a friend, addressing their problem with your service as the solution. Your content is the thread that weaves your story with your customers. Remember, compelling content isn't just about words. Images and videos can support your message.   Visuals – the silent sway   Humans are visual creatures. In fact, 90% of the information transmitted to the brain is visual. High-quality, eye-catching images and videos can convey your message faster and stickier than words alone. Share photos of your "before and after" service provided or a video demonstrating its benefits. The more senses you engage, the deeper your marketing will resonate.   6. Execution and monitoring: making it happen and seeing it through Take the plunge It's showtime! Execute your marketing plan with gusto. Use CRM (Client Relationship Management) tools like HubSpot for email campaigns to save time and stay on track. Remember, marketing is a marathon, not a sprint. Consistency and perseverance are key.   7. Learning from your results   Every marketing initiative is a learning opportunity. Use Google Analytics, social media insights, and customer feedback to monitor how your campaigns are performing against your goals. Identify what's working and what's not, and adjust accordingly. The more you learn, the smarter your marketing will become.   A word of encouragement and empowerment: You've got this!   Marketing can be a rollercoaster, with its ups and downs, but you've already taken the crucial first step – you're learning and adapting—trust in your journey, your construction business's uniqueness, and the value you provide. With persistence, creativity, and strategic thinking, your marketing activities will start to feel like second nature.   Embrace the adventure   Think of marketing as an adventure. You're the explorer, and every campaign is a new frontier. It's okay if there's trial and error and even better if there's growth. You're an integral part of the narrative, and your customer eagerly awaits your next chapter.   Remember, word-of-mouth referrals can also be a powerful marketing tool, so be sure to provide excellent service, build relationships with your clients, and ask for their feedback and referrals.    Now, take these steps, make them your own, and enter the world of marketing with confidence.   Your construction business isn't just another face in the crowd — unique, valuable, and deserving of a spotlight. Let's make that happen. PS  We offer free resources to help you save time and money that you can download and print now.  About The Author: Sharie DeHart, QPA, co-founded Business Consulting And 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 and 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 [email protected]
3/8/202411 minutes, 29 seconds
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565: DIY Construction Accounting Errors And Ways To Improve Your Practices

This Podcast Is Episode 565, And It's About DIY Construction Accounting Errors And Ways To Improve Your Practices Many small construction business owners tend to handle their accounting and bookkeeping, especially when they've just started. However, keeping track of the finance side of the business– everything from income to expenses to tax compliance– can be overwhelming.   Mistakes can happen quite quickly and can have costly consequences for your business. Below are five of the most common Do-It-Yourself accounting errors you should avoid.   1. Unorganized Records It takes excellent organizational skills to do your bookkeeping and accounting right. You must record every transaction, keep receipts or digitize them for future reference, calculate taxes accurately, and more. If your records are not kept organized and updated, you'll likely miss something, which could get you into trouble during the tax season. 2. No Accounting Schedule As a construction business owner, there are many other things you need to attend to, and accounting can easily be pushed to the bottom of your seemingly endless To-Do list. Yet, setting an accounting schedule to add your recent income and expenses into your records is extremely important. If daily updating is not possible, at least dedicate some time once a week to do your accounting. 3. Unreconciled Accounts Regularly check if your bank account reflects the same balance as you record your cash flow and other financial data in your books. If you find a gap, there is likely a mistake somewhere that you need to find or even a fraudulent transaction. Taking immediate action will help you prevent worse problems further down the line. 4. Failing to Take Into Account Small Transactions It can be easy to forget about minor transactions, such as the office supplies you picked up on your way to the office or the freebie you sent a loyal customer. However, no matter how small you think the transaction is, keeping a record and getting a receipt is essential. In case of a tax audit, you will need to be able to present records of ALL business expenses, even these small ones. 5. Not Backing Up Data and Using Accounting Software Imagine if the laptop where you store all your financial data was stolen, lost, or broken beyond repair, and you don't have a backup. You need to redo everything from scratch, which could be a massive waste of time. If you're still using a spreadsheet or paper ledger to keep track of your business finances, you might consider upgrading to a cloud-based accounting software such as Xero or QuickBooks. By migrating to the cloud, you can easily back up your accounting data and access them wherever and whenever necessary.  These cloud-based accounting systems integrate well with your bank account and other valuable construction business apps. The results are streamlined processes, less manual work, enhanced efficiencies, and better overall business performance.  Spend Less Time on Your Books and More Time on Your Business While being aware of these common accounting mistakes could help you avoid them, the most convenient and efficient way to stay on top of your business finances is to entrust your accounting to the experts. Our team of experienced accountants can integrate the most suitable cloud accounting software for your business and even train your in-house staff on its proper implementation. I admit that small business owners - like myself have learned to make the most of our resources. As an entrepreneur, I tend to take on the challenge of wearing multiple hats, managing your business, answering phone calls, responding to emails, and scheduling appointments. However, I am reminding you now that being a construction company owner and doing your accounting and bookkeeping requires a different skill set from being a construction expert in your field.  When it comes to your financials, it would be wise to take a step back and let someone specializing in bookkeeping do it for you. Ensure that they are not just accountants or bookkeepers; they are construction bookkeeping and accounting professionals. Still contemplating whether to outsource or do it yourself? Here are the questions to determine which one is right for you: Do I have experience in bookkeeping and accounting? Outsource: Working with a knowledgeable and experienced bookkeeper specializing in your industry will save you time setting up your system and processes, making it easier to get started. DIY: You may have a bit of a learning curve. Start by familiarizing yourself with construction bookkeeping and accounting processes. Create a system and an everyday routine for managing your paperwork. What kind of software and applications should I use? Outsource: Your construction bookkeeper will be able to help you determine which accounting software will work best for your business, provide you with extensive training and support, and share tips and tricks on optimizing it. Fast Easy Accounting supports several different software and applications. In particular, QuickBooks or Xero for construction depends on how you get paid, the work your company does, and if you need Job Costing. DIY: This is where it gets tricky. As I have mentioned, using a particular software depends on your contracting business, what you need out of it, and how much time you are willing to devote to learning and using it. Remember that using more popular and in-demand software and applications has a significant advantage in case of issues. Tech support should be readily available; if not, a quick Google search can lead to video tutorials and community answers. How do I generate Financial Reports? Outsource: Contractor Financial Reports such as Profit and Loss, Balance Sheet, Cash, Receivables, Payables, Job Costing Reports, and Job Profitability Reports all depend on proper bookkeeping set up from Day 1. It's easy to pull a report based on the entries and use it whether you want to understand when and where you are making money or you need to present your financials to the bank or CPA. DIY: It is easily accessed and generated from your accounting software. The real question here is, how reliable are your reports? For instance, a generic chart of accounts with your QuickBooks software is not customized to your construction business needs; thus, transactions are often assigned to improper categories, resulting in inaccurate reports. Final thoughts We offer construction bookkeeping and accounting solutions at our online store. We have QuickBooks and Xero setup templates for those who would like to do their own bookkeeping; we have packages available to choose from when you need to outsource it to us or opt to have an in-depth review of your current bookkeeping setup. Let us take charge of your books while you focus on growing your business. We help a little or a lot, depending on your needs. I look forward to being able to assist you with any option that best fits your construction company.  PS  We offer free resources to help you save time and money that you can download and print now.  About The Author: Sharie DeHart, QPA, co-founded Business Consulting And 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 and 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 [email protected]  
3/1/202412 minutes, 30 seconds
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564: Common Construction Business Pitfalls And How To Overcome Them

This Podcast Is Episode 564, And It's About Common Construction Business Pitfalls And How To Overcome Them Construction Company owners like you have probably experienced life-changing events in the past few years, as many of our clients did. Are you struggling to keep your construction business afloat? Do you find yourself facing the same issues over and over again? It's common for construction businesses to meet various challenges, but if you're not addressing them properly, they can quickly become pitfalls.    1. Poor Cash Flow Management    One of the biggest challenges for construction businesses is managing cash flow. You need cash to buy materials, pay workers, and keep your business running. However, you may be in a cash crunch if you don't correctly deal with your cash flow. To avoid this, you should create a cash flow forecast and regularly update it. This will help you anticipate cash flow issues and take steps to address them before they become a problem.    2. Failure to Adapt to Market Changes    The construction industry is constantly changing, and if you don't adapt, you may struggle to keep up with the competition. For example, if new regulations are introduced, and you don't adjust your business practices to comply with them, you may lose out on business. Keep an eye on industry trends and be willing to adapt as needed.    3. Poor Project Management    Construction projects are complex and require careful planning and execution. If you don't manage your projects correctly, you may experience delays, cost overruns, and other issues. Ensure you have a solid project management plan and that everyone on your team understands their role.    4. Lack of Communication   Communication is vital in any business but especially important in the construction industry. Your team must communicate effectively to ensure projects are completed on time and budget. Ensure everyone on your team understands the importance of communication and has the tools they need to communicate effectively.   5. Failure to Invest in Technology   Technology is transforming the construction industry, and if you're not investing in it, you may fall behind. For example, construction management software can help you streamline operations, reduce errors, and improve communication. Explore the different types of technology available and determine which can help you run your business more efficiently.    6. Not Delegating/Outsourcing Tasks   As much as we all might like to think of ourselves as superheroes who can handle anything and everything, the truth is that we're all human. Sometimes, even the most capable among us need a little assistance, and that's nothing to be ashamed of. Knowing when to delegate tasks can be one of the most important skills you can develop as a leader or even a responsible adult.   Knowing when to ask for help – whether from family members, friends, co-workers, or specialists – can save you time, reduce stress, and improve the quality of the result. So, if you feel overwhelmed by a project or task, don't hesitate to ask for help. It might just make all the difference in the world.   7. Listening to Bad Advice   When you're a small construction business owner, you get used to people giving you advice. While the advice is almost always well-intended, it's not always good.   These are usually the top two tips that well-meaning people give to construction business owners:   Never turn down a paying customer   Money is a good thing. But that doesn't mean you should say yes to everyone who enters your door. Not every person who approaches you is suitable for your business. If your gut tells you something is off—maybe the person is very demanding or constantly questions your prices—it's in your best interests to say no.   It's not necessarily about the client, either. You might be very busy, and taking on another project means you'll give them subpar service or use your valuable personal time.   If possible, turn them away graciously by explaining that you're very busy and cannot give them the attention they deserve. Consider recommending another business for them that they could turn to.   Don't say "yes" to everyone who walks through the door just because they're a paying customer.   The customer is always right   It's often in your best interests to address an unhappy customer and their needs. But some clients will never be happy, no matter what you do, especially in the construction industry. It's okay to try to make things right with them, but you risk word getting out that you'll bend backward to make customers happy. That encourages more unhappy people to come your way. Or it encourages people to find reasons to be disappointed so they can get additional benefits from you.   If it's a normal part of a routine that customers constantly complain and get some reward, you need to examine your business. If the customers are correct, then it's time for some changes. If they aren't right, stop treating them like they are.   When someone offers advice on your construction business, ask what credibility they have to share their insights. Have they owned their own business? Do they know the industry you work in? Have they learned lessons you could learn from? Was their business similar to yours?   Final thoughts   Running a construction business can be challenging, but with proper planning and execution, you can overcome common pitfalls. The truth is that owning a construction business means you must continually adapt and innovate to thrive.   Remember, just because someone offers advice doesn't necessarily mean they are relevant to you. And just because they provide the advice—or just because it is a common saying—doesn't mean you have to follow it.   Contractors like you need results - not advice. Let me know if you want to discuss how you can operate and grow your construction company. PS  We offer free resources to help you save time and money that you can download and print now.  About The Author: Sharie DeHart, QPA, co-founded Business Consulting And 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 and 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 [email protected]
2/23/202410 minutes, 58 seconds
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563: Unlocking New Construction Clients And Markets

This Podcast Is Episode 563, And It's About Unlocking New Construction Clients And Markets For a business to thrive and grow, it needs a strategic plan and the ability to find new customers and continually tap into promising markets. However, this can be easier said than done in a highly competitive trade industry.   With time, the quality of your work will speak for itself, which is the most valuable testimonial of all. While your good reputation preceding you is undoubtedly essential, there are a few other ways that you'll want to market your services to ensure that you have a steady stream of work.   The untapped potential in existing markets   Start by re-evaluating your existing customer base. Profiling them will help you more accurately define your target consumers.    Strategic Marketing is essential for any business to attract new clients, and the construction industry is no exception. Effective marketing strategies can help you reach your target audience and showcase your expertise. Some of these include: Utilizing Social Media to showcase your work and attract new clients Creating a professional website to showcase your services and expertise Using Search Engine Optimization (SEO) to improve your local online visibility Email marketing to stay in touch with potential clients and promote your services Advertising in local newspapers, magazines, or on radio or podcasts. Appear in directories: Ensure your business is on relevant trade directories in your area. Personas: your marketing's best friend Personas bring your target customers to life. If your service's ideal customer is a 40-year-old stay-at-home mom and a husband in the tech industry looking to update their kitchen, create a detailed profile reflecting their lifestyle, income, concerns, educational background, and other key demographics. The deeper your understanding of your target customer, the easier it will be to find others who fit the same profile. Expanding your business horizons Look at where your customer personas are located. Could different geographical regions hold potential for you? If so, conduct thorough consumer demand research in these locations. If the demand is significant, devise a strategy to serve these customers. This could mean extending your services to locations outside your city if the project will pay well. Integrating vertically or horizontally Depending on your current position in the market, you might find opportunities to expand by buying out competitors or partnering with complementary businesses to increase your reach and customer base. Networking can help you build relationships with potential clients and other businesses in your industry. Attend industry events, join local business associations, and participate in community events to build your network You can also consider partnering with other businesses or contractors to expand your reach and attract new clients. The digital landscape: have an online presence A robust website or a business page is a valuable way to reach more clients. A responsive website design could be beneficial if your business customers mostly found you through a Google search on their phone (that's why it's essential to ask how they found you during your first chat). Your website is your storefront, so make sure it's professional, easy to navigate, and highlights your services and expertise. Increase visibility in the real world Make sure your construction business's name and logo appear on any equipment you use, and make clothes for yourself or your crew to wear when they're out and about in the world. It may be smaller than a billboard, but driving and walking around letting people know who you are, what you do, and how to contact you will go a long way to marketing your trade business. If people become familiar with your business name, they'll likely turn to you when needed. Analyzing your competitors   It's essential to know what your competitors are doing. By researching their marketing strategies, you can gain valuable insights into what works and doesn't in your industry. This can help you make informed decisions about your marketing efforts and stay ahead of the competition. One way to start is by analyzing your competitors' websites, social media profiles, and advertising campaigns. Look for patterns and themes in their messaging, branding, and target audience. Re-evaluate your marketing strategy What actions are you taking to attract new clients? Consider brand promotion through conferences or customer surveys. Enhance your online presence on relevant websites and social media platforms. Showcase your work, engage with your followers, and connect with potential clients. You could even set up a formal referral program, as most customers will refer your business to others. Encourage satisfied clients to refer you to their friends and family, and consider offering referral incentives. You can also ask for testimonials and showcase them on your website and social media to attract new clients. Consider offering promotions and discounts to attract new customers and encourage repeat business. Exploring new markets If you feel you've maxed out growth opportunities in your existing market, it might be time to cast your net wider. Perhaps your expertise could transfer to consulting or different sectors like B2B, which could be viable options. This could require some tweaking of your marketing approach and product offerings to cater to other pain points, problems, and priorities. Partner with other businesses in your industry or outside but still relevant to what you do - like Real Estate Agents, Photographers, and Local Community Artists and Influencers, to offer joint promotions, share leads, and cross-promote each other's services. In Conclusion As a construction business owner, it's important to increase your local visibility, understand your target audience, and create a message that resonates with them. Of course, don't forget to measure your results. Finding new clients and markets is an exciting journey that could unlock doors to business growth. It requires careful planning and strategic actions, but the rewards could be significant with the right approach. P.S. We offer free resources to help you save time and money that you can download and print now.  About The Author: Sharie DeHart, QPA, co-founded Business Consulting And 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 and 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 [email protected]
2/16/202411 minutes, 9 seconds
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562: Improving Productivity And Leadership Mentality As A Contractor

This Podcast Is Episode 562, And It's About Improving Productivity And Leadership Mentality As A Contractor As a construction business owner, improving productivity is essential to your company's success. But you may often find yourself pulled in different directions by competing responsibilities. At some point, we all experience that.   Classifying tasks and tackling the most time-consuming ones can feel daunting. But why is it so hard for us to start – or even finish – seemingly insignificant tasks? Why do these tiny tasks become the bane of our existence, tempting us into procrastination limbo?    Let's explore why we get stuck on even the most minuscule duties and how that might hold us back. Understanding the psychology behind procrastination Procrastination plagues many people. It's a common problem that often leaves people feeling frustrated with themselves. But what if we could understand the psychology behind procrastination and use that knowledge to overcome it? At its core, procrastination is linked to negative emotions like stress, anxiety, and fear of failure. By avoiding or delaying a task, we temporarily alleviate these unpleasant feelings.  However, this relief is short-lived and ultimately only creates more stress. By being aware of this pattern and learning how to manage negative emotions, we can break free from the cycle of procrastination and become more productive. Breaking down the task into small, manageable parts When faced with a daunting task, it can feel overwhelming even to know where to start. However, the key is often found in breaking down the task into small, manageable parts. By dividing larger projects into smaller, more achievable tasks, we can focus our attention and energy on one step at a time, leading to a greater sense of progress and accomplishment.  Whether working on an estimate on a project or a personal goal, taking a moment to map out the necessary steps and tackle them individually can make all the difference in achieving success. So next time you're feeling stuck, take a breath and ask yourself: what's the next small step I can take? Using rewards as incentives to get started Sometimes, all it takes is a bit of extra motivation to get things done. That's where rewards can come in handy as an incentive to get started. Whether it's a tasty treat, a fun activity, or even some well-deserved relaxation time, a reward can give you that extra push to begin tackling a task.  Studies have shown that implementing a reward system can increase productivity and help you achieve your goals faster. So why not give it a try? Choose a reward that suits you and your task at hand, and see how much more motivated you feel to get started. Finding out what your specific procrastination triggers are Have you ever found yourself staring blankly at your to-do list, unable to muster the motivation to tackle any tasks? Identifying your procrastination triggers can be the key to overcoming it. Maybe certain types of tasks are more daunting to you, or you get easily distracted by social media or other forms of entertainment. Whatever it may be, pinpointing your personal procrastination triggers can help you create a strategy to combat them and finally get back on track.  Developing a plan and timeline for success Success isn't something that happens overnight. It requires careful planning and a well-thought-out timeline. Whether it's starting a business or working towards a personal goal, having a plan in place is essential.  The first step in creating a successful strategy is to define your goals and establish the time frame you want to achieve them. It's crucial to take the time to map out the smaller steps needed to reach your ultimate objective and assign realistic deadlines to each of them. Along the way, it's also essential to evaluate your progress regularly and make necessary adjustments to your timeline or plan. With a clear strategy and timeline in place, success is within reach. Planning to avoid distractions or delays In our fast-paced world, distractions seem to lurk at every corner. The constant buzz of notifications, the temptation to check social media, and the never-ending stream of emails can quickly derail our day. The solution? Planning to avoid these distractions and any potential delays. By setting clear goals, creating a schedule, and arranging your workspace in a way that helps you focus, you can reduce the distractions that come your way and stay on track toward achieving your objectives. With some forethought and discipline, you can turn your day from one filled with distractions and delays to one of focused productivity. Letting go of perfectionism and allowing yourself to make mistakes Perfectionism is a trait that can drive people to do their best, but it can also become an obstacle to personal growth. The constant pressure to achieve flawlessness can lead to fear of failure and deflection, ultimately limiting your potential. Accept that mistakes are a natural part of the learning process, and they give us experience and insight that we wouldn't get otherwise. Embracing imperfection requires a shift in mindset, but by acknowledging our flaws and being willing to make mistakes, we can move forward with confidence and creativity. How can this improve your Leadership Skills? Construction Companies have two basic leadership styles: wait until an urgent situation occurs and react like a firefighter or develop business processes that allow the company to respond calmly and direct resources and solutions to the issues like a traffic police officer on a sunny afternoon. Firefighter Leaders - Operate in one of three mental states: Going into a crisis Coming out of crises Waiting for a crisis Traffic Director - Leaders operate in one of four mental states: Preparing for new projects to appear Preventing projects from becoming an emergency Planning for implementation of current and future projects Empowering others and directing the flow of projects to completion and billing The Graph Below - Is similar to the diagram shown in The 7 Habits of Highly Effective People Habit 3: Put First Things First, by Stephen R. Covey, to demonstrate this principle. As illustrated in the Time Management Matrix above, we spend our time in one of four ways. This matrix defines activities as Urgent / Not Urgent / Important / Not Important.  In conclusion Ultimately, it is essential to remember that there is no one-size-fits-all approach to overcoming procrastination. People are inherently different and have different needs and motivations regarding goal setting and habit formation. The key is to be patient with yourself and accept that change takes time. By determining which tasks are the most important to you and your construction business and scheduling your day based on those criteria, you can ease the pressure caused when you have a long list of activities to take care of. If bookkeeping is on your list, call me and let me know how I can help. PS  We offer free resources to help you save time and money that you can download and print now.  About The Author: Sharie DeHart, QPA, co-founded Business Consulting And 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 and 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 [email protected].
2/9/202411 minutes, 48 seconds
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561: Easing Your Back Office Burden One Payroll At A Time

This Podcast Is Episode 561, And It's About Easing Your Back Office Burden One Payroll At A Time As a construction business owner, you have a lot on your plate. You need to manage your employees, oversee projects, ensure compliance with regulations, and keep your clients happy. Amidst all this, you may be tempted to handle your payroll to save costs and maintain control.   At face value, it seems like a great idea. If you're a small business owner with just a few employees, you probably think hiring a payroll specialist is an expense you can avoid.   You feel that you can handle it yourself. You intend to keep your staff paid right and on time. What could go wrong, right? Well, lots, actually. And before you know it, it's now a costly mistake, and you need to spend more money to make it right.   Why doing your own company payroll is not a great idea:   1. Time-consuming   Payroll processing is a time-consuming task that requires attention to detail, knowledge of tax laws, and expertise in accounting. As a construction business owner, your time is better spent growing your business and focusing on your core competencies.    If you don't have a finance background, you'll likely spend a substantial amount of time calculating employees' work hours, computing taxes and other deductions, creating payslips, processing, and filing.   And even if you have a bit of a background in bookkeeping, are you sure you want to spend your precious time doing these tasks instead of focusing on the core aspects of your business?   By delegating payroll processing to a professional, you can free up time for strategic planning, marketing, and business development.    2. Risk of errors    Payroll processing involves complex calculations and compliance with federal, state, and local regulations. Any payroll mistakes can result in penalties, interest, and legal liabilities. By outsourcing payroll to a professional, you can reduce the risk of errors and ensure compliance with regulations.    A payroll specialist knows the ins and outs of taxes, overtime, contributions, sales commissions, and bonuses. The bottom line is that another professional can do it better, and while they're at it, you can get back to doing what you do best– like growing your business!   3. Costly mistakes    Payroll mistakes can be costly for your business. For example, you may be subject to penalties and interest charges if you fail to withhold the correct taxes. Similarly, if you misclassify employees as independent contractors, you may be liable for back taxes, penalties, and legal fees.   Sure, you can learn about relevant tax adjustments and benefits procedures if you want to. But then again, you'd be spending more time educating yourself, not to mention the possibility of making costly mistakes. Payroll processing requires expertise in accounting, tax laws, and compliance regulations. As a contractor, you may not have the time or resources to keep up with the latest changes in payroll regulations.    A professional construction bookkeeper can help you avoid costly mistakes and protect your business from financial risks. You can benefit from their expertise and ensure compliance with regulations.     4. It's aggravating   There's no denying that payroll processing can be stressful, especially when you don't know what you're doing. Reduce stress and spend more time on business activities that drive profits and growth. You can also eliminate the risk of burnout and improve your work-life balance.    Better Practices   Payroll is one of those things that starts simply enough. You create your construction business, outsource contractors, or hire part-time crew, and things tick along. It's straightforward and sufficient to keep everything in line at first, but what happens to most companies is that they grow!   This is a great thing, but it also means that payroll becomes more complicated. As such an essential aspect of your business, payroll must run smoothly. Getting paid is, after all, the primary reason that most people come to work.   Still not quite ready to outsource? How about try this approach:   1. Simplify   Keep things as simple as possible wherever you can. One way to do this is by switching to direct deposit. This will drastically reduce the work put into issuing and tracking payments.   2. Schedule   At least once per year, and preferably more, it's crucial that you (or your payroll professional) take some time to create a payroll calendar. Highlight any dates that may cause a lag in your employees' pay.   It will also allow you to plan for any potential shortcomings or other issues arising from holiday closures or oddities in the calendar. Making a payroll mistake is a surefire way to lower employee morale, so it's essential to be aware of these dates ahead of time.   3. Automate   The computer can be your best friend. Finding the right software to help with payroll can automatically take care of simplifying and scheduling, freeing up valuable time for your payroll specialist.   It also eliminates the potential for human error in payroll processing and creates a crystal-clear picture of your finances. Many options are available these days that are easy to learn and straightforward to maintain.   4. Brush up   Payroll rules and regulations can change frequently and for any number of reasons. It's important to stay informed on any changes in your region and proactively plan for them.   A lot of time can go into correcting a payroll error, so know what's happening to avoid this. With more and more employees being hired remotely, it's also important to be aware of any regulations on those geographically located in a different area from your business.   5. Get help   If hiring a full-time in-house payroll staff is impractical, you can always come to us and let us take care of your payroll. Whether you need weekly, fortnightly, or monthly processing, our team is flexible enough for you.   As construction accounting specialists and payroll experts, we can make your employees happy with timely and accurate wages, maintain tax compliance, and significantly ease your back office burden.   In conclusion   Payroll is most effectively managed when it's simple, straightforward, and coordinated. When it starts getting tough to keep it that way, it's likely a sign that your company has grown and you're ready for more robust support.   Outsourcing payroll to a construction accounting professional can save time, reduce errors, avoid costly mistakes, benefit from expertise, and reduce stress. This will allow you to focus on growing your business and achieving your goals. PS  We offer free resources to help you save time and money that you can download and print now.  About The Author: Sharie DeHart, QPA, co-founded Business Consulting And 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 and 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 [email protected]
2/2/202411 minutes, 47 seconds
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560: Scaling And Adapting Business Strategies Amid The Cost Of Living Crisis

This Podcast Is Episode 560, And It's About Scaling And Adapting Business Strategies Amid The Cost Of Living Crisis When you're ready to take your construction business to the next level, you might start thinking about "scaling." No, it's not just a fancy term for growth; it's about doing more with less. Scaling is about increasing your revenue without proportionately increasing your resources—fancy yet practical, right? It's like sending an email: your effort is the same whether you send it to 100 people or 100,000.    But, as of now, we also probably feel like we are in the thick of a cost-of-living crisis. This challenges entrepreneurs and is a nerve-wracking time for many small construction business owners.   If you've had sleepless nights worrying about how you'll pay your suppliers or support your staff, you're not alone. You've likely already considered where to cut costs, but it seems impossible when suppliers raise prices.    But don't despair just yet! There are strategies to stretch your dollar further, and they're not always about trimming expenses. What are the tricks to scaling and adapting effectively? Efficiently using your resources without emptying your pockets, the MAP way (Marketing-Accounting-Production). So, how can you make this happen? Let's get into it. 1. Look at ways to bring or retain more money into your business. Knowing exactly where and when money is coming from your business, is the first step to seeing where you can save costs. You could be paying for services you don’t even use or simply aren’t worthwhile. Take it one step further and ask yourself if the products or services you pay for add value to your construction business. Arm up your marketing efforts Spending more when you're looking to save might seem counterintuitive, but investing in marketing can yield profitable results in increased sales. There will be short-term costs, but effective marketing can substantially contribute to a positive cash flow in the long run. Understand your clients During uncertain times, empathy goes a long way. Understanding your customers' fears and concerns can inform strategies to drive sales. Depending on their situation, you might be able to offer more services or adjust prices without adverse reactions. As inflation rises and suppliers hike prices, it's crucial to respond accordingly or risk bearing the brunt of the impact. 2. Do what you can with the things under your control while monitoring external influences. Resist the urge to slash expenses indiscriminately. Cutting back in the wrong areas might hinder the growth of your construction business. Make it a priority to retain your staff if you have any, exploring other places to trim costs or increase revenue instead. You can't control everything about your business, but you can stay aware of external factors that might impact buyers' behavior. Keep it simple, keep it clean Don't get lost in complexity. More complexities equal more chances for things to go wrong, time wasted, and resources spent. If you're scratching your head trying to understand a process or a tool, chances are, so are your employees and customers.  Keep it simple to keep control and keep everyone on the same page. Monitor your competitors Do you know how competing businesses cope with the cost of living crisis? Can you see what kind of strategy they've adopted? Understanding their strategies can provide insights about your place in the market and potential customer perceptions. 3. Embrace technology. The daily processes and transactions involved in operating a general maintenance and repair contracting business can mean long hours of repetitive tasks and occasional oversights due to human nature. Automating these tasks can result in significant savings in resources and eliminate mistakes. However, the key is knowing which tasks should be automated and which ones warrant staff intervention and guidance.  Automation is your friend The future is here, and it's all about automation. Some tools can take care of your administrative tasks, saving time and effort. From invoicing to project tracking, automation can streamline your process, making your construction business more efficient and leaving you with time and energy to spend in other areas. Check the activities you perform regularly and explore whether there's a tool that could automate them.  Manage your receivables effectively Nobody enjoys chasing after debts, yet doing so can significantly boost your business, especially in challenging times. Here are some ways to streamline the process: Adopt direct debit systems like for invoice collection. Enable invoice reminders via your accounting software. Consider asking clients for an upfront deposit or partial payment. 4. Use the situation to your advantage. There's a silver lining in every cloud. Reduced sales? Use this time to review and streamline your business processes. Examine the reasons for changing sales patterns and adapt accordingly. Rely on the data Take out the guesswork and let data guide your decision-making. We're in the information age, and there's a metric for nearly everything. Know what's working and what's not by looking at how customers engage with your website or which marketing campaigns are most effective.  Making decisions based on solid data is more critical than ever. Use actual business data, not assumptions, to create your strategies. Don't create an approach based on what you think is happening, but on what is actually happening. As the saying goes, "The numbers don't lie". Before making decisions, know your numbers! Your data remains a reliable constant in an unstable economic and consumer landscape. Accurate, in-depth financial data is crucial to making informed business decisions. Working closely with your accountant is a game-changer A good construction accountant can provide the right solutions at the right time. Their expertise in your business can be instrumental in improving its financial health. They can help interpret the numbers, understand the situation, and guide your future steps. Final thoughts  Scaling your construction business is all about smart growth. It's growing your revenue without increasing your expenses at the same rate.  Imagine increasing customer retention with minimal effort from your end. It's possible if you scale your offerings. Consider automatic renewals, subscription models - maintenance work if you're a plumber or repeatable pricing packages. Not only will these save you time from manual work, but they'll also boost customer loyalty. The secret to effective scaling and adapting lies in maintaining simplicity, embracing automation, making data-driven decisions, and fine-tuning your offerings.  It's not just about working hard but about working smart. For further support navigating your construction business through the cost of living crisis and beyond, please contact us. We're here to help you. PS  We offer free resources to help you save time and money that you can download and print now.  About The Author: Sharie DeHart, QPA, co-founded Business Consulting And 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 and 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 [email protected]  
1/26/202412 minutes, 34 seconds
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559: Mastering Tone For Construction Company Connections

This Podcast Is Episode 559, And It's About Mastering Tone For Construction Company Connections Mastering the right tone is critical when connecting and communicating with people in the construction business. Whether you're writing an email, making a phone call, or meeting in person, how you present yourself can make all the difference in building strong relationships with clients, colleagues, and partners.  Research suggests that as much as 93% of communication is non-verbal, so it's unsurprising that the tone and meaning of emails and messages are misinterpreted as much as half the time. For small construction businesses, email is frequently the preferred way to communicate with new leads, customers, and employees – but if you haven't mastered your tone, the meaning of your message may be lost. In the worst-case scenario, you may even unintentionally offend your audience. Follow these tips to improve your tone when writing emails or other business communications. 1. Adapt to your audience Tone reflects the writer's attitude toward the reader, so you'll use a different tone depending on whether you're asking a bank officer for a loan or your client to respond to your change order question. Your relationship and purpose will help you decide on your word choices, which might be serious and formal, or relaxed and fun. Using active voice will bring your reader right to the point. Taking care always to use courteous language will keep them on the side.  2. Be clear and concise Avoid using jargon or technical terms such as' load-bearing walls' or' footings' that may not be familiar to everyone you're communicating with. Instead, try to use plain language that is easy to understand and gets your point across effectively.  If it's in written form and you doubt how an email may be interpreted, hit save and return to it a day later – or ask a colleague to read it and provide some feedback. These additional tips can help you write emails that get read and avoid offense or confusion: Avoid using slang or sexist language Remove any unnecessary words Be appropriately respectful of subordination Be gracious (please and thank you. You go a long way with creating the right tone, which will keep you from being too abrupt, especially if your email is brief) 3. Be professional and respectful Use proper grammar and spelling, address people appropriately in all your interactions, and avoid confrontational or aggressive language.  What to do when delivering a negative message: The tone becomes a more significant challenge if your message contains terrible news. After all, there is no way around creating unpleasant feelings in some circumstances. You can, however, avoid insult to injury by following these tips: Thank the reader for their message, briefly explaining why you cannot approve a request. In this case, passive voice is preferred because it helps neutralize the message. Take care to avoid personal attacks. You can maintain a professional tone by deferring to policies rather than personal feelings about an event or situation. Avoid the "bright side." Listing any perceived benefits can come off as uncaring by downplaying the emotional impact the reader may experience upon receiving the message. Drafting a style guide this January for a fresh start will help make your construction company's "tone rules" clear to staff, help build greater brand recognition with a consistent voice, and help you avoid the wrong tone in your communications. Start by defining your tone. Is it casual, fun, formal, serious, or quirky? Come up with five words that describe the tone of your brand. Then, list words that may and may not be used in your marketing emails. To illustrate exactly what you're aiming for with tone, include some sample text in your guide – perhaps some of your company's collateral or examples of marketing emails you'd like your construction business to emulate. Selling your services to homeowners involves art and creativity. Words are powerful, and visuals are captivating; combine them with your preferred business tone to make a fascinating webpage to attract the right audience. You can also learn a lot by looking at your competition – pay attention to where they advertise, how they present their advertising, and the tone they use in their written material. Subscribing to competitor newsletters or regularly checking their websites is a good way of keeping up-to-date from a distance. Remember, through it all, being an active listener is the key. One of the most valuable gifts one can give another person is to listen with empathy and understanding and let them speak until they are finished. Final thoughts Being personable and approachable in connecting with others is essential. Don't be afraid to inject a little bit of personality or humor into your messaging, as long as it's appropriate and doesn't detract from the overall professionalism of your communication.  Whether you're communicating with employees about company issues, hoping to negotiate a rent reduction with the landowner, or changes to credit terms to your banker, by mastering the tone in your construction business communication, you can build stronger relationships, avoid misunderstandings, and ultimately achieve tremendous success in your work. PS  We offer free resources to help you save time and money that you can download and print now.  About The Author: Sharie DeHart, QPA, co-founded Business Consulting And 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 and 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 [email protected]
1/19/202410 minutes, 17 seconds
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558: Practical Tax Season Tips For Construction Business Owners

This Podcast Is Episode 558, And It's About Practical Tax Season Tips For Construction Business Owners Tax season can be a bit overwhelming for construction business owners, especially with many things to keep track of in our industry. But don't worry; we're here to help! We know that construction businesses have unique tax considerations that can be tricky to navigate, such as complex accounting and bookkeeping challenges and issues related to payroll and sales taxes.    That's why staying informed about the latest tax laws and regulations is essential, as well as working closely with a qualified construction accountant and tax professional who can guide you through this process and ensure you comply with all applicable tax rules and regulations.    Preparing for tax season is a year-round endeavor. Tip number one for construction company owners is to update monthly financials using a streamlined software or cloud-based system.   This way, come tax time, everything you need is in one place. Well-organized small businesses are better positioned to minimize tax bills while avoiding missing or inaccurate information penalties.   Here are four more ways to take the stress out of tax time and maximize your return. Know your credits and deductions. Small businesses typically benefit from a wide range of tax credits. From special allowances for research and development to programs that supplement wages for student employees and apprentices, knowing which credits apply to your business can save you a tax bundle. It's also essential for business owners to be savvy about deductions. After all, you want to keep as much of your hard-earned revenue as possible. Often-overlooked items you may be able to deduct include: - Seminars, classes, or conventions you attended to improve your professional skills; - Unused inventory that you've donated to charity (an excellent reason to consider donating your overstock rather than paying for storage) and - Capital assets, such as office furniture, computers, and equipment. Speak to your accountant about the deductions you can plan for each tax year. Be careful about what you claim. If you run your business out of your home, you may be able to claim a portion of expenditures like utilities, insurance, property tax, and rent. But you must keep good records and receipts to justify why you've allocated business costs to your home office. The same goes for home office computers and mobile phone expenses. Tax authorities will want to see how you've separated these assets from personal and professional use when you claim them as work expenses. Want to claim drive time as a work expense? Ensure you submit a log of your business-related mileage to demonstrate how your personal vehicle was used professionally. Don't miss the deadline! This should go without saying, but construction business owners are hit with severe penalties for filing taxes late yearly. Missing the deadline can have a range of negative repercussions, including: - Added interest to amounts owing, plus a late payment penalty; - Losing your claim to a refund; - Loss of credits toward retirement or disability benefits and - Delay of loan approvals (lenders require a copy of your filed tax return to process your application). Seek expert advice well in advance. A survey of small business owners found that a full quarter don't understand their tax obligations. What's more, 27% only speak to their accountant at the last minute, just before the filing deadline. Having trouble? You don't have to go through it on your own again. Set yourself up for success this year by following these four pillars of painless tax preparation: 1. Commit to clean bookkeeping from day one Year-round, effective bookkeeping is the best way new business owners can minimize tax season stress. With the wide range of accounting software, there's no reason to rely on time-consuming manual methods that leave room for error. All-in-one options like Xero and QuickBooks automate your most important bookkeeping processes, including: Tracking expenses; Tracking sales and income; Creating and sending invoices and Managing inventory. With your financial records in one place and up-to-date, you're better positioned to maximize your refund while avoiding penalties associated with incorrect or incomplete tax returns. 2. Capture every business expense Each year, 21% of small business owners claim less than half of their business expenses, primarily because they don't have a reliable system for documenting expenditures while on the go. Without carefully logged receipts, entrepreneurs must forfeit valuable tax deductions, sacrificing cash they could funnel back into their business. Cash in on claimable expenses using a mobile app to record receipt data, track mileage, and generate expense reports. As a bonus, many of these tools sync with your all-in-one accounting software. 3. Separate business from personal Right from day one, small business owners should divide their personal and business expenses. Differentiating between the two will make it much easier to claim deductions on your tax return – and support those claims in case of an audit. Recommended steps to separate your business and personal finances include: Create a separate bank account for your business, and designate a credit card solely for business purposes (this will help you track expenditures while building up your credit and borrowing power); Never combine business and personal expenses (for example, if you buy printer ink for your home and your business at the same time, ask for two separate receipts); Pay yourself a set salary from your business checking account each month (this will help you determine how your income and the company will be taxed).   4. Always consult with an accountant Not sure exactly what you can claim as a business expense? Are you wondering which accounting software to use or how to interpret local tax regulations? Consult with a construction accounting professional to put your mind at ease – well before the filing deadline! In addition to managing the nuts and bolts of tax preparation, regular meetings with an accountant will help you continuously improve construction bookkeeping practices and better understand the financial workings of your small business. Final thoughts  Those organizational strategies you commit to now will promote positive relations with your local tax authorities – and the long-term financial health of your construction company. Technology has made it easier than ever for small business owners to file for themselves, but when it comes to thoroughness and accuracy, nothing can replace the expert advice of an accountant. Consult a business professional specializing in construction bookkeeping and accounting well in advance to ensure you get the most out of your tax return and that your documentation is complete. Conversely, accounting fees are often tax deductible, and I do not charge phone chats/consultations. Don't stress too much! Let me know how I can help you. PS  We offer free resources to help you save time and money that you can download and print now.  About The Author: Sharie DeHart, QPA, co-founded Business Consulting And 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 and 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 [email protected]
1/12/202411 minutes, 30 seconds
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557: Becoming A Better Project Manager By Improving Communication Skills

This Podcast Is Episode 557, And It's About Becoming A Better Project Manager By Improving Communication Skills In the construction industry, communication takes many forms, including written reports, drawings, emails, and face-to-face meetings. Each form of communication has its own set of advantages and disadvantages. For example, written reports and illustrations provide a permanent record of information, but they may not be as effective in conveying complex ideas as face-to-face interactions.    Understanding how construction business owners and project managers, like you, if you do both (a one-person company), adapt to their environment, and facilitate procedures could make your company run smoother because there is no money in workplace chaos.   However, the thinking patterns and comfort zone of a well-trained staff or subcontractor are defined by the following: If it isn't broken, how can I ensure it stays that way? When it fails, I fix it, then I look for the root cause and work on that I maintain it so that it does not deteriorate into an emergency Everybody is my client; I work for the internal and the external client When I have to fix things, I must not have done my job right in the first place I gain recognition from knowing things are running smoothly and predictable My clients are important; the world revolves around them I don't know everything, so I ask lots of questions to uncover problems and opportunities I delegate responsibility to those who can handle it, and I guide them to success I read instructions because somebody else learned it the hard way and wrote about it Everything under my control is my responsibility; therefore, I empower myself to fix it Construction Project Managers loathe unpleasant surprises, so I seek to eliminate unpleasant surprises When a severe problem arises, I work with the team to develop a plan before it gets out of control Finally, I don't reinvent the wheel; I find who is doing things right and copy their success Effective leaders are conditioned to avoid emergencies by being proactive and having systems to deal with emergencies. After the crisis has passed, they are ready to evaluate the emergency's root cause and implement change in the system to avoid a repeat performance. That's why excellent communication is crucial in the construction business workplace. With so many moving parts and various stakeholders involved, clear and concise communication is necessary to ensure everyone is on the same page and working towards the same goal. Poor communication can lead to costly errors, delays, and safety hazards.  To become a better leader and improve communication in the construction business workplace, it is essential to establish clear lines of communication and ensure that everyone understands their roles and responsibilities.  Regular meetings and check-ins can help keep everyone informed and up-to-date on project progress and any changes or issues. It is also important to encourage open and honest communication, where team members feel comfortable sharing their concerns and ideas without fear of retribution. This can help to foster collaboration and creativity, leading to better outcomes for everyone involved.  One way to improve and encourage collaboration and clear communication in your workplace is by practicing simple ways to improve it: 1. Always maintain control of your emotions in stressful situations Leaders are often called upon to make difficult decisions under circumstances that are not ideal. If you can keep a cool head and calmly make decisions in a crisis, the people around you will begin to recognize you as the go-to leader when new or challenging situations arise. 2. Remain focused on the conversation at hand When you are in the middle of working on a project, it is easy to get tunnel vision that prevents you from focusing on what is happening around you. When someone engages you in conversation, always try to stay focused on what they are saying.  Occasionally, repeat your understanding of what the other person just told you. Not only will this behavior make them feel you value their input enough to listen, but it will also increase their respect for you as a leader/coworker. 3. Pay attention to your body language It is important to remember that your body language can be just as essential as what you say. If you are in the middle of a conversation with someone and they see you furrowing your brows or not making eye contact, they could walk away with the impression that you are disinterested or angry with them. Try to maintain a neutral expression when conversing with your staff or coworkers. 4. Do not interrupt People approach you when you are a leader because you have the answers. However, it can be easy to speak without a complete understanding of what is being asked and provide someone with incorrect information. Always allow the other person to finish their thought and ask their question in its entirety so you can give a thoughtful, helpful answer. 5. Do not make snap judgments when speaking to someone Occasionally, leaders are sought out when someone has made a mistake or poor business decision. If someone you are leading comes to you and admits they have done something wrong, try your best to withhold judgment. Sometimes, this will require you to listen to their side of the story and reschedule a meeting later in the day or week to discuss a more productive course of action. Other times, it may be as simple as asking them for their solution and addressing it from that angle. 6. Be consistent with your feedback Always consistently seek opportunities to offer cheerful and negative feedback when leading people. Many issues in building sites can be prevented by merely mentioning positive behavior when you see it and constructively pointing out negative behaviors as they occur in hopes of ending there. Final thoughts If you are looking for ways to lead more effectively, communicating better is one of the most accessible and valuable skills you can learn. Effective communication will help you gain the trust and respect of individuals around you, one of the most valuable assets you can acquire. Overall, effective communication is essential for success in the construction business workplace. By establishing clear lines of communication, encouraging open and honest dialogue, and utilizing the right communication tools, construction teams can work together more efficiently and effectively to achieve their goals. As we move forward, let's focus on improving our business practices, streamlining our processes, investing in our employees, and, more importantly, ourselves. We can succeed tremendously by providing our team with the necessary tools, training, and support to excel in their roles.    Wishing you a prosperous and successful new year!   PS  We offer free resources to help you save time and money that you can download and print now.  About The Author: Sharie DeHart, QPA, co-founded Business Consulting And 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 and 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 [email protected]
1/5/202411 minutes, 57 seconds
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556: Rest And Reset For Construction Contractors And Business Owners

This Podcast Is Episode 556, And It's About Rest And Reset For Construction Contractors And Business Owners To be in business and to remain in business, become a business person! To run a business, you must be business-like. It's not sufficient just to be very good at what you do. Many people who are 'very good at what they do' have failed. The familiar cry: "I'm far too busy for that" is no excuse. Are you 'too busy' to be a competent businessperson? If so, your construction business won't last long. You must continue to develop your business skills.   To be a businessperson, you have to make an effort to become something of an 'all-rounder,' not just a specialist player. You can offer outstanding goods or services, but if you don't develop sound business systems, you are not a fully rounded businessperson, and your business will be in danger of failing.   Having a system in place is your key to enjoying a stress-free holiday. There's no need to be overly anxious about your construction business during this period (this week, between Christmas and New Year, for instance) as long as you have a few basic precautions. It's never too late to start building a system; you never know when you might need a break for a momentous occasion or your health and well-being. Back up all your important documents and information and store the backups in a secure place off-site. It also makes sense to take this one step further and check that you can restore your systems from your backup. Arrange for a responsible staff member or someone independent of your business to monitor your premises (if you have one). Alternatively, install security systems if you haven't already: fire alarms/sprinkler systems and break-in monitoring by a security firm. This is something to consider if you haven't done this yet. It's also good to ensure you have appropriate insurance coverage and that your insurance policies haven't lapsed. Practice the Art of Delegating - yes, this is possible even if you're a one-person company. You can outsource small tasks and hire a specialist for a more specialized job in many ways. A virtual assistant can communicate and respond to inquiries, emails, and social media. A construction bookkeeper can take care of your last bits of receipts and payroll. You can also: Plan for contingencies. What would you do if staff fell ill? Who should be contacted if there are any unexpected calamities? Discuss your team's concerns and your own. Pick the right people for the right jobs. This is critical if you want your construction business to continue to operate well in your absence; you'll be relying on your staff while you are away. It is essential that you prepare them. Ensure everyone is familiar with the contingency plans – discuss, revise, and practice them before departure. As a construction business owner, taking time away from work is essential. But worrying about whether staff are meeting deadlines and suppliers are happy translates to more stress and less time enjoying your holiday. With some staff communication and planning beforehand, you needn't worry that your business won't be able to cope in your absence. If you can't switch off from work mode or something urgent pops up, technology can be a great way to check in and ensure things are ticking along. Is it time to start over? For those of you who are using this week to rethink your administration and paperwork processes, I might be able to help you clear some bookkeeping blunders. Sometimes, a contractor's QuickBooks (or bookkeeping) file is a hopeless mess, and fixing it would cost more than simply starting over would cost. Here is a list of warning signs that can help you decide: Nothing inside QuickBooks makes any sense to you. None of the Financial or Job Costing Reports make sense to you. Your QuickBooks bank or credit card balance differs entirely from your last Bank Statement.  Worse yet, your bookkeeper puts all the credit card statement charges in bulk using Journal Entries. Time flies when everyone is busy. Start now and review your records for the following items: Missing Federal Tax IDs and requesting the W-9. Have all your employees verify their pay stubs for the correct address. Check Apartment numbers and zip codes. Have any of the neighborhoods been annexed into the city? Year-End Accounting Clean Up Your Tax Accountant will send your booklet with what they want for records.  What are the loose odds and ends missing for this year? Do you have a formal Accounting System? Do you need to clean up the Accounting beyond the last few months?  Do you have bank statements?  Can you find all your receipts? Tax Accountants do "workarounds" to file your annual taxes. At some point, the Tax Accountant may refuse to clean up and deal with the Lack of Good Records or Messy Records. Tax accountants will have more clients who want their taxes done as the economy improves.  A good tax accountant can do Many Simple or Less Complicated Returns in the same amount of time it takes to do a Messy, Complex Business Return. More Tax Returns become more complex than is necessary because the documents or lack of records make them messy and complicated to deal with.  A tax accountant will assume you gave them everything you had. In reality, you gave The Tax Accountant only what You thought The Tax Accountant needed versus all of the records that might save you additional money in taxes.  A sound accounting system will help you decide better what to buy and what jobs to accept. When did you afford to take payment plans from your clients? When is the need or ability to raise your prices? Only you can decide if the lack of good records was worth the low price. Final thoughts If you're taking time over the holidays, really take time. Don't take time off but then spend that time constantly checking for work-related texts and emails or attending meetings. Put your cell phone away. Stop checking your email. Set an outgoing email that lets people know when you'll respond to their messages, and change your voicemail to note your days off. That way, you can rest, relax, and enjoy your break. As the year ends, whether you are resting or restarting, don't wait until the last minute to get your accounting in order - start early to avoid any potential issues or penalties. Let me know if you need help with your year-end accounting. Contact us to find out how we can help you bring more balance to your business. The New Year is three days away. Are you ready? PS  We offer free resources to help you save time and money that you can download and print now.  About The Author: Sharie DeHart, QPA, co-founded Business Consulting And 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 and 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 [email protected]    
12/29/202311 minutes, 50 seconds
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555: The Benefits Of Outsourcing For Construction Company Owners

This Podcast Is Episode 555, And It's About The Benefits Of Outsourcing For Construction Company Owners Outsourcing can offer a range of advantages for small construction businesses in today's competitive market. Not only does it reduce costs and free up valuable time for owners to focus on growing their business, but it also provides access to skills and expertise that may be unavailable in-house. Small construction businesses can streamline operations, increase productivity, and scale faster than ever by working with external professionals or firms who work in certain areas.    Because a small business focuses on survival, you pay much attention to the bottom line. This makes much sense, but it also leads to being seriously overworked.   Contractors are under increased pressure to cut their prices to get enough work. And that means they need to reduce costs. New technologies and approaches in cloud computing for construction accounting give forward-thinking contractors a fantastic ability to get more for less -but in most cases, contractors' heads are still stuck in 1990, thinking they have to do everything themselves.   Here are some benefits of outsourcing for small businesses and how they can help your business succeed. The advantages of outsourcing for small construction businesses As a small business owner, you want to ensure that every aspect of your company is running smoothly. Outsourcing can benefit your business, including cost savings, access to special skills, and increased efficiency. By outsourcing specific tasks, you can free up time and resources to focus on core business functions. Outsourcing can also help you keep up with the latest industry trends and technologies, giving you a competitive edge in your market. So, if you want to grow your small business, consider whether this is a viable option to help you succeed. 1. Identify which services and tasks are suitable for outsourcing. When outsourcing, you must carefully consider which services and tasks are suitable for delegating to third-party providers. Factors such as the nature of the work, the level of expertise required, and the cost-benefit analysis must all be considered. For example, routine administrative tasks like data entry or customer service may be easy to outsource. Still, more complex tasks like software development or legal assistance may require a more strategic approach. Ultimately, outsourcing can offer numerous benefits to construction companies, including cost savings, improved efficiency, and greater flexibility. Still, it's essential to identify the right areas to outsource to magnify these benefits. 2. Review the cost-benefit of using a freelancer or third-party service provider. When outsourcing specific tasks, businesses have two options: hiring a freelancer or contracting a third-party service provider. Each option has pros and cons that business owners should consider before deciding. On the one hand, hiring a freelancer can potentially save money since they typically charge less per hour than a full-service agency. However, freelancers may not have the same experience or resources as a third-party provider, which could lead to lower-quality work or additional costs down the line. On the other hand, contracting a third-party provider may be more expensive upfront, but they often have a team of experts with years of experience and access to top-of-the-line technology. Ultimately, the cost-benefit analysis will depend on each business's needs and the outsourced tasks. 3. Discuss different payment options when hiring a freelancer. When hiring a freelancer, one of the critical things you must consider is how you will pay them and what payment options are available. Fortunately, several payment options can help you pay your freelancer easily and securely. These options include paying through platforms like PayPal or Stripe, using wire transfers, paying with credit or debit cards, or even choosing to pay by cryptocurrency. Each payment option has advantages and disadvantages, so choosing the one that suits your needs and budget is essential. Whether hiring a freelancer for a one-time project (like your company website) or on a long-term basis, choose a payment option that provides a safe and hassle-free experience for you and your freelancer. 4. Evaluate potential contractors' quality by researching their past work. When finding the right contractor for your projects, researching their past work is crucial in evaluating their quality. You can review their portfolio of completed projects and read reviews from previous clients to gauge their satisfaction with the contractor's work. It's also important to check if the contractor is appropriately licensed and insured and to ask for references from previous projects. By taking the time to research potential contractors thoroughly, you can ensure that you're working with a reliable and qualified professional who will deliver high-quality work on time and within budget. 5. Learn how to manage an outsourced team effectively for maximum results. As companies expand and seek cost-effective solutions, outsourcing has become a widely accepted practice in the business world. However, managing a team that is not located in the same office or even in the same country presents some unique challenges. Developing effective communication, delegation, and collaboration strategies is crucial to get the best results from an outsourced team. By establishing clear goals, providing regular feedback, and fostering a culture of transparency and accountability, you can ensure that your outsourced team is fully engaged and aligned with your business objectives. With the right approach, managing an outsourced team can increase your company's productivity, innovation, and growth. Outsource Your Construction Bookkeeping Anything not related to your core construction business is an outsourcing candidate. When I say, "outsource your contractor's bookkeeping," I do not mean turn it all over to us or any other contractor's bookkeeping service because this never seems to work well. No, I'm talking about outsourcing specific bookkeeping services related to data entry, bills, payroll processing, and preparing Quarterly Tax Returns. It is crucial that you keep control of your money. Outsourcing a contractor's bookkeeping is one of the ways to avoid bookkeeper embezzlement. Never let an outsider pay the bills, print checks, and authorize payment for payroll or any tax payments. I suggest looking at every part of your internal contractor bookkeeping service and asking yourself a simple question: is this a unique and critical part of our construction company, and is it something only we do? If so, it stays in-house and needs the brightest minds you have working on it. If not, it is a candidate for outsourcing, and you need to look at it more closely. Outsourcing a competent construction bookkeeper is a sound business decision as it gives you access to expertise and guidance you might not otherwise have, and it frees up your time and money to take advantage of other business opportunities.  In conclusion Outsourcing can be a cost-effective and efficient way for construction business owners to manage their administrative tasks and focus on growing their business. It is essential to carefully consider each potential service provider's advantages and disadvantages to ensure they meet your needs. Additionally, use references and research contractors' past experiences to guarantee that you get the best possible fit. Finally, take the time to manage your outsourced team correctly so that everyone reaches maximum effectiveness in their jobs. Now might be the perfect time to evaluate whether outsourcing suits your business needs. Everyone celebrates the Holiday Season in his or her way. Enjoy, Embrace, Be Glad, Be Joyful, and maybe a Little Sad. No one is up and happy 100% of the time. Do something nice for others. A smile is easy; it’s always with you and FREE. It can be a simple thing. Treating everyone a little nicer will make the day's challenges more manageable. I invite you all to join me in the Celebration of the Holiday Season of Living Well and being Happy.   Merry Christmas to one and all! PS  We offer free resources to help you save time and money that you can download and print now.  About The Author: Sharie DeHart, QPA, co-founded Business Consulting And 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 and 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 [email protected]
12/22/202313 minutes, 21 seconds
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554: Managing Work-Life Balance As A Construction Business Owner

This Podcast Is Episode 554, And It's About Managing Work-Life Balance As A Construction Business Owner Wellness is an important aspect of life for everyone, especially construction contractors like you. Given the physically demanding nature of the work, contractors must prioritize their physical and mental health. Proper nutrition, exercise, and adequate rest are all necessary for maintaining a healthy body and mind. Additionally, taking breaks and managing stress can help prevent burnout and promote well-being. By prioritizing your health, contractors can feel better and perform better on the job.   However, maintaining a healthy work-life balance can be difficult for a small construction business owner, as most know. You may work long hours, sacrificing personal time and family obligations to keep your business running smoothly. The duties and responsibilities of running your own business often take priority, no matter how personal pursuits are essential for your well-being.    But, with the right strategies and mindset in place, it is possible to strike an effective balance between working hard on your business and making time for yourself.   Set boundaries   As much as we might love our jobs, we must remember that our mental and physical health always comes first. One of the best ways to ensure we care for ourselves is by setting boundaries for our work schedule. For example, taking regular breaks throughout the day can help us avoid burnout and increase productivity when we return to our tasks. Or, if we know that specific tasks require more energy and focus, we can set aside clear days to tackle them.    Create a schedule that allows you to dedicate specific hours to work and specific hours to personal time. Avoid checking emails or answering work-related calls during your personal time, and encourage your employees to do the same.    By sticking to a schedule that puts our well-being first, we can remain motivated and engaged in our work for the long haul.   Do what works for you   Ever feel like you have a million things to do and not enough time in the day to get them done? Trying to keep track of everything can be overwhelming without some system in place. That's why it's important to identify what works best for you and create a plan that keeps you on track and productive. Maybe you're a fan of to-do lists, or maybe you prefer to use a digital calendar. Perhaps you find that breaking tasks down into smaller, manageable steps helps you stay focused. Whatever it is, take the time to figure it out and stick with it. Your future self will thank you for it!   Sort out what is important and what is urgent   We often juggle multiple tasks and try to complete them all at once. This approach can often lead to suboptimal results or burnout. A better system is to sort our tasks based on their importance and urgency, focusing on the most important or urgent tasks first. This way, we can ensure that we are progressing in the right direction and achieving our goals.    Identifying the most critical and urgent tasks may require time and effort, but it will pay off in the long run with increased productivity and reduced stress levels. So, next time you feel overwhelmed with a list of tasks, take a step back.   Learn to delegate   As much as we all might like to think of ourselves as superheroes who can handle anything and everything, the truth is that we're all human. Sometimes, even the most capable among us need a little assistance, and that's nothing to be ashamed of. Knowing when to delegate tasks can be one of the most important skills you can develop as a leader or even a responsible adult.    Knowing when to ask for help – whether from family members, friends, or co-workers – can save you time, reduce stress, and improve the quality of the result. So, if you feel overwhelmed by a project or task, don't hesitate to ask for help. It might just make all the difference in the world. This will help you manage your time more effectively and allow you to enjoy your personal life.   Rest   It's easy to forget the importance of rest and self-care. But the truth is that getting enough sleep and practicing activities like yoga or meditation can be crucial to our overall health and well-being. A good night's sleep can help boost our mood and energy levels, and it's also been linked to a reduced risk of developing chronic health conditions.    Similarly, self-care activities like yoga or meditation can help us feel more relaxed, reducing stress and anxiety. So, if you've been neglecting your sleep or self-care routine, now is the perfect time to prioritize them. Your body (and mind) will thank you for it!   Make time for family and friends   Yes, I have to mention this! It's easy to get caught up in work and forget to set aside time for the people we care about. Not only does it help us avoid burnout, but it also strengthens our relationships with those we love. Whether it's a weekly family dinner or a monthly game night with friends, committing to these moments of connection can profoundly impact our mental health and overall well-being. So, next time you feel overwhelmed by work or life, remember the people who matter most. They'll be there to lift you when you need it most.   Final thoughts   Take the steps necessary to establish successful systems for yourself and reap the benefits! Whether that means setting boundaries, delegating tasks, or even taking time off to spend with family and friends, design a process that works best for you. This works to your advantage, especially during the holiday or when loved ones need you the most.   Achieving a work-life balance as a business owner in the construction industry is an ongoing process. Continuously evaluate your schedule and priorities to ensure you're making time for work and personal activities. It's important to remember that balancing work and life should be a priority – so don't forget to take care of yourself as you continue to strive for success! You deserve it. PS  We offer free resources to help you save time and money that you can download and print now.  About The Author: Sharie DeHart, QPA, co-founded Business Consulting And 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 and 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 [email protected]  
12/15/202311 minutes, 17 seconds
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553: How To Avoid Year-End Construction Bookkeeping Chaos

This Podcast Is Episode 553, And It's About How To Avoid Year-End Construction Bookkeeping Chaos As the year comes to a close, it's important to start thinking about your bookkeeping tasks to ensure a smooth transition into the new year. Deadlines are fast approaching, but it doesn't have to be stressful.    Have you given your bookkeeper, wife, partner, accountant, or tax accountant the information needed to complete your reports? Accountants need good information to create detailed reports and save money on your taxes.   Here is where the expression "Garbage In Equals Garbage Out" comes into play. It is impossible to create Job Costing Reports when all anyone knows is the deposit amount on the bank statement.     It's the Mad Dash To The End Of The Year as a contractor recently described their Year End Madness to prepare his documents for the Tax Accountant. Are you in this cycle? I have great news for you - it is preventable. 1. Review your accounts:  Make sure all your accounts are reconciled and up-to-date. This includes bank accounts, credit cards, and any other accounts.  In Construction Accounting, not everything is an expense. Not every item, tool, material, or customer enters the Chart of Accounts. In some cases, Class Tracking is helpful, but most of the time, it is used to make up for a poor Chart of Accounts or as a "workaround" for an accounting product not designed to have Job Costing Reports or Cost Of Goods Sold. Giving your bookkeeper only your bank statements and saying "Fix It" – I Want Job Costing Reports, I Want To Know Details is not enough. Doing it the way you have always done it – expecting a different result isn't how it works. 2. Review your files: Go through your year's costs and ensure they are all properly categorized. This will help you with your tax reporting and better understand where your money is going.  One of the most overwhelming parts of the end of the financial year is finding all the invoices, receipts, and reports you need to file your taxes correctly. Pay attention to how easy it was—or wasn't—to find what you needed this past year. Did you have to search 15 different places for all your receipts? Did you have a combination of online and physical invoices? Did you have clearly labeled folders for everything? Did you leave everything for the last minute? If you search high and low for every piece of paper you need, you might want to consider revising your paperwork so it's easier and less time-consuming to manage. Can you keep track of everything through software and apps? Is there technology or equipment that can help you? Is it worth investing in a filing cabinet? The effort you put now into sorting your paperwork will pay off hugely every year when you can quickly and easily find all the information you need. Let's face it; you'll come up against the end of the financial year every year, so you may as well be systematic about it. 3. Collect your receipts: Ensure you have all your receipts from the year. This includes receipts for business expenses, charitable donations, and any other tax-deductible expenses. Every missed receipt that is a business expense is a missed deduction. Bookkeeping is all about tracking the money. Money In, Money Out is just following the checkbooks. Accounting is entering into an Accounting System that creates a Profit and Loss and Balance Sheet for the Tax Accountant to do the Annual Taxes. (Every successful contractor should have a Tax Accountant do their annual tax return) 4. Reflect on your year: The end of the financial year is a perfect time to reflect on how the past year went. Celebrate the big successes, but remember to focus on other victories. Even if you didn't meet your financial targets, did you survive a particularly tough year? Did you manage to pivot your construction business and try a new model? Did you take some risks and learn from them? Did you grow your business or expand your offerings? It's great to have goals for each year and celebrate when you achieve them, but it's also essential to look at where things didn't go according to plan and how you grew from those situations. You may need to refine your business plan if you're not meeting your financial targets or rethink how you arrive at your goals in the first place. Do this before you start planning the year so you can revise your strategies in the future. 5. Plan for the new year: Take some time to plan for the new year. This includes setting goals, creating a budget, and thinking about any changes you may need to make to your bookkeeping processes.  Now that you've reflected on what went well and what went sideways, you can better plan for next year. Research upcoming events and schedule your marketing calendar. Plan to address slow times or busy periods. If you didn't meet your financial targets last year, either change how you set your goals or your strategies for achieving them. At Fast Easy Accounting, we have an entire department, The Project Management Department, that questions every bit of our Contractors Bookkeeping System every day and continually finds new and better ways to improve it and make it more valuable to Contractors like you no matter where you are in the USA Including Alaska and Hawaii.  For clients, we added a document management system that links with many banks and credit card companies across the country (adding more all the time). We still use our original Document Management System behind the scenes. The two companies have figured out how to work together to benefit us and our clients. Change is not always easy, but we are so glad we did. The same applies to you, the construction business owner. As you figure out ways to be more efficient, better pricing, and prove a better product and service, your cash flow and profits will increase massively, which means more money in the bank to operate and grow your Construction Company and more freedom to do the things you want to do with your life! Final thoughts By following these tips, you can ensure that your end-of-the-year bookkeeping is completed accurately and efficiently, giving you a head start for the new year. We are also here to help. We are not here to beat up on you for "How You Have Done It." You know it's messy and missing stuff. We know it, too, and we want to help figure out the gaps.  PS  We offer free resources to help you save time and money that you can download and print now.  About The Author: Sharie DeHart, QPA, co-founded Business Consulting And 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 and 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 [email protected]  
12/8/202310 minutes, 44 seconds
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552: Why Online Reviews Matter And Ways To Deal With Negative Feedback

This Podcast Is Episode 552, And It's About Why Online Reviews Matter And Ways To Deal With Negative Feedback In today's digital age, online reviews hold immense power and influence over the success of small construction companies. With easy access to social media, Google reviews, and review websites, customers can easily voice their opinions and experiences with your business online. Most people searching for a local construction company - whether they need a plumber, painter, or general contractor, will check their online reviews before deciding.    Positive reviews can help establish credibility, build trust, and attract new customers. Conversely, negative reviews can damage a company's reputation and deter potential customers. Given the importance of online reviews, small construction companies should aim to provide excellent service and encourage satisfied customers to leave positive reviews.   As a small business owner, you must understand the importance of online reviews, as they will impact your brand image, sales, and customer loyalty.   Boost your brand image Online reviews are the first point of contact between your business and potential customers. Positive reviews can improve your brand image and credibility. When customers leave positive reviews, they help build an excellent impression of your brand, which can lead to increased sales and customer loyalty. A study conducted by BrightLocal found that 85% of consumers trust online reviews as much as personal recommendations. So, having a positive online reputation can make a big difference in the success of your small construction business. Improve your sales Online reviews can directly impact your sales. Positive reviews can help you attract new customers, while negative reviews can drive potential customers away. Positive reviews indicate that your business is reliable, trustworthy, and provides excellent customer service. You should encourage customers to leave positive reviews and respond professionally and promptly to negative ones. Gain insight into customer experience Online reviews can provide valuable insights into customer experience, which can help you improve your business. Reviewing them lets you identify areas to improve customer service, products, and business operations. Also, reviews can help you understand your target audience and what they value most about your business. Addressing customer feedback shows that you are willing to take the necessary steps to improve your business, which can enhance your online reputation and attract new customers. Increase customer loyalty Customers appreciate businesses that value their feedback. Responding to customer reviews and addressing their concerns shows you care about their experience with your business. When customers feel heard and appreciated, they are more likely to return and become loyal customers. Ways to deal with negative online feedback/review: Leave the negative review up A negative review doesn't have to be the end of the world. Although customers like to see five-star reviews, they understand that perfection is almost impossible—and probably a sign that something is "too good to be true." In that sense, having a customer or two provide negative feedback gives more credibility to the positive reviews. Customers expect to see a couple of negative reviews. If they're in amongst positive feedback, the negatives won't hurt you much and may increase your legitimacy if handled well. Respond to the review honestly Customer complaints are a way to build trust with your potential clients by allowing you to respond honestly and professionally. Did something go wrong that was out of your hands? Offer an apology and explain what happened. Was there a misunderstanding? Take the opportunity to clear it up. Has the reviewer requested additional information or a solution? Respond online to show what you've done to address the situation. Did the reviewer misunderstand a policy? Explain your policy and invite them to contact you with further questions. Doing so shows readers that you take their concerns seriously and are willing to take responsibility when things go wrong. Learn from negative reviews If you see the same concerns repeatedly in the online feedback, it may be time to review your services. Negative reviews give you insight into areas where your customers feel your business could make changes, so take the time to consider what you're being told. You can improve your offerings or communicate better with clients to manage their expectations. Thank them for their feedback, let them know you're taking their concerns seriously, and explain your next steps. In summary A solid online presence with positive reviews can give you an edge over competitors. It shows that you're reliable, trustworthy, and provide quality work. Encourage satisfied customers to leave reviews on platforms like Google, Yelp, and Facebook. This can help increase the number of reviews and boost your overall rating.  However, remember never to pay for or incentivize customers to leave positive reviews. Make it part of your process to encourage customers to leave reviews by simply asking for them. Monitor and ensure you respond to any negative reviews professionally and promptly. If possible, ensure your responses include an apology, a statement about your commitment to your clients, and a way to continue the conversation offline if further communication is needed. Doing so will show potential customers and clients that you care about their feedback and are willing to take responsibility. It will also allow you to move the conversation to a more private forum if the reviewer isn't happy with your response. PS  We offer free resources to help you save time and money that you can download and print now.  About The Author: Sharie DeHart, QPA, co-founded Business Consulting And 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 and 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 [email protected]  
12/1/202310 minutes, 10 seconds
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551: Recognizing The Value Of Construction Contractors In Our Daily Lives

This Podcast Is Episode 551, And It's About Recognizing The Value Of Construction Contractors In Our Daily Lives I was taking a moment to reflect on the challenges for the Pilgrims coming to America. They decided to make the journey with no guarantee of success. To build homes, plant crops, and take care of animals. Then, later, everyone chose to move West by wagon train, horse, or on foot. I am grateful for them! I think about my Grandparents and my Great Grandparents. What was life like when they were children? Where did they come from, and how did they get to where they were? The family's oral history seems so inadequate. My father shared so much, but now it looks like so little. Be glad for the simple things we take for granted: Going to the grocery store, deli, or restaurant for dinner Living indoors with electricity and indoor plumbing Driving a car Crossing the water on a bridge or ferry Modern times. I am all for living in the city with the gas station and grocery store just down the street. I appreciate reliable electricity, and tree contractors trim powerlines year-round to help prevent outages. I am grateful for the linemen who repair power lines during a storm so we have electricity.     Please note: The offer does not apply to Outsourced Accounting, Bookkeeping Review, or any Consultation and Training products; you can, however, use it to purchase any course or monthly subscription classes in Construction Accounting Academy   Thank You, Contractors, for going to work so the rest of us can stay home safe.    Thank you to the road crews, police, firemen, linemen, tree crews, plumbers, and electricians who work when the news says "Stay Home" and to all the other contractors and emergency services I have not mentioned. Contractors Make Our Lives Better Contractors build and maintain the things that make our lives better. They built the factories where the factory workers work. The rancher and farmer, whom you don't think about as contractors, construct and repair buildings and fences and maintain equipment. They learn to be jacks of all trades, raise crops and animals, and battle the elements. Heat, wind, rain, snow, forest fires, or grass fires – they see it first—the more remote their location, the more diverse their skills.    Why did you decide to become a Construction Contractor? Fast money, easy work, few hours, or all those reasons? Yes, contractors can make much money in this industry. Fast, however, is a relative term. Definition of Fast Money Collecting a job deposit is designed to lock down the job and buy materials. While using your client's money to start the project is always a good idea, that doesn't mean you have money to party heartily, buy a bunch of tools, or buy that brand-new truck you want.  The money will fly out of the checkbooks with everyday business expenses without extra help.  If you spend your job deposits in this manner, you get into a cycle of "Borrow from Peter to pay Paul." (author unknown) This was a favorite phrase of the '60s and '70s. What do I mean? Using the deposit from the next job to pay for expenses from the last job is a slippery slope to financial disaster. Another common phrase is "Leverage Is Great Until The Stick Breaks."  It's like a child's game of musical chairs. When the music stops, someone is without a chair. The same thing happens when the economy turns, as in 2008. Contractors thought (and hoped) the recession would be a slight dip and everything would return to normal by the summer of 2009. That is not what happened for most construction contractors.  Some construction contractors had lots of work in the pipeline unaffected by the recession. Many were overconfident and thought other contractors had a hard time because they "just didn't know how to run a business." Unfortunately, those same contractors were badly hurt when their pipeline of jobs ran out. Definition of Easy Work Easy work is any job that you know how to do quickly. Preparing Thanksgiving dinner for twenty or more is a simple task for a chef. However, it might be impossible for a college student living in a dorm or shared apartment. Definition of a Few Hours Yes, construction contractors can work a few hours every day. Usually, they work twelve hours or more every day of the week. It is only a few hours to: Take the call Schedule the appointment Meet the client Create the bid Present the bid Collect the deposit Schedule the work Make a material list Pick up the materials Coordinate any employees Go to the homeowner's house or job site As you begin the job: Think, plan, and do the work. Watch out for children and pets. Answer the homeowner's questions. Be polite and make small talk as needed. Keep working at a pace that compensates for any time spent watching out for children and pets or chatting with the homeowner. The homeowner expects work to be completed on time or ahead of schedule, no matter how many interruptions you or your employees have.  End of the day – Clean up the job site so it is ready for use this evening or clean and ready for work tomorrow. Pick up all your tools and materials (mobilize and demobilize) Meet with the homeowner to discuss the rest of the project. Assure them all is going well. Make notes of possible change orders or add-ons. Do not forget to price out change orders. Homeowners remember that unless you agree to a price reduction in writing, you are not obligated to reduce the price. The increase in scope is never forgotten. You Promised To Do [fill in the blank]. If you think any changes are omitted, wait; you will hear a grownup impersonating a preschooler wanting a cookie. Water on the stone is an understatement.   Like most Construction Contractors, you feel like you are waving the money as it goes by. Rest assured, it is true in Washington State, where contractors collect and pay sales taxes. The tax money is just moving through the checking account. Borrowing State and Federal tax money is very bad.  The same applies to payroll taxes, except the company must make a company match for Social Security and Medicare, pay state unemployment insurance and state worker’s compensation, and obtain a contractor’s license, contractor’s liability insurance, bond, and other specialty licenses. The business of being in business as a construction contractor involves: Keeping track of a lot of paperwork Filling out and filing government forms Paying taxes  Financials are essential for filing annual federal taxes, whether you are a sole proprietor, LLC, or S-corp. The individual reports are for the benefit of the construction contractor. Are you making money? Which job? – Did you like that particular type of job? Do you go into any job knowing it will barely break even?  Are you passing out business cards or flyers to the neighbors of your current or past jobs? Are you driving long distances between jobs? Final thoughts You couldn’t change yesterday; you could only review it and think about what you could do today. And how can you have a better tomorrow? Tiny changes can make a big difference. Sometimes, taking a pause is the right decision to make. Money makes the world go round. It is hard to buy gas or groceries with hope and a promise. It is not unreasonable to expect to be paid for your work. Contractors like you bring value to everyone's life you touched. I am rooting for your success and wish you and yours the best in everything that comes your way. PS  We offer free resources to help you save time and money that you can download and print now.  About The Author: Sharie DeHart, QPA, co-founded Business Consulting And 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 and 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 [email protected]  
11/24/202313 minutes, 19 seconds
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550: Becoming A Better Construction Leader By Practicing Generosity

This Podcast Is Episode 550, And It's About Becoming A Better Construction Leader By Practicing Generosity If you have been lucky enough to encounter generous people, you understand they have a unique gift for garnering the respect and admiration of individuals around them. When you are a leader, having a positive relationship with the people who follow you is a huge asset you cannot put a price on.    In the construction business, generosity and helpfulness are two fundamental traits that can make a business successful. When contractors are willing to share their knowledge and expertise with others, it creates a sense of community and fosters growth and success for everyone involved. Additionally, when contractors are generous with their time, resources, and even their finances, it can significantly impact the success of other businesses and individuals.    t is the right thing to do and being generous because it is something you value are two different things. If you want your generosity to be compelling, it must come from a place of sincere care and concern for those you lead. Being generous to others not only lowers their anxiety and increases their appreciation for you, but it also adds to your happiness and health.   2. Look for moments to be grateful.   Being grateful could be as simple as sending a brief, personal thank-you email when the occasion arises. You do not need to create a large display or spend much money to make people feel valued. Simply watch for positive behavior in others, and when you see it, make a mental note to acknowledge it and express your gratitude.   3. Find opportunities to give back to your community.   Depending on your resources and the capacity to lead others, the extent of your reach may vary, but don't let that stop you from finding ways to give back to your community. Most homeless shelters have standing requests for donations of socks, bottled water, coats, and blankets. Speak to your company to gauge their interest and help organize a supply drive or fundraiser to give back to your community. When the people you lead see you being generous, it displays your character and often increases their respect for you.   4. Become more hopeful.   Naturally generous people are often idealists. They perceive how the world around them should be and believe in the goodness of people. Becoming an optimist could be a struggle if you are naturally pessimistic, but it is not insurmountable. Next time a challenge arises on the team you are leading, go above and beyond to believe the best in others and trust that the outcome will be positive even when it may not look that way on the surface.   5. Look for opportunities to trust others.   Trusting others may not seem like a quality of a generous person; however, one of the most remarkable ways you can be generous with others is by trusting them enough to allow them to take the lead on things that matter to them. Trust their ideas and, more importantly, their ability to complete the task. When you loosen your grip as a leader and trust the people around you to do what needs to be done, they will see you as a more trustworthy, generous leader.   There are many ways to express generosity toward others. When you look for opportunities to be more understanding and helpful, the people you lead will feel more secure following you. A leader needs to gain trust and respect; one of the best ways to do that is by being generous as often as possible!   And what's the most generous thing you can do for yourself? Hire help!   If you're like most construction business owners, there are never enough hours in the day to complete every task on your list.   Often, you must prioritize what you need to do right now – deal with a client, estimate a project, attend an event – and what you know you should do for the ongoing growth of your business.   It sounds simple, but many entrepreneurs' self-sufficient, independent nature can make it difficult to get comfortable delegating responsibility. Finding the right people to relieve the burden of doing everything all the time is the only way a business can scale and reach its potential.   Think carefully about how you spend your days. Are you still at the point where you want to – or need to – do it all? The ultimate success of any company is to reach the point where it can run without you so you can enjoy a holiday, pass the business on to a family member, or sell it. Start outsourcing the tasks you like the least - it could be managing your online presence or bookkeeping, for instance, so you can spend more days with the things that matter and the people you love the most.   Final thoughts   Developing new business habits takes time and commitment – but the payoff is well worth it! Generosity can help you become a better construction business owner. It means going above and beyond what is expected of you and being kind and empathetic toward your employees, clients, the community, and yourself. When you approach your business with generosity, you create a culture where everyone feels valued and respected. This, in turn, can lead to increased productivity, better client relationships, and a positive reputation within the industry.    So, if you're a contractor looking to positively impact your community and build strong relationships with others in the industry, consider being generous and helpful whenever possible. It may lead to tremendous success and satisfaction in the long run. PS  We offer free resources to help you save time and money that you can download and print now.  About The Author: Sharie DeHart, QPA, co-founded Business Consulting And 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 and 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 [email protected]  
11/17/202310 minutes, 55 seconds
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549: Construction Company Budget Vs. Cash Flow

This Podcast Is Episode 549, And It's About Construction Company Budget Vs. Cash Flow Finding some certainty can make all the difference in the unpredictable construction business world. While the future remains a mystery, budgeting and cash flow forecasting tools can significantly reduce uncertainty, allowing you to anticipate challenges, learn from past events, and enhance your ability to navigate your business. Budget vs. Cash Flow: The Crucial Distinction A common misconception is that a budget and cash flow are interchangeable. A budget is a projection of future possibilities, enabling you to consider various sales and expense scenarios. On the other hand, a cash flow provides a record of actual expenses and sales revenue that flow into and out of your business each month. Although they often deal with the same data, their applications differ. Budget and cash flow are both essential concepts in construction management. However, they serve different purposes and are used in different ways. A budget is a financial plan that outlines expected income and expenses for a specific period. In construction, budgets are typically created for individual projects or a company. The purpose of a budget is to help managers plan and control expenses, set goals, and allocate resources. On the other hand, cash flow is a measure of the amount of cash coming in and going out of a business over a specific time.  In construction, cash flow is significant because it can be used to determine whether a project is financially feasible and whether there is enough cash on hand to pay for expenses. Budgets and cash flow are related but not the same thing. A budget is a plan, while cash flow measures actual cash transactions. A project can be under budget but still experience negative cash flow if expenses exceed income.  Conversely, a project can be over budget but have positive cash flow if income exceeds expenses.  You might budget $1,000/month for online costs, whereas in the cash flow, you'd record the actual amount spent. Despite their distinct uses, cash flow and budgeting are often maintained on the same spreadsheet or similar accounting software for ease of use and comparison. The advantages of budgeting and cash flow forecasting Incorporating budgeting and cash flow forecasting in your construction business has numerous benefits. They help predict and manage potential cash surpluses or shortages, plan for tax obligations, time new equipment purchases, determine when to buy in bulk, and even identify when you might need a small business loan or a line of credit. Budgeting and cash flow forecasting are essential tools for any construction business. They provide a clear picture of the company's financial health and help identify potential problems before they occur. By creating a budget, companies can plan their finances more effectively, set realistic goals, and allocate resources to maximize profitability.  This is particularly important in the construction industry, where projects can be complex and costly. Cash flow forecasting is equally essential, enabling businesses to understand their cash position and ensure they have sufficient funds to meet their obligations. This is particularly critical in construction, where delays or unexpected expenses can quickly impact cash flow. By forecasting cash flow, businesses can plan for these contingencies and ensure they have the necessary funds available when they are needed.  One handy feature is the ability to track expenses and highlight any unusual cost increases or decreases. This allows you to take prompt action to address the issue. Additionally, these tools can help monitor sales levels and flag any underperforming areas of your business. Practical tips for effective budgeting Preparing an annual budget requires sufficient time – allocate at least two or three months for this process. Update your budget each month based on the actual cash flow. Remember that the sales forecast is often the most challenging part. If you're new to the construction business, examine separate estimates for different products or geographical areas and note any seasonal patterns in your company and industry. Sensitivity analysis: a proactive approach A sensitivity analysis, often called 'what if' scenarios, can help you understand how different outcomes affect business performance. This analysis allows you to review the effects of changes in your revenue or costs.  The power of regular updates Regularly comparing your actual expenditure against your budget enhances your ability to predict future costs accurately. Reviewing and updating your budget and cash flow forecasts at least once a month or more frequently if your business environment changes quickly is good practice. Having a construction accountant on board can be incredibly beneficial when managing finances in the construction industry. One of the critical advantages of having a construction accountant is their ability to help with budgeting and cash flow.    A construction accountant can assist with creating a budget that takes into account all of the costs associated with a construction project, from materials and labor to permits and fees. By having a detailed budget, contractors can better manage their cash flow and avoid surprises down the line.    Additionally, a construction accountant can provide ongoing financial analysis and reporting, allowing contractors to stay on top of their finances and make informed decisions about future projects and investments. With the help of a skilled construction accountant, contractors can better manage their finances and set themselves up for long-term success. In summary Budget and cash flow are essential in construction management but serve different purposes. A budget helps managers plan and control expenses, while cash flow helps determine whether a project is financially feasible and whether there is enough cash to pay for expenses. Budgeting and cash flow forecasting are potent tools to help construction businesses like you manage your finances more effectively, plan for the future, maximize profitability, and guide your business decisions. However, their value lies in their regular review and updating, ensuring their figures remain current and reflect your construction business's financial health.  PS   We offer free resources to help you save time and money that you can download and print now.  About The Author: Sharie DeHart, QPA, co-founded Business Consulting And 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 and 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 [email protected]
11/10/202311 minutes, 22 seconds
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548: The True Value Of Networking To Contractors And The Community

This Podcast Is Episode 548, And It's About The True Value Of Networking To Contractors And The Community The ability to network is a fundamental part of running a business. Running a business in isolation is difficult, so it helps to have expert partners and acquaintances available to share ideas with.   If you're looking to network with construction industry professionals, there are several ways to do so.   1. Attend industry events: Look for construction industry conferences, expos, and trade shows in your area. These events often have networking opportunities, such as meet-and-greets or after-hours social events.   Conferences are a way to actually meet in person, so the results can be hard to beat. Most conferences have time set aside for networking, allowing you to meet everyone in your niche. More work might involve getting to a conference, but the networking opportunities alone are often worth it. Best results can often be gained by creating a good impression in person, followed by an online contact.   2. Join industry organizations: There are many professional organizations for people in the construction industry, such as the National Association of Home Builders, the Associated General Contractors of America, and the Construction Management Association of America. Joining one of these organizations can give you access to networking events and other resources and benefits.   3. Connect on social media: LinkedIn is an excellent platform for connecting with other professionals in your industry. You can also join LinkedIn groups related to construction and participate in discussions to connect with others.   Podcasts are popular now, so you should consider creating one for your niche audience. Regarding networking, though, a podcast can introduce your personality to relevant experts. Getting an interview might be your priority, but you can get better results if they are tempted to contact you directly. Discussing important industry news and updates will be attractive to industry leaders who are passionate about their niche.   An interview will give you direct contact with an expert, allowing you to make an impression and promote their brand. You might not get every consultation you desire, but most experts seek ways to promote themselves and will oblige. If you can approach them with a credible website, there is a good chance you can get some of their time.   Social media is perfect for networking, mainly when people are open to communicating directly. If you find an active expert in your niche, respond to their questions or comments. By making good contributions, you will quickly be noticed.   4. Attend local business events: Many cities have local chambers of commerce or other business organizations that hold networking events. These can be a great way to meet other professionals in your area and make connections.    5. Volunteer or get involved in your community: Volunteering for a local charity or community organization can connect you with other professionals who share your values and interests. This can be a great way to make connections and build relationships.   When you get a chance, volunteer at your kid's school (or a local school if you don't have children of your own). They may need to make props for a school play or a quick paint job. This will open doors for you to meet parents and teachers who might need home service repair or remodeling.   Remember, networking is about building relationships, not just collecting business cards. Be genuine, be interested in others, and follow up with people after you meet them to continue the conversation.   There are all kinds of groups dedicated to networking. Some are highly structured with performance requirements, exclusive membership, and the payment of dues. Others are free form, come as you please, and no charge.   Not every group is suitable for every kind of business. You will find that some groups may not have connections in the market you are seeking to attract. You will find that some groups have rules that just don't fit with how your business works.   Yet one factor is often overlooked when considering a networking group: does this group offer more long-term or short-term value?   When focusing on short-term value, you see each group member only as a prospect. This limits the business potential of the group because you can't reach beyond the people in the room. If there are only 50 members, and 25 of them fit your prospect profile, what do you do once you have presented to all 25? You can either quit that group to start all over again with another group, or you can take a long-term value approach.   The long-term value of networking groups lies in building strong trusting relationships that will give you influence beyond the people in your immediate group.   Discover Needs   If you are like most people, you are already pretty clear about what you need. You may not be clear on what your business connections need. Do you know anyone who is a good prospect for them? Can you recommend or offer services that will help them? Find out what your contacts need and act to fulfill those needs.   Be generous   Stop looking at every person in your networking group as a potential sale. Especially early on, be more concerned about what you can give than what you can get from these meetings.   Give materially by sponsoring group events, donating to fundraising efforts, or bringing in some bagels for the meeting. Give your time and effort by contributing to a service position, or be free with great ideas and a welcoming smile.   Especially give liberally by helping others make valuable connections. If you can help one of your group members by introducing yourself, do it. If you are generous, the effort will come back to you.   Build trust   People seek out people they can trust. Cultivating trust takes time and effort, but is worth it. When it comes to business, trust is based on three factors:   Value – do you consistently bring value to the relationship?   Dependability – are you the real deal? Can you be depended upon?   Consistency – are you consistent over time? It is harder to develop trust if you are an occasional participant or just passing through.   Hold regular one-on-one meetings with group members. Get to know them, and they will get to know you.   Networking groups provide valuable business allies who can open doors and remove obstacles. Cultivate relationships instead of just asking for sales appointments. Because strong relationships build strong businesses over the long term, this is the most valuable approach to networking.   By implementing these methods, networking will become far more accessible. One of the problems with networking is the effort it can take for no results, but these methods all involve adding value. When an expert can see that you are being helpful first, making a connection becomes smoother.  All it requires is a few people with a reputation to support you, with this social proof adding to your status.   PS   We offer free resources to help you save time and money that you can download and print now.  About The Author: Sharie DeHart, QPA, co-founded Business Consulting And 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 and 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 [email protected]  
11/3/202311 minutes, 41 seconds
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547: Essential Bookkeeping Practices For Construction Start-Ups

This Podcast Is Episode 547, And It's About Essential Bookkeeping Practices For Construction Start-Ups Starting a new construction business is exciting but has its fair share of responsibilities. One of the most critical responsibilities is maintaining accurate records of your business transactions. From saving receipts to processing employee payroll, every money-related detail should be documented. It's not just about keeping things tidy; it's about understanding the financial health of your business and meeting all your tax obligations.   Don't underestimate the basics   Some small businesses continue to rely on traditional systems, like pen, paper, and a trusty shoebox. Although it may seem outdated, this method can work well for businesses with few transactions. These businesses might not have the latest payment technology and could be invoicing customers or receiving immediate cash or cheque payments. In such cases, they must maintain a record of all receipts, past, present, and future jobs, and a log of their customers and transactions.   In fact, to this day, most of our local construction clients will drop by our office to hand over their receipts, invoices, and paperwork in shoeboxes, envelopes, or plastic containers.   Of course, if you're serious about your business, you might want to consider using a more accurate system.   The power of spreadsheets   In the digital age, spreadsheets offer a simple and effective way for construction start-ups to keep track of their financial activities. A spreadsheet can be a cost-effective alternative when starting or operating a part-time business with a limited budget. As your business grows and becomes more complex, you can transition to specific accounting software.   With a spreadsheet, you can set up a basic accounting system to track invoicing, perform calculations, and even set up a budget.   Embrace accounting software   For those more serious about their business, subscribing to accounting software might be the best option. Modern accounting software often links directly to your bank account, making it an efficient way to document all necessary transactions. It also reduces the risk of errors and offers features like generating professional invoices, tracking debts, and ensuring everything is entered accurately for your accountant during tax season.   If you opt for a cloud-based solution, you'll enjoy real-time access to your accounts, increased data security, and the flexibility to access your financial data anytime, anywhere.   When you become a client, accounting software and training are included in your subscription. The best part? You can access it 24/7, know how much it will cost, and you are not forced to sign an annual contract and pay a fine if you change your mind; if you're unhappy with our services, you can cancel it anytime.   Stay on top of your cash flow   Regardless of your accounting system, a good strategy will enable better decision-making based on real-time financial insights. Identifying cash flow trends can help drive your construction business growth by revealing your most profitable products and services, biggest clients, highest costs, and more. The ability to monitor these trends places you in a better position to improve your profits and spot potential growth areas.   Financial management is vital to running a successful contracting business, but entrepreneurs often start their business with little understanding of making solid financial decisions.    Managing your finances is more than bookkeeping and paying taxes, which are crucial to a sustainable business. It's about managing cash flow, preparing for income fluctuations, and having the resources to take advantage of opportunities.   Here are six practical money management tips you should follow if you're a first-time entrepreneur or even if you are a seasoned restarting construction business owner to increase your chances of success.   1. Have a budget   Having a budget is essential in being on top of your finances. Knowing how much money you have, how and where you spend it, your limits on how much you'll spend, and where the money comes from gives you crucial information about your profitability. That data can then help you make vital operational decisions about your construction company—such as where you need to save money and where you can spend more.   Having a budget and accurate records helps keep your business and finances on track. Every important financial decision should be weighed against your budget.   2. Start an emergency fund   Your emergency fund doesn't have to hold much money, but it is there for you in case of sudden emergencies. Even highly successful companies have periods where they struggle financially—often due to circumstances well beyond their control, such as market shifts. An emergency fund can help your business survive during times when income drops. It can also provide you with needed cash to take advantage of an unexpected opportunity.   3. Don't spend too much   New construction business owners might feel tempted to grow their businesses too quickly, make significant but unnecessary purchases, or hire too many people before they have financial stability.   Wait until you have a steady, reliable cash flow to make significant changes to your company. At least initially, it's important to focus on the necessities for running your business and get to know your business cycle. Don't spend large amounts of money until you know when your busy periods are and when the slower times tend to occur—and how drastically they affect your finances.   Plan for massive expenditures and establish guidelines for when you'll start spending more money, for example, after a set period of stable income. Then, stick to the rules you've set out for yourself.   4. Hire an accountant   An experienced accountant can help you understand tax laws and take advantage of deductions. Without an accountant, you could face an unwelcome and unexpected surprise when your taxes are due. You can also make costly mistakes if you do your taxes.   Tax regulations can affect everything from your company's ownership structure to the best ways to spend your money so you can decrease your financial obligations at tax time. Hire a construction accountant and get to know them well so they can give you tax advice that meets your needs.   5. Keep your business and personal finances separate   It can be enticing to mingle your business and personal finances, especially if your business is small. However, doing so means you don't have accurate financial information about your construction company or yourself.   It's also vital to pay yourself an income from your business. This helps ensure you're financially stable. Combining your business and personal finances means you aren't paying yourself. You keep whatever is left over after everything else is paid for. This leads to situations where your business becomes unsustainable because all your money goes into the company, leaving you with nothing to live off.   Open a business bank account and draw your salary from that.   6. Maintain a good credit score   Good credit is essential for construction business owners. It establishes your creditworthiness and enables you to apply for loans, open accounts, and maintain a steady cash flow. You must know your credit score and maintain a good rating.   If your credit score is poor, focus on paying bills on time and double-check to ensure your credit report is accurate and up-to-date.   Wrapping up   As a construction start-up, your primary task is to evaluate your construction business needs and choose an accounting system that allows you to track your cash position accurately, keep precise records for tax purposes, and identify cash trends.   Consulting with your construction accountant can be an invaluable first step. They can advise on the best system and ensure it's compatible with their processes. Remember, your financial records are the lifeblood of your construction business, and keeping them in perfect order is integral to your success.   Do you want to discuss what system will best suit your needs? I am here to help. Fill out the form on the right (or below, for mobile users), and I'll get back to you shortly. About The Author: Sharie DeHart, QPA, co-founded 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 [email protected]  
10/27/202313 minutes, 14 seconds
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546: Seven Sure-Fire Ways To Grow Your Construction Business

This Podcast Is Episode 546, And It's About Seven Sure-Fire Ways To Grow Your Construction Business   Once your construction business is up and running, it’s essential not to rest on your laurels. Successful business owners always look for ways to grow and maximize their profits. We’ve compiled a guide and checklist to help you identify ways to get the most out of your contracting company.   1. Grow your sales   Contact your best clients.   One of the easiest ways to increase sales is to sell more to your existing clients. For example, you could try contacting every customer and offering a complementary product or service they might need now. You could also determine when clients need maintenance checks.   Create a client loyalty scheme.   You’re looking to create a customer care program using customer contact software and implementing a customer loyalty scheme.   Commence a contact nurturing program.   Can you make more effective use of your database of customers and clients by maintaining regular contact through newsletters (physical or email), phone calls, personal visits, or attendance at conferences and trade fairs? Do you advise them of special offers or tell them about any products and services they have not previously bought?   Develop a social media campaign.   If you’re not on social media, now’s the time to start. It’s one of the most essential marketing tools and one of the cheapest (and often accessible).   Run webinars/demonstrations.   By doing this, you’re positioning yourself as an expert in your industry, creating brand awareness and customer trust. It’s also a great way to network among industry peers and meet potential customers.   Attend and exhibit at trade shows.   These are important for the same reasons you’d run webinars and demonstrations, but trade shows also offer the chance to get your product to new customers, increase word-of-mouth advertising, and add more to your customer database.   Cross-sell complementary products/services.   Learn the fine art of cross-selling, which suggests to customers that whatever they’re buying from you would be of more value if they purchased a complementary item.    2. Grow by developing new services   Research new ideas and see if you can update current services.   You’re looking to identify any new products or services that a) complement those already existing and b) your customers have indicated they’d be interested in buying them from you. Any new product needs to complement what you already sell, not be a substitute. Otherwise, there is no growth in sales.   Check financial feasibility   It’s essential to ensure there’s a demand and that you can create the product. Diversifying into new products is a medium to high-risk growth strategy because new products and services cost time and money to source or develop.   Test with customers   From friends and family to more formal focus groups, testing your product in your target market and recording and analyzing the results is essential. You’ll be able to determine if the demand exists and if there are changes you could make to the product or service before taking it to market.   Protect intellectual property   The last thing you want is your brilliant idea and all the work that went into creating it nixed at the last minute because someone else beat you to the patenting, copywriting, and trademarking. Equally, you don’t want to steal someone else’s idea, so protect your IP and ensure you’re not breaching anyone else’s.   3. Grow by improving profits   Improve efficiencies   Technology’s great here – there are many ways you can use it to make your processes more efficient. So review all your systems and look for ways they can be improved. The better the system, the more efficient and productive it will be. Look at your customer base. Do you have habitually late or non-paying customers? It might be time to ditch them.   Increase prices   Increasing prices widens your margins and raises the cash you might need for business growth. You should always seek to increase your prices over time to improve your profit margins and keep up with inflation. Make sure you communicate to your customers the reasons for the price increase. It’s essential to convince your target market that your products or services are worth the additional cost, so consider ways to justify a price increase and focus on the benefits.   Streamline debt collection so there’s more cash coming in.   Make sure you’re always paid on time. If your customers owe you money, the faster you can obtain it using effective collection tactics, the better. Ideally, you want to reduce the chance of bad debts and pressure on your business’s cash flow.   4. Grow your capability   Assess your capacity to handle expected growth.   This is especially important if you need additional equipment or space. Capacity building is about working on your business’s ability to do more internally – such as speeding up production or improving your systems and processes.   Retrain current staff if your business’s growth requires new skills.   Exploring the available training options is a good idea if your current staff would benefit from retraining instead of taking on a new employee with those skills. It’s crucial to discuss retraining with your team to ensure they can fit it into their schedules.   Review your technology   What you’re looking to do is determine if you need to upgrade internal systems or software. Ensure that your systems can administer your business and that its sales can handle expected growth.   5. Grow by updating your construction business model   Develop a strategic alliance to gain shared advantages.   Consider entering a strategic alliance with successful distributors or complementary businesses, as you may be able to expand your business’s reach and win new customers more cost-effectively.   Purchase a competitor   Not only will you expand your customer database, but you’ll also get access to their staff and suppliers. Odds are that your competitor has unique strengths your business can benefit from. You’ll be able to open up to new and diverse markets as you add more value for your customers. And, because you already know the industry, acquiring a competing business should be a safe investment if everything checks out once due diligence is complete.   6. Grow staff expertise   Investigate training courses your staff can attend   As your business grows, so should your staff expertise. You and your employees must be well-trained in how to use them. Aside from in-house training, look at educational institutes and the courses they offer to determine if any of them complement your business.   Run in-house seminars on new technologies.   If you’ve installed new software that your staff will need to use daily, ensure they’re up to speed by training them in-house. You might want to get a specialist on the new software to conduct the training, or if you’re an expert, you can do it yourself. This applies to any new technology you’re introducing to your business.   7. Grow your cash reserves   Free up internal cash.   You want to avoid seeking a loan or outside investment here. Reduce the number of withdrawals you’re making, or look at leasing equipment only when needed instead of buying it. If you can achieve growth without borrowing to do it, so much the better.   Weigh up the risks versus rewards to assess whether you need a loan.   It could be that there’s no other option than to borrow money to finance your business growth, but you should carefully consider whether it’s worth it in the long run.   Final thoughts   Successful construction businesses don’t rest on their laurels. You should always be on the lookout for ways to add to or improve your service, which is where continuous research and development is essential.    Remember, growing a business takes time and effort, so stay focused and be patient. About The Author: Sharie DeHart, QPA, co-founded 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 [email protected]
10/20/202313 minutes, 28 seconds
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544: Why Banks Won't Lend Money To Your Construction Business

This Podcast Is Episode 544, And It's About Why Banks Won't Lend Money To Your Construction Business Getting approved for a business loan or line of credit is more complicated than qualifying for a personal loan. Small construction business owners must be adequately prepared to meet with a lender to present their business in the best possible light and ready for the money they need. Think of all the times: You loaned money to a friend or relative Provided labor and materials for somebody's home or business without a deposit check Did change order work that you never got paid for doing and never will Gave a subcontractor/employee an advance on their paycheck, and you never got paid back Multiply that by 100,000, and you will understand why banks seem so tight-fisted about loaning money. Banks stay in business by loaning money and earning interest. They work hard to find people, companies, and contractors with reasonable credit risks they can lend money to and get paid back promptly, with all of the interest due to them. Do your best to avoid raising any of these red flags. #1 Your Profit & Loss and Balance Sheet Reports do not conform to financial industry standards #2 The financials tell the banker your bookkeeper doesn't understand Construction Accounting #3 The preparer's signature on the annual tax returns is not from a qualified tax specialist #4 You have no access to a Construction Accountant, not even for quarterly check-ups #5 You don't have a formal documented Business Plan with a budget and projections   If you have already raised some or all of these red flags, no worries; we can help you fix most of them. Bankers love chatting with accountants because we speak the same language as homebuilders, who love talking with sub-contractors and building material suppliers. After all, you all speak the same vocabulary. The Risk Management Association (RMA) 1914-  the Robert Morris Club (RMA) was formed to help businesses and bankers exchange credit information. It was named after Robert Morris, a signer of the Declaration of Independence, and was believed to be the primary financier of the Revolutionary War. The RMA developed several tools; among them was a system of Ratios that we use today to study the financial statements of all companies in all industries. The banking and lending industry has enormous databases and artificial intelligence software from places like The Risk Management Association, allowing them to separate reasonable contractor risks from bad ones. It generates recommendations based on algorithms much more complex than any gambling casino and with a much higher payoff. One of the keys to getting a banker, lender, or bonding company to consider your construction company for financing is how your financial statements are presented. In particular, your construction company's Profit & Loss and Balance Sheet. A banker, lender, or bonding agent logs into their RMA account, fills out electronic forms, answers questions about your construction company, and inputs specific numbers in specific blanks taken directly from your construction company's Profit and Loss and Balance Sheet. Any construction accountant knows precisely how to set up QuickBooks correctly for this process.  If a contractor gives their banker, lender, or bonding agent a set of financial reports that do not conform to the RMA requirements, they may or may not try to extrapolate the numbers needed using Excel or some other program. In most cases, they are polite and thank you for "applying" before giving you the "We will let you know as soon as we know anything" speech. I know this because I have heard it from many bankers, lenders, and bonding agents who are frustrated. After all, they know you are an excellent client and know you are a person of integrity who can be trusted to pay the loan back on time, with all the interest. The RMA and other reports show where your contracting company stands concerning other contracting companies serving similar geographic and demographic markets. Each major category, Sales, Cost of Goods Sold, Overhead, Other Expenses, and Other Income, is rated on a scale of top 25%, middle 50%, and bottom 25%. Ideally, all the numbers on your Profit and Loss and Balance Sheet fall somewhere in the middle 50%. Whenever a contractor "forgets" to declare all their income or "overstate their expenses," it will appear as a red flag. Finally, a Z-Score is compiled, a formula for predicting bankruptcy. Edward I. Altman published it in 1968. The procedure may be used to predict the probability that a firm will go into bankruptcy within two years. Although not 100% accurate, it is a valuable tool, similar to a tape measure, which is not 100% accurate yet still practical. This is why sometimes a contractor with excellent credit cannot get a loan or line of credit, and yet another contractor with only good credit can get financing. Prioritize these three things for a smoother loan application: Your business risk profile One of the most essential parts of any business loan application is demonstrating to a lender that your company can make regular payments and repay the loan in full. If your business is profitable, you can show you're at low risk by presenting cash flow statements, a detailed business plan, and your good credit history. Some of the most common reasons a bank won't grant a loan to a small business are a lack of security (e.g., no business assets), a poor or non-existent credit history, business inexperience, and a weak business plan. Know your credit score It's highly recommended that you review your credit score before you apply for financing. That way, you'll know whether it might be better to wait until you're in a better position to qualify. Check that your report is complete or free of any errors that can affect your score. Your credit report includes your payment history for credit cards, equipment leases, mortgage or office rentals, electricity, phone fees, and other business expenses. A simple omission – say your internet provider, whom you always pay on time, isn't included in your payment history – can result in your credit score being lower than it should be, so be sure to correct any errors immediately. Before you apply for financing If you suspect a lender will decide your business is too high risk for a loan, or you've been denied financing, apply for business credit instead. Your spending limit may be low, but a credit card will allow you to build a good credit history. Pay off your balance – or, at the very least, make your minimum payment each month. Keep up with your other financial obligations, such as personal loan payments, rent, leased equipment, and any income taxes owed. Apply for a loan in six months to a year, and you'll have a much better chance of approval. Before you apply, be sure you have all the documentation needed to support your loan application. Include in your portfolio copies of business banking statements, financial reports, a detailed business plan including projections, and a well-researched marketing plan. It would be best if you also were prepared to discuss with a lender why you need to borrow the amount you're asking for, the term length, and how your business can afford to repay it. Make a strong case for funding by demonstrating profitability, a good credit history, and a solid business plan, and you'll be in an excellent position to qualify for the funds you need to grow your business. Final thoughts Hopefully, you have gained insights into the banking, lending, and bonding industries. Profitable contractors and construction company owners have known about the value of outsourced bookkeeping services and contractor coaching services like ours for a long time, and now you know about it too. Reach out to me and let's chat about your construction business; whether you need a little help or a lot, I'm just a message away. About The Author: Sharie DeHart, QPA, co-founded 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 [email protected]  
10/6/202313 minutes, 8 seconds
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543: Better Practices For Managing And Maintaining Construction Business Cash Flow

This Podcast Is Episode 543, And It's About Better Practices For Managing And Maintaining Construction Business Cash Flow In the business world, cash flow remains the lifeblood that keeps your operations running smoothly. Whether you're a start-up finding your feet or a seasoned business in the construction industry, managing and maintaining a steady cash flow can be challenging. But a few small changes can make a world of difference to your cash flow and overall revenue.   Your business needs cash. Cash keeps your company in operation and enables it to grow, so you should know how much your business needs to survive. Although many think the answer is linked solely to operating expenses, this isn't true.   No single factor determines how much cash every construction business needs to have on hand. Somewhere between 3-6 months of operating expenses is an excellent baseline to start from, but there's more to it than that.       Initiate a discussion with your lenders if interest only or deferred payments on outstanding debts are possible.   Request more flexible payment options   It never hurts to ask, especially if you've been transacting with your vendors for a long time and you've established a certain level of mutual trust and confidence. You can request more flexible payment options or longer payment terms.   Tap into available credit lines   Take advantage of available lines of credit and place the funds in interest-bearing accounts.   Assessing your cash flow is fundamental to better understanding your business's financial health.   Let's dive into some practical strategies you can implement to boost your cash flow.   Make invoicing a priority -get paid faster and aggressively follow up on invoices.   Receiving speedy payments is crucial to improving your cash flow. If you typically invoice your customers, consider offering them an incentive to pay earlier than the standard 30-day payment period. A small discount of 5% could encourage them to settle their bills within ten days.   Small businesses in the construction industry are at risk of having their clients not pay them on time—or at all. Being too passive in collecting unpaid invoices or reminding clients when payment is due will not help you collect the money you need to pay your bills.   Sending out reminders of due invoices can speed up getting you paid and encourage clients considering not paying you to reconsider. Reach out to clients if necessary to discuss payment options. Even a payment schedule is better than no payment at all.   Invoicing should be a regular part of your business day. Adopting a same-day or next-day invoicing practice can ensure you're on top of your receivables. Additionally, consider emailing invoices as a supplement to regular mail.   If you have customers who are habitually late, don't hesitate to remind them regularly about payments.   Use business credit cards.   Using business credit cards to pay suppliers or make purchases can also help manage cash flow. Most credit cards offer a grace period, sometimes up to 25 days, allowing you to settle the statement balance without incurring interest. Some even come with cash-back features.   Watch for scope creep.   Scope creep occurs when clients or stakeholders change a project's goals or deliverables. Almost all projects experience some form of scope creep, but too many changes to a project can severely impact your bottom line and hurt your cash flow.   Make sure the terms of your project are set out clearly, and let clients know that any changes to the project will result in additional fees. If clients attempt to change the project, you can remind them about the original agreement and the extra costs. If they insist on making the changes, you can charge the agreed-upon amount.   Invest in today's technology.   Investing in modern bookkeeping software or invoice management services can help streamline your receivables and expedite customer payments. While it may seem like an additional cost, this investment can offer tremendous cash flow benefits in the long run.   Many software solutions can help you understand your company's cash flow. They can help you build projections and get a real-time view of how your business is doing. This information can then be shared among company managers so everyone knows how the company is doing financially and where strategies need to be put in place or altered to get you back on track.   Additionally, invoicing and project management software can encourage faster, more manageable payment from clients and keep projects on budget. This will also improve your cash flow.   Consider delegating the financial tasks.   Many construction small business owners become self-employed because they have construction skills, not because they want to be businessmen. The financial aspects of a construction business are complex and take much time and planning. That can add demanding responsibility to the business owner.   Hiring someone to take care of the financial aspects of your business or even to advise you about the decisions you face can take the stress off you. That's precisely how we can help. Having someone on your side with the financial expertise and construction experience to assess your business, advise you about your cash flow, and help you secure funding. With the time and money you'll save, it will be worth it in the long run.   Final thoughts   Remember, cash flow is king in the business world. Assessing your cash flow is fundamental to better understanding your construction business' financial health. Implement these simple yet effective strategies to maintain a positive cash flow and drive your business toward success.   Need help with managing your cash flow? Get in touch with us now. About The Author: Sharie DeHart, QPA, co-founded 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 [email protected]  
9/29/202310 minutes, 47 seconds
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542: What Is A Fractional CFO And How Can It Help Your Construction Business?

This Podcast Is Episode Number 542, And It's About What Is A Fractional CFO And How Can It Help Your Construction Business? A fractional CFO, or Chief Financial Officer, is a finance professional working part-time, retainer, or contract. They bring the experience and expertise of a high-level CFO to your business – without the cost of hiring a full-time, in-house employee.   Fractional CFOs service several clients simultaneously, typically on a part-time, retainer, or contract basis. Their specialty is providing outsourced CFO services to small and medium businesses.   Because their financial management skills are so well-developed, it's common to bring one on board to help navigate a challenge.   Every construction business can benefit from dedicated financial management expertise, but very few small companies have the means to hire someone full-time—particularly in the lean early years.   Unfortunately, it's those first few years when a company is just starting up that establishing good habits with managing financial resources is so important, and, over time, can even make or break a construction business.   Outsourcing a CFO is affordable for business owners like you who recognize the need for a financial expert with construction business experience. CFOs provide top-level advice when needed, offering incredible value and cost savings to companies focused on growth and long-term success. But what happens when you hire a CFO without a construction business experience? At the very least, you and your CFO would constantly struggle between having all the documents needed for data entry and providing the tools to the Bookkeeper to deliver the reports correctly. As a construction business owner, you want answers to the following questions: Am I making any money? Where am I making any money? Why isn't there a report that gives me all the answers at the push of the button? Furthermore, a financial challenge sometimes comes beyond your team's skill or experience level. This is where a fractional construction CFO can be of great benefit. Some of the issues they assist with include: Cash flow problems High expenses Existing systems that are no longer working Cost-cutting analysis Getting through an audit Hopefully, these situations don't come up often, but when they do, it's beneficial to have an expert on your side to guide you through. Your small construction business might want to consider the benefits of working with a fractional construction CFO. Achieving goals A fractional CFO can help you realize your dreams by deciphering the numbers. They will look at where you are now and help you plan where to go next. This includes: Ensuring the books are in order Performing financial forecasts Helping with strategic relationships Overseeing due diligence There are plenty of ways a fractional CFO improves your operations. The specific skills and experience they provide will clarify your situation and help you achieve what you want. Managing growth Taking your construction business to the next level can seem daunting. You want to grow but don't want to risk your success by taking on too much or making a damaging misstep. A CFO will help you navigate the steps ahead. If you're already growing at a rate that makes you feel like losing control, they will help you retake the reins. A fractional CFO will help by: Breaking down large amounts of financial information into helpful data Making a plan to develop existing employees and their skills Identifying the need to hire new employees to manage growth Implementing systems that will work in the future Exploring causes of revenue loss and cost overruns and developing solutions to address them Ultimately, a fractional CFO is helpful to guide you through the growth process so that you can feel confident as your business expands. High-level decision making A CFO can analyze your construction company finances and provide expert advice to help you make more informed, strategic decisions for ongoing profitability. That senior-level financial oversight can help you understand any risks or weak spots, identify opportunities, and create a realistic and actionable business plan that steers the company precisely where you want it to go. Managing risk Your business is an asset that needs protection from any potential risk that may threaten its ongoing success. A fire or flood, cyber attack, or employee theft can all cause long-term damage if you don't protect your business. A CFO can undertake a risk assessment and ensure that you invest wisely, have appropriate insurance, and secure sensitive data, equipment, and inventory. Field tools are a given. The truck has a rack for ladders and lumber. Vans have shelves and bins; they are tall enough to stand in, saving wear and tear on employees' knees. Less strain on knees can keep or postpone possible Worker's Compensation claims. Worker Comp claims lead to increased premiums. Once the Tools and Equipment are updated, it is much easier to see which employees are productive. In the Field – Who is bringing their jobs in on time, under budget is reasonable. Jobs without warranty work and signing billable change orders add to the bottom line. Simple Efficiency is a "Win-Win" for everyone: The Contractor Owner receives the reports needed to make good, proactive decisions. The CFO has a smooth-running operation and can focus on the "Money Management" duties necessary to run the business. The Office Manager or Bookkeeper can efficiently enter the day-to-day paperwork into the QuickBooks file, answer the phones, and complete other daily tasks without frustration. The Field Staff know they have turned in all their paperwork (paper and digital) in a timely fashion with limited stress and are greeted warmly by the Office Manager or Bookkeeper. Everyone is ending their day on a "Happy Friendly Note" and looking forward to tomorrow. Everyone Wins When: 1. The Contractor Owner knows the accounting records are accurate and can make decisions 2. The CFO can be confident that clients are billed, and no one is paid twice. 3. The Office Manager or Bookkeeper can easily track Job Costing and Timecards 4. The Field Staff stays on top of the job and gets signed Change Orders 5. The Customer is happy with an excellent job without any warranty work. Final thoughts When you hire a fractional CFO, you decide how often their services are required and only pay for the services you need. Hiring a financial expert on contract is a cost-effective solution for construction businesses that only need part-time support. Staying on top of your company's financial management is a struggle for many small business owners, who spend much time attending to clients and profit-generating activities. Working with a team of accountants, bookkeepers, and a CFO can help you better manage the most critical aspect of your business for ongoing growth: your bottom line. About The Author: Sharie DeHart, QPA, co-founded 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 [email protected]  
9/22/202311 minutes, 54 seconds
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541: The Value Of Documenting Effective Construction Business Systems

This Podcast Is Episode Number 541, And It's About The Value Of Documenting Effective Construction Business Systems Many entrepreneurs operate with their business processes and systems in their heads. They know what they must do daily and how they want to get things done.   Unfortunately, when a construction business grows, and staff need to be hired – or the owner needs to take time away from the company – it's an absolute liability not having processes and systems documented in one place.   To be in business and to remain in business, become a business person! To run a construction business, you must be business-like. It's not sufficient just to be very good at what you do. Many people who are 'very good at what they do' have failed. The familiar cry: "I'm far too busy for that," is also no excuse. Are you 'too busy' to be a competent businessperson? If so, your construction business won't last long. You must continue to develop your business skills.   To be a businessperson, you must try to become an all-rounder, not just a specialist player. You can offer outstanding goods or services, but if you don't develop sound business systems, you are not a fully rounded businessperson, and your construction business will be in danger of failing. Remember that other stakeholders in your business - such as the building material suppliers who give you credit and the bankers who extend loans and financing terms, are constantly assessing your business skills. If you consistently pay people late or can't meet the duration of your debt agreements, they will draw obvious conclusions about your business skills. Here are the top five reasons to record your company processes and systems so your business can run more efficiently and effectively even when you're not there. 1. Improve efficiency When you sit down to record your processes and systems, you may discover gaps where improvements could be made. You might find better ways to perform routine tasks, reducing bottlenecks and eliminating extra steps. You may decide that some tasks are too time-consuming, and you'd save time and money switching to an automated solution. Reviewing how you do things as you record systems can help create better systems, improving productivity. 2. Support staff training When hiring new talent, a systems manual can dramatically reduce the time you spend training. Documenting your processes can also ensure that jobs are consistently performed to a high standard. Sharing your procedure guidelines can help new employees and casual staff quickly get up to speed on expectations and give them a reference to check before asking questions. 3. Sell your systems Develop a unique turnkey system that other construction businesses can implement to save time and cut costs, and you can increase profits by selling your operating manual. Those documented processes are part of your company's intellectual property and can be licensed like your brand name. 4. Getaway One of the perks of running your own business is setting your schedule. But without systems, it can be challenging to get away for a vacation, let alone retire. To build a company that can run without you, you need to be able to delegate the tasks and processes to someone else with confidence that they'll be performed correctly and consistently. Another excellent reason to make sure your systems are recorded and your manual is updated regularly. 5. Sell your business When it comes time to sell your construction business, you'll get top dollar if you can provide a buyer with an operating manual. A potential buyer wants to know that the company will continue to run smoothly without you throughout the transition period and that institutional memory will be retained when there's staff turnover. The greater ease with which someone can step in and operate the business, the greater the value and the higher your compensation when you're ready to sell. As we've seen, several excellent reasons exist to review your systems and record them, even if you're just starting. You might update it yearly, just like your business plan, to discover best practices and ensure it maintains its usefulness to you and your staff. Too many businesses fall over because the owner has not established efficient business systems. This typically happens because the business owner is so caught up in the day-to-day running of the business that the fundamentals of good business management get forgotten. It must be often said that the owner doesn't like bookkeeping or other administrative tasks, so these get put on the back burner. The symptoms are familiar, and their results are disastrous: Poor or non-existent record-keeping. Tax obligations are not met. Invoices go out late, and debts remain uncollected. There is one cash flow crisis after another. Goods and services are incorrectly costed and priced. Any of these factors can lead the business down the slippery path to failure, but all are avoidable. The whole point about using sound systems is that they free you to spend more time working ON your business, not in it. How good business systems will help you? Good systems will make your construction business more substantial, efficient, and manageable. They will also make your business far more attractive to future buyers because if you have developed clear operating and procedure manuals, the business will be seen as an independently viable unit and less dependent on you. Consider, for instance, what makes franchises so successful: they are designed so that people can buy a proven system and operate it after minimal training. They can do this because the business procedures are captured in simple, clear operating manuals. You don't have to be an expert at everything in your construction business. For example, you might hate bookkeeping. Okay—but do get someone else to do it for you; don't rely on a shoebox for your accounts! And you should at least understand the processes and the overall accounting picture, even if you don't want to do the 'drudge work' yourself. Final thoughts Large, profitable construction companies have known and used some form of Business Process Management (B.P.M.) for hundreds of years. We've always used M.A.P. to help our clients find the treasure hidden inside their construction business. (You can download our free toolkit here if you haven't done so). Having poor systems is the road to stress and burnout. On the other hand, good business systems will enable you to work smarter, not harder. They free you to work on your business rather than in it. That way, you're more likely to avoid burnout, and you'll be able to take time off work because you can train others to follow your documented systems and procedures. Build a better construction business and liberate yourself from it. About The Author: Sharie DeHart, QPA, co-founded 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 [email protected]    
9/15/202312 minutes, 38 seconds
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540: Key Financial Concepts For Construction Company Owners

This Podcast Is Episode Number 540, And It's About Key Financial Concepts For Construction Company Owners Not everyone knows construction accounting, and it is easy to assume all accounting is the same. Even if you have outsourced your financial functions, as a small construction business owner, having a solid understanding of critical financial concepts is crucial to work with your advisor and 'speak their language". This article outlines several essential concepts that every small business owner should know.   Construction is a tricky business, and people's failure is expected. Most of our clients have either failed or come very close. It doesn't matter how many times you are knocked down; it only matters that you learn your lessons, get up, and go again. We noted these lessons years ago, owning and operating our construction company. By building a system and gaining insight from us, you can pick up from our mistakes, which you don't have to go through and can start avoiding before it comes crashing down.    Get that one thing working, then move on to the next one. What is the most annoying thing you can quickly fix? We talk about accounting because that is our primary focus. Start with the basics: Open a business checking account. Use a dedicated credit card for the business (if using a personal card). Create invoices, present them to your customers, collect the money, and get it in the bank (Do you have an easy way for your clients to pay you?). Collect the money ASAP because, without cash flow, you are out of business. Basics of income and expenses As a construction business owner, you must understand how you generate and spend money. This way, you can maintain fiscal responsibility while also promoting business growth. Income statements (Profit & Loss) versus cash flow Business owners should always stay on top of the latest cash flow analyses and projections to make smart short-term financial decisions. Remember, a P&L doesn't tell you if you can pay your bills or how liquid your business is. Keep that in mind! Operating cash flow Understanding a company's operating cash flow is vital for assessing its performance and cash runway. Gross sales versus net profits As a small business owner, paying attention to sales and expenses is vital to ensure a healthy and well-managed business. Remember, gross sales don't equal net profits. Understanding every expense, knowing the industry averages, and having enough cash to thrive long-term are crucial. Reading a balance sheet It's important to understand the line items on a balance sheet. Taking a deep dive into these details can provide valuable insights into your financial well-being. Soon, you will instinctively know if something doesn't look right. Return on equity This concept helps us decide whether to keep investing in the business or look into other investment options. You see, there are always opportunity costs to consider for every investment. Materials A construction contractor may purchase material and resell it to their customer. Thereby thinking it is a reimbursable expense. (You lose money when doing this).  Remember all invoices to the Customer (Retail, General Contractor, Spec Builder, Developer) are income. Every line item on a customer invoice is ALL INCOME. If the words are on the invoice, then the invoice is either taxable or non-taxable based on other factors. Washington State, for instance, has a clear explanation.  Purchases for the material are Cost of Goods Sold or are expenses if you are short-cutting your accounting. I have seen financial statements backed out because they will reflect reimbursable income as a negative number, thereby showing it as a deduction. (The net effect is double dipping on the expense side.) The cause is that the accounting software is not correctly set up.  Cost of goods sold It's imperative to clearly understand the cost involved in producing your products or services. If you're unsure how much it costs to provide your services, it's hard to know how much you'll have left to cover your overhead expenses. For example, a material receipt arrives at the regular bookkeeper's desk from a lumber supplier, and they open the QuickBooks contractor file, look up the supplier to determine how the previous lumber purchase was coded, and proceed to code the new transaction the same way. The problem is that each transaction is unique and could go into any of a dozen accounts or item codes depending upon whether it is a direct cost, indirect cost, WIP, retention, warranty, overhead, administrative, or other costs, or simply an expense. The cumulative effect of these bookkeeping errors in one month can do enough damage to the financial and job cost reports to bankrupt a contractor eventually. Accounts payable and accounts receivable Managing cash flow through digital tools for accounts payable (AP) and accounts receivable (AR) is crucial. After all, cash is king for small businesses! No - the company with the most Accounts Receivable or Accounts Payable does not win a prize. Accounts Receivable means your customers owe you money. Accounts Payable means you owe money to your suppliers. Net Profit is the money left over. You want lots of Net Profit! You are not a banker! Stop borrowing money using your credit cards, Loans, and Lines of Credit, then finance customers' projects at 0% interest. Working capital Monitoring working capital is vital for ensuring the business has enough funds to operate smoothly. You can get loans if you can't get enough working money because of seasonality or other external factors. A working capital ratio between 1.2 and 2 signifies a healthy business to lending companies. The operating capital ratio shows the percentage of assets to liabilities, i.e., how often a company can pay off its current liabilities with its existing assets. The working capital ratio calculation is Working Capital Ratio = Current Assets / Current Liabilities. We are deeply passionate and committed to the construction industry and want to support you, our clients, and our readers to achieve your definition of success. Whether you're a contractor, owner, spouse, business professional, bookkeeper, or accountant, we understand your frustrations because we've been where you are now and are here to help. We have proudly produced 12 classes in our Construction Accounting Academy. Each course was designed for QuickBooks users from all levels - Beginner to Experienced. Our goal is to provide the student with suitable and valuable information to build a construction accounting system specific to their type of construction business and company role. As with every type of business, having the right tools can help you work efficiently and effectively. The key to your business profitability lies in understanding the critical concepts of construction accounting. Now that the tools are available online and accessible 24/7, it's up to you to leverage and implement the power of knowledge. To wrap things up A solid understanding of these key financial concepts enables you to make informed decisions, effectively manage your finances, and strategically drive your businesses' growth and long-term success. With financial acumen, you can identify expansion opportunities, mitigate risks, and build a sustainable foundation for your business ventures. Don't navigate your finances alone – we're here to help. About The Author: Sharie DeHart, QPA, co-founded 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 [email protected]  
9/8/202312 minutes, 54 seconds
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539: Construction Company Contract Traps And The Advantages Of Legal Help

This Podcast Is Episode Number 539, And It's About Construction Company Contract Traps And The Advantages Of Legal Help Mistakes can be expensive in the construction business, and as an entrepreneur, although you'll know many of the regulations that apply to your business, there are so many that you can't possibly remember all of them. Depending on the type of contracting business you run, you could face laws regarding taxation, employment, product liability, premises liability, discrimination, health and safety, and various other regulations.   Keeping on top of all the laws that affect you and the changes to those laws while still being mindful of all the other aspects involved in running a business is almost impossible.   That's why you need legal help. A legal professional can identify the rules and regulations that apply to your business and advise you on operating within those laws. They can also help you draw up necessary contracts that could prevent legal action in the future, and they can prepare a case in the unfortunate event that you wind up facing or filing a lawsuit.   For instance, a new contractor meets an experienced customer, and money changes hands, not how you expect it. Typically, this happens when you first get started: You bid on a project and are the low bidder. You are given the client's standard contract, which contains the client's favorite set of commercial terms and conditions, to sign as a condition of getting the project. You close and sign the contract because you don't want to ask for changes in the terms or consult your construction attorney. You put the signed contract in your bottom desk drawer and pray that nothing will happen during the project that will cause you to reread the contract. Before it is too late, consider these contract traps to look out for: 1. Poorly defined scopes of work create claims and disputes. 2. The completion schedule is too short and exposes you to monetary damages for failure to finish on time. 3. Payment terms put you in never-ending negative cash flow by loaning the customer money at 0% and borrowing on your credit cards at 24%. 4. The customer keeps 5%-10% of the contract price as retention for up to a year or more after the entire project is finished, which could be all your profit. 5. Indemnity clauses could make you financially responsible for bodily injury and property damage claims caused by customer negligence. 6. Indemnity clauses could make you pay the customer's attorney fees and costs. 7. Your insurance company may be required to provide additional insured coverage for the project, giving the customer free insurance and full access to the policy coverage and limits. 8. Often, the terms and coverage of the warranty are beyond reasonable industry standards. 9. Dispute resolution clauses that require arbitration first and then litigation are probably the two worst ways ever invented to resolve disputes. 10. The client's pre-printed final waiver of the lien document (necessary for the contractor to receive final payment) waives all contractor's rights to recover unpaid extra work and to pursue any claims that arose during the project. Here are three reasons you need a professional to help. They help set up your construction business In the early stages of your business, they can help you make vital decisions and understand the consequences of those decisions. Is your business going to incorporate? Do you know what that means from a legal standpoint compared to other business entities? Do you understand the difference between hiring employees and working with contractors? Do you know the employment laws surrounding hiring and firing if you hire employees? Law experts understand each of those and can explain how they affect your business. They can help you make an informed decision that is in the best interests of your organization and protects you in the future. They help with contracts At some point, your business will enter into contracts. Whether those are employment contracts with employees, service contracts with clients, or business agreements with other partners, you will need legally-binding documents to protect yourself. Not all contracts are easy to read or understand, and some may have confusing clauses. They will help determine if the contract is in your best interest and if there are inclusions you need to know about—such as whether parts of the contract can be assigned to third parties or how to terminate the agreement. They can also revise the contract or change anything you deem problematic. If you're drawing up the contract, getting a qualified legal opinion can ensure the agreement represents your needs and goals. This will definitely prevent experiencing contract traps, as mentioned earlier. We recommend seeking the advice of a qualified construction attorney to put together a contract that fits your specific needs. Your arrangements need a well-defined scope of work, clear payment terms, a reasonable schedule, and a proper change order clause. No work should ever be performed based on verbal agreements. Get everything in writing, always, with no exceptions. They help prevent lawsuits When you own a small business, there's always a chance you'll wind up in litigation. You could have a dissatisfied customer or an angry former employee. You may file a lawsuit because someone else infringes on your trademark or copyright. Usually, there are steps you can take in those situations before filing or facing an expensive lawsuit, and a lawyer can help you navigate those steps, possibly avoiding the cost of going to court. If you wind up in court and already have legal representation, that person will be familiar with your business, making representing you much more manageable. Many small construction business owners and entrepreneurs wait until it's too late to seek help. They wait until a lawsuit has been filed or need to file it. A lawyer can advise you of ways to avoid those situations in the first place, saving you unnecessary legal expenses in the long run. Final thoughts Yes, attorneys cost money. The benefits of having one, however, far outweigh the expenses. They will not only advise you on business decisions and contracts that protect your business in the future; they will help defend your construction company, product, or yourself if a lawsuit arises, either with you as the plaintiff or the defendant. Smart construction business owners know there is a time and a place to spend money. Spending your money in intelligent ways saves you time and energy. It can save you money in the long run by reducing turnover and preventing costly mistakes. About The Author: Sharie DeHart, QPA, co-founded 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 [email protected]
9/1/202311 minutes, 14 seconds
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538: Pros And Cons Of Working With Family And Friends In Construction

This Podcast Is Episode Number 538, And It's About Pros And Cons Of Working With Family And Friends In Construction Ever dreamed of starting a family business? Investing in a franchise opportunity with friends?   Businesses owned and operated by families can have incredible staying power. All family-owned companies, Volkswagen, Samsung, and Nike, are among the world's most successful, leading brands.   Working with family and friends can be fun and rewarding, especially in the construction industry. I know because we've been in one. But before you hire the people you care about most, it's wise to consider the pros and cons.   Pro: Dynamics When you hire family and friends, working together can feel comfortable and pleasant. You can vouch for their work ethic and values upfront. You already know their natural talents, abilities, preferences, and skill sets – their strengths, weaknesses, and how you can best work together. Con: Dynamics Regarding family and friends, modifying negative behavior or communication patterns can be challenging. What's more, it can be complicated to confront a loved one when they aren't acting in the company's best interest. The temptation to avoid conflict or hurt feelings can make managing a friend or relative tricky at best – at worst, it can become a severe liability. Always practice clear communication. Share business policies, practices, and expectations just as you would with any employee. Pro: Streamlined hiring You'll save time and money when you have a crew of committed workers ready to go before you're set to launch. With family and friends willing to help you, you won't have to screen and interview candidates – or spend precious time following up on background checks and qualifications. You can hit the ground running, focusing on generating income and profit. Con: The company has to come first Building a profitable and sustainable business requires effective management without exception. That means sometimes it may be in the company's best interest to re-train an employee for a different role, ask a worker to take on additional responsibilities – or, in some cases, to let someone go. When it comes to complex personnel matters, it can help to seek guidance from an independent advisor. Pro: Tradition is seen as a strength Strong brands are quickly built on the values we associate with family, such as honesty, trust, and enduring relationships. A recent study showed customers prefer family-owned businesses for their perceived stability, trustworthiness, and consistent service. Con: Too much tradition can hold you back When a family business does things as they've always been, the company can suffer from a lack of diversity and innovation. It's essential to keep an eye on market trends and changes in your industry, so you can adapt quickly and avoid missing opportunities. Solution: Set up a board consisting of family members and an equal number of independent advisors. A note on the spouse doing the construction bookkeeping and divorce Here is what we see repeated many times over. Contractors cross the line and treat their spouses as indentured servants who should be grateful for a place to live, eat and sleep in exchange for maintaining a household and being an overworked, underpaid contractor's bookkeeper. They become incredibly frustrated and desperate. In some cases, you are not at fault; you are being hammered by customers who are doing everything they can to drive the price of everything and everyone into the ground in a twisted attempt to get something for nothing, and I have a suggestion for how to fix that. The answer is simple. We have helped save many marriages by working with contractors' spouses and showing them how to do what they are good at, like managing the money, paying the bills, customer service, and other management tasks, and letting us take care of the contractors' bookkeeping services. Having your spouse handle construction bookkeeping can be a recipe for disaster. Mixing business and personal relationships can lead to conflicts of interest and communication breakdowns. It's best to keep these two areas of your life separate to maintain a healthy work-life balance and avoid potential complications down the line. Ultimately, going through a divorce after being in the construction business together can be challenging. It's not just about separating personal and professional lives, dividing assets, and determining who gets what. It's important to approach the situation with a level head and seek legal counsel to ensure a fair and amicable outcome.  Remember to prioritize the well-being of any children involved and communicate openly with your former partner to minimize conflict. It may be a difficult process, but with patience and cooperation, you can move forward and begin a new chapter in your life. Having family and friends involved in a business can have advantages and disadvantages.  On the one hand, having family members or close friends as business partners or construction crew can provide a sense of trust and loyalty that may not be present with outside partners. It can also be easier to communicate and make decisions with people you know well and trust.  On the other hand, working with family and friends can also lead to conflicts and emotional tension that can spill over into personal relationships. It can be difficult to separate business and personal disagreements, which can quickly become heated and damaging. Additionally, working with family and friends may limit the pool of talent and ideas available to the business, as outside perspectives and expertise may be overlooked.  Whether involving family and friends in a business is beneficial depends on the specific situation and individuals involved. It is essential to consider the potential risks and benefits before making any decisions and to prioritize clear communication and boundaries to maintain healthy personal and professional relationships. Final Thoughts Because family members and friends are personally invested in your business – both emotionally and financially – they can make fantastic employees. They'll work hard, put in the extra hours when needed, and do everything they can to ensure your venture succeeds. The biggest challenge can be to draw the lines between work, family, friendship, and home. As an employer, it's crucial that you set boundaries, practice clear communication, and be willing to make difficult decisions so your business and personal relationships can thrive. About The Author: Sharie DeHart, QPA, co-founded 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 and 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 [email protected]
8/25/202311 minutes, 26 seconds
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537: How To Safeguard Your Construction Company From Employee Expense Fraud

This Podcast Is Episode Number 537, And It's About How To Safeguard Your Construction Company From Employee Expense Fraud As a small business owner, you always look to keep your company running efficiently. Expense reimbursement fraud is the last thing you want to face. Not only can it hurt your bottom line, but it can also damage your construction company's reputation. Here we discuss employee expense fraud, the reasons behind it, and, most importantly, how to prevent it from happening to your construction business.   What is expense fraud?   Expense fraud is submitting falsified or inflated expense claims to receive reimbursement from the employer or avoid paying out of pocket. It is illegal, unethical, and detrimental to your business.   Employees can commit expense fraud in several ways, such as using personal expenses as business, submitting fake receipts, inflating costs, duplicating submissions, falsifying mileage, and using company funds for personal use. Why do employees commit expense fraud? There can be multiple reasons behind expense fraud. Financial gain is the most common motivation, but some employees may do it for personal reasons, misunderstanding of policies, pressure to achieve targets, or simply apathy. As a business owner, it is essential to understand the reasons behind expense fraud, as it can help you identify and address them proactively. Understand The Employee Theft 10-10-80 Rule - Discovered over many years of experience and first-hand observation by auditors, accountants, fraud examiners, and anyone involved in detecting employee theft. Ten Percent of all employees, including bookkeepers, will steal in various ways from office supplies, petty cash, graft, kickbacks, and payoffs from your suppliers, vendors, and sub-contractors, and even hundreds of thousands or even millions of dollars. They will do it regardless of how many security systems are in place because they lack integrity. They cannot be stopped, only caught! And only then, if you have systems in place and can convince the criminal justice system to take action, good luck with that! Ten Percent of all employees, including bookkeepers, will never steal because they have integrity and a "Producer's" paradigm. Ultimately, these people will add so much value to your company that you cannot help but reward them with more money, benefits, and recognition. Because if you do not, they will be recruited by your competitors.  Eighty Percent  of all employees, including bookkeepers, will steal if they feel confident they can get away with it and if circumstances allow for it due to weak integrity and a sense of "Redistributing The Wealth, But Not The Work Or The Responsibility." Signs to watch out for your employee: Asks for signature authority on your checking/savings/payroll accounts Has a lifestyle that seems above what they are earning Takes Records Home to work on, or they want to work in the office when no one is around (Fraudulent activities are more accessible when nobody is around) Gets defensive when you or your CPA asks questions. Has access to your credit/debit cards Your bookkeeping is a complete mess, and you cannot understand it. Tries to explain away delinquency tax notices. Is the primary contact for your company's banks, auditors, creditors, etc. Misplaces payroll receipts, deposit records, supplier letters, and estimates. Makes bank deposits, and they seem to be too small. Show signs of drinking, drug, gambling, or family financial problems. Suggested they could save money by eliminating the outside accounting firm. Gets angry when you ask for a QuickBooks report. Tries to blame the previous Bookkeeper or outside accounting firm for messy QuickBooks. Does not get along well with other employees and staff members. There are more warning signs, so be aware of and action steps you can take. How can you effectively prevent expense fraud? The first step in preventing expense fraud is to have a comprehensive and clear expense policy. It should be up-to-date, relevant, and easily accessible for all employees. Ensuring that the policy covers all necessary expenses, acceptable limits, documentation requirements, and reporting procedures is essential. It would be best to encourage employees to ask questions or seek clarification regarding the policy. Require detailed receipts and proper documentation to support the expense claims. Expense receipts should be original and include the date, amount, vendor name, and a clear description of the expense. For instance, credit card statements are not acceptable as receipts because they need to provide detailed information about the payment. Conduct regular audits of expense reports to identify any patterns or suspicious claims. Audits not only help you detect fraudulent activities but can also identify internal control gaps or process deficiencies. Providing policy training and raising awareness of employees regarding business ethics can also help prevent expense fraud. All employees should be trained on these measures and regularly communicate a zero-tolerance policy for fraud and misconduct.  Additionally, implement systems for reviewing and approving all expenses and ensure checks and balances are in place to prevent unauthorized spending. By taking these steps, we can maintain a culture of integrity and honesty in your business and protect your construction company's reputation. You can leverage expense management software that automates the expense reporting process, thereby reducing errors and improving efficiency. It can also help monitor suspicious activities, such as multiple submissions for the same expense or expenses exceeding the allowable limit. Final thoughts Preventing expense fraud requires a collective effort from construction business owners, project managers, and employees. Having a clear and comprehensive expense policy, encouraging ethical culture, conducting regular audits, and leveraging technology can help prevent expense fraud. By implementing suitable prevention measures and promoting ethical conduct among employees, you can reduce the risk of expense fraud and protect your business from potential financial and reputational losses. Don't let expense fraud be a hidden cost in your business. If you need help creating policies or want to review your existing expense processes, we're here to help. Reach out to us today! About The Author: Sharie DeHart, QPA, co-founded 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 [email protected]
8/18/202311 minutes, 18 seconds
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536: How To Handle Construction Client Debt So You Get Paid On Time

This Podcast Is Episode Number 536, And It's About How To Handle Construction Client Debt So You Get Paid On Time If your customers owe you money, the faster you can obtain it using effective collection tactics, the better. Ideally, you want to reduce the chance of bad debts and pressure on your construction company's cash flow. It can be easy to neglect to manage your debtors when you're busy growing your business, but intelligent credit control is important. So it's crucial to have the skills to handle the people who owe you money well, especially if you want to avoid taking them to court. When negotiating contracts with clients, try to set payment terms that help your cash flow, such as deposits or progress payments. Dealing regular payments for contracts that take months to complete has two purposes: it gives you cash flow to match your expenses and protects you from total loss on a project if the customer goes into liquidation. Please include a timetable for the customer to pay invoices as part of any agreement. Agree on clear milestones for the work to be completed to minimize the chance of the customer disputing any invoices. Successful debt collection is about good processes. As with most things, prevention's better than a cure. If you have good processes in place for collecting debt, the less likely it is that you'll have to chase debtors. And if you do, having the proper procedures to follow up on late payers makes it much more manageable. 1. Tighten your credit control Having stricter control over new debtors is the best way to limit your exposure to future bad debts. So make sure that you: - Ensure your business completes comprehensive reference checks before offering credit to new customers. - Set fair credit limits – and ask your staff members to notify you if a customer wants to exceed their agreed limit. - Approve any additional credit extensions in advance. Make sure you state clear payment conditions in your terms of trade agreement. Make use of credit checks – this can be especially important for new businesses that feel pressure to gain customers. Try to avoid being careless with credit checks. It might come back to haunt your business in the form of cash flow problems up the road. Terms of trade – implement a system whereby new customers must sign their acceptance of your terms of trade before you offer them credit. Follow up by emailing (and any changes) annually to refresh their memories. 2. Structure payment terms It's essential to put together your payment terms to encourage prompt Payment. You could, for example, offer a 2% discount for customers who pay within 21 days. Ensure that your terms of trade state exactly when you'll start charging interest on any overdue amounts and the rate you'll be charging. Don't yield to customers even if Payment is only a day late. Whether you decide to make any exceptions for those customers that usually pay promptly is up to you – but be clear that it's a once-only exception because you value that customer's business relationship. 3. Good organization is vital You'll come across as an astute businessperson who takes Payment collections seriously if you systematically show your clients that invoices are a top priority. By being organized and able to quickly reference a customer's account when they make contact, you'll be more likely to get paid faster. Some ways you can project a higher level of organization include: - Being professional – all written communication with your customers should be consistent, look professional, and clearly show contact details, the amount owed, expectations, and payment terms. - Having a consistent schedule – sending invoices at the same time of the month and following up after a set number of days. - Don't show a layered approach – a customer's first invoice will show the amount due and by when, but next month should state that they're late in paying. Don't have 'late Month 1, Month 2, Month 3'. They are all late and should accumulate. - Flexibility for significant clients – a degree of understanding may be necessary for your critical clients with larger bills to pay that help keep you in business. Phone calls or more personal letters to key staff may be warranted to entice earlier payments. 4. Address problems quickly Identify and deal with problem payers as soon as you can. The sooner you start chasing the debt, the sooner you'll get paid. If you've got good accounting software, it'll notify you of any unpaid credit sales as they become overdue. Many accounting programs will automatically flag due bills and generate reports of unpaid bills showing how long they've been late. You're looking to speed up the collection of late payers. You can do this by: - Calling them directly – to discuss how a resolution can be made quickly. - Visit in person – a face-to-face meeting is generally more effective. - Sending a legal letter – if all other options have been exhausted and you're close to writing off the debt. So when is a good time to ask for Payment? When the contract is signed, ask for a deposit. Progress Payments - Every week, perhaps on Monday, you could review the work completed the week before, issue a simple invoice or give your customer a comprehensive payment application and get paid. Change Orders - Every change order has a clear scope of work and pre-determined price, which needs to be documented before the work is done and paid in advance. Sounds strong? Well, change orders have a short shelf life; the value of the work and the motivation to pay for the work on all Change Orders rapidly diminish after the work has been performed.  Final Payment - when the work is done. When you prepare the final invoice, you will credit back the deposit and either issue a small refund check or collect a small check. Final thoughts Stop doing the work and yet feel embarrassed about asking for money. Construction business owners often find chasing money owed to them like pulling teeth. It's not pleasant, and it's not the reason you went into business. But when people owe you money, and it's the lifeblood of your business, then you cannot afford not to take action. Clients will respect you for being firm but fair. About The Author: Sharie DeHart, QPA, co-founded 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 and 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 [email protected]
8/11/202310 minutes, 50 seconds
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535: A Guide To Service Based Business Advertising That Works

This Podcast Is Episode Number 535, And It's About A Guide To Service Based Business Advertising That Works Marketing covers everything you do in your business that creates awareness, including advertising, brochures, competitions, trade shows, demonstrations, travel, direct mail, email campaigns, your website, and sponsorship. Let's narrow our focus to an integral part of Marketing - Advertising. Advertising is a massive industry with multiple mediums for your message to be heard or lost in translation. It might sound like a no-brainer, but before you start planning your advertising, you must consider what you are trying to achieve from your investment. Your ultimate objective likely is to build sales, but other things to consider are increasing market presence and building your brand. Advertising can be used to: Establish a reputation as the market leader or industry expert – allowing you to win long-term contracts or even increase prices. Build brand awareness for a product to make it easier to sell and raise the profile of your other products. Change customer perceptions of your products and services to boost sales. Detail a specific, one-off message to your market by informing potential customers of a special offer or product component. Address your existing customers to increase your brand awareness – meaning they think of your business first when considering a product or service. Identifying your target market Before any advertising is written, you need to take the time to define your target market (if you haven't already). Knowing who you are trying to target will help you customize your marketing efforts to suit those people. You should already know who is interested in your products or services, but the easiest way to clearly define your target market is to create an ideal customer profile. How to create a customer profile: Try and create an ideal demographic for your target market. Think about the age, gender, marital status, and income of the person most likely to buy your product or use your services. If you are unsure, think about your biggest customers – is there anything they have in common, such as age or gender? Think about the geographical reach of your business – service-based businesses like yours have a limited market area. Think about your regular customers or clients that live within the region. Once you know your market area, you could research existing data or conduct some market research to find out the average age, income, and family status of people in your area. Be careful not to make your target market too specific, as you may exclude many potential customers. For example, rather than targeting couples aged up to 30 years who own their first home, it might be better to target couples aged up to 40 years who are currently renting but are interested in purchasing a property. You can learn a lot about your target market by looking at your competition – pay attention to where they advertise, how they present their advertising, and the tone they use in their written material. Subscribing to competitor newsletters or regularly checking their websites is a good way of keeping up-to-date from a distance. Types of advertising Knowing what type of advertising will appeal the most to your target market is the key to producing effective advertising. Here are the most common types of advertising you can use to promote your construction business. Print advertising. Print advertising traditionally covers newspapers, magazines, brochures, flyers, and other printed media. Print advertising can be expensive, such as a feature page in a newspaper or a local magazine. More inexpensive options include community papers, classifieds, or delivered printed fliers. Internet advertising. Internet advertising includes online services such as YouTube, Facebook, Google, and Twitter but also includes banner ads and embedded video content. Internet advertising offers a range of options for different budgets, from pay-per-click services such as Google AdWords to home page coverage on a popular website. Outdoor or out-of-home advertising. Outdoor advertising covers a range of billboards, signs, or even event sponsorship. Other popular types of outdoor advertising include motor vehicles, such as advertisements on buses or cars. Some outdoor advertising, such as billboards, will require a permit, and most signs are subject to local laws and regulations that determine where they can be located. Broadcast advertising. Broadcast advertising traditionally includes television and radio but can also cover some Internet mediums such as YouTube, Vimeo, or even podcasts. Appealing to your market Now that you have identified your target market, the next step is to decide which forms of advertising will give you the best return on your investment. This decision will be based on the characteristics of your target market, such as: Personality Values Interests or hobbies Lifestyles. Think about how your service fits your target market's lifestyle – will they have enough time to wait for a renovation project to be done, or are they too busy? Also, consider what features of your product or service will be most appealing to them, such as quality, price, and after-sales support. You should now have a good idea of which features of your products or services you should pay the most attention to in your advertising material. Future-proofing your advertising To get the most out of your investment, make sure you: Listen to any customer feedback about your advertising. Are prepared to amend your advertising efforts if they aren't working. Observe your competitors' advertising efforts and pick up on any new trends or tools you can use. Ask another business owner or professional for advice if you doubt advertising material content, design, or tone. Are aware of laws or regulations about where you can advertise and the content of your messages. Feed your advertising results back into your marketing or business plan. No-idea vs. Objective and Task Method I see many construction businesses that are just too busy during certain times of the year to think of advertising, and if they did, it would be a waste as they would not be able to handle the work anyway. Suddenly, however, sales fall (perhaps due to seasonality), and then the business starts marketing. However, this could be a waste of money as you're often marketing at the wrong time or advertising to get instant sales, which is unlikely. So the problem is that the marketing money is spent during slow times (this hurts) and is allocated to fix a problem instead of creating new opportunities. What to do? At the start of the year, select the targets you'll aim at over the next 12 months. Work out what you want from each of these targets (such as 20 new clients, or each existing customer to spend another $100 in your plumbing business, or an increase in the average sale). Then expressly state what you want to do to achieve this, estimating how much it will cost (common sense will give you guidelines, for example, a small service-based business will not be spending $100,000 on TV advertising). Final thoughts "Early to bed, early to rise, know your numbers, and advertise." Always have a method of monitoring if your advertising is working or not—otherwise, you'll fall into the 'no idea' category that far too many small business owners belong to. You can't refine and improve your marketing spending without measuring the results. About The Author: Sharie DeHart, QPA, co-founded 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 and 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 [email protected]  
8/4/202312 minutes, 3 seconds
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534: The Rundown To Running Your Own Construction Business

This Podcast Is Episode Number 534, And It's About The Rundown To Running Your Own Construction Business Getting your construction business up and running and making a profit is usually much more complicated than it sounds. So let's focus on honing the skills you'll need to make it happen by acquiring these yourself or consulting professionals to help you. What it means to be your own boss Being your own boss might sound like it is the ultimate ticket to freedom and financial success – and it can be. But don't be fooled into thinking you'll be able to put in a few hours each morning and spend the afternoons networking over a round of golf. The reality is that most businesses require much hard work – more than your standard 9–5 job and over some years – before they start to make a reasonable profit, and many new construction businesses fold before they reach that point. Here are the top things you should be aware of: You need to be passionate about what you do: Setting up your contracting business is challenging. If you're not passionate about what you do, you'll find it hard to stay motivated when faced with several hurdles. Also, if your business is just another idea to make money and not something you're passionate about, you'll lack that key ingredient to make your new business more attractive than the established competition. Before you start a construction business, ask yourself if you're passionate about this industry. You'll need to make sacrifices, at least during the first couple of years: You'll need to put in a lot of hard work between coming up with your business idea and establishing your business. You'll probably have to work harder than most of your mates and make many sacrifices. It might mean less time with your friends, less time for sports or hobbies, or even less time with your family. You'll also probably be taking home less money – and might need to sacrifice family holidays or put major household purchases on hold until your business is established. Ask yourself if you're prepared to make the sacrifices necessary to make it a success – and check that your family is prepared to make these sacrifices too. You'll face risk and uncertainty: When you start your own business, you won't have the security of regular payments from an employer. Your business might be unable to pay you a wage for the first few weeks, months, or years. In addition, you might need to draw on your savings or even take out a loan to finance your business operations. There's an element of risk and uncertainty when you start your own business, so you need to be sure that your construction business idea is viable and that you have enough money to support yourself and your business until you reach your break-even point and start turning a profit. You'll need abundant patience and persistence: It's rare for a start-up that has everything run according to plan without any teething problems. You'll likely encounter your fair share of setbacks and challenges, from financial issues to demanding customers and problem staff. While there's a fine line between persisting against all odds (when the business is not viable) and giving up when the going gets tough, you'll need patience and persistence to make your business a success. Getting the skills you need Very few people who own businesses start with all the necessary skills. The secret is to quickly inventory your current skills and identify the gaps in your knowledge base. You can then either get the training you need or employ people with the right skills for those areas you don't have a natural affinity for. You'll need the following skills to run your business. Market research skills to understand the market you are entering and stay abreast of market developments, customer preferences, and the actions of your competitors. Money management skills to forecast when you expect your business to break even, understand your financial position at any point, and asses the financial implications of any business decision you make. Marketing and sales skills to effectively promote your products or services and reach your break-even target sales as soon as possible. People skills to help you manage and motivate your staff and deal with customers. Negotiating skills to ensure you can strike the best deal when dealing with suppliers or bidding contracts. In the longer term, it's a good idea to do courses in all these areas, even those you're uncomfortable with. If, for example, you don't like figures, or feel you are not good with people, try to develop these skills over time. A rudimentary understanding of financial statements and what the critical metrics for your business mean will help you run your business better and improve your people skills if that is your area of weakness. "Do you have what it takes" Self-test Here's a quick self-test you can take to see what it takes to start your construction business. 1. Do you have several years of experience in the trade industry you're considering entering? If not, it might be best to wait a few years until you increase your knowledge and contacts. 2. Starting your own business is challenging. Do you thrive on challenges? If not, starting your own business might not be your best option. 3. A wide range of skills to run a business successfully would be best. Are you prepared to undergo training to develop the skills you need or to heed input from specialist advisers in areas, not your specialty? 4. There's no fallback guy when you run your own business. Do you enjoy making and being responsible for your own decisions?  5. You'll need to invest much time into your business start-up. Are you prepared to work long hours without the security of a steady income? 6. You might not be able to pay yourself a wage for a while. Are you prepared to lower your standard of living until your business starts to make a profit, and do you have sufficient savings or an alternative income to live off during the start-up period? 7. Most small businesses fail due to inexperience, poor management, or lack of planning. Are you actively working on overcoming these common problems?  8. Starting your own business has implications for your family, including less income, reduced family time, and taking on additional responsibilities. Does your family understand this and unconditionally support your desire to start a business?  9. Regardless of how excited you might be about starting your own business, there is a chance you might fail. Are you prepared to risk losing the money you invest in your business? When a business starts, it's natural for you, the owner, to be a jack-of-all-trades. You may not have the capital to hire specialists or access the technology to help you. As your business grows–or as you look to take a minor role in your construction company–you may find the industry has become over-reliant on you, making it challenging to take a step back. Final thoughts Have you M.A.P.ped your business yet? Consider this before retreating and delegating: Marketing - never sells more than Production can provide; on-time and on-budget Accounting - manages the money to maintain operations and produce a reasonable profit Production - delivers the project intending to exceed customer expectations As you know, we are big on Construction Marketing, Accounting, and Production; having a basic operation manual in place for your office, remote, and field employees pays off in the long run. It won't be easy to run your construction business on your own. Are you prepared to hire staff and delegate responsibilities to them or use the services of a professional? If not, this could reduce the chances of your business being successful.  Call, email, or fill out the form on the right to schedule a free consultation with me - regardless of where you are in you're construction business journey. About The Author: Sharie DeHart, QPA, co-founded 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 [email protected]
7/28/202313 minutes, 25 seconds
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533: Finding The Right Construction Talent And Common Onboarding Mistakes

This Podcast Is Episode Number 533, And It's About Finding The Right Construction Talent And Common Onboarding Mistakes As a business owner, you know the right people are crucial to your construction company's success. The best employees can help you achieve your business goals, improve productivity, and drive growth. But finding the people best suited to your team can be daunting, and sometimes it's easy to hire someone who seems okay rather than taking the time to find the best fit.  Here are some steps to find and hire staff that support your business growth, whether in the office or the field. Step 1: Define the job and necessary qualifications The first step in finding the right talent is accurately defining the job description and qualifications. Is this a new position you're hiring for? Are there gaps in employee skills that need to be met? Is this a position that requires specific knowledge and experience?    Remember that there's a difference between "must-have" qualifications and "nice to have" considerations. When setting out "must have" qualifications, include only those that are necessary to the person successfully performing the role.  Remember also that the job salary should match the role and the qualifications. You can't expect to hire someone with ten years of experience by only offering an entry-level wage.    Step 2: Use multiple recruiting channels These days, there are many places you can turn to when finding employees, and each attracts different people. Using a variety of channels when searching for employees gives you a higher chance of success.  Post the job description on your company website and multiple social media platforms. Use job boards and recruitment agencies to expand your reach. Contact your personal and professional networks to ask for referrals or recommendations. After all, the people you know also know people. They may be able to recommend someone who's an excellent fit for your construction business. Step 3: Screen candidates Once you have a list of candidates, you'll need to screen them. This includes going through resumes/CVs and conducting interviews. Check to make sure they have the qualifications and experience you need.  During the interview, ask open-ended questions to assess the candidate's problem-solving abilities, communication skills, and overall fit. Ask about the results they've obtained in previous jobs and lessons they've learned throughout their experience. It's also important to allow candidates to ask questions about your company and the position you're hiring for. Step 4: Check references Before making a job offer, it's essential to check references. Contact former supervisors and colleagues to ask about their work performance and attitude. Double-check that they obtained the results they said they did. This will help you ensure that the candidate has a proven track record of success and is a good fit for your construction company. Step 5: Make a job offer After checking references and confirming that the candidate has the skills and qualifications to match your needs, it's time to make the job offer. Be clear about the terms of employment, including salary, benefits, and start date. Give the candidate time to review the offer and ask any additional questions they may have.  Once they accept the offer, you can begin the onboarding process. Step 6: Provide training and support Once you've hired someone, it's crucial to provide training and support to help them succeed in their new role. This can include job-specific training and coaching on company culture and values. Regular check-ins and feedback can help new employees feel supported and valued and ensure issues are handled quickly and effectively. In this regard, while most small businesses spend much time and effort finding the right employees, they often fail to capitalize on their newly hired talent by ceding the onboarding process to HR or neglecting their responsibility entirely. From long waits for workspace, equipment, or training to an overly negative recitation of 'don't do these things or you will be fired,' employers consistently miss the opportunity to inspire new contributors and set aggressive performance standards. Before you bring on your next new hires and leave them to languish in the lunchroom filling out paperwork with an HR representative, consider the following seven common onboarding mistakes small businesses make. 1. Letting human resources lead While it's important for newly hired employees to fill out their tax forms and enroll in benefits, this process should not replace new-hire orientation. Rather than waste valuable time on paperwork, send new employees a package of documents, or give them a link to apply online before they start their first day of work. Nothing is more demotivating than spending four hours alone in a room filling out paperwork you could have quickly done at home. On their first day, an employee should be greeted by their direct supervisor, who spends at least a half-hour with them to begin building a relationship. 2. Focusing on negatives While it's vital to discuss expectations early in the onboarding process, focusing on a list of negatives that could result in termination detracts from why you hired the person in the first place. While it's crucial to address ethics and accountability, newly hired employees must be encouraged to engage in the work they were hired to do rather than focus on the top 10 ways they could get fired. 3. Failing to prepare workspace and equipment There is no excuse to leave newly hired employees without workspace or equipment. It would be far better to delay an employee's start date rather than leave them in a conference room without a workspace or equipment to do their job. 4. Failing to provide an agenda All newly hired employees should have a training agenda before their start date. The agenda should list the type of training they should expect to receive, the name of the trainer with a short bio, and an expectation of when they will be finished their training and start work on their own. If there is a competency test before the start of work, this should also be noted in the agenda. 5. Failing to introduce co-workers Co-workers are an excellent resource for newly hired employees. While companies often focus on introducing their most productive workers and managers, introducing new hires to other recently hired employees who can more easily empathize with their needs is often helpful. If possible, consider hiring new employees in waves rather than individually, as this can often build relationships and lead to a more cohesive team. 6. Failing to provide comprehensive training Training provides a critical foundation for ongoing success in a construction company. Not only does a well-trained employee perform better, but the employee will also have more confidence when interacting with customers and will be far more likely to succeed. If your organization has a high churn rate within the first six months, poor training is likely the culprit. Untrained new hires often become disillusioned with an organization that lacks structure, training, and follow-up. During the first 90 days of hire, an employee should have enough training to be self-sufficient for at least a week, regardless of their position. 7. Failing to provide knowledge resources Not all employees learn at the same rate using the same methods. Make sure new hires have access to training material in various formats. This includes training handbooks, training videos, and employee shadowing. Rather than force a particular format, concentrate on the results needed to excel at the position. Make sure to give feedback regularly throughout the process. New employees' first day on the job should be a day of promise and inspiration, not a window into dysfunction. Since first impressions matter, alert everyone in the organization that a new employee has been hired, and supply a biography. There's nothing more gratifying to new employees than to be enthusiastically greeted by co-workers who have taken the time to find out who they are and how they can contribute. Final thoughts Finding the right talent for your business can be challenging, but you can increase your chances of finding the right people to help your business grow. Remember to be clear about job expectations, use multiple recruiting channels, screen candidates thoroughly, conduct in-person interviews, check references, make a job offer, and provide proper onboarding, training, and support. About The Author: Sharie DeHart, QPA, co-founded 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 and 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 [email protected]  
7/21/202313 minutes, 36 seconds
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531: Cultivating Construction Company Productivity Through Staff Training

This Podcast Is Episode Number 531, And It's About A Guide To Building A Solid Construction Company Marketing Plan When it comes to the construction industry, employee training and development is crucial for success. Providing employees with the necessary skills and knowledge can make their work more efficient and effective, leading to higher-quality results and increased productivity. From safety training to technical skills development, a variety of areas can be focused on in construction employee training and development programs. Investing in these programs not only benefits employees but also improves the overall success of the construction company. Don't have an employee? As a construction company owner, it's important to prioritize investing in yourself and your growth. By paying yourself first, you'll be better equipped to make intelligent investments in your construction business and provide valuable training and development opportunities for your soon-to-be employees in the industry. This can lead to a more skilled and efficient workforce, which can ultimately help your business thrive. Let's say that you have two people working for you, one is your apprentice, and the other is your office administrator; developing employee skills for them and yourself creates a situation where your construction company benefits from a more knowledgeable and capable staff while your whole team gains additional skills or qualifications. This can allow employees to further their careers and possibly increase their earning potential in the long term.  Training and skills development can assist underperforming employees and be used to encourage talented employees, allowing them to grow within the business. This helps both individual employees and your business achieve their full potential. Some business owners worry that training and development can cause an employee to seek additional responsibility elsewhere. But it's also worth bearing in mind that driven and successful employees will lose interest in their job and leave if it doesn't allow them to develop their skills. To develop skills as a construction professional, starting with a solid foundation of knowledge and experience in the industry is essential. Here are some steps you can take: 1. Set a training budget Consider setting aside money for staff training and development in your annual budget as you'd budget for other necessary business expenses. You could claim the training costs as a business expense or negotiate more expensive training as part of a salary package with employees. 2. Draw up a training policy A training policy doesn't need to be too in-depth, but it should set out any special requirements so your employees know what training you'll consider and what requirements they'll have to meet to benefit from company-sponsored training. You could require that: Training needs to be job-related for the company to pay for it. Employees pay 50% of the course fee if training is helpful to the company but not necessary for their job. Employees reimburse costs (if completely necessary) if they don't complete or pass the course. 3. Discuss career goals and opportunities. Discuss short- and long-term career goals during performance reviews or employee conversations. You can decide how to match their goals with any short and long-term opportunities available in your business. Training in areas that do not further your employee's short- or long-term career goals will not be embraced as enthusiastically, so it makes sense to plan future development to balance business needs and employee goals. 4. Identify employee strengths and weaknesses One of the best ways to get agreement on the appropriate training is to collaboratively identify the strengths and weaknesses of each employee for any current and future roles they might play. Start by identifying the skills they'd need for the job. Then ask them to identify the skills they have and list their strengths. Then ask your employee to identify the weaknesses in their skill set. Phrase this carefully and be clear that you're not looking to criticize but to find areas where additional training would help them perform current or future roles better. 5. Agree on training objectives Use the information you've obtained from exploring career goals and opportunities and examining strengths and weaknesses to identify suitable training options for each employee and collaboratively agree on training objectives. Write down the objectives, then plan how these will be achieved and the timeframes you expect them to be achieved. 6. Stay current Ideally, as a construction business owner, you must stay current with industry trends and advancements by attending conferences, workshops, and other professional development opportunities. Remember, developing your skills as a construction contractor is an ongoing process that requires dedication, hard work, and a commitment to continual learning and improvement. You can build a successful career in this exciting and challenging field with patience and persistence. 7. Monitor progress and request feedback Monitor progress by reviewing the agreed objectives at least once a year to evaluate progress. This allows you to revise the training objectives and plans where necessary. Consider scheduling regular meetings to ask staff for feedback. These can be as informal or formal as you like, ranging from a quick conversation to asking staff to complete a questionnaire or conducting a formal presentation on what they have learned. You'll want the following: A quick summary of what was learned (the take-home benefits). Feedback on whether the training met the employee's expectations. Feedback on whether the training met your business's objectives. Give your employee adequate notice that you'll be asking for feedback. This helps you to evaluate courses or training service providers to use or avoid in the future. Cultivating construction company productivity through staff training and development is crucial to ensuring success and growth in the industry. By investing in employee training, companies can improve their workforce's skills, knowledge, and efficiency, leading to higher quality work, faster project completion times, and increased profitability.  Training can take many forms, from on-the-job mentoring to classroom instruction, but the key is to provide employees with the tools and resources they need to excel in their roles. This can include technical training in specific construction techniques, safety and compliance training, or leadership and management training to help employees develop critical soft skills. Moreover, training programs should be tailored to the company's and its employees' unique needs. By identifying areas where employees need improvement, companies can design training programs that address those needs, resulting in a more effective and efficient workforce.  Final thoughts Investing in staff training is an intelligent strategy for construction companies looking to improve productivity and profitability. Companies can build a skilled, motivated, and productive workforce that can confidently take on even the most complex construction projects by providing employees with the resources they need to succeed. You can't outwork your competition forever, but you can outlearn them. We offer free construction bookkeeping and accounting consultation; fill out the form on the right, and I'll get back to you shortly. We understand your frustrations, so if you or your in-house bookkeeper is lost and tired of your paperwork system, we also offer Construction Accounting and Bookkeeping Classes. About The Author: Sharie DeHart, QPA, co-founded Business Consulting And 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 and 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 [email protected]
7/7/202312 minutes, 2 seconds
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530: How To Manage Your Construction Company Payroll Effectively

This Podcast Is Episode Number 530, And It's About How To Manage Your Construction Company Payroll Effectively Payroll is one of those things that starts simply enough. You start your construction business and hire a few employees, and things tick along. It's straightforward enough to keep everything in line at first, but what happens to most companies is… they grow! This is a great thing, but it also means that payroll becomes more complicated. As such an essential aspect of your business, payroll must run smoothly. Getting paid is, after all, the primary reason that most people come to work.   One of the biggest challenges contractors face is keeping track of overtime hours. With so many employees working on different job sites and projects, it isn't easy to calculate their overtime pay accurately. Complying with all federal and state labor laws is another essential aspect of a construction payroll system. This includes appropriately classifying employees as exempt or non-exempt, withholding the correct amount of taxes from their paychecks, and providing accurate wage statements.   Here are some tips for managing payroll effectively: 1. Simplify Payroll is one of those things that can be overly complex, and the importance of simplifying it can't be overstated. Many small and medium-sized companies have quirks in managing their payroll. This can make it difficult for somebody else to step in or for someone new to be trained. Keep things as simple as possible wherever you can. One way to do this is by switching to direct deposit. This will drastically reduce the work put into issuing and tracking payments. 2. Schedule At least once per year, and preferably more, it's essential that your payroll professional take some time to create a payroll calendar. This will allow them to highlight any dates that may cause a lag in your employees' pay. It will also allow you to plan for any potential shortcomings or other issues arising from holiday closures or oddities in the calendar. Making a payroll mistake is a surefire way to lower employee morale, so it's important to be aware of these dates ahead of time. Once compiled, distribute the calendar to your managers so that they can communicate the information to their employees. This will keep everyone apprised of any potential delays in getting paid that may come up. 3. Automate The computer can be your best friend. Finding the right software to help with payroll can automatically take care of simplifying and scheduling, freeing up valuable time for your payroll specialist. It also eliminates the potential for human error in payroll processing and creates a crystal-clear picture of your finances. Many options are available these days that are easy to learn and straightforward to maintain. 4. Brush up Payroll rules and regulations can change frequently and for any number of reasons. It's important to stay informed on any changes in your region and proactively plan for them. A lot of time can go into correcting a payroll error, so know what's happening to avoid this. With more and more employees being hired remotely, it's also important to be aware of any regulations about those geographically located in a different area from your business. 5. Get help There comes the point for all growing trade businesses where they have to outsource their payroll processing; if this is you, congratulations! It is truly a milestone. There are many options out there regarding hiring a payroll specialist, and many of them are available online. Choose the one best suited for you and your business needs without leaving your desk. This takes the pressure off you to know all the nitty gritty details about payroll processing. By hiring an outside professional, preferably a construction payroll specialist, you can ensure your employees will be paid correctly and on time. Payroll Options While every contractor recognizes the flaws of using ineffective tools, they may still be losing money due to inefficient payroll tools and processes. When contractors ask us which payroll option we recommend the most, we often say Direct Deposit. As usual, the reasons are simple and related to our primary role as "Profit and Growth Specialists for Contractors." Option 1 - Paper check looks like the least expensive. Calculate payroll, handwrite or print a paycheck, hand it to your employee, and done. What is the first thing an employee does after getting a paper paycheck? They go to the bank or the check-cashing store and get cash! Nowadays, you can deposit a check using your bank's mobile app, but let's say your employee wants to cash it immediately: If they are paid for travel time to and from the job site, they will typically cash their paycheck to the job site or take a break as soon as the bank opens. Having this scenario in mind, there are three costs to consider:  #1 Travel Time - See how much ten minutes can cost your company and Multiply By Three! Because it will take ten minutes each way to detour to and from the bank or payday advance company, plus ten minutes inside the building. For example, you pay your employee $25.00 per hour, which means every ten minutes of doing personal business on company time costs you $5.94, multiplied by three equals $17.82. If Your Company Earns 10% Net Profit, you need to sell another $178.20 worth of work to compensate for your loss. If there is more than one worker in the company vehicle, multiply everything by that number. #2 Cost Per Mile - To operate the company vehicle, which varies depending on the type of vehicles your company uses. Generally, the numbers range from $1.25 to $1.75 per mile. This considers Fuel + Insurance + Repairs + Maintenance + Registration + License divided by the number of miles driven. In this example, we estimate a three-mile detour at the middle range of $1.50 per mile = $4.50. This is towards the lower-end cost and may not reflect the current prices.  #3 Delays On The Job - In construction, you are dealing with project-based systems, not operations or manufacturing-based operations. Every additional day you have to mobilize and de-mobilize costs you money. For example, if it takes (15) minutes for (4) workers to get set up in the morning and the same amount of time at night, your total costs could be $121.92 The total cost for paper checks is between $15.00 and $50.00 per employee. To get the actual results for your company, some analysis would need to be run, or you would look in your Business Process Management System (BPM) for the answers. Option 2 - Direct deposit could cost an additional $5.00 per payroll and $0.99 per deposit. Direct deposit drops into your employee's bank account one minute after midnight on the day payroll is due. Having a Professional Bookkeeper prepare the payroll is less with direct deposit because of the time saved in making and printing the paper checks, setting them aside for you to sign them, stuffing them in the envelopes, and taking time to pass them out. Option 3 - A debit Card is similar to a direct deposit. The difference is that the employee does not need a checking account. Final thoughts Everything runs smoothly during your regular pay schedule when timecards arrive on time. When employees do not turn in their timecards on schedule and expect you to have their checks ready, no worries; we have you covered. When Payroll Processing gets too complicated, it's time to outsource it.  Payroll is most effectively managed when it's simple, straightforward, and coordinated. By ensuring that our employees are paid fairly and on time, we can help to create a positive and productive work environment. When it starts getting tough to keep it that way, it's likely a sign that your company has grown and you're ready for more robust support.  About The Author: Sharie DeHart, QPA, co-founded Business Consulting And 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 and 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 [email protected]  
6/30/202312 minutes, 43 seconds
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529: A Guide To Building A Solid Construction Company Marketing Plan

This Podcast Is Episode Number 529, And It's About A Guide To Building A Solid Construction Company Marketing Plan As a contractor, having a solid business plan is essential for growing your company and attracting new clients. If you're serious about getting the best value you can for your marketing budget, you'll need to develop a marketing plan. One of the first steps is to identify your target audience. Who are your ideal clients? What are their needs and pain points? Once you understand your target audience, you can develop a marketing strategy that speaks directly to them. Building a solid construction company marketing plan is essential for any business owner looking to grow their company. With the right strategy, you can increase your brand awareness, generate leads, and ultimately boost your revenue. Some critical elements of a successful contractor marketing plan might include the following: 1. Knowing your customers Firstly, you need to identify your target market. You probably have an idea of who buys from you, but make sure you: Define your target market in detail. Write down who your target market is. To help you focus your promotions more effectively, spend time finding out about your client's preferences and habits. To get the best return on your investment, look at how your message is structured, worded, and designed – and where and when you advertise. 2. Studying your market Market research is an effective way to help find out about your target market. Ask customers for feedback directly or send them an email. Ask questions such as: Why did you hire us? What could we do better? What additional services would you like us to offer? Your clients' responses will highlight what works well and will help you attract more sales. This feedback can also help improve your service and encourage positive word-of-mouth referrals. Show that you're listening and improving where you can, and you'll gain greater customer loyalty. 3. Identifying your competitors Find out who your direct competitors are – and gather as much detailed information about them as possible. Try: Visiting their websites Reviewing their advertising and promotional leaflets. Observing their relative strengths and weaknesses. If you want consumers to differentiate between you and your competitors, develop a new marketing and advertising approach. Your competitors' weaknesses will present opportunities for you to market your points of difference. 4. Determining your competitive advantage When it comes to the construction industry, there's no shortage of competition. Many companies are vying for the same contracts and trying to build a reputation for quality work. But how can you set yourself apart from the rest? How can you create an advantage that will help you win more bids and secure more business? Sit down with your staff, advisers, and mentors to brainstorm the best competitive advantage for your business. Your competitive advantage can be anything that sets you apart from your competitors in your target market – such as price, service, or location. It should be something that: Makes you stand out from the crowd Exploits a gap in the market that your competitors haven't thought about Suits your business and the current market condition Is essential to your target customers   Use it in all your marketing after you've worked out your competitive advantage. Ensure that your competitive advantage is evident in any customer communication. One key factor is innovation. Look for ways to incorporate new materials or processes into your projects to give you an edge over your competitors. Maybe you can find a way to use eco-friendly materials that are more cost-effective in the long run. Or perhaps you can streamline your construction process to save time and money. Another factor is reputation. Word of mouth is compelling in the construction industry, so ensure you deliver quality work and treat your clients well. Be responsive to their needs and concerns, and go above and beyond to ensure their satisfaction. This will help you build a loyal customer base and attract new business through referrals. 5. Creating a promise A promise helps clarify the most crucial aspect of your business to your customers. You want the customer to value your promise or guarantee. For example, if you offer a product or money-back guarantee, you must stand by these assurances. Your customers will find out if you can't stand by your promise, and they'll quickly lose trust in you and your business. You'll also run the risk that they'll warn their friends not to hire your company. 6. Building a reliable brand You must develop an integrated marketing strategy to ensure that all your promotions, advertisements, and marketing communications convey the same unified message and consistent brand values. A solid online presence: In today's digital age, website and social media profiles are crucial. Ensure your website is easy to navigate and showcases your services and expertise. Use social media to share project updates, photos, and testimonials from satisfied clients. Networking: Building relationships with other professionals in your industry can help you generate referrals and connect with potential clients. Attend industry events, join local business organizations, and try to stay in touch with your contacts. Advertising: Depending on your budget and target audience, you may want to consider paid advertising channels such as Google Ads or Facebook Ads. Be sure to track your results and adjust your strategy as needed. Content marketing: Creating valuable content such as blog posts, videos, or infographics can help establish you as an expert in your field and attract potential clients to your website. Also, make sure you maximize the opportunity to cross-market your message. For example: Mention your website in your email signature. Market your social media presence on your website. Use your various social media platforms to cross-market content effectively. 7. Evaluating your marketing and updating your plans Measure the return on investment on all your marketing efforts and update your marketing plans based on what works and what doesn't – for your business, market conditions, and customers. Some returns are easy to quantify, like the number of sales or the sales value generated from an advert or promotion. Others are harder to put a value on like the number of followers gained on social media or the number of visitors to your website. Some are more difficult to measure, like customers' perceptions or increased brand awareness. Marketing experts will be able to advise you on the best ways to measure the hard-to-quantify parts of your marketing plan – and will help you improve your efforts for maximum results. Final thoughts Don't underestimate the power of marketing. Ensure your website and social media presence are top-notch, and invest in advertising to get your name out there. Consider partnering with local businesses or organizations to increase your visibility in the community. Remember, developing and implementing a successful marketing plan takes time and effort. Be patient and focus on your goals; you'll see results over time. About The Author: Sharie DeHart, QPA, co-founded Business Consulting And 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 and 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 [email protected]
6/23/202311 minutes, 22 seconds
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528: Construction Accounting Concepts You Can Benefit From Today

This Podcast Is Episode Number 528, And It's About Construction Accounting Concepts You Can Benefit From Today   As a small business owner, you know that managing your finances is crucial to the success of your business. But with so many accounting principles and practices, it can be challenging to know where to start. That's where we come in! This guide will break down the essential accounting principles that every small construction business owner should know. We'll discuss how these principles can help you keep track of financial transactions, create accurate financial statements, and make informed decisions for your business. So, let's dive in, shall we? Why Are Accounting Principles Important for Construction Businesses? Accounting principles are the foundation for any successful business. They provide a uniform framework for recording and reporting financial transactions, ensuring consistency and accuracy in your financial records. By adhering to these principles, you'll be able to: Make better financial decisions based on accurate and reliable data Monitor your business's performance and identify areas for improvement Meet legal and regulatory requirements for financial reporting Build trust with investors, lenders, and other stakeholders   All Accounting Uses The Same Accounting Equation Assets = Liabilities + Equity Regarding construction accounting, several concepts can be highly beneficial to understand. Here are a few you can start taking advantage of today: Construction Accounting Vs. Regular Accounting Not everyone knows what construction accounting is, and easy to assume all accounting is the same. Construction Accounting Is Used - When the entire place of business is packed up and taken to the customer. In essence, you are selling, assembling, delivering, and installing a customized product from a mobile shop on location. Think of it like shooting a movie on location without all the glamor, resources, and money to go with it. Why is there confusion? From a tax standpoint, most construction projects are all lumped together, and after the Cost of Good Sold, Expenses, and Depreciation, you either made money or didn't. The Tax Accountant rolls the numbers to compute the annual tax return. Therefore, if the information is not needed to be broken down for taxes, then the Tax Accountant is not concerned. As the Construction Contractor paying the bills, you are constantly concerned about which jobs are "Making Money or Losing Money." "Why does it seem like I am watching the money fly by and zooming out of my checking account? It never seems like there is any money left over!" Materials A construction contractor may purchase material and resell it to their customer. Thereby thinking it is a reimbursable expense. (You lose money when doing this).  Remember all invoices to the Customer (Retail, General Contractor, Spec Builder, Developer) are income. Every line item on a customer invoice is ALL INCOME. If the words are on the invoice, then the invoice is either taxable or non-taxable based on other factors. Washington State, for instance, has a clear explanation.  Purchases for the material are Cost of Goods Sold or are expenses if you are short-cutting your accounting. I have seen financial statements backed out because they will reflect reimbursable income as a negative number, thereby showing it as a deduction. (The net effect is double dipping on the expense side) The cause is that the accounting software is not correctly set up.  Cost Of Goods Sold (COGS) It appears regular bookkeepers over their heads with construction accounting are trying to figure out how to input new QuickBooks transactions by copying previous transactions. This is not an issue with regular accounting because there is only one or two costs of goods sold accounts (COGS), no direct COGS, no indirect COGS, no Work-In-Progress (WIP), no retention, no job costing allocation to consider, and only one customer "cash sale" in addition to several other variables involved in construction accounting.  For example, a material receipt arrives at the regular bookkeeper's desk from a lumber supplier, and they open the QuickBooks contractor file, look up the supplier to determine how the previous lumber purchase was coded, and proceed to code the new transaction the same way. The problem is that each transaction is unique and could go into any of a dozen accounts or item codes depending upon whether it is a direct cost, indirect cost, WIP, retention, warranty, overhead, administrative, or other costs, or simply an expense. The cumulative effect of these bookkeeping errors in one month can do enough damage to the financial and job cost reports to bankrupt a contractor eventually. Another example is if the bookkeeper generates job costing reports that are off by 10%, it could cause the contractor to make radically different decisions based on what they believe about the job costing reports. If the contractor believes the company is undercharging, they may raise bid prices, lose jobs, eventually run out of cash, and file bankruptcy. If the contractor believes the company is overcharging, they may lower bid prices, lose money on all jobs, eventually run out of cash, and file bankruptcy. Many bookkeepers have lost their jobs and are freelancing as Jack-of-All-Trades and Master-of-None bookkeepers, doing whatever work they can find, and I understand that everyone needs to eat. I would prefer they avoid contractors and stick to regular bookkeeping like retail stores. The net result is that more contractors are going out of business due to inadequate financial and job costing reports just when construction demand is about to grow. Fix the giant boulders one at a time. Get that one thing working, then move on to the next one. What is the most annoying thing you can quickly fix? We talk about accounting because that is our primary focus. Start with the basics: Open a business checking account. Use a dedicated credit card for the business (if using a personal card). Create invoices, present them to your customer, collect the money, and get it in the bank (Do you have an easy way for your clients to pay you?). Collect the money ASAP because, without cash flow, you are out of business. No - the company with the most Accounts Receivable or Accounts Payable does not win a prize. Accounts Receivable means your customers owe you money. Accounts Payable means you owe money to your suppliers. Net Profit is the money left over. You want lots of Net Profit! You are not a banker! Stop borrowing money using your credit cards, Loans, and Lines of Credit, then finance customers' projects at 0% interest. Final thoughts Becoming knowledgeable in accounting principles has the power to transform the way you run your construction business. Understanding and implementing these concepts in your construction accounting practices can improve your financial management and set your business up for long-term success. Fast Easy Accounting does the bookkeeping, accounting, and payroll and offers business coaching for small, brand-new Construction Contractors, General Contractors, Trade Contractors, and Handymen across the USA, including Alaska and Hawaii. Do the parts only you can do; leave the rest to us. You are never too small for us to help, and we can help to begin with your first day in business. Schedule your free consultation here. About The Author: Sharie DeHart, QPA, co-founded Business Consulting And 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 and 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 [email protected]
6/16/202312 minutes, 13 seconds
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527: Leading Causes Of Stress For Contractors And How To Counter Them

This Podcast Is Episode Number 527, And It's About Leading Causes Of Stress For Contractors And How To Counter Them Construction business owners face various sources of stress that can negatively impact their well-being and overall business performance. Some leading causes of stress for construction business owners include financial pressures, tight deadlines, workforce management, safety concerns, and regulatory compliance. If not adequately addressed, these factors can lead to burnout, decreased productivity, and even business failure.  Many entrepreneurs believe hard work and determination are all it takes to build and sustain a successful business. But when you consider the pressures of running a company, it seems wise to add effective stress management to the list. Left unchecked, stress can erode your passion and undermine performance – not to mention a severe toll on your health. Are you wondering how to stop stress from derailing your productivity, profits, and overall well-being? Follow these practical tips for avoiding the main causes of "business burnout." Cause: So many tasks, so little time Solution: Without effective strategies for managing time and sharing the load, you'll be forced into a reactive versus proactive position – the perfect storm for chronic stress and impaired decision-making. Prioritize your tasks. Make a to-do list and prioritize your tasks based on urgency and importance. This will help you focus on what must be done first and avoid feeling overwhelmed. Use a project management tool to organize and assign tasks, track progress, and share results with clients. Don't try to do everything yourself. Delegate tasks to reliable and competent employees or outsource them to a trusted contractor. Hire an accountant to help you navigate taxes and implement time- and money-saving financial solutions year-round. Cause: Cash Flow Solution: All businesses, particularly start-ups, must have enough cash to keep running after covering monthly expenses. Cultivating a consistent cash flow is crucial for managing your finances and stress levels. Here are a few ways to stay cash flow positive. Follow up promptly on unpaid bills, and consider offering an incentive for early bill payment (such as a slight discount when payment is received within five days of invoicing) Be wary of slashing prices: if you must mark down a product or service, be sure you can recover your costs elsewhere. Think "less is more" when purchasing inventory to avoid sinking precious cash into excess stock. Have a trusted employee monitor your cash flow and inform you once it dips below a certain threshold. Again, this is where your construction bookkeeper comes in. I recommend reviewing your Five For Five At Five. Cause: Attracting New Clients Solution: Starting to panic because you keep missing your sales goals? Auditing your current approach and implementing better growth strategies is critical to alleviating that stress. Here are a few ideas to get started. Drill down into the behaviors and preferences of your customers, so you can better target your marketing. Analyze each step in your sales process to see where the holes are and tighten your approach. Use your audience research to develop a new product or service that fills a unique need for your customers and gives you a leg up on the competition. Practice self-care. Taking breaks throughout the day is important to clear your mind and recharge. Go for a walk, grab a snack, or do something you enjoy. Take care of yourself physically and mentally. Get enough sleep, exercise regularly, and eat a balanced diet. Consider meditation or other relaxation techniques to reduce stress. Final thoughts Starting and growing a business takes tremendous energy. But by leveraging skilled help and improving key management processes, you'll learn to pace yourself – and keep that passion burning for years to come.  Running a construction business is challenging, but taking care of yourself is essential to effectively manage your business without burning out. About The Author: Sharie DeHart, QPA, co-founded Business Consulting And 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 and 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 [email protected]  
6/9/20238 minutes, 44 seconds
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526: Becoming A Better Construction Company Owner By Developing Courage

This Podcast Is Episode Number 526, And It's About Becoming A Better Construction Company Owner By Developing Courage Fear is a natural, emotional response to distress. The evolution of humanity was dependent upon feeling and responding to fear. Unfortunately, for some of us, fear is a stumbling block to unlocking our full potential and becoming great leaders.  Fear can have a significant impact on business activities. If a business owner is afraid of taking risks or making decisions based on past negative experiences, it can hinder their success. It's important to remember that fear is often based on False Evidence Appearing Real or F.E.A.R. It's crucial to approach business decisions objectively and not let fear cloud judgment. By recognizing and addressing fear, business owners can make informed decisions that lead to success. The good news is that courage is like a muscle, and when you exercise courage, it often becomes more robust and more natural. Here are a handful of ways to overcome fear, find courage and become a better construction company owner. 1. Don't lose your sense of direction If you struggle to lead in your construction business or manage your employees, staying connected to your purpose for making your decisions is essential. If you lose your sense of direction, the people you are leading may begin to question your ability and authority. When giving instructions to someone you are charged with leading, be specific about what needs to be done and why. 2. Visualize all of the possible outcomes Visualizing a negative outcome may seem counter-intuitive to building courage; however, realizing that the worst that could happen is not fatal in most situations is incredibly beneficial. Conversely, visualizing a positive and prosperous outcome can give you the bravery to make risky choices and stand behind them occasionally. 3. Be willing to do what other leaders won't If you are surrounded by leaders who continually play it safe but are sensing a need to take the road less traveled and make a bold decision, be willing to do it! The fear of people around you disapproving of your choices can be crippling. But the sense of pride when you carefully calculate your options and make a bold choice that turns out well, will strengthen your sense of courage. 4. Carefully consider the opinions of people around you You don't need to allow yourself to be persuaded by the opinions of others in any way, but occasionally a new view from someone with less experience can bring new life into your construction business. Don't let your employee's inexperience cause you to overlook the great ideas they may occasionally have. Be willing to do things someone else's way occasionally bravely, and your courage will undoubtedly increase. 5. Be willing to commit to success Have the inner strength and courage to keep going even when things get tough because you know that everything will work out in the end; if something has not worked out yet, it is not the end. 6. Make the hard decision and say "no" As uncomfortable as it can be to shut down someone's idea, it is necessary sometimes. Next time someone has an opinion you are completely uncomfortable with, respond by telling them no. Often, no explanation is better than a long explanation when you disagree with a person's idea. As a leader, it is right to go with your gut instinct and override decisions you disagree with. Saying no to bad ideas will increase your courage and even the level of respect your employees have for you. As you can see, building courage is not a complicated process. Building courage is simply taking small steps in your daily life and being unapologetic about doing what you know is right. If you are willing to commit to taking the above steps as a leader, you will soon become more confident in your decisions! Many leaders struggle to feel courageous regardless of their time leading. Fear on all sides Contractors without financial reporting systems they can trust to generate accurate Key Performance Indicators and Reliable Job Cost Reports do not know if they are making or losing money from day to day, which leads to doubt which leads to stress, and they tend to work faster and harder. This frantic behavior raises everyone's stress level, affecting your team, project, and client. Contractors are superheroes! What is your Contractor Superpower? The power of choice.  Increase your pricing Which projects do you say YES to Collect job deposits Ask the client for money Your working hours The area of the country where you want to live You can choose what is best for you, your loved ones, and your construction company. It is easy to listen to the news and become depressed, agitated, or think the day's challenges are hopeless to overcome. Mother Teresa (of Calcutta) said it best: We, the willing, led by the unknowing, are doing the impossible for the ungrateful. We have done so much, with so little, for so long; we are now qualified to do anything with nothing. Final thoughts The rough and tumble world of construction company ownership is not for the weak or the timid. It is an arena where the price of admission is a lot of blood, sweat, tears, long nights, and lost sleep, with peaks of enthusiasm and depths of despair. It can feel like riding a roller coaster operated by a madman trying to convince you to get off, get out and do something more relaxing, like teaching a pig to sing! With careful planning and a solid strategy, you can overcome any obstacles that come your way. Don't be afraid to take risks and think outside the box. Remember, the greatest successes often come from taking bold actions. So be brave, stay focused, and keep pushing forward. Your construction business dreams are within reach! Life is a journey that happens one day at a time, one decision at a time, one choice at a time. Tomorrow is a new day with every potential of being happier if we allow it. We will continue empowering and advocating for contractors and construction business owners like you. About The Author: Sharie DeHart, QPA, co-founded Business Consulting And 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 and 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 [email protected]
6/2/202311 minutes, 18 seconds
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525: Building A Competitive Advantage In The Construction Industry

This Podcast Is Episode Number 525, And It's About Building A Competitive Advantage In The Construction Industry A competitive advantage is something that you offer or have that the competitor does not. There must be compelling reasons for people to do business with you rather than with other construction companies. The need to identify your point of difference is essential. The more similar your business is to many others, the greater your need to develop competitive advantages. The key to benefitting from the competition is knowing how to take on competitors so your company earns a profit effectively. Look into your industry and the successful contractors around you not to lose sight of your vision for your construction company but as an inspiration to guide your systems and processes. Identifying your advantage A competitive advantage is what you are better at doing than anyone else. The wiser you can be about developing and promoting your competitive advantage, the better placed your business will be to succeed. Think about how you can differentiate yourself: Low pricing – you're able to supply the most budget-friendly service. Specialization – you service a specific niche market better than anyone else. Differentiation – you have the same service as others, but you make it different. Specialization and differentiation are the most common small business strategies because more significant businesses can usually get bulk deals and compete on price. Being affordable is the most straightforward tactic to implement (reduce all your fees but know your worth), though this is the last thing to consider, as it is often a losing strategy. The chances that you can be the cheapest and survive are not good because you will usually compete against companies with far more financial muscle than you have. Having the most considerable margins is your ultimate goal. You can position yourself away from the cheap end of the market if you develop other competitive advantages, such as excellent, friendly service, good after-sales service, a more specialized range of products, more knowledgeable staff, and so on. Here are some ways to get ahead of your competition and grow your construction business: 1. Awesome staff Your staff will be one of your best (or worst) competitive advantages. The advantage of having friendly, knowledgeable, proactive staff must never be underestimated. The key is ensuring your staff is motivated, trained, and performing well. Do this by: Establishing clear performance standards. Starting incentive schemes. Sending them on training courses. Encouraging them to develop their product/service knowledge. Holding yearly selling courses. 2. Unique or exclusive products You have an advantage if you can source products or deliver services that the competition cannot. If you're competing against larger or similar businesses, can you establish a reputation for unique products people can't find anywhere else? 3. A great website A website that is more attractive or easier to navigate than competitors can be a distinct advantage. Can you create a better, more effortless online scheduling experience? More competitive payment options? 4. Become a star Your own image can be a competitive advantage. No one else has quite your mix of skills, and you can build a 'character owner' image by having your name on as much material as possible, including: A signed mission statement for online and in-person visitors. Signing your name at the end of all newsletters and correspondence. Offering personal guarantees. Becoming prominent in your community. Becoming an authority in your field and a spokesperson for the industry. 5. Brush up on your technical knowledge If you can't compete on price, offer superior knowledge to other businesses around you. Consequently, it would be best to ensure staff are well trained. You could ask your suppliers to provide training. 6. Get to know your suppliers Being on good terms with your suppliers and their sales representatives is an often-overlooked competitive advantage over other businesses that haven't bothered to develop this closeness. A good relationship will provide the following: Better service and support.  Better supply and faster delivery. Better return policy and customer support. Early notification of specials or discounts. You might get promotional material, displays, signs, and staff training. Being linked to a large, well-known supplier is a definite competitive advantage. They might do most of the market research, develop new products, conduct customer analysis, and provide nationwide branding and advertising that enhances your credibility. An independent will find it more challenging to compete with you. 7. Display your other services To gain an advantage, offer things that the competitors don't, especially if they cost very little. Sometimes this may involve displaying what you already do for customers, but most may have been unaware of it. Don't simply expect customers to be automatically aware of your competitive advantages. You must advertise and promote them. 8. Strategic alliances and joint ventures One of the best ways to compete against larger businesses is to form alliances and joint ventures with other companies. For example, by banding together with other businesses in your industry, you can often gain better group discounts from suppliers than you would if you ordered on your own. The ability to form intelligent alliances and joint ventures is an increasingly essential and distinguishing feature in the success of many businesses. Joint venture marketing is another way of sharing advertising costs. You can brainstorm many variations on this theme with your staff. 9. Speed People want quick service, so the faster you can deliver your product or service, the better. Hold regular staff meetings on how to streamline your business processes and fulfill or exceed client requirements without sacrificing the quality of delivery. Final thoughts There's room enough in most industries for competition. While knowing who you're up against is a good idea, ultimately, your clients are your priority. Focus on providing meaningful goods and services to them, addressing their pain points, and improving their lives. Market yourself to make those aspects clear. Show them why you're the ideal company to hire for their project.   Using these strategies can effectively take on the competition and help your construction business be successful. Take it one step further by hiring an expert to help you with the things you are not an expert on - for instance, hiring a Website/Social Media Manager to take care of your online presence, as this is your digital office.  Of course, a financial advisor or a construction accountant who has been where you want to go and can guide you will benefit your construction business. We want to be that person for you. Optimize your time and skills by doing what you love and do best. About The Author: Sharie DeHart, QPA, co-founded Business Consulting And 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 and 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 [email protected]
5/26/202311 minutes, 32 seconds
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524: How To Increase Your Construction Business Profit In Three Months

This Podcast Is Episode Number 524, And It's About How To Increase Your Construction Business Profit In Three Months Sales and profit are two very different things – as a construction business owner, you can find yourself without the cash to pay bills despite making sales you knew were profitable. You may also be startled to discover that solid cash flows from sales deliver little profit.   A cash flow forecast tracks cash flowing in and out of your business. The timing of these flows enables you to identify cash-rich and cash-lean periods. This helps make the right decisions, such as buying assets or preparing for cash shortfalls.   Cash flow is essential to the survival of your business – arguably more so than profit in the short term. Profit may be necessary for the longer term, but cash is needed to pay bills and operating costs quickly.   For example, if you're a plumber with reasonable cash reserves, you can survive until your business becomes profitable. However, if your business runs out of cash, you'll need to find a solution quickly to avoid going bankrupt.   Profit is the money left in your business after all your expenses have been paid. An income statement (also referred to as a profit and loss report) reveals what profit your construction company made last month or last quarter. Your profit's detailed in two figures, namely: Gross profit is what's left from sales after deducting the costs of goods sold or services provided. Net profit is left from gross profit after operating expenses (your business overheads) are deducted. Note that net profit isn't the final 'bottom line' profit until all taxes have been paid. Gaining more significant profits depends on accomplishing all the little things better – rather than making one huge change. You'll need to focus on every detail to reduce expenses and increase your sales turnover over the next 90 days. Decreasing your costs For most small businesses, reducing costs is the easiest way to increase profitability. Reducing direct costs can dramatically increase your sales profit while eliminating unnecessary business overheads. Challenging your direct costs Identify the steps you can take to minimize your direct costs, such as: Negotiating lower prices with your suppliers. Reviewing processes and systems to minimize waste. Implementing additional security to reduce the chance of theft. For example, you may have had one material supplier over the last five years. It might be time to challenge your supplier on their wholesale prices while introducing yourself to others who might do a better deal. Some of your business costs, such as insurance, power, and the Internet, could be put out to tender. The value of effective systems Practical systems help you minimize errors – and save time and money. The time invested in creating designs is usually minimal compared to solving a problem from scratch. Where appropriate, turn decisions into policies to avoid making the same decision again – or sort out the same issues repetitively. Learn from mistakes and problem areas, and if systems go wrong, fix them. It's a wise idea to review your procedures periodically to see where improvements can be made. For example, if your software firm decides to place all its information on a central server to ensure staff can access it at any time, hours of productivity can be saved each week. Stay focused on profitability Focusing staff awareness on profitability can have a dramatic impact. Even if cash flow is your top priority, it shouldn't be at the expense of profitability. Monitor your actual costs against your budgets and your sales against your forecasts. Measure staff performance Monitor and measure staff performance and productivity. Be sure to reward productive staff members by linking pay rates to effectiveness. It's important to praise and thank the staff when it's been earned. Aim to provide a clear career path so your team can grow, and they don't see their prospects as limited. Aspire to get constant improvement A simple planning cycle dramatically enhances your ability to make continuous improvements. Thorough planning also helps you anticipate problems and adapt as your circumstances change. Aim to: Set measurable, time-limited targets – to monitor how effectively your plans are implemented. Review what you've achieved to learn from your experiences and continuously improve. Keep improving your underlying systems and planning process, but be ready to alter your strategy if necessary. Increasing your turnover To improve your turnover, look for new markets and distribution channels. Some ideas to help you increase turnover include: for instance, are you making the best use of the Internet? Can you form a strategic alliance with a complementary business or a joint venture to tackle work you don't have the resources for? Actively selling – simply taking orders won't ensure your survival as a business. Aim to gain more sales by being proactive. Retaining existing customers – through outstanding service and placing value on lifetime patronage. Maximizing the value of your sales – consider moving upmarket and providing a premium product or service. Add features to your offerings if the perceived value to customers is greater than the cost to you. Keep your products or services up-to-date – extend your product range or work to ensure it stays ahead of your competition. Focus your efforts on your most profitable customers – look after your customers who place large or frequent orders, pay their bills on time, and are low maintenance. Review your profit margins To improve overall profitability, review your sales and profit margins periodically. Divide your services or products into four categories, namely: High percentage of sales and high-profit margins – nurture these stars. High percentage of sales but low-profit margins – consider a price increase and examine how you can cut costs to increase your profit margins. Low percentage of sales but high-profit margins – consider a sales push. Low percentage of sales and low-profit margins – eliminate these where possible. Consider any possible effects before making decisions. For example, a low-profit product might be the one that brings other businesses from a significant, highly profitable customer. It's possible to run out of cash or go bankrupt by taking on too much business too quickly, even though each sale is profitable. This is called overtrading – companies that sell on credit rather than cash terms are more at risk. Remember, use O.P.M. - Other People's Money. Final thoughts Familiarize yourself with the reports your accounting software can generate to track long-term trends, identify and mitigate risk, and discover new ways to increase profitability. Talk to your accountant about your construction business's most important reports and metrics and how to utilize them.  You don't have to go through this alone. Don't try to manage your company's finances all by yourself.  Collaborate with a trusted professional, invest in quality IT solutions, and spend some time familiarizing yourself with relevant tools and trends. Whether you improve your profits in three months, implementing these processes will result in better construction business management. About The Author: Sharie DeHart, QPA, co-founded Business Consulting And 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 and 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 [email protected]  
5/19/202312 minutes, 7 seconds
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523: Ways To Keep Your Construction Company Sustainable

This Podcast Is Episode Number 523, And It's About Ways To Keep Your Construction Company Sustainable Taking steps to create a good foundation in the early days of your business is essential for a sustainable and profitable future.  It's rare these days that your prospective leads happen to find your construction business and become a client with no work. Your company has to grab people's attention, turn curious visitors into leads and then convert those leads into sales. Keep in mind: Marketing-Accounting-Production The first thing I would like to point out is: 1. Don't neglect Marketing Entrepreneurs like you are incredibly busy, and finding the time to promote your business can be a real challenge. The other challenge for new trade companies is money—but every small business needs to invest in marketing activities to increase sales and keep the cash flow flowing. It's wise to be wary of costly large-scale marketing strategies when you're just starting. The best use of your time in the early days is getting to know your clients and how they tick so that you can design (or hire an expert to mastermind) highly appealing, cost-effective campaigns. And don't turn a blind eye to what your competitors are up to. Monitor how they attract new customers and think about how you can improve on what they're doing—or take a completely different approach to promote your business that will help your young brand stand apart. This means that the more solid leads you have, the greater your chances of making a sale. Solid leads are contacts engaged in your business, fit your client persona, and are at least somewhat motivated to hire your service. Here are four great ways to get more leads for your business: 1. Target your ideal clients You might want your business to be relevant to everybody, but the reality is that there is a specific target client who is ideal for your business. Those clients are the ones who are most likely to be attracted to your services and, therefore, the most likely to hire you. These are the people to aim your marketing at. Knowing who they are and what they like helps you develop the products and services they'll use. It also saves you money on marketing because you can target your ideal clients rather than marketing to everybody and hoping somebody shows interest. Even more critical, when you understand your ideal clients, you can build connections with them more effectively, generating leads that can turn into sales. 2. Know your unique value proposition Your unique value proposition is what makes you different from your competition. Every business has something that sets it apart and attracts a specific market. Your products or services might be of a higher quality. You might have better loyalty programs or more specialized staff. Even the size of your business can be a unique value proposition. Smaller companies can claim more personal, attentive, and efficient service for their clients.  Determine what differentiates your construction business from your competition and use that uniqueness in your marketing. 3. Attend networking events Yes, in-person marketing takes time and energy, and you can only talk to so many people simultaneously. But hearing an entrepreneur speak passionately about their business can be very persuasive. Networking events are a great way to get face-to-face time with potential leads. Meeting people at events lets you talk directly to potential clients and hear what issues must be solved. Just make sure the networking events you attend are relevant to your business and are functions that your ideal clients attend. Otherwise, you'll be wasting that valuable time and energy. 4. Create high-value content With so many people using the Internet to find companies and make purchasing decisions, you must ensure your business is easily found. That means developing attractive, high-value, informative website content that is compelling and encourages page visitors to submit their contact information. Make sure you use engaging calls to action. Write blog posts that drive traffic to your website. Develop tip sheets that quickly address some of your clients' issues and get people to sign-up to receive them. Create a newsletter that clients or customers can subscribe to. The people on your newsletter subscription list become leads. However, ensure your content is timely, engaging, and relevant to your clients and business. Now that you got Marketing handled let's move to Accounting. 2. Keep your eyes on the numbers If you're starting, you may be surprised by how quickly those day-to-day expenses add up. It's essential to make sure, right from day one, that you consistently track your spending, file your receipts, and monitor your income and expenses with an easy, reliable accounting system. Cloud-based accounting software (like Xero) can help you know exactly where your finances stand in real time—with secure access to accurate, up-to-date financial data anywhere, anytime. In addition to collaborating more efficiently with your bookkeeper and accountant so you can get advice whenever you need it, you'll avoid the stress and hassle come tax time—and be empowered every day to make better, more intelligent business decisions. Touching base with your business advisor is valuable. Every successful entrepreneur learns from experience—not to mention failure, which can be the greatest of all teachers. While it's true that "you don't know what you don't know," you can shrink your learning curve by reaching out to experienced mentors for guidance. Consider working with a small construction business accountant who can provide personalized advice to help you make it through the first year—and an ongoing objective perspective on your business, industry, and market in the future. And last, let's talk about Production: 3. Take care of your employees Your business is nothing without your employees; happy employees are more productive, motivated, and loyal. Smart construction business owners know it's worth spending a little extra money to ensure you have the best employees on your staff and reward them for their hard work.  When you can, spend money on your crew, offer bonuses or gifts for meeting their goals or exceptional service, provide better-than-average benefits plans, give them opportunities for training, or increase their salaries. Happy employees give more to your business. They reduce the turnover rate, saving you the cost and headache of finding and training new workers. Plus, your clients like seeing consistency in your staff, so they'll appreciate that you keep your workers happy. Alone? I hear you. The reality is that as a small business owner, you DO NOT HAVE to hire employees. Invest in yourself, and outsource the most mundane low-value tasks that take time away from what you are skilled in. Remember that you are your company's most important employee. It's been said many times that a business is like a baby—and it can be challenging for entrepreneurs to trust someone enough to hand over any aspect of it. Many construction business owners work to exhaustion because they can't let themselves take a weekend off. They neglect their most important relationships and never get to enjoy their successes because there's always more to do. Final thoughts Leads don't just magically appear out of thin air. Developing solid contacts that turn into paying clients takes time and work. By knowing who your ideal clients are, understanding your unique value proposition, putting in some face-to-face time, and developing relevant content, you can quickly increase your solid leads this year.  The most successful entrepreneurs know they can't do it all—nor should they—and build in time for rest so they can be more productive at work. Train someone early on to run the business in your absence so you can take a rejuvenating vacation and enjoy the freedom you likely dreamed of when you first imagined going into the construction business for yourself. Now, you have a road MAP to sustain your construction company for success, and all you have left is to assemble the tools, equipment, and staff to set up your trucks and vans and go to work! About The Author: Sharie DeHart, QPA, co-founded Business Consulting And 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 and 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 [email protected]
5/12/202312 minutes, 39 seconds
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522: Increasing Construction Company Profitability Through Better Practices

This Podcast Is Episode Number 522, And It's About Increasing Construction Company Profitability Through Better Practices If you feel overwhelmed by the sheer volume of technological gadgets, never mind apps and other digital "solutions,"; you're not alone. Technology sprawl and the rabbit hole of more and more information available all the time makes productivity—and healthy downtime—a real challenge for many of us. Although we may be quicker at completing redundant tasks, more time is wasted managing all our different apps and technologies—and more of us live in a near-constant state of distraction. An epidemic of distracted workers Maintaining focus on the job is increasingly difficult in the era of social media, chat apps, games, and the ability to search for anything at any time—whether related to the task at hand or not. Recent research shows that, on average, office workers switch between tasks roughly every three minutes. Half of those "task switches" were not because the phone rang or someone stopped by with a question—they were self-interruptions. The same study showed that when an interruption is related to the primary task, it isn't a problem for the worker to maintain focus when the interruption ends. But when people have to "shift their cognitive resources" to a new task, it takes longer to remember where they were, refocus, and regain momentum. If your team isn't working across the same devices, platforms, and apps, imagine the increased inefficiency as workers spend more time dealing with incompatibility issues. For anyone moving between several decentralized apps during the workday, the cost is mental exhaustion—which can lead to an increased lack of focus and even less productivity. Tools and tips for increasing efficiency No matter how much we'd like to improve our productivity, multitasking is a myth; most humans can only perform one task well at a time. It seems there are never enough hours in the day to complete every job on your list. Often you're faced with prioritizing what you need to do right now – deal with a customer, meet a deadline, attend an event – and the things you know you should do for the ongoing growth of your construction business. Scheduling time to attend to these business activities regularly is a great way to get on track for tremendous success. 1. If you must use a computer at work To help minimize the temptation to check Facebook or random search, focus on your to-do list and block all digital distractions, like placing your smartphone next to you, so you can focus on just what's in front of you. Another tip is to batch email rather than reading and responding to messages continually. Sending emails twice a day—once in the morning and again in the afternoon—will train people not to expect to hear from you instantly, creating more reasonable (and sane) expectations. No one can or should be available to work around the clock for our own personal and collective well-being. 2. Know your numbers It's not uncommon for business owners to lose touch with how well their business is performing daily. But an awareness of your real-time income and expenses is the key to making better decisions that will nurture growth. Implement these changes and see the difference they make in your business: Switch to an online accounting solution offering access to real-time data anywhere. Monitor your finances daily, weekly, monthly, and quarterly; review the data with your accountant often. Check-in on your other numbers – your website metrics and software analytics – to know whether your marketing, lead generation and sales tactics are working. 3. Update your business plan Construction companies should update their business plan at least once a year—sooner if an upcoming change requires planning, financing, or re-assigning resources (for instance, a service launch or a new side business). Many trade business owners neglect to revise their plans regularly. They end up operating on autopilot, losing sight of their bigger goals and the steps they planned to take their business to the next level. Set goals, mark milestones, and start implementing your plans. Look at your previous year's books to plan with your latest annual figures in mind. 4. Hire help It sounds simple, but many entrepreneurs' self-sufficient, independent nature can make it difficult to get comfortable delegating responsibility. Finding the right people to relieve the burden of doing everything all the time is the only way a business can scale and reach its potential. Think carefully about how you spend your days. Are you still at the point where you want to – or need to – do it all? The ultimate success of any company is to reach the point where it can run without you, so you can enjoy a holiday, pass the business on to a family member, or sell it. Finding the right people you can trust to perform their jobs well and continue to grow your business can take time. A recruitment agency can help you craft an attractive job description and recruit so you can focus on strategies that can bring you greater enjoyment and success. 5. Unplug Perhaps most importantly, unplug and rest your mind each day. A week or two of time off, away from work, email, and other stress-inducing distractions, will do more to increase your productivity than any app. And be good to yourself by taking a health break each year. Bottomline Remember, you can do anything, but not everything. Developing new business habits takes time and commitment – but the payoff is well worth it! Monitor how creating and implementing these practices in your construction business improves company performance.  About The Author: Sharie DeHart, QPA, co-founded Business Consulting And 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 and 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 [email protected]  
5/5/20239 minutes, 59 seconds
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521: Unlocking The Secrets Of Small Construction Business Cash Flow

This Podcast Is Episode Number 521, And It's About Unlocking The Secrets Of Small Construction Business Cash Flow Cash is king! Construction Company cash flow is the movement of money in and out of your Construction Company; these movements are known in accounting circles as inflow and outflow. Inflows for your Construction Company primarily come from selling goods or services to your customers, but keep in mind that inflow only occurs when you make a cash sale or collect on receivables. Other examples of cash inflows are borrowed funds, income derived from sales of assets, and investment income from interest. Outflows for your Construction Company are generally the result of paying labor, material, other direct and indirect costs of goods sold, and overhead expenses. Is Cash Flow Same As Profit? While they might seem similar, profit and cash flow are two entirely different concepts, each with completely different results. Profit helps calculate your taxes and report to the IRS. The idea of profit is somewhat broad and only looks at income and expenses over a certain period, say a fiscal quarter. Cash flow, on the other hand, is a more dynamic tool focusing on the day-to-day operations of a Construction Company owner. It is concerned with money movement in and out of a Construction Company. However, more important, it is concerned with the times when the direction of the money occurs. In theory, even profitable Construction Companies can go bankrupt. It would take a lot of negligence and total disregard for cash flow, but it is possible. Consider how profit and cash flow relate to your Construction Company. Example: If your retail Construction Company bought a $1,000 item and turned around to sell it for $2,000, then you have made a $1,000 profit. However, what if the item's buyer is slow to pay their bill, and six months pass before you collect on the account? Your Construction Company may show a profit, but what about the bills it has to pay during those six months? You may not have the cash to pay the bills despite the profits you earned on the sale. Furthermore, this cash flow gap may cause you to miss other profit opportunities, damage your credit rating, and force you to take out loans and create debt. If this mistake is repeated enough times, you may go bankrupt. Maintaining a healthy cash flow is essential for a small business's sustainability and growth. Your construction business can be incredibly profitable but fail because of improper cash flow management. To prevent that from happening, here are some best practices that can help you better manage your cash flow and maintain the financial health of your small business. Remember, being proactive and vigilant about your finances is the key to success.  Let's dive in! 1. Understand Your Cash Flow Cycle Before managing your cash flow, you must understand your cash flow cycle. This involves tracking when money comes into your business and when it goes out. You can identify patterns and potential issues by examining the timing and sources of your cash inflows and outflows. For example, you'll notice periods with higher expenses and lower profits or the reverse.  This information helps you make informed decisions on maintaining a positive cash flow. For example, you might offer more sales during your slow periods or find ways to cut costs.  2. Develop Accurate Financial Forecasts Financial forecasting is crucial to cash flow management, allowing you to anticipate your cash flow cycles. Regularly create and update cash flow projections, considering expected sales, expenses, and other relevant factors. Accurate economic forecasts will help you identify potential cash shortages or surpluses and effectively make informed resource allocation decisions. For example, you might hold off buying new equipment this month because the next two months are expected to be slower financially, then make the purchases when you have more cash coming in.  3. Monitor Your Cash Flow Regularly Just like a doctor checks a patient's vital signs, you should monitor your cash flow regularly to maintain your business's financial health. This means periodically reviewing your cash flow statements, balance sheets, and income statements. Doing this lets you spot issues early on, such as late payments or unexpected expenses, and take corrective action before they become significant problems. 4. Maintain an Emergency Fund Unexpected expenses are a fact of life for any business. To mitigate their impact on your cash flow, establish an emergency fund. This reserve can cover unexpected costs or tide you over during periods of slow cash inflow.  Ideally, your emergency fund should be able to cover at least three months' worth of operating expenses. Not only will this help your finances, but it will also give you peace of mind because you know you'll have breathing room in an emergency.  5. Invoice Promptly and Efficiently Although invoicing is vital to your cash flow, many small business owners put off invoicing and following up on unpaid invoices.  You must invoice your clients promptly and efficiently to maintain your cash flow. This means using accurate invoicing software, setting clear payment terms, and providing convenient payment options for your customers. If you have clients with accounts payable processes, ensure you understand the process and their payment cycles so you don't wind up waiting months for payment. Additionally, follow up on overdue invoices promptly. The sooner you invoice and follow up, the sooner you'll get paid. 6. Encourage Early Payments Offer incentives for customers to pay early, such as discounts or other perks. This can help increase cash coming in and provide a buffer for cash flow management. Additionally, consider implementing payment milestones for large projects, where customers pay a portion of the invoice at specific intervals throughout the project. 7. Keep Your Expenses in Check To maintain a positive cash flow, it's essential to keep your expenses under control. Regularly review your expenses, identify areas where you can cut costs, and negotiate better terms with suppliers. Remember also to check your ongoing subscriptions and automatic payments. You may be paying a lot for products you don't use.  8. Use Technology Embrace technology to streamline your cash flow management. By leveraging technology, you can save time and effort, allowing you to focus on growing your business. There are many tools available that can help you track expenses, create financial forecasts, and automate invoicing. Chat with us to get our recommendations for your business.  9. Seek Professional Guidance Financial professionals provide valuable guidance and insights on managing your cash flow. They will identify potential issues and develop strategies to maintain a healthy cash flow.  Working with a construction accounting specialist can help you avoid costly mistakes and make well-informed financial decisions, which is well worth it in the long run.  The bottom line Effectively managing your cash flow is crucial for the success and growth of your small construction business. By understanding your cash flow cycle, developing accurate financial forecasts, monitoring your cash flow regularly, and implementing the better practices discussed in this blog post, you can maintain a healthy financial position and pave the way for sustainable growth. Monitoring and managing your cash flow is essential for the vitality of your Construction Company. The first signs of financial woe appear in your cash flow statement, giving you time to recognize a forthcoming problem and plan a strategy to deal with it. Furthermore, with periodic cash flow analysis, you can head off those unpleasant financial glitches by recognizing which aspects of your Construction Company can potentially cause cash flow gaps. Need assistance? We can help you analyze and manage your cash flow more effectively and ensure your Construction Company has adequate funds to cover day-to-day expenses. About The Author: Sharie DeHart, QPA, co-founded Business Consulting And 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 [email protected]
4/28/202313 minutes, 21 seconds
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520: The Problem With High-Profit Jobs In The Construction Industry

This Podcast Is Episode Number 520, And It's About The Problem With High-Profit Jobs In The Construction Industry Many problems can be traced back to the "Halo Effect," which happens when a contractor thinks, "We are so good at (fill in the blank) we should expand into (fill in the blank)." The most common situation is when a residential remodel contractor with a reputation and a substantial company generating 15% or more profits decides to start building custom homes. Or the opposite, a home builder who decides to branch out into residential remodeling. Residential Remodel Contractor Building A Home The processes, tools, equipment, materials, skills, and invoicing procedures required to build a house from the ground up differ entirely from modifying a home with people living there. The remodeling contractor uses a form of "Cost Plus" or "Not To Exceed" to provide the homeowner with the scope of work and a contract price the bank needs to finance the construction. That process can work for a residential remodel because the house is already in place, which helps define the size and scope of the project. The size and scope of the homeowner's dream house are limited only by what the building codes will allow. When the labor, material, other costs, and subcontractor bills pile up, the remodeling contractor asks for a construction draw and is told the bank needs a Pay Application filled out and submitted. Then it will take a while for the bank inspector to review the project and approve the draw. This is when the remodeling contractor figures out they are providing all the labor, material, other costs, and subcontractor expense up front and getting paid only when and if the building inspectors, architect, bank, and the client agree to the draw request. Home Builder Doing A Residential Remodel The processes, tools, equipment, materials, skills, and invoicing procedures required to modify a home with people living in it differ entirely from building a house from the ground up. New construction workers are more like cave dwellers with a brute-force mentality. If something doesn't fit or will not work the way they want, they use more brute force until it does. Every problem has one answer "Brute Force." The same goes for managing sub-contractors and suppliers. The home builder bids on a residential remodel project using the exact square foot costs they have continuously operated in building houses and quickly discovers the meaning of "Hidden Costs." These costs include dry rot, cracked foundations, broken plumbing, bad wiring, worn-out HVAC, and other unpleasant surprises. Homeowners living in the house while the remodel is happening do not ever want to be without water, lights, heat, and privacy, and they don't know how much debris, dust, and noise is involved in a remodel. Homeowners want to believe everything is included in the original contract price, including the little extras they think of along the way. When it comes to change orders, that is something most home builders do not understand. They don't have a process for tracking them, let alone pricing and getting paid for doing them. Most trade contractors and subcontractors working on residential remodel projects understand change orders and how to pressure the builder to get paid. Too often, this is the main reason home builders go bankrupt - cash flow issues. The Solution Most construction business owners who use accounting software quickly master the basics. They automate processes like invoicing and payroll, track expenses, and view real-time financial reports to manage cash flow and make better business decisions. The problem is that high-profit jobs have a way of turning into low or no-profit jobs, and in some cases, they can bankrupt your construction company because you bid on the project using whatever model you are accustomed to using, and in the end, you wind up with cash flow problems. But what many business owners don't take advantage of are key insights that can improve customer care and increase sales. With the help of your accounting software, you can continue to provide services that you're good at, work on improving them, and help boost your bottom line. Gain insights that increase sales If you're not tapping into your accounting software analytics to better understand your clients, you're missing a significant opportunity to close more sales. Most accounting software can highlight your biggest spenders and buying trends. Knowing who your best clients are, your most extensive selling products and services, and how much each customer spends impact your marketing decisions – not to mention - help you fine-tune your sales strategies. Improve customer care and boost profits Accounting software can offer peace of mind when you know your financials are accurate and up to date. But another significant advantage of an online accounting solution is how much time you'll save by automating processes like invoicing and payroll – giving you more time to follow up with clients and seek out new prospects. We all know how important the personal touch is in sales. So why not use your accounting software client data to help remember your customers' birthdays or thank them when they've hit a milestone – being on your subscription service for five years, for example? With enhanced customer data at your fingertips, your construction business will earn a reputation for personalized service. You'll be able to respond quickly when a client calls with a question about a service. And you'll be able to suggest substitutions and offer valuable add-ons based on their buying preferences, so upselling becomes a snap. How will you use accounting software to grow your small contracting business? Savvy construction business owners take the first step toward better profitability when they stop thinking of accounting software as a financial management solution and consider it a comprehensive tool for business growth. You may be surprised at how accounting software can help you better serve your customers or improve your sales strategies when you look at its true potential. Final Thoughts For your construction company to survive and thrive in any economy, you must pick a niche market and develop your Strategic Business Process Management System (BPM) with written goals of what you want to accomplish and how much money you want to earn. Once you have picked your construction specialty, stick with it no matter what, and in the end, you will have the best chance of making much money and retiring wealthy. All contractors who try to do the right thing deserve to be rich because they bring value to other people's lives. About The Author: Sharie DeHart, QPA, co-founded Business Consulting And 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 and 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 [email protected]  
4/21/202312 minutes
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519: Using Financial Reconciliation To Keep Your Construction Business On Track

This Podcast Is Episode Number 519, And It's About Using Financial Reconciliation To Keep Your Construction Business On Track   As a small business owner, you're likely already aware of the importance of keeping your finances in order. Financial management goes deeper than paying your bills on time and collecting invoices (although those are also important). It involves regularly checking your financial situation to ensure your accounts are in order, your records are up-to-date, and you're spending within your budget. Among those activities, financial reconciliation is vital in keeping your finances and business on track. Force reconciliations can cause your net income to be over or understated, which means you pay too much in taxes now or too little now and the rest later with penalties and interest because the IRS can ask for a copy of your bookkeeping record.    Here's what you should know about financial reconciliation and how it can help your construction business. What is financial reconciliation? Financial reconciliation is a process of ensuring your financial records are consistent and accurate. When you conduct a financial reconciliation, you review financial statements and compare them with your bank statements, credit card statements, vendor statements, and other relevant financial records, such as invoices.  As you do this, you'll look for errors or discrepancies–for example, if a payment appears on your bank statement but not your accounting records or the costs are for different amounts on different records. When you conduct a financial reconciliation, you want to ensure that the money in your bank account matches the money your financial documents show you should have. Discrepancies need to be addressed, or you'll wind up with financial information that isn't accurate, which affects your cash flow and your ability to make financial decisions. If the discrepancy involves an ongoing payment to you or a vendor, catching it early could save you much money.   Financial reconciliation ensures that all financial transactions are recorded accurately and thoroughly in your accounting system. That way, you know exactly how much money you have and how much is moving into and out of your business, and you can make informed financial decisions.  Types of financial reconciliation Every business has different reconciliation needs, depending on how big, how many, and what types of transactions it has. Bank reconciliation involves your business's bank statement to your accounting records to ensure that all transactions have been recorded correctly. You're looking to safeguard your bank statement's bottom line matches your bank account balance. If not, you'll want to determine why. Is there an automatic withdrawal not yet posted to your account? If so, you need to be aware of it to prevent yourself from overdrawing on your account.  Credit card reconciliation involves reconciling your business's credit card statements with your accounting records to ensure that all charges have been recorded accurately. This is similar to a bank reconciliation in that you need to know exactly how much you've spent on your credit card–including pending transactions–to understand how much you have available.  You can also conduct vendor statement reconciliation, examining your vendor statements against your accounting records to ensure all invoices have been paid and recorded accurately. This can prevent any errors in paying your vendors.  You'll need to conduct intercompany reconciliation if you have two units of business or more–such as divisions, subsidiaries, or franchises. This is where you compare financial records between two or more companies to ensure transactions are recorded accurately and consistently. Why you need financial reconciliation Financial reconciliation is a vital tool that helps you manage your business more effectively. It ensures your financial records are accurate, complete, and up-to-date. This prevents errors or discrepancies that could lead to financial losses or legal or compliance issues. It can also help identify any fraudulent activity or transactions you disapprove of, protecting you against fraud and lessening the risk of financial losses. If you have numerous transactions that are difficult to track, regular financial reconciliation prevents accidental overspending or missed payments that could ultimately affect your relationships with vendors. As mentioned above, many businesses must comply with financial regulations and reporting requirements. Financial reconciliation helps ensure that your business complies with these requirements. If you're not compliant, you can take measures to address the issue quickly before it gets out of control.  How to conduct financial reconciliation If you're looking to establish a solid, repeatable process, these are a few steps you can take:  Step 1: Identity what types of financial reconciliation you need to perform.  Step 2: Establish roles and responsibilities for each team member involved. Make sure everyone knows and understands what they are responsible for and when. Step 3: Create a schedule for conducting financial reconciliation regularly. This may vary depending on the size of your business, and you may perform different types of reconciliation on various programs depending on your unique business needs.  Step 4: Ensure all financial data is easily accessible to those who need it. Each time you conduct a financial reconciliation, ensure you have all the necessary documentation and data. Cloud accounting software can help you manage your reconciliation. Step 5: Conduct the reconciliation: Compare your financial statements to your accounting records to identify discrepancies or errors.  Step 6: Investigate and resolve discrepancies: If you find errors or inconsistencies, look into them and do what you can to fix them. You may have to hunt down additional paperwork, contact vendors to discuss payments, or contact your bank or credit card issuer.  Final thoughts As a construction business owner, you must make vital decisions to move your company forward. Accurate financial records enable you to make those decisions based on your cash flow and current financial standing.  Bank and credit card accounts are the hubs of all your construction accounting and bookkeeping, meaning all transactions must be coded and input properly to have meaningful, reliable reports. If you have questions about financial reconciliation or other important financial aspects of your business, don't hesitate to contact us. We're always happy to answer questions and show you how we can simplify business management. About The Author: Sharie DeHart, QPA, is the co-founder of Business Consulting And 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 and 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 [email protected]    
4/14/202311 minutes, 12 seconds
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518: How To Protect Your Construction Company From Bankruptcy

This Podcast Is Episode Number 518, And It's About How To Protect Your Construction Company From Bankruptcy   Starting a construction business is not for the faint of heart. A certain level of stress comes with ensuring your company's success. If things go wrong, it all falls back on you. That said, the freedom and sense of accomplishment of running your own business make the challenges well worth it. With good planning and strong business practices, you can avoid the pitfalls and drive your trade business to financial success. Learn the top reasons why small businesses end up in bankruptcy and what you can do to prevent that from happening to you. 1. Poor cash flow Not bringing enough money in is the main reason why businesses fail. You must have more money coming in than is going out, or you're on the express train to bankruptcy. This might mean increasing your prices, decreasing costs, or combining the two. There might also be different service models you can offer (such as subscription services) or ways to branch out your income.    Work with an accountant or bookkeeper to help you identify issues with your cash flow as soon as you know there's a problem–or to prevent one before it happens. The earlier you catch a cash flow problem, the better. 2. Insufficient initial funding Don't rely solely on credit to fund your business. If you start in a deficit, climbing out of debt and becoming cash positive will be much harder. It can also be challenging to break the habit of throwing capital investments on credit in an attempt to start making money. Explore all of your options for initial funding. Ensure you have enough budget to start your business on the right foot.  3. Difficult market conditions Economic recessions or depressions can negatively affect businesses, especially those relying heavily on consumer spending. Unfortunately, there's not much anyone can do about a poor economic climate but try to budget for the ebbs and flows of the market so you have breathing room if times get tough. An emergency account with money set aside for unexpected situations will at least give you some cash to survive on if things take a downturn. 4. Poor financial management Finances can get complicated, so you must ensure you're on top. Failing to keep accurate financial records, not managing expenses effectively, and not correctly forecasting future revenues and costs are all issues that could hurt you financially. Work with an accountant, bookkeeper, or advisor if you have difficulty managing your finances. They can help you set a plan and show you how to ensure your money is best used.  5. Lack of market research If you can't compete with your rivals, your construction business may struggle to generate enough revenue to stay afloat. This problem typically comes back to a lack of market research.  Entrepreneur jumps into a market they're passionate about, only to discover that somebody else is already offering the same thing – and they've already got the market cornered. Or maybe there's no need for that particular product or service.  Market research before entering the business and offering a new product or service. The results will tell you whether there's a need for what you're offering.  6. Legal issues Lawsuits, fines, and penalties can be costly for businesses, draining their financial resources. The best way to avoid this is to ensure you're familiar with the rules and regulations you must follow or get help from a professional advisor when necessary. An ounce of prevention is worth a pound of cure. Construction Company Failure is Always Preceded by Bad Bookkeeping The construction company owner who buys QuickBooks and hires a regular bookkeeper to "put stuff into QuickBooks" and then ignores all of the financial and job costing reports generated from their QuickBooks file drives their construction company into economic doom. Too often, contractors have led down the primrose path into bankruptcy and business failure by relying on inaccurate, false, misleading financial and job costing reports from their QuickBooks file. Part of the blame rests on Intuit, the maker of QuickBooks because their marketing strategy implies that anyone, regardless of their understanding of accounting principles, can use QuickBooks, and if you are a contractor, all you need is QuickBooks for Contractors. It sets up contractors for failure by playing to their self-image of strong people who are rough and tumble and can do anything. In too many cases, these contractors end up feeling inadequate and experience huge disappointments feeling like they are the only people on earth who cannot figure out how to use QuickBooks. Most of these contractors give up trying to make QuickBooks do what they want and lower their expectations to just knowing how much money is in the checkbook, Key Performance Indicator #1, and ignoring the other four Key Performance Indicators. Ultimately, it is like driving a car in the pitch-black darkness, on the freeway, with a tiny flashlight at 60 MPH, and being shocked and dismayed when it crashes, rolls in the ditch, and burns. How to avoid bankruptcy While the reasons construction businesses end up going bankrupt may seem numerous, there are some specific things you can do to make sure it doesn't happen to you, such as: Maintain accurate financial records and regularly review your business's performance. Develop a solid business plan that includes realistic revenue and expense projections. Diversify your business's revenue streams to reduce reliance on a single source of income. Stay current on industry trends and market changes. Reduce unnecessary expenses and manage costs effectively. Seek professional advice from construction accountants, lawyers, and business consultants when necessary. Build up an emergency fund to help your business weather tough times. Avoid taking on too much debt and manage what you already have effectively. By taking these steps, you can reduce the risk of bankruptcy and increase the chances of long-term success. Final thoughts A business might end up in bankruptcy for many reasons, but a bit of planning goes a long way. Do your research, be honest when you need help, and work with a financial professional to help you stay profitable. Contact us to discuss further how you can protect your construction business and learn how we can help. No construction company goes bankrupt that had useful, accurate Financial Statements and Job Costing Reports that they understood and paid attention to because they would have seen bankruptcy coming well enough ahead of time to avoid it. About The Author: Sharie DeHart, QPA, co-founded Business Consulting And 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 and 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 [email protected]  
4/7/202311 minutes, 20 seconds
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517: How To Weigh ROI Vs Cost When Making A Business Purchase

This Podcast Is Episode Number 517, And It's About How To Weigh ROI Vs Cost When Making A Business Purchase Deciding to purchase something to help your construction business is a big decision. It can be challenging to part with hard-earned money, especially in the early days. To understand the right time to invest by purchasing something for your business, you must calculate whether the Return on Investment (ROI) would be profitable. The cost is the money you spend making the purchase plus any indirect costs (such as training costs) related to the purchase. The ROI is a calculation of financial gains or benefits that you obtain due to that cost. To determine ROI profitability, there is a simple formula you can use. If the purchase yields a positive return, it can be considered profitable. However, if the purchase does not earn back the money it costs, it would be considered a negative return on investment.   Return on Investment Formula Using a formula to calculate the ROI only offers a rough initial estimate. Other factors might come into play, such as future work you will get because of the new asset or unforeseen expenses. The formula to determine ROI is: ROI = (Net Profit / Cost of Investment) x 100 Let’s see an example: Suppose you run a spec home building company. Three employees spend their time in the field gathering data and taking stock of how a proposed development project would affect the landscape. Vegetation, waterways, animals – everything is taken into consideration. You have one client who would like you to survey very rugged terrain. They would pay $2500 if you could complete this work, but covering the landscape would be difficult and take time. The only way to do it effectively would be to purchase a drone for $1000. It would cost $200 to train each employee how to use the drone. The new equipment would make taking on this work possible and save many hours spent physically in the field. Additionally, having a drone would mean you could offer your new aerial surveying services to other clients who are undertaking more large-scale or complex projects. Calculating the ROI of obtaining new equipment for this project: First, you would tally your total expenses and expected revenue to decide whether this purchase would be profitable. Expected Revenue = $2500 Total Expenses = $1000 + ($200 x 3) = $1600 Then, you would subtract the expenses from your expected revenue to determine the net profit. Net Profit = $2500 – $1600 = $900 To calculate the expected return on investment, you would divide the net profit by the cost of the investment and multiply that number by 100. ROI = ($900 / $1600) x 100 = 56.25% Your return on investment would be 56.25%, a positive return. Not only that, but your new equipment may allow you to gain more work in the future, making your ROI even better. What happens when you don’t put your investment to work What if you purchase the drone but find the learning curve overwhelming, and it collects dust in a corner? In this case, your client may not hire you, or the hours required to do the work on foot may make taking on the project cost prohibitive. Your ROI would be zero, plus you would be down $1600 from the initial expense and training. This would result in a negative return on investment, mainly if you have already performed the employee training. On the other hand, how many places can you find with a strong chance Of 100% Return on Investment? Let me say - If something seems too good to be true, it probably is, and you should stay far away from it. We Do Like Managed Risks This is anything we can control the input and have a more remarkable than the breakeven chance of making a profit. We pay close attention to the higher levels of math and how it is used to predict probable outcomes accurately. Decision Modeling Decision modeling uses reliable QuickBooks reports to generate predictions of profit and loss based upon re-allocating resources and aligning your Business Process Management system processes to present to you a variety of possible outcomes. It offers you a way to attach knowledge, expertise, and analytic insights. As possible results are analyzed, decisions become easy because the goals, processes, and data come together. As contractors like you move away from gut-level decisions and begin relying on your construction accounting systems to provide helpful financial and job costing reports, it will open a treasure chest busting at the seams with practical knowledge which can lead you to earn massive profits and, by extension, increase your wealth exponentially. Knowledge Leads To Profits And Cash Flow What Makes Knowledge Powerful? Use Of Knowledge! If you could harness and truly understand even half of the information in your existing QuickBooks company file and truly understand it, you could quickly become wealthy, debt free, and live the lifestyle you deserve in five years or less. Final thoughts While making a large purchase to benefit your business can be daunting, significant rewards often come with taking the plunge. Do your research, calculate if the investment is worth it, and then move ahead confidently. If you calculate correctly, you will find that your purchase takes your construction business to new heights. About The Author: Sharie DeHart, QPA, is the co-founder of Business Consulting And 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 and 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 [email protected]  
3/31/20239 minutes, 57 seconds
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516: Construction Business Growth Through Networking And Having A Mentor

This Podcast Is Episode Number 516, And It's About Construction Business Growth Through Networking And Having A Mentor Most business owners receive plenty of well-intentioned advice and 'helpful opinion' from family and friends. However, good business advice spoken from commercial experience is another matter entirely. That's not to say it's hard to find, but finding a reputable source in the Internet age is sometimes less than straightforward – especially if you have a specific problem to solve and limited time. This is why, for good times or bad, developing a network of peers or seeking out a business mentor can be a great idea. Networking Business owners shouldn't feel they need to operate in isolation. There are several options to consider, and you're not limited to only one or a few. Developing a network of peers and colleagues is an excellent way to keep in touch with new developments, and you'll have a great resource to access when you need input and advice. Your local chamber of commerce Your local chamber of commerce is likely to be a helpful resource. They should be able to put you in touch with industry bodies and refer you to people who can give you professional advice. In addition, they might also have information and resources to help you deal with the issues you are facing. Attending meetings and events is also an excellent way to brush up on skills and meet and network with other business people operating in your area. Local chambers can be found online through the US Chamber of Commerce. Your industry body Most industry sectors have some organization representing the collective interests of businesses operating in the sector; some will have more than one. They can give you industry-specific advice and put you in touch with other people in your line of business for input. These sources should also be able to refer you to reputable outside professionals if you need the help of an accountant or a lawyer, for example. They will generally also hold regular meetings where you can meet and get to know other small business owners. Once you've met or contacted a business peer or professional, swap business cards and keep their details on file; while you can do this manually, it would be more effective to include their details in your contacts on your computer and mobile and to connect with them through other networks like the business-focused LinkedIn or even Twitter. If you keep people's contact details, you can give them a call whenever you need assistance. Even if they cannot help you, they might be able to suggest someone who can. LinkedIn is a great networking resource for business people. You can join several online groups to ask relevant questions and get good advice. You can create your own if you can't find a forum to suit your needs.  We are also highly recommended on Alignable, and we recommend it, too. It is a great way to connect with local business owners and work-from-home entrepreneurs who are also there to network and market their services and might need a plumber, handyperson, roofer, or remodeling soon. Credible online sources of advice It would probably be best to meet face-to-face with your banker, accountant, or lawyer for financial or legal advice, depending on the advice you need. But there are several additional resources you can turn to for assistance. The usa.gov site dedicates part of its site to small and medium businesses. The United States Patent and Trademark Office website lets you do many online functions. For the answers to several employment or health and safety issues, look at the United States Department of Labor website. Business mentors If you're not looking for business advice on a particular problem but are more interested in long-term direction to help you grow and develop your construction business, you should consider getting a business mentor. Mentors can act as an experienced sounding board for ideas and help you consider long-term strategies, assess your business from an independent but supportive point of view, and even connect you with others from their business networks. So how do you connect with a mentor and get the most out of your mentor-mentee relationship? Perhaps you already have an accountant but would like a Construction Accounting mentor. The first step to seeking a mentor is knowing the kind of guidance you and your business would most benefit from right now.  For construction business owners in the early start-up stage, someone who can provide advice for surviving the first few lean years—and someone you can get in touch with more often—may be the perfect fit. In this scenario, finding a mentor with a background in your industry is a plus. Mentors with relevant experience have been where you are now and understand all your issues and frustrations. Let's face it: all business owners are busy people. And although meeting with a mentor consistently is most beneficial, doing so in person regularly can be a challenge for both parties. For some mentors and mentees, what works best is video calls. Our Contractor Bookkeeping Review, for instance, offers consultation and mentoring from Sharie and works well through a phone call or in-person meeting. To get the most out of mentoring—and to demonstrate how valuable your mentor's help has been—be sure to follow up on your progress. A mentor will appreciate hearing how you've put their advice to work, your milestones and successes, and the goals you'd like to work on in the future. Acknowledging your progress will help you stay motivated by seeing how far you've come. Final thoughts Profitable contractors attend networking events not because they have nothing better to do; they do it because it pays off. You can either spend hours doing office tasks like bookkeeping or getting face-to-face with someone who may need your services. Meeting people gives you the chance to build and develop relationships, hire you, or refer you to someone who might. The opportunity to learn from not just an accountant but your Construction Accounting mentor can do more for your business than any course, educational program, or degree. Being a mentee means you get first-hand experience without dealing with all the mistakes yourself.  About The Author: Sharie DeHart, QPA, is the co-founder of Business Consulting And 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 and 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 [email protected]
3/24/202310 minutes, 24 seconds
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515: What Every Trade Business Owner Should Know About Raising Prices

This Podcast Is Episode Number 515, And It's About What Every Trade Business Owner Should Know About Raising Prices Raising prices can be a sore subject. Many construction business owners like you assume doing so will spell the end of your competitiveness. But by not raising prices, you're simply letting inflation and your suppliers' maintenance of your margins quietly eat away at profitability. The bottom line is that costs will always rise long-term - at least with inflation. That means you have to pass on the costs to your customers or consume those costs yourself to the point where one day, you'll have to either suddenly raise prices or accept the eventual failure of your business. The worst thing you can do is avoid measuring your costs by sticking your head in the sand. Cost rises will catch up with you eventually, so take action to maintain your margins. Analyze and reduce your costs Regularly check the accuracy of the prices you use in your forecasts and break-even calculations. If you're using outdated costs, your predictions could be dangerously off course from the actual performance of your business. Ideally, you should have your figures analyzed by a professional accountant with experience in the construction industry - and even then, you should remain directly involved to maintain an understanding of your books. But if that's impossible and you have to make your own costs and margin analysis, try using the following tips to help you resolve any profit issues. Analyze costs and profits on an individual product and service level first before looking at the business as a whole. You may miss critical financial details if you try and cut straight to the chase. Try making minor, subtle adjustments throughout your range rather than hiking prices on one service, even if the margin on that particular item is the one causing the biggest headache. Sharp, sudden price rises are more likely to attract a long-term adverse reaction from the target market than almost imperceptible ones they can easily accept. If you find a loss-making product in your books, don't immediately delete it. Consider first whether it's required to aid sales of profitable services. Schedule small price increases every six months or years rather than waiting every few years to raise prices more noticeably. Increase your prices If your costs are optimal, look at the other end of your margin - the price. You may be hesitant to raise prices because you think any price advantage you have over the competition is too significant to lose, but if you give customers more compelling reasons to hire you, you may be able to justify a higher price. Remember, it's all about positioning. Premium pricing reinforces the value of a premium service. If your market research tells you there's a gap in the market for a value alternative, fill it. But if there's also a gap for a superior choice, take that option if you can deliver a product or service to the required standards. Why? Put simply; there's always someone willing to go cheaper. Look at how large shopping outlets use their buying power to find ultra-cheap stock and take customers away from smaller businesses with tighter margins. Many small business owners take it as gospel that the last thing they should do is raise prices, but the opposite is true more often than not. Just make sure that if you do raise your prices, you do so: At a fair pace and intervals instead of raising prices in a way that will shock the market With consideration of the market's price tolerance Alter your product or service mix Any two margins are rarely the same in a range of products, so why focus equally on selling them all if concentrating on the higher-margin products will increase your income? If costs and pricing are optimal, altering your product mix is the only way to maintain or increase your margins. This means being ruthless and chopping products or services that may be close to your heart to focus instead on those that bring people in through the doors. Look at your margins, pick the top earners, and focus your marketing efforts on promoting these products and services above the others. Pricing Feasibility Your prices must be set to cover your costs and provide you with a healthy margin, but they also need to be developed considering your target market's tolerance for pricing. If you don't do this, you could price yourself out of the market or underestimate the value of your products or services. You'll be tempted to let your competitors dictate your pricing, but you need to build a comprehensive pricing strategy that reflects the value of your product and the price your market might be willing to pay for it. Carry out market research Finding out the price expectations of your target market may be as easy as simply asking them. The key is to get an accurate idea of your offering's value before you enter the market. The best way to do that is by directly talking to your target market. Conduct surveys or, if you already have a working product prototype or service concept, form a focus group to gain their instinctive responses and opinions on how much value they'd place on your offering. Ask them: The price they'd expect to pay for a product or service like yours. Where else do they buy, and why. What typically influences their purchasing decisions (you may find competitive pricing isn't as crucial as you expected). Remember that the prices you choose must reflect your position in the marketplace if you want your brand to thrive. At the end of the process, you need to know the following: Whether your service needs to compete directly on price or whether it's innovative enough to charge a premium for. The maximum price ceiling the target market will tolerate. Consider test marketing If you struggle to estimate your market's price tolerance, consider releasing your service on a small, limited scale as part of a test marketing exercise. You'll be able to get direct, valuable feedback from customers on what they think about your product or service and its pricing. Assess costs and margins Once you know your target market's price expectations, you can start looking at the feasibility of meeting them. Assess your cost and supplier options, and produce financial forecasts that could give you a long-term view of profitability. A cash flow forecast will give you a clear idea of the possible return on investment you could expect, while a break-even calculation will estimate the minimum performance (in units sold or hours) you'd need to meet before you start making a profit. These forecasts will be critical to your strategic decisions. Consult an accountant to make sure you've accounted for all your costs. Use your forecasts to answer these questions: Will the return on investment be worth your while? Can you trim your costs to improving your margins? Should you consider a more premium pricing strategy to improve your margins? Final thoughts While it may seem scary, remember that your job is to keep prices fair for you and your clients. That means you must charge fees that work for you and allow you to remain operational. It's just good business sense. Whatever the case, research and review your prices often to ensure you position your trade business correctly. About The Author: Sharie DeHart, QPA, is the co-founder of Business Consulting And 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 and 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 [email protected]    
3/17/202312 minutes, 9 seconds
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514: How To Attract Profitable Construction Clients

This Podcast Is Episode Number 514, And It's About How To Attract Profitable Construction Clients  
3/10/202312 minutes, 48 seconds
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513: Seven Ways Your Construction Business Can Market Its Services

This Podcast Is Episode Number 513, And It's About Seven Ways Your Construction Business Can Market Its Services When you go into business as a tradesperson, you often focus on performing your trade to the best of your ability – as it should be. With time, the quality of your work will speak for itself, which is the most valuable testimonial of all. Before the internet was commercially available, just as many experts advised contractors about the layout and design of yellow page ads and which books to spend money on, I say you spend money because that is what it was - Marketing. Many of us who owned and operated construction companies spent thousands of dollars on these experts. Based on their recommendations, we spent tens of thousands of dollars annually in full-page yellow page ads as close to the first position. Spending Money Is Easy, Investing Money Takes Work However, any trades accountant or bookkeeper will tell you there's more to it now. While your good reputation preceding you is undoubtedly essential, there are a few other ways that you'll want to market your services to ensure that you have a steady stream of work. Read on to learn seven paths you can market your construction business. 1. Appear in directories Since setting up a new business is usually a digital experience, it's easy to overlook the step of making sure you appear on a physical list where people can find you. Ensure your trade business is on relevant trade directories in your area. Additionally, make sure you appear in the online equivalent. Yelp, Google, and Facebook each have business directories. And let's not forget the old standby: the phone book. Yes, they still exist! They are valuable resources for some people looking to hire a tradesperson. 2. Have a website Some website-building platforms are very user-friendly, but hire someone if you feel that's beyond you. Almost everyone does an online search before they hire a business, and not having a website is like waving a giant flag that says you're out of touch, old-fashioned, or possibly not legitimate. Meanwhile, having a website reassures people that you are who you say you are and can provide the services they need.  3. Leverage social media Nothing is more substantial than a good referral, and people naturally turn to social media to find out what your customers are saying if they don't know someone who's used your services personally. Keep your social media presence strong and engaged. If you're uncomfortable doing this, hire someone to do it for you. It's critical when doing business today. 4. Offer referral promotions When you wind up with a happy client, give them an easy way to speak positively about you and suggest you to their friends. A card or a thank-you email with a discount code will do the trick. 5. Run ads Construction marketing can be tricky because, typically, your services aren't always needed. But when you are required, it's usually urgent.  If your trade business doesn't appear on the first page of Google, it might be worth your while to take out an online ad. That way, when someone searches for a tradesperson in your area, your business will appear next to their search. The only way someone can click on your information is if they see it – so make sure they have that chance, whether through an organic search or a paid ad. 6. Make yourself visible in the real world Make sure your construction business's name and logo appear on any equipment you use, and make clothes for your team to wear when they're out and about. It may be smaller than a billboard, but driving and walking around letting people know who you are, what you do, and how to contact you will go a long way to marketing your company. If people become familiar with your business name, they'll likely turn to you when needed.  7. Good old-fashioned snail mail Believe it or not, print campaigns are alive and well! If you operate a construction business whose services are sorely needed in a specific area, consider making a print ad to pop into mailboxes. A word of warning, though – make sure your print ad is relevant, valuable, and eye-catching. You don't want to spend money producing something that will immediately go to the recycling bin. Final Thoughts Marketing for trade businesses is a lot like any other type of business in that you have to understand your audience and their needs and show up when they're looking for you. With some research and proactive planning, you can be sure your business will appear in the right place and time. Continually examine your approach. Instead of yellow pages people, I see many well-intentioned people with their minds and hearts in the right place that have great ideas on what works and fails in social media. I certainly don't know what works for every contractor; however, I do know that every construction company is unique, and what works for your competitor may not work for you. I encourage you to develop your market tracking system along with these methods. Perhaps you will discover what works best for your construction company and increase your sales bottom line profits. If I can be of service, don't hesitate to contact me. About The Author: Sharie DeHart, QPA, is the co-founder of Business Consulting And 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 and 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 [email protected]  
3/3/20239 minutes, 26 seconds
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512: Understanding Cultural Differences Within Your Company And Clients

This Podcast Is Episode Number 512, And It's About Understanding Cultural Differences Within Your Company And Clients   We're in a dynamic, multicultural country with many different races of people from diverse origins, just within the domestic market; it's vital that you know who might be interested in your goods or services and how they could perceive particular messages. Whichever specialty your construction business is in, cultural differences can directly impact your profitability. If you try to understand your crew's and clients' cultures – their customs and differences – you'll have a better chance of keeping them and gaining more, respectively.   Suppliers, vendors, and service providers respect leaders who have a vision, mindful and considerate, and can power through every obstacle to achieve success. They will support you in ways you cannot even imagine because it is in their best interest. Decide how you want to lead, how you want to be respected, and the work culture you want to create.   Ensure certain business areas don't offend potential subcontractors and clients from different cultures. Body language – it's important to know what body language to communicate to potential staff or clients you meet or in visual advertising directed at your customers. For example, if your business has a sizable Indian customer segment, be aware that a typical western hand wave meaning 'hello' is usually interpreted by Indians as 'go away' or 'no.' Communication – the secret to success in any business. If your company can communicate on the same level as your local customers, you're already heading in the right direction. One example that failed miserably was when PepsiCo marketed Pepsi in Taiwan using an ad tagline, "Come alive with Pepsi!" They didn't realize the Chinese translation meant, "Pepsi brings your ancestors back from the dead!" Awareness – simply being aware of your prospective customers' cultural backgrounds will allow your business to convey its messages more accurately and with less chance of offending. By drawing up some personas of the main types of clients in your target market, you'll begin to break down what each kind of personal values. You may even find their trigger points – those that make the purchase. Ensure you're familiar with each persona: Etiquette – such as getting to know the culture of Chinese customers and being patient when conducting business. Dress – if you have significant customers in the Pacific Islands, it's more common to dress informally when doing business. Business and religious customs – familiarity can go a long way toward a successful business. For example, Japanese people consider it rude to make demands when doing business, while Indonesian people prefer to do business face-to-face. History – if you're kicking off an advertising campaign that uses an aspect of history to get your message across, make sure it's accurate and not likely to offend a particular demographic. Simple acts of mindfulness promote a positive reputation for your construction company. One common example: When working on residential projects, it is important to note that Asians, in general, and most Eastern Europeans, dislike wearing outdoor footwear inside their houses. It is customary to remove your shoes or wear shoe covers to show respect as you enter; not only that, it ensures the floors and carpets are clean and clear of possible mud and dirt. Often businesses don't take sufficient time to have people on the ground interacting with their potential customers. There are language barriers and different customs that need to be considered. Speaking with advisers who have the exact origins of your major market segments is a brilliant idea. The advice could prove invaluable – ensuring you don't offend through ignorance or lack of knowledge. You must ensure all aspects of your marketing work together, delivering the same message – one that's aware of the cultural differences amongst your clients. By being aware of the critical factors impacting your business, you'll set yourself up to maximize sales from a global melting pot of potential customers. About The Author: Sharie DeHart, QPA, is the co-founder of Business Consulting And 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 and 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 [email protected]
2/24/20238 minutes, 3 seconds
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511: The Difference Between A Construction Accountant And A Tax Accountant

This Podcast Is Episode Number 511, And It's About The Difference Between A Construction Accountant And A Tax Accountant How often have you hired someone with the expectation that they know how construction works, and then you found out they did not know about it? You are a master in the construction industry, so you recognize what to look for in your particular field and quickly observe if someone has the skillsets, and you proceed accordingly. You know what happens when you send your best Rough Carpenter that you pay piece work for framing spec from the ground up in all kinds of weather and working conditions to install some custom-made cherry wood cabinets with gold plated pulls and knobs in the home of your best client (who happens to be in the wealthiest neighborhood in your town). It is not a pretty sight. Have you pictured a crew with muddy work gear and boots stepping onto your client's pristine floors? The dirty secret is that Tax Accountants operate like Rough Carpenters because they work fast and furious, and they are paid piece work. The main difference is that they earn the bulk of their annual income in three and a half months. This means they do not waste time going through your receipts to ensure you get all the deductions you are entitled to.   Both Groups Are Important, And Each One Fills A Need Project Management Construction Accounting Professionals (PMP) work above the line and focus on generating positive outcomes and results for contractors: Increase Sales Reduces Expenses Increase Net Income Certified Public Accountants (CPA) work below the line focused on filling out annual income tax forms, ensuring contractors pay their fair share of taxes, preparing certified financial statements, and performing audits on your QuickBooks contractor file.  Three Times Construction Contractors Need A CPA In Their QuickBooks For Contractors File: You apply for a large loan or line of credit over a million dollars You need certified financial statements to get a performance bond Your construction company is so large that you are required to have an annual audit Most construction contractors with annual sales under $10,000,000 and less than 20 employees will never have those issues. Preparing end-of-year reports and filing taxes can be complicated. If you're not doing it right, you could be liable for penalties or, at the very least, not take advantage of tax gains and financial opportunities. A Construction Accountant can ensure your business remains compliant (and pay as little tax as possible), help you analyze your business performance, and work with you to achieve your goals. On the other hand, Tax Accountants can kill more cash flow and profit in your construction business (in less than an hour) by preparing your annual tax return using a messed up QuickBooks file than you can make up for with hard work in several months, if not years. This is because saving you money on your tax bill is not what they are paid to do; they are paid to fill out tax returns. Why does it need to be separate? Trust but verify! When you need financing, most bankers and finance sources like to see a separation of duties. They want to see two different firms involved because it reduces the chance of errors, collusion, cover-up, and fraud. They may not say a word to you; however, we often hear about it! We insist our construction contractor clients use an outside CPA or tax preparer to review the QuickBooks Contractor's bookkeeping services that we have performed and prepare the annual income tax return. As a result, we have developed good working relationships with several CPA firms and yearly qualified tax preparers. It is good to know our contractor clients trust us and know that we have their best interest in our minds and hearts; however, we are human, make mistakes, and welcome input from CPAs and tax preparers. It is all about teamwork and people working together to ensure everything in your construction accounting system works correctly. Bottomline: Construction Accountants should not be preparing annual tax returns because nobody can serve two masters. Either be a Tax Accountant and serve the interests of the tax collection agencies or be a Construction Accountant and serve the interests of contractors. Please don't think we are too hard on Tax Accountants. Understand that we have great relationships with them. We have had Tax Accountants review our QuickBooks and prepare our business and personal returns for over thirty years, and we refer many businesses to various Tax Accounting and Preparation companies. What you need to look for is someone who is experienced, capable, and understanding. You should feel they'll be a good advisor and are interested in developing a long-term professional relationship with you. Having the right Construction Accountant for your business leaves you free to focus on why you started the construction company in the first place – to see it grow and become profitable. A Construction Accountant and a Tax Accountant are integral to this because they'll keep your finances on track. Which, in the end, is the whole point. About The Author: Sharie DeHart, QPA, is the co-founder of Business Consulting And 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 and 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 [email protected]  
2/17/202311 minutes, 1 second
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510: How To Protect Yourself And Your Construction Business From Fraud

This Podcast Is Episode Number 510, And It's About How To Protect Yourself And Your Construction Business From Fraud Unfortunately, fraudsters are out there. They want your money and identity, and they're getting more sophisticated. There's a wealth of opportunity for swindlers to take advantage of people because so much of what we do is now online. There are ways for you to protect yourself, both by taking action and being aware of what's going on.  While they might get less information from a small business, thieves will easily access it. If your construction company keeps any time-sensitive information on a computer network—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.    As a small construction business owner, you may not have the significant security budget of a large company, but you can combat employee theft and protect yourself from financial losses if you can identify red flags and follow suitable preventive measures.    Here are eight ways to protect yourself from personal and construction business financial fraud. 1. Protect your identity Getting someone's identity is often the first step to running up enormous charges in their name. Scary as it is, you can go bankrupt if someone opens credit cards using your ID and maxes them out before you know anything has happened. Shred your mail and dispose of records securely. Dispose of any documents with your name or other information carefully. It may take extra time, but these small steps can save you a world of headaches. 2. Don't click on unknown links Whether sent to you in an email or via text message – don't click! It's a popular tactic for fraudsters to send a normal-looking link that's harmful. Before you know it, you're freely giving away your information. Just don't do it. Instead, take the extra step to visit a website through its legitimate homepage or call customer service if you suspect a link is a scam. 3. Check your bills With so many bills offered online, it's easy to forget to review them. Make sure to check your statements for accuracy every month. It's the only way to identify fraudulent charges and correct them. 4. Don't put your personal information online carelessly Think of this like putting the toothpaste back in the tube – it just can't be done once you've squeezed it out. The same goes for putting your personal information online. Fraudsters can use something as innocuous as your birthdate or workplace to verify your identity and expose you to financial fraud. 5. Never give up information over email or on the phone The pandemic made us especially susceptible to being taken advantage of because so much was changing at once. Extra government programs were in place, vaccination campaigns were underway, and this administration meant more phone calls, text reminders, and emails. Trustworthy institutions typically do not ask for your personal information in these ways. If you get a suspicious phone call or email, hang up and call them directly. That extra step can save you a lot of money and stress. It's too easy to fall victim to one of these scams, especially if the caller claims that a loved one is in trouble and needs help – a common tactic these days. 6. Be cautious when shopping online Fraudsters are getting savvy when it comes to tricking us online. It's not uncommon for a fraudulent website to appear exactly like a legitimate place to shop. Double-check web addresses and question deals that seem good to be true. Be aware of spelling mistakes or awkward grammar on these websites. They're often a giveaway that it's a lookalike designed to trick you into handing over your information. 7. Check your credit report periodically If you live in a region where you can get free credit reports that don't harm your credit score, take advantage of this from time to time. It's an excellent way to know if loans have been opened in your name or to be alerted to any other suspicious activity. 8. Set spending limits on your credit and debit cards Most cards can be set up to alert you of purchases, and you can set the parameters of when that happens. If someone has your credit card information, it's not uncommon for them to run through several smaller purchases as a sort of test to see if you're paying attention. Set up spending alerts so you can stop them in their tracks. A Note on Construction Bookkeeping Embezzlement/Employee Fraud Bad Bookkeepers will leave you with unfiled and unpaid taxes. They come from every race, creed, color, gender, and age. There is no definitive profile or absolute way to know which contractor bookkeeper is an embezzler until they have been caught and convicted, and even then, if you do not perform extensive background checks, you may never know it until it is too late. Just because you catch a bookkeeper embezzling funds, don't think for one minute that they will always be punished and made to pay you back. For the most part, you must understand that employees are poor innocent victims of brutal greedy business owners in the eyes of the public. I have seen bad bookkeepers ruin too many businesses, especially construction businesses. In most cases, it was Bookkeeper Incompetence or Bookkeeper Embezzlement, and in other cases, it appears there may have been some deliberate identity theft; however, I cannot be sure. What you can do: Monitor your financial records closely, and investigate if you come across the following discrepancies: Mismatched payees: the name on a cashed check doesn't match the name entered in the general ledger Identical payments:  two checks have cleared for the same amount to different vendors in the same date range; one may have been authorized on the strength of supporting documentation for the legitimate payment. Questionable companies: a supplier or vendor with unprofessional invoices (i.e., apparent errors, a missing or incorrect address, home address, or non-existent web presence) FEA Cybersecurity As an accounting firm, our client's privacy and security remain our top priorities, and we are continually looking at ways to develop and evaluate our system to prevent a breach and network holes. We utilize 128-bit Secure Socket Layer encryption, which ensures that all data passed between the web server and browsers remain private and integral. There are two levels of restrictions, and passwords must be entered before you can get your data file. At Fast Easy Accounting, Cloud Security is not an option- it is a fundamental requirement. We only use Intuit Approved Commercial Hosting Services. Their Cloud Security rests on U.S.-based servers, backups, data centers, and technical support. Not one aspect of our Cloud Security relies on outsourced services or offshore locations. We have taken steps to select the best to ensure that your data is as secure as that found for online banking and financial institutions. Final thoughts It's a big, connected world, but modern technology has also made us more susceptible to fraud. However, with a few good habits and suitable tools and practices, you can protect yourself from personal fraud and continue enjoying online life's conveniences. Let this post be a reminder to watch for suspicious employee behavior. Segregate financial roles so no one has unlimited access, control, or opportunity - and ensure your bookkeeping is always up to date so any "red flag" scenarios can be dealt with promptly. About The Author: Sharie DeHart, QPA, is the co-founder of Business Consulting And 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 and 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 [email protected]
2/10/202312 minutes, 37 seconds
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509: Growing Your Construction Company Through Collaboration And Partnership

This Podcast Is Episode Number 509, And It's About Growing Your Construction Company Through Collaboration And Partnership Operating and growing your construction business requires more than functional and skilled employees, but it's an excellent start. You need a steady stream of quality, paying clients to keep your company afloat. Likewise, deciding on an online marketing plan can be overwhelming for company owners like you who are looking for affordable ways to nurture consistent, sustainable growth. With time in short supply, the key is to find one or two growth strategies that will get results at a minimal cost. Building a construction business requires collaboration and partnership. The deployment of employees in a way that allows them to work together to problem-solve and act with a shared sense of urgency; and increasing brand awareness through an alliance with people in the industry are simple, cost-effective ideas for building your company within, in the office or job site, or externally through referral and online connections. When this occurs, you and your crew come to leverage the strengths of one another as you work to achieve shared objectives vital to your company's growth. Also, mutual learning occurs, increasing the probability that each employee's performance will evolve from good to better and then best. In turn, a construction company's performance improves as well. Collaboration As collaboration occurs, your team can leverage individual differences to produce exceptional outcomes. This knowledge-sharing creates a learning enterprise in which employees more readily identify solutions to problems. Consequently, your construction company may become more operationally and financially successful. A collaborative environment makes a range of disciplines accessible on an as-needed basis, which leads to the efficient use of employee talent in a way that isn't possible otherwise. It allows your crew to complete a task at hand, making it more likely that the right talent is available at the right time. With collaboration, jobs are done more efficiently, leaving more time for the staff to concentrate on activities that contribute to company growth. A group brings different perspectives to a problem at hand. As individuals share their views, each team member considers issues from multiple viewpoints, and the person begins to think like the group. The culture change contributes to new thinking, which may lead to new plans and ideas to deliver your services. In addition, diverse and complementary talent may enhance individual work processes as each of your employees becomes a part of a greater whole, which can positively affect your construction company's culture. A team succeeds or fails according to the combined capabilities and commitment of the individuals involved. Deploying a variety of unique strengths and skills advances a team's understanding of a problem, leading to faster problem scoping and solution formulation and more effective solutions. Partnership This simple growth hack is influential both on and offline. A partnership with a company that provides complementary products or services can quickly increase your online email lists and boost your sales figures. There are many ways a business partnership could work – you might negotiate a joint venture, host an event where you promote each other's products, run a giveaway together or launch a combined product or service. It doesn't have to be a formal business partnership, but reach out to businesses in complementary industries to suggest a referral relationship in which you refer relevant clients to each other. You could also agree to partner up on specific projects. For example, a kitchen remodeler and a flooring contractor could refer clients to each other or work together on projects requiring both skills.  Keep in mind, though, joint ventures are a bit like change orders. They can be an incredible opportunity to make or lose money very quickly. So, forming partnerships doesn't necessarily mean a business merger but more on providing customized help to a client that needs a range of solutions. Final thoughts Remember, communicating better is one of the most accessible and valuable skills you can learn if you look for ways to lead and collaborate more effectively. Effective communication will help you to gain the trust and respect of individuals around you, which is one of the most valuable assets you can acquire. Collaboration is also an effective means of problem-solving because it allows a company to leverage individual employee differences, evaluate employee efforts in the aggregate and create a learning enterprise. When problems are solved more readily, resources become available to achieve other company objectives, including company growth. Collaborating and forming partnerships are more impactful when you have written goals of what you want to accomplish and how much income you want to generate from all your efforts. I can help provide additional financial advice and support as you update your business plan based on your intentions and current financial records.  About The Author: Sharie DeHart, QPA, is the co-founder of Business Consulting And 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 and 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 [email protected]  
2/3/20239 minutes, 40 seconds
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508: Seven Tips To Help Your Construction Business Adjust For Inflation

This Podcast Is Episode Number 508, And It's About Seven Tips To Help Your Construction Business Adjust For Inflation Inflation has ballooned worldwide in recent months, and there's no question that small construction businesses are feeling the pinch. Supplies cost more, employees are hard to find, and your profits are shrinking. This can lead to operating at a loss - spending more money than you make. Otherwise, you will eventually run out of cash reserves and be out of business. And while it's not uncommon, especially for new companies, it's still not ideal and shouldn't continue in the long term.   Be aware of what's going on in your industry and adjust. Customers judge a business based on perceived value. If you're at the bottom of the pack price-wise, they're likely to skip over you to get a good deal. Price yourself accordingly to attract quality clients.   It's undoubtedly challenging, but you can weather the storm with the following tips. 1. Study your data You first need to identify why you're operating at a loss. If you're still in the start-up phase, 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. Your numbers are always helpful, but in times of rapid inflation, you'll be incredibly thankful that you keep a nice, clean set of books. Analyze your data to learn what products and services make you the most money, which ones cost the most to offer, and to identify where you can save. 2. Cut expenses Now that you've identified where you can save money, go ahead and cut what you can. It's nice to be able to offer many products and services, but this is a time to tighten your belt. Focus on the items that keep your business as healthy as possible, and ditch the rest – at least for the time being. It's okay to simplify, especially when times are tough. 3. Adjust your prices Nobody likes to raise their prices, but you likely have no choice. Keeping fees the same would indeed be fantastic for your customers or clients. However, if you're offering your products or services at the same prices as before inflation started to climb rapidly, you're absorbing the cost. When you dig into your data, you may find that some things you offer actually cost you a lot of money. That's not a sustainable business model – raise your prices to keep yourself afloat. You should always seek to raise your rates over time to improve your profit margins and keep up with inflation. 4. Simplify and automate If aspects of your business take a long time to complete, see if there's anything you can do to reduce those hours. Switching to cloud accounting or inventory management software would be an excellent example, as doing so would allow you to use your valuable time elsewhere. Identify where you can simplify and automate, and then do it. Then, even when inflation comes back under control, you will undoubtedly find that the saved time helps. You can build efficient systems by streamlining your processes and using technology. There might be administrative tasks that you can ditch altogether.  5. Focus on your client Remember that your clients are keeping you in business and experiencing inflation in their lives too – both at home and in their businesses. Keep the lines of communication clear and open, especially if you're going to alter your offerings or raise your prices. It's easier to retain loyal customers than to gain new ones, so make sure they know how much you value them and communicate openly to maintain their trust and loyalty. 6. Consider your employees Good help is hard to find. Those who work for you are feeling the pinch as well. While it's essential to automate what you can, you must consider the consequences it will have on your staff. Identify how you can better use their talents if parts of their roles become automated. 7. Remember, this will pass Inflation has happened before and will undoubtedly happen again after this. Historically, periods of inflation last anywhere from a few months to several years. However, we remember one thing: all periods of inflation end.  Final thoughts While inflation is problematic for small businesses, there are steps you can take to reduce its impact. You will leave this inflationary period intact with clear communication and intelligent adjustments. Focus on what you can control and face what you can't with confidence and creativity. It's also important to review your practices honestly and carefully to pinpoint what you can improve in your construction business during this challenging period. Being proactive with your marketing, asking for an expert's help with your accounting, and putting a plan in place for production are necessary to operate and grow your company during this time. About The Author: Sharie DeHart, QPA, is the co-founder of Business Consulting And 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 and 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 [email protected]
1/27/202310 minutes, 14 seconds
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507: Starting And Operating A Small Construction Business On Limited Funds

This Podcast Is Episode Number 507, And It's About Starting And Operating A Small Construction Business On Limited Funds So you have a great business idea and are convinced you can make it work, but you don't have much capital to get your business off the ground. Juggling existing financial commitments such as a mortgage or bank loan could put a squeeze on your business plans. Many entrepreneurs use creative thinking and shrewd planning to get businesses off the ground with the smallest budgets. Freelancers in all industries deal with the same problems due to the nature of their work. Most of you came from the skilled craftsman trades; some worked as construction company managers and have now started or thought of starting your business.   If you just did, congratulations, you have decided to own and operate a construction company. Practically, solo contractors manage every aspect of their business, but we are here to help you navigate it. Here are the things you need to consider (especially when you are on a limited budget) to keep it running. Making your construction business fit your finances Starting your company on the tiniest of budgets means working harder to ensure your business doesn't implode from a lack of funds. Even if you don't have funds, you probably have something that many established companies don't have - time. You can build income and cash flow from your hard work if you have time. Remember that the easiest businesses to get off the ground with limited capital don't require plenty of resources or initial outlay. These are generally service-based businesses, such as handyperson and residential home-improvement services. Minimizing costs and eliminating expenses It goes without saying that if you have a limited budget, you will need to direct your spending where it has the most significant impact on your business. Here are some tips to make your money go further. Harness free business support. Business support or advice doesn't need to cost a fortune – there are plenty of ways to get help and build your knowledge for free. Use the Internet to research success stories in your chosen industry and find out if there are any government business mentoring services you could access. You could also approach your network of friends and family or industry associations to put you in touch with someone in your industry who could share their knowledge.  Do it yourself. Almost any business task can be completed by yourself, depending on how much spare time you have. If you don't have the design budget for an expensive-looking website or are unsure how to design advertising material, consider learning how to do it yourself. For example, you might be able to attend a free or low-cost course on how to use design software or use Internet resources to teach yourself.  Work from home or lease low cost. Working from home can be a great option; you don't need to meet clients at your premises, as most will invite you to their property. If you need a physical office to meet clients, leasing a room in a shared office or splitting the lease on a property with another business is an excellent way to minimize costs. Shared office spaces often have shared amenities such as meeting rooms and coffee break areas, which are great for meeting clients. Order only what you need. Avoid the temptation to order large quantities of stock from suppliers in anticipation of large orders. Less supply means you save on storage costs and reduce the risk of theft or damage. The downside is that you may have to pay more for items, lowering your margins, but you can order in bulk once the business is booming. Minimize fixed costs. The more fixed costs you have, you are financially tied down. Some fixed costs like power and telephone line rental can't be avoided, but other costs such as transport costs or office supplies will vary each month. Think carefully before financially committing to services that may not be necessary, such as expensive mobile data plans or a private mailbox. Use free or cloud-based software. Rather than paying for bundles of software, download software off the Internet instead. A variety of websites offer free word processing software, accounting platforms, and budgeting tools, either as a limited-time trial or completely free. There are also free or low-cost cloud-based versions of many commonly used programs. Cloud-based programs are stored on the Internet, so they don't require as much processing speed or physical space as those stored on your computer's hard drive. Use social media as a marketing tool. Creating a Facebook or Instagram account is free and provides you with a platform to market your business to your local community. Facebook also features a low-cost paid advertising feature you could use to drive potential customers to your pages. Social media pages can also be a free substitute for a website until you have enough money to create your own. You will need a significant online presence to gain customers and generate sales through social media, which takes time. Directing profits back into your business It may have taken a lot of hard work and determination, but you are now making sales. Spending money on yourself or some new gadget to reward your persistence is tempting. Avoid splashing out unless it will make a big difference to your business by improving productivity or operational capacity. It's generally best to put the money straight back into growing the backbone of your business – either by purchasing a piece of essential equipment or growing your client list. Know when to spend Like any start-up business, there will be times when you need to make big decisions, such as pursuing expansion opportunities or new markets. You might need to spend most (or even all) of your savings or consider borrowing to take advantage of new opportunities. Final thoughts Many aspiring to self-employment do not have any idea what freelancing entails. Contracting services to homeowners or individuals require lots of time and effort to earn a profit immediately. Employees tired of their own work lives idealize those of business owners and often ignore the difficulties faced in this environment. Before counting on notions of optimal freelancing experience, consider your own life, strengths, and abilities. Ask yourself these questions: "Am I ready to begin a long-term career in contractor work?" and "What do I want to achieve through my contracting business?"  f you are a new, struggling construction business owner, tackling these problems from the bottom up streamlines the path to success. If you ever become discouraged, remember that everyone starts at the beginning and that you can achieve your desired level of success if you put in the work to attain it. Again, you are not alone. Let me know how I can help you today by filling out the form on the right. About The Author: Sharie DeHart, QPA, is the co-founder of Business Consulting And 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 and 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 [email protected]  
1/20/202311 minutes, 49 seconds
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506: The Advantages Of Paperless Payroll In Your Construction Company

This Podcast Is Episode Number 506, And It's About The Advantages Of Paperless Payroll In Your Construction Company When you think of payroll, you might still envision paperwork and envelopes given to employees by hand. Even with direct deposit being the norm for years, there is still a significant paper component to manage. You won't find a contractor using inefficient tools on the job site these days. The hammer or the nail gun? No question. While every contractor recognizes the flaws of using ineffective tools, they may still be losing money due to inefficient payroll tools and processes. As with most things, payroll is going digital – for a good reason. There are many benefits to digital payroll for construction business owners and staff alike. Read on to learn why switching to paperless payroll could be right for you. 1. It empowers your construction employees Your employees can log in to the system and access anything they need – anytime and anywhere. Pay stubs, hours worked, and so much more. It's all right there, which means they don't need to call or visit a specific department for help. If they have questions about time off or sick days, they can easily find that information.  When everyone can access what they need, it makes everything easier. It also means that whoever would traditionally have to pause what they're doing to provide information can stay on task. 2. It increases convenience and eliminates delays When you're manually processing your payroll, delays come up that are a normal part of the contracting business. But that isn't the case when you take your payroll digital. Because everything runs automatically, you no longer experience holdups due to holidays or slow mail. Additionally, everything is distributed instantly online, meaning everyone gets paid on time. You'll reduce the chance of mistakes as well. Taking human error out of the equation means you no longer have to spend much time correcting mistakes or investigating what went wrong. 3. It keeps everything secure Security is built right into paperless payroll systems. Employees have a unique username and encrypted password, which they use to access a secure online portal. Some even have two-factor verification. All payment information is kept securely on the portal, accessible only to those with permission. With all data stored online, you reduce the risk of losing sensitive documents. You also don't have to worry about shredding confidential information. The risk of fraud is also nearly eliminated. 4. It saves you money, and valuable time There are obvious cost savings in reducing the paper, postage, ink, and toner required to distribute paper pay stubs. Those costs are high, too. But you will see the most significant savings in the hours no longer needed to run your payroll. With most of the process automated, it's no longer necessary to spend time tallying up hours worked, calculating overtime and sick pay, and then sorting out taxes. Instead, your software will take care of it for you. 5. It helps the environment Finally, paperless payroll is nearly waste-free. You'll no longer produce stacks of paper, envelopes, and supporting documents, which add up in filing cabinets all over your office – which is only a pitstop before they're discarded. Payroll Processing Not Fun? Outsource it! Having trouble processing payroll? Do employees ever turn in timecards late? Any difficulty keeping track of employee loans? Does keeping track of garnishments take lots of time? Wouldn't it be great to get rid of payroll processing? We understand construction companies and their payroll needs because we have owned and operated construction and service/repair plumbing companies for over 25 years, which means we know how to get payroll processed fast and quickly! Everything runs smoothly during your regular pay schedule when timecards arrive on time. When employees do not turn in their timecards on schedule and expect you to have their checks ready, no worries, we have you covered: Process payroll outside your normal pay schedule - fast and easy Track and allocate garnishments Track and report on employee loans Track and information on employee reimbursements Everything for one flat fee and no long-term contract  Final thoughts There are several benefits to adopting paperless payroll, and it's a popular system for employees and employers alike. When considering taking your payroll paperless, ask yourself what the needs of your business and your employees are. If both would enjoy the features listed above, it might be time to start thinking about making the switch. Outsource your payroll processing to save time and money. Reach out to me at your earliest convenience. About The Author: Sharie DeHart, QPA, is the co-founder of Business Consulting And 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 and 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 [email protected]
1/13/20239 minutes, 50 seconds
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505: Setting Construction Business Financial Goals For 2023

This Podcast Is Episode Number 505, And It's About Setting Construction Business Financial Goals For 2023 The new year is a natural time to decide what you want to achieve and how. Businesses tend to progress more consistently if the owner sets financial goals and makes a plan to achieve them.    Your construction business (and personal) budget is one area where you should keep your resolutions from slipping. While it’s true that there’s also next year when it comes to your financial goals, putting it off has real consequences that equal less money and more work. So here are seven steps you should take in January to start your 2023 budget.   1. Review and evaluate your 2022 goals You’ve got to see where you’re coming from to know where you can realistically go. At year’s end, review the goals you set last year and use your numbers to see how your business measured up. Whether or not you met your goals, that information is valuable. What circumstances enabled you to meet your goals or prevented you from doing so? If you didn’t make a formal list last year, try to think of where you were a year ago and see if you progressed as much as you thought you would. 2. Use that information to set your 2023 goals Now that you know how far you came in 2022, jot down what you’d like to accomplish in 2023. Don’t worry about getting specific here – it’s just a jumping-off point. Try to be ambitious without being unreasonable. Setting unreachable goals only sets you up for disappointment and a feeling of failure, which is entirely counterproductive. 3. Get specific Flesh out your ideas by paying attention to the details. Use real numbers in your goals. Are you going to make more sales? Raise prices? Find new clients? Outline exactly how you’re going to get to these numbers. The more specific you can be here, the better. It will help you to make your dreams a reality. 4. Sort your goals into categories Once your goals are outlined and detailed, look at them. Some plans are small and quickly achievable. These are fantastic ones to tackle early in the new year to boost your business and get you on the right track. Plan to get to these as soon as possible so you can reap the rewards. There should be some items on your goal list that will take more time, effort, and planning. Break these bigger goals into smaller steps, and create a timeline for achieving each milestone. You will likely have a handful of goals that fall somewhere in between. Distribute these evenly throughout the year in a way that makes sense for your business. 5. Break down the steps in each goal With your short, medium, and long-term goals laid out, go over them with a critical eye. You need to ensure that each one has a clear set of steps to help you achieve it, especially if it is a bigger or more complicated goal. Create milestones for each one of your goals, with what you need to accomplish broken down into manageable chunks. A complex goal may even require weekly targets to help you get to the finish line. After finishing this step, you’ll have a detailed picture of what the year looks like for your construction business. What was once daunting becomes exciting! If you’ve balanced things out well, you’re likely to gain a feeling of accomplishment when you look at this goal map and will be keen to get things underway. 6. Check that each goal is SMART Most of us are familiar with the concept of SMART goals, but we don’t always take the time to make sure they pass this check. Go over your goals to ensure that each is specific, measurable, attainable, relevant (or realistic), and timely. If each goal meets these requirements, you’re good to go! 7. Set reminders to check in each quarter Accountability is key. Set up dedicated time at least once per quarter to review your progress. If you find that you’re falling behind, make a plan at that time to get things back on track. Final thoughts Most construction business owners have an idea of what they want to achieve each new year, but the only way to make those dreams a reality is to plan, plan, plan. It’s the best way to make sure your ambitions come to pass. After that, check in on your project regularly. About The Author: Sharie DeHart, QPA, is the co-founder of Business Consulting And 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 and 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 [email protected]
1/6/20238 minutes, 40 seconds
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504: Year-end Closing And Planning For Construction Business Owners

This Podcast Is Episode Number 504, And It's About Year-end Closing And Planning For Construction Business Owners The end of the year is typically a reflective time. Something about that lull between holiday festivities and New Year's Eve sets the stage for introspection and review. While you're busy reflecting on the year ending and making plans for the new one about to begin, make sure you take some time to consider your finances.  Preparing your End of Financial Year (EOFY) information often feels stressful—there are receipts to sort out and reports to review. You must ensure you have all the necessary information about your income and expenses. It can be overwhelming, and it can make the EOFY feel daunting. The end of the financial year isn't just a time to collect receipts and find invoices. It's also a time to reflect on how your past year went, what went well and what didn't, and what you can change for next year. Here are three tips to make the most of your end-of-financial year: 1. Consider redoing your files One of the most overwhelming parts of the end of the financial year is finding all the invoices, receipts, and reports you need to file your taxes correctly. Pay attention to how easy it was—or wasn't—to find what you needed this past year. Did you have to search 15 different places for all your receipts? Did you have a combination of online and physical invoices? Did you have clearly labeled folders for everything? Did you leave everything for the last minute? If you found yourself searching high and low for every piece of paper you needed, you might want to consider revising your paperwork, so it's easier and less time-consuming to manage. Can you keep track of everything through software and apps? Is there technology or equipment that can help you? Is it worth investing in a filing cabinet? The effort you put now into sorting your paperwork will pay off hugely every year when you can quickly and easily find all the information you need. Let's face it; you'll come up against the end of the financial year every year, so you may as well be systematic about it. 2. Reflect on your year The end of the financial year is a perfect time to reflect on how the past year went. Celebrate the big successes, but remember to focus on other victories. Even if you didn't meet your financial targets, did you survive a particularly tough year? Did you manage to pivot your construction business and try a new model? Did you take some risks and learn from them? Did you grow your business or expand your offerings? It's great to have goals for each year and celebrate when you achieve them, but it's also important to look at where things didn't go according to plan and how you grew from those situations. You may need to refine your business plan if you're not meeting your financial targets or rethink how you arrive at your goals in the first place. Do this before you start planning the year so you can revise your strategies in the future. 3. Plan for the future Now that you've reflected on what went well and what went sideways, you can better plan for next year. Research upcoming events and schedule your marketing calendar. Plan to address slow times or busy periods. If you didn't meet your financial targets last year, either change how you set your goals or your strategies for achieving them. Many retailers offer significant discounts at the end of the financial year. Does it make sense for you to make a purchase right now? Should you buy new equipment, technology, or other goods now? It may be worth it if you have the money to do so and need those items. Although the end of the financial year can feel stressful, it's also a fantastic time to reflect on the past year and celebrate your achievements. You can take the time to plan and incorporate the lessons you learned from the past year to make the upcoming year your most successful. If you made your goals, that's great! If they fell by the wayside, look at what you could have done differently. Or, take some time to set a more manageable goal to get that sense of accomplishment next December. Construction is a tricky business, and people's failure is common. Most of our clients and people who reached out have failed or come very close. Very close doesn't mean failure because it doesn't matter how many times you are knocked down; it only matters that you learn your lessons, get up and go again. This coming January, it's time to hit that reset button or, better yet, start again no matter what day of the month, no matter where you are in your construction company journey. I chat with contractors like you every day. You tell me your stories. About your challenges in running a business, keeping up with the bookwork (accounting and bookkeeping). About estimating and bidding jobs, doing the work and collections from clients, having (or not having) employees, and paying their taxes. Talk to your clients (or reach out to your previous ones) about their needs, too. Ask them how their habits have changed, what projects they're looking forward to this new year, and the challenges they're facing or, most likely, will need to address in the coming months - roof replacement, bathroom remodeling, renovation budget concerns. Construction is what makes civilization and a civilized society possible. Because of the commitment of people like you to step out of your comfort zone and start a construction company and work it, we owe you all an outstanding debt of gratitude. Thank you for working hard through these past few years when most of us are hunkered down, choosing to continue your service, and maintaining our homes, businesses, and community. May this New Year bring you joy, hope, prosperity, and love. About The Author: Sharie DeHart, QPA, is the co-founder of Business Consulting And 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 and 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 [email protected]  
12/30/202211 minutes, 20 seconds
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503: Reclaiming Your Time And Switching Off During The Holidays

This Podcast Is Episode Number 503, And It's About Reclaiming Your Time And Switching Off During The Holidays Small construction company owners like you already have a time-consuming and challenging job running your business. If you're working on weekdays, you usually need the weekend to catch up on paperwork, pay bills, and manage any tasks you didn't get to during the week.  But this weekend is Christmas, and with it comes time to relax, focus on family and friends and take stock of what is essential in life. Phone calls from employees dealing with a minor crisis will pull your focus from your family, or your Christmas dinner will be taken over by business talk. Like the merry bells of Christmas, your cell phone will constantly chime with the sounds of urgent text messages and emails that must be dealt with. Clients will need your attention. So, if you've been waiting for a sign or permission to pause, this post could be the one you're waiting for. It's easy to let the construction company take over your personal life, but as a small business owner, it's vital that you get some time away from work. Here are some tips for helping you switch off during the holidays. 1. Shut down entirely for the week If your business can be shut down for a week, consider closing from Christmas to New Year. Your employees will love the time off, and you won't be Small construction company owners like you already have a time-consuming and challenging job running your business. If you're working on weekdays, you usually need the weekend to catch up on paperwork, pay bills, and manage any tasks you didn't get to during the week.  But this weekend is Christmas, and with it comes time to relax, focus on family and friends and take stock of what is essential in life. Phone calls from employees dealing with a minor crisis will pull your focus from your family, or your Christmas dinner will be taken over by business talk. Like the merry bells of Christmas, your cell phone will constantly chime with the sounds of urgent text messages and emails that must be dealt with. Clients will need your attention. So, if you've been waiting for a sign or permission to pause, this post could be the one you're waiting for. It's easy to let the construction company take over your personal life, but as a small business owner, it's vital that you get some time away from work. Here are some tips for helping you switch off during the holidays. 1. Shut down entirely for the week If your business can be shut down for a week, consider closing from Christmas to New Year. Your employees will love the time off, and you won't be bothered by urgent texts about something that went wrong at the office. This time is generally not as productive for workers, as they all want to get home, be with loved ones, and celebrate the season. Just make sure you give your clients some notice that you're closing up. Good clients will respect your decision and even encourage it. 2. Have someone trained to deal with your absence A big headache for small business owners is constant calls from employees who can't carry out basic tasks or make decisions. If you plan on taking time off but are leaving the business open, have someone senior available to answer questions or take over duties other employees can't. Ensure employees are prepared for situations that could arise but can fix on their own. Can they use someone else's computer if theirs dies? If a client calls with a crisis, which staff members can handle each situation? Assign one or two people—not you—to contact people in case staff needs assistance and give those two people strict instructions about when they can contact you. You don't need phone calls on your days off because someone doesn't know how to work the coffee machine. 3. Resist the urge to plan meetings during this time When a client comes to you just before you take your days off and requests a meeting over the holidays, it can be difficult to resist that urge. That meeting, however, will take up time and space in your brain aside from the actual meeting time. You'll prepare for it, think about it, and plan what to say. If the meeting doesn't go well, it will affect the rest of your days off. Instead, push the meeting until after the holidays. Unless the situation is dire, an extra week won't hurt. Or ask another worker to attend the session for you. The key here is to delegate the tasks you don't need to do. As a construction business owner, you have regular duties that need to be done but could be better done by an expert. Doing them yourself takes up a ton of your time. Look at your tasks and determine which ones are eating up your valuable time. Virtual assistants can now be hired to handle general customer service on your behalf. Could you hire a bookkeeper? An accountant? Regardless of your current situation, if you need help, we can tailor a plan to fit your budget and your construction bookkeeping needs.  You will not know whether it is a good idea until we chat. One thing is for sure - hiring outside service providers costs money, but we are worth the expense when you consider the time and energy you'll save by not taking on that tedious bookkeeping tasks. Especially when you factor in the extra personal time you'll have. We have options for your business accounting, whether you would like to outsource or do it yourself. Let's figure out a way to free some of your time and get your life back, be with your family and loved ones, and increase your cash flow and earnings while improving your quality of life and relationships. Final thoughts If you're taking time over the holidays, really take time. Don't take time off but then spend that time constantly checking for work-related texts and emails or attending meetings. Put your cell phone away. Stop checking your email. Set an outgoing email that lets people know when you'll respond to their messages, and change your voicemail to note your days off. That way, you can rest, relax, and enjoy your break. Your overall well-being is necessary to you, your business, and your community. You'll need this time to restore your energy for January. I end this by wishing you a Merry Christmas and Best Wishes of Joy this Holiday Season. Enjoy. Be Glad. Be Joyful and maybe a little sad. But try to find something to be happy and grateful for each day. What matters most are our family, friends, and loved ones - those we celebrate with, those we can't be with, and those who are with us in spirit. About The Author: Sharie DeHart, QPA, is the co-founder of Business Consulting And 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 and 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 [email protected]    
12/23/20229 minutes, 48 seconds
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502: How To Prevent Your Construction Company's Yearly Cycle Of Chaos

This Podcast Is Episode Number 502, And It's About How To Prevent Your Construction Company's Yearly Cycle Of Chaos The year is almost over. Fourth-quarter and year-end deadlines are approaching. Most construction business owners who reach out to us describe this as their "Year End Madness" to prepare their documents for the tax accountant.  The end of the year tends to be chaotic for construction company owners, but it's an excellent time to get some extra housekeeping done for your business. If you're on QuickBooks, you can click the Help Menu; depending on the year and version you're using, you can access the Year-End Guide, which will show you how to wrap up your business year. It's not an easy process, but it's all worth it.  Why? Because tax preparers will take what you give them - they don't have the time, and it's much work that you've paid for, but a good tax preparer will know how much you can save if you can track your money. Bottomline - pay your taxes right, but it doesn't have to be more than what you owe. Since you have a few weeks left for December's statements, ensure everything from November back to January 1st is reconciled. Here are also a few things to catch up on: 1. Review your goals and Key Performance Indicators A lot has likely happened for your construction business over the previous 11 months. The end of the year is the perfect time to look back and see how your performance is stacked against your goals. Consider your KPIs and review how you did. Be honest with yourself. If you didn't make your goals, that's okay. Now you can look at what went wrong–or right–and adjust accordingly. Were there surprises that affected your business? Could you prepare more for slower times? Did you take on too much all at once? If you met or exceeded your goals, take some time to celebrate the achievements. 2. Review your business plan Seeing how reality compares to your original business plan is always surprising. Allow yourself to evaluate how you're doing and see if your construction business is becoming what you hoped it would. If it isn't, ask yourself if your goals and vision have changed or if you haven't been focused enough on them. It's okay to adapt your dream as your business evolves and you understand the market better, but make sure the change is one you intend to make, not one that's happened unconsciously. 3. Reconcile accounts receivable Unpaid invoices are often one of the biggest disruptors to cash flow. Check if you have any outstanding accounts and remind those clients to settle before the year ends. It also doesn't hurt to double-check if you have any amounts owing to your suppliers and pay those. 4. Catch up on expenses This is especially important if the end of the calendar year also marks the end of the tax year in your location (as I would like to remind our readers from outside North America), but it's a good practice for anyone. Ensure you've accounted for any eligible business expenses by year's end to stay up to date for tax season. 5. Verify vendor or client information You already know that your business has changed for the year. The same is true for all the other companies that you work with. Take some time to ensure you have their correct information and are aware of any changes to their business terms. 6. Review subscriptions It's easy to let subscriptions fly under the radar, but they quickly add up. Review your active subscriptions and cancel any that aren't relevant anymore. It's easy to get more money in your pocket, and it's fun to choose some new ones for the new year that better meet your needs. 7. Send out year-end letters Put together a year-end letter for customers or clients and another for employees. Let your clients know what you've been up to over the year, share some of your milestones, and let them know how much you appreciate their business. Highlight any community events that your business was a part of. It's an excellent way to stay in touch and keep yourself fresh in their mind for when they may need your services in the new year. Thank your employees for all their hard work over the year. Call attention to your successes and celebrate all that you've achieved. It's a great way to provide recognition and highlight the most important events of the year. 8. Consider end-of-year gifts or bonuses The end of the year is a terrific time to reward employees for a job well done. Even if you have an established bonus program, it's always nice to surprise employees with a gift. It's a personal way to say thank you and tell them how much you appreciate them. Final thoughts The end of the year is notoriously busy, and the holidays make it even harder to get things done. However, it's a great time to reflect on and celebrate your accomplishments. You'll be glad you did when the new year rolls around, and you feel like you've wrapped the year up in a bow – ready to take on the next one with a sense of renewal. If you are still asking yourself the $64,000 questions: What about this and that? Have I met my goals for this year? What should I do for the balance of this year? What are my plans for the start of next year? Should I start now? Should I wait? I can't decide! - It is time to start fixing those loose ends now! The reports are only as good as the data received. Contact me to discuss your needs. If you don't know the answers tell me as much as you can, and I will do my best to "fill in the blanks." About The Author: Sharie DeHart, QPA, is the co-founder of Business Consulting And 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 and 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 [email protected]    
12/16/202210 minutes, 57 seconds
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501: Key Drivers To Improve Construction Profitability And Cash Flow

This Podcast Is Episode Number 501, And It's About Key Drivers To Improve Construction Profitability And Cash Flow Enlightened contractors like you understand the value of developing your own unique Construction Contracting System, a collection of documented repeatable processes and operation manuals. The key is continuously refining your construction company's practices and procedures. Your office ensures your contracting company has a steady flow of projects. Proper accounting and bookkeeping develop timely financial reports to show which jobs are profitable so you can pursue more. Thus, you can focus more on the following: Acquiring the right clients Doing the project as close to on time and budget as possible Get job deposits and timely progress payments Follow-up with clients to monitor satisfaction and line up new projects Boost profitability by recognizing your key drivers Identifying the key drivers of your business is critical to boosting profitability. A key 'driver' significantly impacts your specific construction business's performance. A whole range of factors can affect the performance of every business. The secret is to focus on a handful of drivers that: Affect the performance of your business significantly Are measurable Can be compared to a benchmark, such as last year's figures or an industry average Can be acted upon Make use of benchmarking Use past figures as a benchmark for current performance. Figures for last year or last quarter provide hard facts and established patterns that expose potential problems and opportunities. Also, compare your construction business with other similar companies, especially competitors. Your accountant, bank manager, or industry association may be able to supply industry benchmarks. What are some of the key drivers in business? Critical drivers vary from business to business, and in construction businesses, they include: Sales lead in capital goods or service Market share where only the biggest will survive 'First-time fix' in a maintenance business Even direct competitors may have different drivers. A prime location is not a key driver for a floor installation business, but it is for a brick-and-mortar competitor that relies on a well-located retail store if they sell hardwood flooring and carpet and provide installation services. Some of the following drivers might be relevant to your business: 1. Converting leads into sales The number of leads (information requests or quotes given) provides early warning of any peaks or downturns in your sales. If you have an established leads-to-sales conversion ratio and know the size of an average sale, you can use the pace of leads to forecast sales. Monitoring sales figures can show:  - Which categories of products are selling well - What each salesperson has achieved - If lead conversion rates are improving - Keep your costs under control Maintaining a healthy gross profit margin is critical. If your gross margin percentage is falling, take swift corrective action. The causes could include higher input prices, a changing product mix, production inefficiencies, or excessive discounting. If you run a service business that bills out time, it can be helpful to treat consultants' salaries as a variable rather than overhead costs because this makes it easier to work out who is making you money. 2. Collecting receivables efficiently Your accounts receivable collection period (the number of days on average to collect customer payments) is an important driver to monitor. Try to improve your past performance and at least match the industry standard. If the standard is 35 days, and you take 45 days on average to receive customer payments, then improve your collection activities immediately. Bill promptly and highlight overdue payments for prompt action. The key is consistency – late payers should know that you'll unfailingly contact them. 3. Optimal inventory levels Your inventory turnover rate is the ratio of cost-of-sales to inventory. Most businesses aim for a high inventory turnover rate because it indicates an efficient use of capital resources. If the ratio decreases, find out why. For example, you may be overbuying or purchasing inventory you cannot sell. The more you can break down your inventory figures into separate product categories, the easier it will be to pinpoint problems. 4. Hours billed An interior designing firm had a disappointing level of monthly sales for years until the owners realized that hours billed per consultant per week was the key driver. Once they began monitoring this, they could see which consultants were earning the revenue. The firm could then target small and manageable improvements – such as billing 30 minutes more a day each. Attitudes changed overnight, and sales increased significantly. 5. Turning over staff A plumbing company recognized that staff turnover was their driver. A skilled plumber with sales experience was three times more productive than a new recruit. The recruitment and training process for new salespeople also significantly burdened the business. The plumbing company introduced a long-term incentive into salary packages to reduce staff turnover. It also introduced quarterly performance reviews. 6. Defective/Wrong goods A painting supply and service business found that the defect ratio was a driver. Defects or wrong paint color led to goods being returned, extra time wasted on rework, delays in payment, and lower profit for the business. The company reorganized the workforce into 'quality cells,' and productivity increased significantly. Identifying the five key drivers you need to focus on What key factors enable your small construction business to outperform its competitors? Try to identify the five key drivers you need to focus on. The questions you need to ask yourself are: What drives the sales figures? What drives the costs? What drives the cash flow? Final thoughts By optimizing these Key Drivers, successful contractors understand how and why the construction business cycle works. Cost is what you see; the profit potential is what you don't see. High-profit construction company owners focus on both and understand that "It Takes Money To Make Money." Next Steps: What gets measured gets managed. After learning your key drivers, it's time to understand your reports and use them to your advantage. {{cta('50be41f5-209e-4d3c-915e-b9df12ca6b69','justifycenter')}} Discover insightful lessons with actionable tips for your bookkeeping processes with our Five Key Performance Indicators online course. Get your reports done with our "Five At 5 For 5" approach and improved practices. About The Author: Sharie DeHart, QPA, is the co-founder of Business Consulting And 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 and 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 [email protected]
12/9/202212 minutes, 3 seconds
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500: Cost-Reduction Strategies For Construction Company Owners

This Podcast Is Episode Number 500, And It's About Cost-Reduction Strategies For Construction Company Owners Cutting costs can be a quick and easy way to improve the profitability of your construction business. Introducing cost-control measures can bring immediate savings and ensure you remain profitable in the long term. But cost-control measures must be carefully managed. Eliminating errant expenses is beneficial, but indiscriminate cost-cutting could lead to a drop in quality or poor morale if staff fear being made redundant or are not given the tools they need to do their job efficiently. This risk is heavily reduced by identifying where you can safely trim costs, setting clear cost-reduction targets, and researching any cost-saving initiatives before making changes to your contracting business. Planning for effective cost-control The first step towards reducing costs is identifying your major cost areas. These are likely to include: Production Purchasing Sales and marketing Financing Administration Facilities maintenance 1. Profit and Loss Start by assessing your profit and loss statement for the last six months and rank all your expenses from highest to lowest, working your way down the list and identifying areas where you can reduce costs. It's a good idea to first focus on identifying cost-saving measures in places where you'll see the most significant return. For example, it's wise to work toward saving 5% on a $200,000 expense rather than a slightly higher percentage on a lower-cost expense. 2. Try new ideas You might find it challenging to anticipate savings without implementing new systems and processes. Remember that any changes you make don't need to be permanent. If you aren't sure if a cost-saving measure is suitable for your business, consider trying it for a few months and then assessing the results. This way, you'll know the actual cost savings without committing long-term to new processes or changes. Any new processes or systems should be benchmarked and frequently revisited to ensure they are still suitable for your business. Consider asking staff for feedback around any changes to confirm that no hidden problems could cost you more than the cost-saving value. If you are in doubt about any potential changes, consider seeking professional advice from an accountant, industry association, or business mentor. 3. Quick savings You might be surprised that significant savings can be made without worrying about your quality and affecting performance. Here are the most popular ways to trim costs without making radical changes. Eliminate unnecessary costs – start with waste reduction, heating costs, and utility charges. Reduce inefficiency by identifying manual tasks that could be computerized or completed less frequently. Avoid frequent, small orders that cost more than larger orders and take additional time to complete. Reduce travel expenses by booking air travel earlier and using cheaper accommodations on business trips. Find alternatives to high-priced suppliers or negotiate better payment terms or discounts on purchased goods. Revise your credit policies to encourage prompt payment. Brainstorm immediate cost savings with your staff – they might have some valuable suggestions you may have overlooked. 4. Significant savings Once you have identified your major cost areas, you may want to investigate potential ways to save money by changing existing processes. Some of the most common opportunities are listed below, but before adopting any changes, you should be aware of any potential damage to your core business activities. Cut payroll costs by outsourcing non-essential activities. Redesign your existing processes to eliminate duplication and cut time wastage. Make use of current technology or the latest industry innovation. Agree to long-term supply contracts, or guarantee a minimum purchase amount to secure better terms. Trim back or revise your current product offering and remove poor-performing products. Form strategic alliances with other businesses to buy larger volumes. Consider subletting office space or relocating to a more cost-efficient location. There may also be other costs, such as long-term, fixed-rate business loans or fixed-price contracts for raw materials, that you may be able to reduce when these are up for renewal or tender. Pitfalls to avoid Reducing costs can have a negative effect, so you'll need to be sure that changes will not compromise your operational performance. Some common pitfalls include: Over-dependence on one supplier could put you at risk if your supplier fails. Reducing your marketing budget could affect your marketing strategy. Tighter control of business finances could leave you without a safety margin if cash flow becomes tight. Cutting short-term costs such as training, research, development, or advertising can lead to long-term weaknesses. Employee costs Reducing employee-related costs is generally risky and counterproductive in the long term. Reducing costs such as staff training or meeting times could lead to poor staff morale and reduced productivity. Making employees redundant could bring short-term costs and the risk of possible employment proceedings. It may also contribute to low morale. Changing an employee's terms and conditions can also create legal issues in some circumstances, so it's always a good idea to get expert advice before making a decision. These problems can be minimized by maintaining clear communication with employees. Introducing cost-saving through improved practices and procedures will require a degree of employee 'buy-in' so your employees know why you are making changes. Employees may need additional training and support over these periods. Next steps Schedule a staff meeting to review your costs and brainstorm possible saving measures. Commit to an ongoing cost-control and monitoring process (or delegate to key staff to manage the process). Ask your accountant to assist you with cost-saving initiatives or brainstorm ideas. Final thoughts Every small construction business owner knows how challenging it is to cut down expenses without somehow compromising internal or external quality. Regardless of your business's nature, the first step to reducing your overhead costs is to take the time to go through every single expense you have -assess which ones are necessary for your business to operate smoothly, what can be trimmed down, and what can be eliminated. It's important not to rest on your laurels. Continually thinking of ways to reduce your overheads is essential for a healthy cash flow, so conducting regular reviews of your business expenses should be a routine task. About The Author: Sharie DeHart, QPA, is the co-founder of Business Consulting And 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 and 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 [email protected]
12/2/202212 minutes, 27 seconds
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499: Construction Company Employee Vs. Contractor - What You Need To Know

This Podcast Is Episode Number 499, And It's About Construction Company Employee Vs. Contractor - What You Need To Know Depending on the nature of your construction business, you may have workers who are employees or contractors, or you may have both. Each has its merits, but it's important to review which are to meet your tax obligations. With so much discussion about employees, payroll, and payroll taxes, you may feel like missing out by not hiring many employees. The reality is that as a small business owner, you do not have to hire employees. To hire or not to hire employees is one of the few optional things where the business owner can choose, change their mind, and change direction as needed. When you have an employee, you must withhold income tax and report on additional benefits. Contractors generally look after their tax obligations. Is there another way? Yes - to outsource most of the mundane low-value tasks that take time away from what you are skilled in. As the owner, you can use that time to meet with clients, create estimates, collect money, pay bills, and have a little left over. It's against the law to treat an employee as a contractor. Significant penalties apply if you do, so it's essential to get it right. The simplest way to remember is: An employee works in your business and is part of your business. A contractor is running their own business. But how can you be sure that you've got an employee or a contractor on your hands, especially with remote work blurring the lines between employees and contractors? Does it come to the point that you should be hiring a worker as an employee when you thought they were a contractor? There are six factors to consider: 1. Ability to subcontract or delegate An employee is not able to subcontract or delegate the work. They must perform the outlined tasks themselves. If they can't do the work themselves for any reason, say a prolonged illness, and someone else does it, this is a substitution. Your business would then pay the other person to carry out those activities. A contractor can delegate the work as long as they're not obligated to do it themselves per the contract. If your contractor didn't work, they would arrange for another qualified person to do it. You would pay your contractor, who would then pay their subcontractor. 2. Basis of payment An employee is paid a set amount per period. The most obvious example would be an annual salary or hourly wage. Some employees are paid piece-work rates. They receive an amount per successful sale or per the number of pieces produced. A commission basis would be a price-per-item structure. A contractor, however, is paid an agreed-upon price in exchange for a predetermined result. Some contracts may specify the amount to be paid in increments as stages of the project are completed. But the key takeaway is that a contractor is paid when the agreed-upon result is achieved. 3. Equipment, tools, and other assets If your business is responsible for providing the equipment, tools, and other assets required to perform the job, that's characteristic of an employee. If the worker is providing these items, they are likely a contractor. 4. Commercial risks Employees do not bear the commercial risk and are not liable for correcting any defects in the work at their own expense. Instead, your business takes this responsibility. The worker will be paid for the time required to complete the task. A contractor assumes commercial risk. They are responsible for fixing any mistakes on their own time. Your business does not have to pay for any extra time taken or materials used unless otherwise specified in the contract. This additional work would fall under the umbrella of the terms set at the beginning of the project. 5. Control over the work Employees have to complete the work the way the employer specifies. What work is done, where it's done, how it's done, and when it's done are all up to the employer. The employee then completes the work as required. Contractors are not subject to the same rules. They decide when and how the work is done, so long as it meets the obligations laid out in the contract. For example, a contractor could work three 10-hour days rather than four 8-hour days to complete a job. 6. Independence An employee works within a business. They complete tasks as required until they leave the job. A contractor operates independently and may have other contracts with other companies. They can freely accept and refuse other work. Their obligation is complete when they deliver the specified outcome. Final thoughts Don't add staff just to have staff. Employees are expensive. In Washington State, it is mandatory to offer Family Leave and PTO. Family Leave is similar to State Unemployment which is calculated on gross wages. PTO (Personal Time Off) is at a rate of 1 hour per every 40 worked. The employee can use the time off anytime they want – no notice given) Other benefits may include paid vacation and holidays. Most construction company owners like you are doing what they can to survive and thrive in tough economic times, and we are here to support and hopefully help you stay out of trouble where we can. It can be confusing to determine between an employee and a contractor, but it's crucial that you do so to meet your tax obligations and play by the rules. Contact us to learn more about your tax obligations for employees and contractors. P.S. Here's a Promo Code that you can use in both our Fast Easy Accounting Store and Construction Accounting Academy for a 40% Discount: CONTRACTOR40 You can use it today, November 25, up to Sunday, November 27, 2022, at 11:59 PM. (Please note: Offer does not apply to Outsourced Accounting, Bookkeeping Review, or any Consultation and Training products; you can use it, however, to purchase any course or monthly subscription classes in Construction Accounting Academy). For questions, suggestions, or comments, email me at [email protected] or call me at 800-361-1770 or 206-361-3950. I look forward to helping you with your business goals. About The Author: Sharie DeHart, QPA, is the co-founder of Business Consulting And 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 and 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 [email protected]
11/25/202211 minutes, 22 seconds
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498: The Solution To Your Construction Company Equipment Dilemma

This Podcast Is Episode Number 498, And It's About The Solution To Your Construction Company Equipment Dilemma Is it time for your construction business to invest in some new equipment? And if so, is it a more brilliant business decision and cost-effective to rent or buy? Black Friday, followed by Cyber Monday, is coming. The real question is what equipment is on your business shopping list. It is all a question of your budget, income, cash flow, profit & loss, and taxes. Why you might need new equipment: The right equipment can enhance your processes, productivity, innovation capacity, and bottom line, but should you buy now or wait till a later date? A few reasons you might need to purchase new equipment now are because: - You have some big contracts coming up and need to increase production. - Your construction business is expanding at a fast rate. - You need to replace some aging equipment to maintain your business’s high standards and keep up with the competition. Evaluate your existing financial state It can be easy to get caught up in the growth of your business without putting the necessary time into assessing whether you’re financially ready to buy some more equipment. Try to look beyond your current situation to project your costs over the coming months or years (depending on whether you plan to hire or buy).  You can reduce the financial impact on your business by: Using financing to buy the equipment – you may even get lower rates than hiring the asset, and after you complete your payments, you’ll own it. Purchasing quality used equipment could be more cost-effective than renting over the long term. Examine your business as a whole Short-term purchases without long-term plans can be costly Consider these questions when drawing up plans to invest in more equipment: What effect will the new equipment have on your human resources? Will you need additional staff or relocate staff elsewhere throughout your business? Can the equipment you’re replacing be used elsewhere in your business? The length of the job or project A crucial deciding factor as to whether the right time to purchase more equipment is now is the length of an upcoming project (or the frequency of extra jobs coming up). Additional short-term work suggests hiring would be a better option. Likewise, if you need a highly specialized (and expensive) piece of equipment, it might be preferable to hire it. It makes more sense to buy for longer-term projects. Hire costs can add up quickly as a job gets delayed and pushes past its expected finish date. Usage and availability Knowing that the right equipment is available to your business whenever needed is a significant advantage. If anything unexpected happens with a job, you’ll have the necessary equipment to react and reschedule. Potential clients will also notice that you own the equipment necessary to complete their requests, helping develop trust with your business. When you decide whether to hire or buy, consider the risk of your preferred hire company not having the equipment you want when you need it. Deciding to hire or buy You can get the new equipment you need by renting (hiring) or buying. Each has advantages and disadvantages, so it’s worthwhile assessing your business’s current financial situation, its current capabilities, and its plans (for growth). Weigh up the pros If you choose to purchase new equipment, the advantages over hiring will include the following: Availability – you can be sure the equipment will be available when needed. Ownership – you own the equipment and can potentially get a return on it when you sell it. Additional financing – if using a loan to pay for your equipment, you might be able to get extra funding to cover transport, training, or installation. If you decide to rent the equipment, the pros include the following: Cost – smaller initial investment Maintenance – the lender, should handle insurance and maintenance. Technology – you can usually hire the latest equipment available and should be able to upgrade as your project progresses. Will renting make your life easier in the short run while you consider buying at a later date? Will buying now be more beneficial to your business over the longer term? On the accounting side: If you buy before - the end of the year – the Internal Revenue Code – Section 179 allows for accelerated depreciation. If your purchase is less than $500.00, it is always a qualified expense. The bigger stuff is Vehicles / Tools Mounted On A Trailer / Generator / Specialty Equipment. Depending on type - Life span and cost basis can trigger other tax reporting rules. Section 179 accelerated depreciation has been in place for many years. Three reasons the 179 accelerated depreciation went into effect: Stimulate the local economy – some purchases, such as QuickBooks, are purchased at local stores. Give the business a reason to grow and expand by adding new equipment and additional employees. Useful life ended long before the depreciation schedule ended years later. Everything comes back to two issues - Taxes and Cash Flow If you have the cash or can finance, do you need to buy a piece of equipment for the field? If you have the cash or can finance, do you need to buy a piece of equipment or software for the office? From an operations viewpoint - If you purchase either now, can you use it to make or save money? It’s easy to assume that the deduction will always be available. Congress decides what changes year over year in the details of the deductions. At one point (several years ago), vehicles over a certain weight (SUVs) had a cap on the depreciation deduction. They were considered luxury vehicles, and the extra features were unnecessary over the basic pickup truck. Summary A wheelbarrow and a shovel are cheaper but would a small Hitachi be more productive and cost less in the long run, which could give you more money to operate and grow your construction business?  Taking into account the points above, you’ll get a clearer idea about whether now is the right time for you to purchase more equipment, either with your capital or through financing, or whether it’s a better option to hire for the time being. Next steps Talk to your accountant to discuss the pros and cons of hiring and buying new equipment. Have a word with your bank manager about whether you can get funding to purchase the equipment your business needs. Reach out to me; I'm ready when you are. About The Author: Sharie DeHart, QPA, is the co-founder of Business Consulting And 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 and offers insights on managing the remaining cash flow to operate and grow their construction company sales and profits to put more money in the bank. Call 1-800-361-1770 or [email protected]
11/18/202211 minutes, 3 seconds
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497: A Guide To Construction Client Retention

This Podcast Is Episode Number 497, And It's About A Guide To Construction Client Retention Long-standing customers form the backbone of a robust and well-established business. Make it your mission to ensure that most of your current customers stay with your company for many years. Understanding the High-Profit Client Most of them have personality traits commonly known as drivers. Folks accustomed to getting things done quickly and efficiently do not mind paying professionals for servicing, repairing, remodeling, or building new construction projects related to their houses and commercial buildings. Why it's vital to keep existing customers Your current customers already have personal experiences dealing with your business and using its services. You won't need to spend much time, money, and energy convincing them to continue hiring you. You and your staff know your current clients well. They're likely to increase the amount (or the frequency) of their purchases and recommend your business to others if you: Solve their problems. Meet their needs. Exceed their expectations. According to the US Chartered Institute of Marketing, it costs between four and ten times more to win a new customer than to keep a current customer. Therefore, it's vital to implement outstanding client service to convert occasional customers into loyal, long-standing regulars. 1. Communicate consistently and manage expectations Let your clients know what they can expect from your business, including timescales. Ensure emails are clear Your loyal clients deserve communications that are more personal and less formal. Using impersonal emails for your more extensive email list is fine, but use more personal touches with your best customers. 2. Show your customers you appreciate them You can show your customers you appreciate them in many different ways, including: Thank them personally for hiring you. The more special your clients feel, the more likely they will hire you again. They'll appreciate your thoughtfulness and value your service. Offer your long-term customers bonuses for their loyalty. Giving them a voucher, so they save money the next time. Or a voucher for someone they know who needs your service. It's great to offer new customers rewards and incentives, but that leaves existing customers feeling ignored. 3. Develop customer service standards Develop customer service standards for your business. You could use some of the following guidelines for your business's customer service standards. Try to: Be polite, helpful, and friendly to your clients at all times. Respond to emails as quickly as possible, preferably within three hours but within a maximum of 24 hours. Listen carefully to questions and requests so that you can offer the most appropriate help or advice. Inform customers immediately if there's an unexpected delay in processing their requests or implementing change orders. Train your crew in customer service - everyone in your business who will contact customers should be trained in customer service. Use your business's customer service standards as a basis for your training. Ensure staff knows precisely what's expected of them when interacting with clients. 4. Deal with customer complaints effectively Regard each customer complaint as an opportunity rather than an annoyance. This allows you to handle the complaint satisfactorily. If a customer complains, it shows they still care. Steps to take when a customer complains Train your staff members to take several steps whenever a customer complains. They should: Listen carefully to what the customer is saying. Understand exactly what they're complaining about and why. Admit any mistakes that your business has made and apologize to the customer. Make amends quickly. If necessary, ask the customer what they would like you to do to remedy the situation. Promise to do better next time. Test and improve your business's customer service There are several ways to find out how well your staff is handling their customer service duties, including: Asking customers for feedback on how your business could improve its customer services. Inviting your staff to suggest how your business could treat its customers better. Use all these ideas to develop and extend your customer service skills. Ensure each employee has ongoing training. 5. Exceed customer expectations Ways you can exceed your customers' expectations include: Delivering an excellent product or service. You'll keep customers for life if you exceed their expectations. Responding quickly to all customer questions, requests, complaints, and other communications. Training all your staff in excellent customer service skills. Managing all aspects of a transaction efficiently, from the sale to the delivery to invoicing. Dealing with complaints quickly and effectively. Delivering on your promises. Never promise anything that your business can't provide. Final thoughts Build relationships with clients and take time to learn more about them. Recommend solutions that address their specific problems. Go the extra mile to show your customers they're important to you. Ask for their input, as well. They'll get to know your products and services and offer insights into what's working and what could be improved. If you engage them--and make changes based on their feedback--you'll develop a loyal customer base. Encouraging repeat customers makes solid business sense. It's far less expensive to keep an existing customer than to win a new customer. Recognize the value of your customer base and invest in building an exceptional customer experience that will ensure your customers return for many years to come. About The Author: Sharie DeHart, QPA, is the co-founder of Business Consulting And 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 and 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 [email protected]
11/11/202210 minutes, 28 seconds
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496: Managing Payment Terms For Your Construction Business Clients

This Podcast Is Episode Number 496, And It's About Managing Payment Terms For Your Construction Business Clients Getting paid correctly and on time by customers can be a constant frustration for business owners. Communicating your terms is the best way to ensure you aren't out of pocket – or are left chasing debtors. Investors, developers, and shrewd business people designed the most popular method - those who understand the concept of divide and conquer - it is when contractors get little or no down payment for a construction project, do all the work, including change orders, and then try to collect their money. What often happens is that contractors hate paperwork preferring to keep everything in their heads. Then when it comes time to collect their money, they have to re-sell the job and talk their customer into parting with their money. Contractors who finance working capital with their own money and whatever they can borrow will earn less profit and put themselves at a higher risk of failure than contractors who use Other People's Money (O.P.M.). The importance of setting your terms of payment Your payment terms let clients know when and how you expect to be paid. Setting your terms and letting your customers know your expectations gives you better control over your business and a valuable platform for resolving potential payment issues. Remove barriers to sale Setting payment terms shouldn't discourage regular or new customers from doing business with you – there are advantages to giving clients several options. Encourage clients to hire your services and remove barriers to the sale by making the purchase as easy as possible through a variety of ways to pay, including: Mobile payment options. Cash or check. Bank deposit. Online money transfers to your bank account Debit or credit card payment. Take the time to become familiar with all these options and their relative pros and cons. You might, for example, decide to accept only major credit cards, offer a discount for cash, or give your staff leeway to negotiate cash discounts if customers request this. Know your industry's norms It's worth researching your industry's generally accepted payment terms and terms competitors use. This doesn't mean you have to follow suit. You may be able to spot a gap or opportunity to be more flexible. The following examples could build a competitive edge: Feature more payment options than most competitors. Provide quicker and easier ways to pay. Offer a discount for cash deals that give you immediate cash flow and protect you from credit payment defaults. Offer longer payment terms in return for a slightly higher price. Investigate faster and more convenient ways to pay using the latest smartphone technology. Offer variations for payment There are numerous terms you can set out for your customers to pay. Sometimes it's best to use a method that works for you both. Payment in advance Some businesses, such as those operating over eBay or other auction sites, require payment in advance to protect against possible online fraud. Customers first pay the purchase price (including shipping costs). You then wait for the payment to clear before supplying your services. Although this might not work for your type of business, still be wary of relying on a bank deposit or email confirmation not sent directly from the depositing bank as proof of payment. Progress payments These can be useful when working on a lengthy project, such as building a house or a massive remodeling project. Progress payments serve two critical purposes: 1. They provide a regular cash flow to pay running costs. 2. They protect you against total loss if your client goes bust. Standard practice is to build progress payments into contracts based on measurable milestones. Early payment discounts Early payment discounts can encourage people to pay on time. They're more useful on higher-margin services as the deal will have less impact on your profits than thin-margin products. For example, if you offer clients 60 days of credit, consider a 5% discount for payment within 30 days. Some clients will try to claim discounts after the due date. If you don't stick to them, your customers won't either. It's in your interests to politely but firmly point out your terms of trade. Contracts and debit orders Businesses that offer regular services, such as plumbing maintenance, can benefit from offering customers a set annual (or longer) contract. The attraction for the customer is a price that's typically lower than paying for each visit or service. Requiring the client to set up a debit order eliminates time chasing payments. Spreading the cost over 12 monthly payments can also make it easier for them to manage their budgets. Meanwhile, your business benefits from a regular cash flow. Selling on credit Selling on credit terms can expose your business to delayed payments or outright loss, affecting your cash flow. Some rules to help you include: Developing or adapting a credit application form – your bank manager can help. Asking customers for business references and permission to do a credit check. Setting agreed on credit limits. Clarifying your payment terms – 30 days or 60 days are the most common. Explain any interest charges you'll impose on late payments. Getting your customer to sign acceptance of these conditions to prevent future arguments. Monitoring any overdue payments or orders that will breach agreed credit limits. Choosing your payment terms By now, you'll have a sure idea of payment terms that could suit your business. Run your choices past your accountant, bank manager, and lawyer for their input. Remember that your terms should attract clients, not turn them away. You might lose sales if you don't accept credit cards or add a surcharge for credit card payments. In this case, weigh the extra costs of accepting credit card payments against the business you might otherwise lose. It's your decision. Communicate your terms to customers Whatever your payment terms are, clearly communicate these in your terms of trade, website, and business materials. Final thoughts There are many accounting and invoicing software platforms and invoice templates out there that you can use. As a reminder, billing your clients depends on your signed contract, and sending invoices is based on this agreement's details. Again we recommend you hire a reasonable construction attorney and have that person write your contracts. Depending on your business needs, we can always help a little or a lot. About The Author: Sharie DeHart, QPA, is the co-founder of Business Consulting And 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 and offers insights on managing the remaining cash flow to operate and grow their construction company sales and profits to put more money in the bank. Call 1-800-361-1770 or [email protected]
11/4/202211 minutes, 39 seconds
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495: Common Construction Payroll Implementation Errors You Can Easily Avoid

This Podcast Is Episode Number 495, And It's About The Common Construction Payroll Implementation Errors You Can Easily Avoid   Small business owners spend an average of eight hours monthly performing payroll functions. That's 12 business days a year that could be spent generating sales, prospecting new business opportunities, improving products or services, or servicing customers. Upgrading or changing your payroll system comes with a ton of attractive benefits. Saving time and money, making everyone's account more manageable, and better integration are all excellent reasons to consider a change. But if the switch is mishandled, the results can be catastrophic and lead to long-lasting problems. Read on for tips on avoiding a disastrous payroll system migration. 1. Give the project the time it needs People may indeed enjoy coming to work. But for most people, earning money is the main reason they seek employment. Our jobs make the world go round and support our families and us so that we can afford everything else. Not getting paid, or getting paid incorrectly, is a massive problem for your employees. As a business owner, you want to ensure your employees are paid right and on time. This protects your business, but it also protects their happiness. Changing payroll systems is a huge undertaking. There are many moving parts and people who will be affected. Make sure to give this project the time and attention it deserves. Determine what will be necessary to make the transition, understand whom it affects, and communicate with everyone involved. The planning process is critical. Treat it as the foundation for making the switch, and the rest will fall into place. 2. Map out integrations All payroll software will do the basics, but that's just the beginning of your new system. Learn about what other software will integrate with your new platform. Do your research for what add-ons you will need, and build accordingly. Your new system will be able to connect with HR software, advanced accounting functions, time-tracking tools, and so much more. Envision what your complete system looks like and understand how to get it to all work together. When you have the complete picture from the planning stage, it will make the transition a lot smoother. 3. Adjust the platform to your needs The primary motivation for implementing a new payroll system is to make things easier. Yet, many businesses overlook the ways that their new technology can help. It's easy to lean on old methods for getting things done because they're familiar, but that would be a mistake when switching to a new payroll system. Make sure you know about and understand the features of your new platform. This is where the real-time, money, and energy savings will come in. Automate anything you can. When these tools prove their worth, your team will understand the reason for switching. 4. Don't bring over insufficient data When implementing or switching to a new system, take the opportunity to go over your incoming data. Yes, all of it. Get rid of what you don't need while keeping in mind what you have to keep on hand according to any relevant tax agencies. While payroll software is beneficial, it can only do so much. If you put insufficient data in, it will spit bad data out. Go over the information you're inputting with a fine-toothed comb to get the best result. 5. Test, test, test Before you officially implement anything, make sure to test it out. This phase is critical and is often overlooked. There's no quicker way to turn your staff off of something new than for it to work poorly or not right out of the gate. Take the time to test now and reap the benefits when you go live. A Better Approach If you think hiring a full-time in-house payroll staff is not practical, you can always come to us and let us take care of your payroll. Whether you need weekly, fortnightly, or monthly processing, our team is flexible enough to do it for you.  When contractors ask which payroll option we recommend, we often say Direct Deposit. As usual, the reasons are simple and related to our primary role as "Profit And Growth Specialists For Contractors" and our mission, which helps you - the people of the most significant industry on earth - the construction industry, to achieve your definition of success.  Option 1 - Paper check looks like the least expensive. Calculate payroll, handwrite or print a paycheck, and hand it to your employee. What is the first thing an employee does after getting a paper paycheck? They go to the bank, or the check cashing store and get cash! If they are paid for travel time to and from the job site, they will typically cash their paycheck to the job site or take a break as soon as the bank opens. Considering this scenario, there are three costs to consider:  #1 Travel Time - It will take ten minutes to detour to and from the bank or payday advance company, plus ten minutes inside the building. For example, you pay your employee $25.00 per hour, which means every ten minutes of doing personal business on company time costs you $5.94, multiplied by three equals $17.82. If your company earns 10% Net Profit, you need to sell another $178.20 worth of work to compensate for your loss. If there is more than one worker in the company vehicle, multiply everything by that number. #2 Cost Per Mile - To operate the company vehicle, which varies depending on the type of vehicles your company uses. Generally, the numbers range from $1.25 to $1.75 per mile. This considers Fuel + Insurance + Repairs + Maintenance + Registration + License divided by the number of miles driven. In this example, we estimate a three-mile detour at the middle range of $1.50 per mile = $4.50 #3 Delays On The Job - In construction, you deal with project-based systems, not operations or manufacturing-based operations. Every additional day you have to mobilize and de-mobilize costs you money. For example, if it takes (15) minutes for (4) workers to get set up in the morning and the same amount of time at night, your total costs could be $121.92. Total cost for paper checks - between $15.00 and $50.00 per employee. To get the actual results for your company, some analysis would need to be run, or you would look in your Business Process Management System (BPM) for the answers. Option 2 - Direct deposit could cost an additional $5.00 per payroll and $0.99 per deposit. Direct deposit drops into your employee's bank account one minute after midnight on the day payroll is due. Having a Professional Bookkeeper prepare the payroll is less with direct deposit because of the time saved in making and printing the paper checks, setting them aside for you to sign them, stuffing them in the envelopes, and taking time to pass them out. Option 3 - Debit Card is similar to a direct deposit. The difference is that the employee does not need a checking account. Final thoughts Deciding to change your payroll system is a big undertaking. But some planning and preparation can be a smooth and rewarding transition.  As payroll experts in the construction industry, we can keep your employees happy with timely and accurate wages, maintain tax compliance, and significantly ease your back office burden.  So get in touch with me today if you'd like to learn more about how we can help make payroll easier for you. Give yourself the peace of mind you deserve!   We help a little or a lot, depending on your needs. I look forward to being able to assist you with any option that best fits your company.  Please feel free to download all the Free Forms and Resources that you find useful for your business.   About The Author: Sharie DeHart, QPA, is the co-founder of Business Consulting And 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 and offers insights on managing the remaining cash flow to operate and grow their construction company sales and profits to put more money in the bank. Call 206-361-3950 or [email protected]
10/28/202213 minutes, 2 seconds
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0494: Five Signs You Need To Start Outsourcing Your Administrative Tasks

This Podcast Is Episode Number 494, And It's About The Five Signs You Need To Start Outsourcing Your Administrative Tasks When you start a small business, it's usually only you behind the whole operation. You wear many hats, from CEO to clean-up crew. As you pour your heart and soul into your business and it begins to grow, the amount of work involved grows. Because a small business focuses on survival, you pay much attention to the bottom line. This makes much sense, but it also leads to being seriously overworked. These days, contractors are under increased pressure to cut their prices to get enough work. And that means they need to reduce costs. New technologies and approaches in cloud computing for construction accounting give forward-thinking contractors a fantastic ability to get more for less -but in most cases, contractors' heads are still stuck in 1990, thinking they have to do everything themselves. There will inevitably come a time when you must consider letting go of some control and paying others to take some things off your plate. Here are five signs that it's time for you to start outsourcing tasks: 1. You're overwhelmed and stressed This one's a dead giveaway. If you find that there isn't enough time in the day, you're losing sleep, free time is a thing of the past, and you're not your usual self — you've reached burnout. This is not a sustainable place, and it would be wise to start offloading some activities ASAP. 2. You're spending time doing things you hate Nobody goes into business hoping to spend their days completing tasks they despise. It starts with a dream or an idea for how to make things better. Or even an idea for how to make more money. Whatever the reasons you had for starting your construction business, they likely did not include doing tedious chores that you don't enjoy. When you decide to outsource, start with functions that are eating up your time in an unenjoyable way. Once you let these go, you'll find your purpose renewed because you can focus on what you love about your business to begin with. 3. Quality of work has gone down When you're working hard and trying to manage all aspects of your business, it can be easy to miss this sign that you're not juggling it as well as you thought. The first signs often come from a client complaint, like delivering a lower-quality product or missing something in your services.  When the quality of your work declines, it's time to hire some help. If you do not satisfy your customers, your business will begin to suffer – and then you won't need the extra support because there won't be a business to run. 4. No time to grow If you want your construction company to grow, you need time to plan for it. If you're getting by and unable to plan your next steps, you need to outsource some tasks. When you find that you're barely holding it together to get everything done and there's no time for anything else, get help. No business gets to the next level by completing the bare minimum. 5. No personal time When your work life is taking over your personal life, it's time to enlist some help. It isn't sustainable to work so hard that you have no time for family, friends, or enjoyable pursuits. Did you get into business so you could work 16 hours a day, seven days a week? Probably not, but you may find yourself doing that for weeks and even months at a time. You might save a bit of money, but you will also exacerbate your stress and miss out on the enjoyable parts of life.  If that's the case, you're going to burn out. It's time to get some help.  Outsource Your Construction Bookkeeping Anything not related to your core construction business is an outsourcing candidate. When I say, "outsource your contractor's bookkeeping," I do not mean turn it all over to us or any other contractor's bookkeeping service because this never seems to work out well. No, I'm talking about outsourcing specific bookkeeping services related to data entry, bills, payroll processing, and preparing Quarterly Tax Returns. It is crucial that you keep control of your money. Outsourcing a contractor's bookkeeping is one of the ways to avoid bookkeeper embezzlement. Never, ever let an outsider pay the bills, print checks, and authorize payment for payroll or any tax payments. I suggest looking at every part of your internal contractor bookkeeping service and asking yourself a simple question: is this a unique and critical part of our construction company, and is it something that only we do? If so, it stays in-house and needs the brightest minds you have working on it. If not, it is a candidate for outsourcing, and you need to look at it more closely. Outsourcing a competent construction bookkeeper is a sound business decision as it gives you access to expertise and guidance you might not otherwise have, and it frees up your time and money to take advantage of other business opportunities.  Final thoughts As non-employee, we can give helpful, honest advice on improving your procedures and overall efficiency. Most employees want to fill their time and are resistant to change. Outsourcing your construction bookkeeping to us means you can pick and choose what services you want. We will work within your budget, so there are no surprises.  It's a problematic mindset shift for an entrepreneur who has spent all their time trying to save and earn as much as possible. But needing to outsource your tasks is a sign of success. When you take the leap and hire someone to share the burden, you will be pleasantly surprised by the many ways that it pays off. About The Author: Sharie DeHart, QPA, is the co-founder of Business Consulting And 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 and offers insights on managing the remaining cash flow to operate and grow their construction company sales and profits to put more money in the bank. Call 1-800-361-1770 or [email protected]
10/21/202210 minutes, 28 seconds
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493: Management Priorities For New And Experienced Construction Company Owners

This Podcast Is Episode Number 493, And It's About Management Priorities For New And Experienced Construction Company In the past, Construction Project Managers were laborers or served an apprenticeship in one of the skilled construction trades and were promoted to foreman. This meant many people were more comfortable in manual labor without management skills. And when "things" were put in charge of "people," the results were not usually favorable. Because of this, many construction companies failed and went out of business due to the Cost of Chaos in their businesses. And it is still happening today. In the late 20th century, construction and construction management were separated into individual disciplines, each with its methodologies, terms, and definitions. Project Management Institute developed a set of standards and guidelines, including a glossary of terms to make it possible for construction project managers worldwide to have a common language to communicate. In today's construction business world, there is a need for excellent project management. Highly skilled and qualified Construction Project Managers on your payroll can provide your company with another competitive advantage over your competition which could be like having a money tree in your backyard. As a result, you can put more money in the bank to operate and grow your construction business. Whether you just started your construction business and are a one-person company (just looking to hire a subcontractor for other parts of your project) or a weathered construction company owner looking to regain skills to operate your business confidently, it is essential to prioritize these management guidelines: 1. Put together a solid advisory team Starting a business and owning a construction business can be a lonely process, and thinking you can do it all yourself is the road to extra stress and pressure. Study successful business owners, and you'll find they have surrounded themselves with a strong group of advisers. A typical core team would include an accountant, a lawyer, a banker, and a mentor, such as an experienced business person you admire. You can then add experts who can give you quality advice on specialist areas where you may lack skills, such as finance, production, marketing, or technology. 2. Choose the proper business structure – with advice Should you start as a sole proprietor, a limited liability company, a partnership, or something else? Get advice, as each structure involves legal, regulatory, and tax issues. Think beyond this year. Which structure will carry the most credibility with customers? What's the best system for expanding the business or taking in partners? What form would best suit future investors? Think also of succession – one day, you will want to sell or pass on the business to family, staff, or an outside buyer. 3. Sort out all compliance requirements You don't want to be distracted by compliance issues once you're in business. List everything you need to sort out now, from health and safety issues to permits and consents required from Federal, State, or local authorities. If you're starting a business from home, do you need permission? Will your business involve hazardous activities, noise, or toxic chemicals? If so, what licenses do you need, and what health and safety measures do you need to take? What taxes do you have to pay, and when? What is a sound system for getting this done, so you don't miss any payments or incur penalties? Make a checklist and work systematically through it with help from your advisers. 4. Set up well-built systems Good business is all about substantial systems. To run your business well, you need efficient processes. Time spent setting up simple but effective systems will pay off handsomely. Think about everything from production and work processes to service and billing. With good strategies, you can: Run the business more efficiently and delegate more confidently. Deliver efficient and consistent quality in products, services, and customer delivery. Train new staff more quickly if they have clear operating manuals to follow. Delegate or take time off with more confidence that others can follow operating manuals. Add value to your business in the eyes of a future buyer. Build the foundation you will need to future-proof your business. 5. Develop good credit management You need a fast, efficient, consistent credit management process if you sell on credit. As a new business, you need the money owed to you as soon as possible to pay bills and lower your interest costs. Never let things slide, or some customers will treat you as a source of cheap finance. Key points: Check the credit standing of all new customers, even though you may be eager for their business. Make sure customers understand your terms of trade and sign an agreement with them. Set credit limits and a system to flag orders exceeding the agreed credit limit. Bill promptly and send statements out on time. Follow up on late payers immediately. Late payers must know you're always on their case. In order of effectivity, visit them, call them, or email them. 6. Deploy an exceptional accounting system You need timely information to make the right business decisions. Get help from your accountant to set up an easy-to-operate accounting system. A correctly set up construction accounting system should allow you to: Automatically download and categorize bank statement details, saving time and eliminating manual data entry errors. Generate instant profit and loss, budget, and other financial reports. View a quick dashboard summary of business performance. Bill customers, track payments, and flag overdue payments for your attention. Keep your cash flow position updated so you can update your forecasts. If you choose a cloud solution, you and your accountant get the added benefit of being able to access the information from any internet connection. 7. Identify and monitor your key drivers (KPIs) Some Key Performance Indicators (KPIs), such as gross profit and net profit margins, are common to all businesses. But each company also has KPIs specific to its types, such as production units for a manufacturer, conversion rate of visitors into sales for a retailer, or billable hours per week for a service business like yours. Get help from your financial advisor or accountant to identify the core drivers for your type of business. Then monitor them closely and set improvement goals. Monitoring your KPIs will help you grow your business and show other stakeholders, such as lenders and investors, that you have your finger on the living pulse of your business. 8. Build good relationships with stakeholders In addition to customers, lenders, investors, and suppliers are also important stakeholders in your business. Make a point of developing good relationships with all of them. As well as enhancing your business experience, good relationships will pay off handsomely in tough times. Paying suppliers on time will develop a relationship you can draw on later to negotiate more acceptable payment terms if times get tough. Showing you have good money skills and can forecast cash flow crunches well in advance will build the confidence of your lenders and investors. If necessary, learn what you don't know, such as financial management basics or construction bookkeeping and accounting. Final thoughts Too many construction businesses fail because the owner has not established efficient management systems. This typically happens because the construction company owner is so caught up in the day-to-day operations that the fundamentals of proper business management get forgotten. Often too, it must be said that the owner doesn't like bookkeeping or other administrative tasks, so these get put on the back burner. The whole point about putting in sound systems is that they free you to spend more time working ON your business, not in it. Having weak systems is the road to stress and burnout. On the other hand, solid business systems will enable you to work smarter, not harder.   We help a little or a lot, depending on your needs. I look forward to being able to assist you with any option that best fits your company.  Please feel free to download all the Free Forms and Resources that you find useful for your business.   About The Author: Sharie DeHart, QPA, is the co-founder of Business Consulting And 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 and offers insights on managing the remaining cash flow to operate and grow their construction company sales and profits to put more money in the bank. Call 206-361-3950 or [email protected]  
10/14/202213 minutes, 49 seconds
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492: Top Construction Company Marketing Blueprint

This Podcast Is Episode Number 492, And It's About The Top Construction Company Marketing Blueprint Construction contractors like you are primarily in the "Hurry Up" and "Wait" zone. Hurry up and answer the call from the customer.  Wait to make the appointment.  Hurry up and get to the job.  Wait for the customer to come home, to be available.  Hurry up and create the proposal.  Wait for a decision.  When the client says "Yes," it is - wait for the Job Deposit. Wait to Start The Job This Hurry Up and Wait for activity makes it hard for the contractor to schedule other jobs. Many contractors only hold a place open for the client once a job deposit has been received.  Unless your construction company has lots of work stacked up, there will be times when there is nothing to do, and that is the best time to think about Strategic Marketing and following the adage: "Dig your well before you are thirsty" You won't build a loyal client base if you can't earn your visitors' trust, which is why companies value social proof highly. Proving your construction business's value online takes a unique skill set, but boosting it during your downtime is a great practice.  While waiting for something to happen, here are a few strategies that can help you generate leads: 1. Build credibility quickly Just started? Why should people hire a new business? Your first challenge is quickly overcoming their doubts by building trust and credibility. Some tips: Promote your skills and experience, plus those of your staff and associates. Join your industry or professional organization and start building a profile. Commission a writer to produce articles using your ideas. Feature customer feedback and projects completed on your website. Gain a market foothold by offering a service or product at less than full price in return for an endorsement you can use. (Regard this as an advertising expense.)   2. Focus on solving pain points Identify and then focus sharply on solving the customer's challenge, whether it is a problem, a desire, or a fear. Be specific and monetize your solution if possible. Try building a story around your service that the customer can relate to. For example, how much does double glazing save an average house in heating costs? Wrap the story of the saving around other payoffs, like a more comfortable and healthy living experience – warmer in winter, cooler in summer. Service businesses often have a reputation for being late. If you offer services, can you guarantee to arrive on time? Look for the 'hidden' pain points in your industry. 3. Promote your point of difference Boil down your client solutions into a compelling point of difference that will overcome customer hesitation. Refine this competitive advantage into a memorable slogan or a few short sentences at most. Run the result past your advisers and some small business owners. Once they approve, vigorously promote your point of difference on your website and in all your marketing material. Make sure staff can also confidently communicate it to customers. 4. Develop a strong website A website can be a powerful marketing tool. Some priorities: Make sure customers can find you. Get expert advice to improve your search engine ranking. Make the website fast and user-friendly. Get outsiders to test the site without prompting and fix what frustrates or baffles them. Include credibility-enhancing Frequently Asked Questions, Customer feedback, or Projects Completed sections. People often browse a website to build their confidence in your business before they buy. Include social media buttons to help readers spread the word. Encourage people to sign up for a newsletter in return for a discount or other incentives. Give people a reason to return by featuring hot deals and new information on the home page. 5. Use low-cost promotions first Try the low-cost tactics first. Direct mail and telemarketing can still be cost-effective for higher-priced services or products. Small-scale runs can give you an indication of demand and allow you to experiment with different options. Blogs and profiles on social media such as business-focused LinkedIn or people-focused Facebook and Twitter are valuable ways to develop conversations with customers or potential customers. If you are new to social media, research online etiquette first. 6. Start with a splash If you just started, can you come up with some newsworthy event or gimmick to launch your business with a splash? Study how other companies launch. Can you do better? If you can't afford to hire a PR firm, ask a retired journalist with media contacts to help you put together some press releases. The media are always hungry for good stories. Some innovative thinking can lead to free publicity in the local media. 7. Build a client database A good client database is worth gold. It is easier and cheaper to sell more to existing customers than it is to find new customers. Start capturing customer information (with their permission) from day one and decide what details you need to include to help you build repeat business. For example, you can record what customers hired you for, how much they spend, and when their purchases of services are likely to need renewal. Your database will help you build a complete profile of your customer types, so you can focus on finding more people like your best clients. 8. Network vigorously Business is all about people. The more people you know, the better, so try to get out there and meet others in the community. Join your industry or professional association and local organization such as small business networks, the chamber of commerce, and community groups. We are highly recommended by locals here. 9. Focus on referrals Word-of-mouth referrals are the most cost-effective way of gaining new customers because you don't have to spend anything on advertising or marketing. Research has repeatedly shown that referrals have a higher conversion rate (inquiries to sales) and spend more than other customers. People have more confidence in a business recommended by friends or colleagues. Referrals will happen naturally if you provide excellent service and good value, but you can improve your referral rate through an active program of incentives. 10. Measure to improve Give preference to marketing you can measure to avoid the mistake of many businesses who don't measure marketing results. You may be talked into some radio or newspaper ads, but if you don't measure what happens, you'll never know if your investment was wise or a waste. Measuring can be anything from adding a clip-out coupon or code to asking customers, 'By the way, how did you find out about us?' The results may surprise you but will also empower you to focus your marketing budget on what works. Final thoughts Focus on building and nurturing your construction business and personal relationships online, especially when you're in the "Hurry up" and "Wait" period. There are many things beyond our control, but Marketing your construction business, is one of the things we can take advantage of right now. About The Author: Sharie DeHart, QPA, is the co-founder of Business Consulting And 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 and offers insights on managing the remaining cash flow to operate and grow their construction company sales and profits to put more money in the bank. Call 1-800-361-1770 or [email protected]  
10/7/202212 minutes, 11 seconds
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491: What Sets Your Construction Company Apart

This Podcast Is Episode Number 491, And It's About What Sets Your Construction Company Apart Let me start by saying it's good if you have competition. Indeed, competition pushes you to be innovative. It also means there's an established community for your services. If no one else is offering the service, there's a chance there's no market for it.   But, have you always wondered how a small construction company like yours could stand out from the crowd and its competitors? Awareness of what others in your industry have developed and provided leads to a newfound motivation and belief in making an impactful difference, whether within your company or your community.     The key to benefitting from the competition is knowing how to take on competitors. You measure your share in the particular segment you operate in and obsess about your immediate competition, just as contractors who did not market effectively did years ago.   But first, you need to step back and ask yourself these three key questions and make sure you answer them in a way that will define and liberate your construction company at the same time. Ask Yourself: What am I offering? New construction, remodeling, or service and repair? Who is my competition? DIY, other contractors, money homeowners for a construction project? What is my fundamental competency - Residential, Commercial, or both? Challenging yourself is the key to answering these questions. Write your answers on paper or computer, sleep on them and then revisit them again and again until you get to the truth. Define The Type Of Contracting You Offer And Who Is Your Competition Be that homeowner doing a weekend project, Handyman Contractors, Remodel Contractors, Trade Contractors, and other contractors and House Builders. It may not be the same form, structure, and category that you operate. For example, Home Depot does not see itself competing in the building supply business but for a share of the home and commercial remodel and repair market. This approach and behavior across the organization, too, saw themselves as fighting for a share of the building supply market. Getting The Leads And Doing The Work Is Only Part Of The Answer Not answering them and acting on the knowledge is one reason many construction companies shrivel and die. They focus on the wrong areas to innovate or improve. They focus on the wrong enemy and threat. As a result, they miss what they could be doing to succeed and prosper over time. Here are three ways your small construction company can establish itself from competitors and stand out from the crowd: 1. Concentrate, then generate. What separates wealthy contractors from poor contractors? They concentrate then generate. Returning to the critical questions at the start, successful contractors know what type of contracting they are good at. SWOT Analysis is one tool used in strategic planning for construction companies to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in determining the particular target market. Concentrate Strengths - are projects that your construction company does exceptionally well and earns a higher than average gross margin that gives you an advantage over other contractors. What are they, and how can your construction contracting company expand on them? Weaknesses - are projects your construction company does poorly at and breaks even or loses money. What are they, and how can your construction contracting company turn them into strengths? Opportunities - are projects and markets not currently being served where your construction company can enter and turn them into strengths. Have you considered tapping into the "work-from-home" market during this time? Or commercial establishments looking to remodel to implement a better floor plan? Threats - are elements outside your construction company that could cause trouble for you or your construction projects. What are they, and how can your construction contracting company turn them into opportunities? A SWOT analysis will help you identify each of these characteristics for your business to understand better what you're doing well, what you could improve, and which external factors could affect your business. Generate Marketing is a science, not an art. Now that you've analyzed your SWOT, you laid the foundation by having a vision for what your Construction Company will be when you finish building it, you know who you are, and you know who your prime client is. You can quickly generate more leads than you can handle. 2. Give the client what they want and deliver an excellent service. There's room enough in most industries for competition. While it's a good idea to know who you're against, your clients are your priority. Focus your efforts on providing goods and services meaningful to them, addressing their pain points, and improving their lives. Market yourself to make those aspects clear. Show them why you're the ideal company to hire for their project.   Large businesses have weaknesses. The bigger they are, the less personalized and responsive their service is. They market themselves to a broader audience and have to bring in more clients to cover their costs because their overhead is higher.  In this respect, your size is an advantage. Fewer customers mean more personal service. That opportunity for relationship building will entice customers looking for extra attention.   Examine what people love about your competitors but also what frustrates them. Build your construction business to address those gaps. If you find that something isn't working with your customers early on, don't be afraid to shift. Be innovative in responding to market changes and client demands. You'll have an easier time making that change early than once you're more fully established.  3. Put together a stellar team. It is one thing to be a carpenter, plumber, electrician, framer, drywaller, painter, or any other master crafts person and quite another thing to own a construction company that performs those things while managing a business. Many small contractors have friends in the same trade and work well. Remember that being on your own is okay because employees are not required to succeed in this industry. You could also work well with a group of Trade Contractors and complete the work seamlessly as a team effort. On the other hand, you could be a one-person remodeler who may have unknowingly built a team by working with highly-skilled professionals. For instance, the person who did your company logo or the banker who helped you set up a business bank account—outsourcing a specialist to help you with the things you are not an expert on - like a Website/Social Media Manager to take care of your online presence does wonder for your Marketing without needing to hire in-house staff and do their payroll. Of course, a financial advisor or a construction accountant who has been where you want to go and can guide you will benefit your construction business. Optimize your time and skills by doing what you love and do best, and outsource the rest to operate better and grow your construction company. Final thoughts We are big fans of optimizing instead of maximizing. We've developed strategies that take the least amount of effort in the least amount of time possible. By taking advantage of existing knowledge from your competitors, you can improve and build upon these as they are relevant for you and your type of construction business. Knowing that you're different from what's already out there and why you are different makes you attractive to your target market. Be the contractor who will do whatever it takes to rise above owning a job and develop a construction business that will provide for themselves and their families for a lifetime. About The Author: Sharie DeHart, QPA, is the co-founder of Business Consulting And 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 and offers insights on managing the remaining cash flow to operate and grow their construction company sales and profits to put more money in the bank. Call 1-800-361-1770 or [email protected]
9/30/202213 minutes, 38 seconds
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490: How To Raise Your Prices: Value Over Price

This Podcast Is Episode Number 490, And It's About How To Raise Your Prices: Value Over Price As prices continue to rise, you've likely noticed that your cost of doing business has increased as well. After all, the main point of any business is to make money, and you can't do that if you're no longer breaking even.    It's inevitable in every industry – you must raise your prices to continue making a profit. Many factors decide how much to charge, all of which are dynamic. The rising cost of goods, inflation, and a changing market are just a few reasons why any small business has to reevaluate its rates regularly to stay competitive (and to stay in business).   If you're overworked and overbooked, you're undercharging. People know your worth and are fighting for your time. It's time to increase your prices!   Although there's a lot to consider when raising your rates, make a point to reevaluate every six months. Here are some tips on how to increase your prices and how to tell your customers.   Accept that you have to do it   It's a daunting task to consider raising your prices, as the danger of losing customers will be front of mind.   But the bottom line is this: you cannot deliver quality service if you're not charging enough. It's that simple.   If you're spinning your wheels trying to make up for the difference, you'll lose customers anyway. You won't be able to deliver the excellent service you're known for if you're constantly overworked trying to find profits elsewhere.    Raising your prices is part of doing business. It doesn't make good financial sense to swallow the cost to appease your customers. With that in mind, know that you're doing the right thing for yourself and your clients.   Understand what's costing you more   At least once per year, consider what your business costs. Check which products or services are making money and which aren't. Then take it a step further and pinpoint the breakeven position for each area.   You will then be able to decide how much more you need to make to be profitable and comfortable. Evaluate all avenues – supplies, staff wages, bills, rent and utilities, training, etc. Doing this regularly lets you see which areas cost you more over time. Those that cost you more will likely benefit from a price increase.    Decide your approach   A blanket increase would make sense if costs went up across the board. However, if you find that only some of your services now cost more to operate, it might be a good idea to increase only those prices. Your customers will appreciate only the necessary cost increases being passed on.   Gauge the satisfaction level of your current customers   If you know that your clients are happy and believe they're getting excellent service, they will be happy to continue paying for that. They won't bat an eye when you inform them of your increase.   But, if they're not currently satisfied, a price increase will be an excellent excuse for them to leave. This isn't necessarily a bad thing–some of the lost profits from those customers leaving will be made up by the price increase to other customers. And clients that aren't happy could become long-term headaches for your company.   Give a lot of warning   If you offer subscription programs (such as system inspections and routine maintenance for homeowners), email your client base three months before your planned increase to let them know your plans. State the reasons for you're raising your prices now.   Emphasize that this change is necessary to continue delivering the high-quality service they're used to. Giving enough notice to your clients, so they have time to react and prepare shows you respect them.   Send a personal message to long-time clients or ones that hold significant accounts. This shows them that you care about their reaction and gives you a chance to listen to their concerns.   Keep the communication lines clear   Most clients will be OK with your price increase. Some will likely have questions, concerns, or even complaints. Focus on answering their questions.   This isn't a hard sell – it's a discussion. Because you've done your research, your increase is completely justified. As you take the time to chat with your clients, they will come to understand this. Remember, you aren't asking their permission to increase your prices. You're letting them know of the decision to do so.    Communicate your value   Don't be shy about bringing up what you've delivered in the past. By reminding them of the great service you've provided already, they're likely to come around.   It's a great idea to provide options if they're still hesitant, but don't give away more than you can. For example, you could offer to keep their prices the same but trim the services included for that price. You can find a middle ground that works for both of you – alleviating their cost and your workload.   Final thoughts   Once you've researched and informed everyone, go ahead confidently with your price increase. You'll find that you can keep your customer base while keeping up with the increased cost of doing business. By doing so, you'll be able to continue providing your clients with excellent service.   If you're already in regular contact with your clients, the conversation around rising prices will be much less awkward. Remember, the price is how much your clients are paying for your service, but the value has no monetary measurement; it's what the consumer believes your services are worth, and you are worth it. Contractors like you deserve to be wealthy because you bring value to other people's lives. About The Author: Sharie DeHart, QPA is the co-founder of Business Consulting And 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 and offers insights on how to manage 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 [email protected]
9/23/202210 minutes, 37 seconds
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489: Construction Company Employee Compensation And A Note On Taxes

This Podcast Is Episode Number 489, And It's About Construction Company Employee Compensation And A Note On Taxes There are a few different methods that employers use to pay their employees, and while they may have similarities, they each also have implications for your construction business and employees. On top of that, there may be a blended model at play, in which you offer two types of compensation at once, such as a wage and bonuses.    When paying employees, laws and the IRS have made the payroll function a time-consuming nightmare for the small business owner.   Small business owners spend an average of eight hours monthly performing payroll functions. That's 12 full business days a year that could be spent generating sales, prospecting for new business opportunities, improving products or services, or servicing customers.   How you pay your construction employees will impact your finances and your reporting requirements. Read on to learn the differences between the main ways of earning money in the workplace. Wages Most entry-level positions offer an hourly wage in exchange for work. An hourly wage might be $20. So if the employee works 8 hours that day, they would be compensated $160 for that day. The minimums set by law vary depending on where the business operates. Typically, the minimum wage is directly related to the cost of living in that area.  Generally, a set number of hours can be worked in a week, and working beyond that maximum entitles the employee to a higher pay rate. There may be premiums associated with working undesirable shifts or an even higher pay rate that employees are entitled to for working on holidays. Because of the number of hours worked, the specific days worked, and overtime, the amount an employee will potentially earn each year can vary widely when paid with hourly wages. Salary A salary is the standard compensation for management and upper-level positions. It is an agreed-upon annual total, where a certain number of hours worked per week is expected – typically 35 to 40. Other requirements will be outlined, such as how many days per week are expected. Depending on the schedule, the total salary is divided into equal payments for each pay period. Often, compensation is agreed to as an annual figure, with each paycheck equally divided by the number of payments. If you pay an employee a salary of $60,000 yearly once a month over 12 months, you will pay $5,000 each, not accounting for any deductions. How a company manages its payment schedule will vary from company to company. Other pay, such as overtime, commissions, or bonuses, are separate from salary. Many companies don't offer overtime pay for extra hours worked, but they may offer commissions or bonuses for performance. Commission This is a form of compensation that is based on performance. The amount an employee receives can vary drastically, depending on how well they perform in a pay period. The commission is typically a calculated percentage of goods or services sold. It is meant as an incentive to drive employees to make sales. For example, you may offer to pay $100 as a commission for each deal closed. An employee selling ten service subscriptions in the pay period would receive a $1,000 commission.  All earnings made by commission are counted as taxable income. Some salaried or hourly positions offer a commission on top of regular earnings. However, some positions, especially those in sales, can be based solely upon commission. This means that employees don't get paid if they don't sell anything. Bonuses A bonus is a compensation type that is not guaranteed. It is usually tied to some company goal, driven by sales or performance. A bonus might be awarded individually or to a team or other work group. The idea behind a bonus is to create an incentive to meet a specific goal. It is rewarded when the goal has been reached or evaluated at particular times. Bonuses are offered on top of a wage, salary, or commission.  Because of the unofficial structure, bonuses are loved by some and loathed by others. It can be motivating to receive a bonus, as it's completely separate from what an employee already earns. However, it can also leave employees feeling disgruntled if they feel they weren't supported well enough to reach the goal and missed out on the bonus. If the goals are unrealistic, employees may also struggle with motivation even if they are offered a bonus.  Some construction company owners usually decide by the end of the year if their employees deserve a Holiday or Year-End Bonus.  The key questions to ask yourself: Can I afford to give a bonus? Can I afford to provide a reward for my employees? Do I want to give a bonus to each of my employees? How do I decide how much Bonus I should give? Reality Check: Is bonus taxable? Starting with the last question: In most cases, it may be taxable. All income is subject to State, Federal Payroll Taxes and is part of the employee's W-2. All forms of income, including bonuses, are income to your employee.  The most common is to give your employee a set amount known as a 'Net Check". It would not seem the same to say, "here is your bonus for $200.00," but the actual check received is $169.04. Your employee will think you are tacky and cheap, and you can afford to give them a Big Bonus.  Instead, you give the employee a check for $200.00, and the company pays all the payroll taxes. The bonus value is much higher when a check is grossed up (meaning you, the employer, pay all the taxes, company half, employee half of Social Security, Medicare, Federal Withholding, State, and Local Taxes). Final Thoughts We know that when it comes to compensation and payroll service, no one size fits all. Whatever payment structure your construction company follows, ensure you are consistent and fair as an employer and obey all applicable laws. We offer payroll solutions that meet your business's needs and enable you to spend time doing what you do best - running your company. As we have been where you are now, we know that as construction business owners, you are selling your time first and your skill second. Your time as the contractor is the most valuable, so I hope you are doing tasks that only you can do. Contact us to learn more about different forms of compensation and what they mean for your bottom line. About The Author: Sharie DeHart, QPA is the co-founder of Business Consulting And 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 and offers insights on how to manage 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 [email protected]  
9/16/202211 minutes, 58 seconds
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488: Ways To Get Rid Of Construction Accounting And Bookkeeping Confusions

This Podcast Is Episode Number 488, And It's About Ways To Get Rid Of Construction Accounting And Bookkeeping Confusions Doing something different is hard. Do you feel like everyone else is the most brilliant person in the room, and you just don't get it? Getting into a rut and repeatedly doing the same things is easy.   If those things work, then yes, continue to do them repeatedly. The problem is when something is not working, and you continue down the same path expecting a different result. The opposite of too much change can create another form of chaos. How do you know what is broken if you change a zillion things all at once?   Looking for ways to make your job easier is the goal of all construction contractors. The last thing you want to hear from your staff or a trade contractor is, "Do you want me to do that over?" Your answer is "No!" (thundered, with many extra words). What you expected was that your staff did it correctly the first time.   In accounting, the first piece of the confusion comes from Construction Accounting Vs. Regular Accounting. Not everyone knows what construction accounting is, and easy to assume all accounting is the same. Why is there confusion? From a tax standpoint, most construction projects are all lumped together, and after the Cost of Good Sold, Expenses, and Depreciation, you either made money or didn't. The Tax Accountant rolls up the numbers to compete for the annual tax return. Therefore, if the information is not needed to be broken down for taxes, then the Tax Accountant is not concerned. As the Construction Contractor paying the bills, you are constantly concerned about which jobs are "Making Money or Losing Money." "Why does it seem like I am watching the money fly by and zooming out of my checking account? It never seems like there is any money left over!" Second, confusion always comes about the material. A construction contractor may purchase material and resell it to their customer. Thereby thinking it is a reimbursable expense. (You lose money when doing this).  Remember all invoices to the Customer (Retail, General Contractor, Spec Builder, Developer) are income. Every line item on a customer invoice is All INCOME. If the words are on the invoice, then the invoice is either taxable or non-taxable based on other factors. Washington State, for instance, has a clear explanation.  Purchases for the material are Cost of Goods Sold or are expenses if you are short-cutting your accounting. I have seen financial statements that are backed out because they will reflect reimbursable income as a negative number and thereby show it as a deduction. (The net effect is double dipping on the expense side) The cause is the accounting software not correctly set up.  New Construction Home Building is another area of confusion. In the mind of many construction contractors, a Spec home is any new house being built for resale. That is true; it is a New Construction House. It is a Spec Home for the Owner and Developer (who might be the General Contractor running the job). The question is on the construction accounting side.  The question to be answered is "Who owns the house?" - It is a Spec House in the accounting system for the owner. For the General Contractor who is building a New Construction Home for a Developer, it is NOT a Spec Home. Why might it seem the same as both are New Construction Houses?    If the General Contractor Does Not Own the house, then from an accounting side for that specific General Contractor, the house is a Custom Home with an owner who is not The General Contractor.  Recognize expenses when the house sells. If the General Contractor, Developer Owns the new House being built, then it is a Spec House in the Accounting System. All costs roll up into WIP (Work-In-Process) and convert to COGS when the house is sold, not before. Otherwise, expenses one year; sales the next equals taxes.   In Washington State:  All Construction Contractors working for a Spec Builder must collect sales tax on all services (labor and material) when billed from the General and Trade Construction Contractors. All Construction Contractors working on Custom homes, Residential or Commercial Projects, Large or Small Remodels, and Handyman Projects can accept reseller permits from the General Contractor. Sales Tax is billed and collected from the Owner by the General Contractor.  Contractors must collect sales tax on all retail projects, including Labor, Materials, Other. Sales tax must be collected on every line item. Customer Discounts can be given for any reason. Fix the giant boulders one at a time. Get that one thing working, then move on to the next one. What is the most annoying thing you can quickly fix? We talk about accounting because that is our primary focus. Start with the basics: Open a business checking account. Use a dedicated credit card for the business (if using a personal card). Create invoices, present them to your customer, collect the money and get it in the bank (Do you have an easy way for your clients to pay you?). Collect the money ASAP because, without cash flow, you are out of business. No - the company with the most Accounts Receivable or Accounts Payable does not win a prize. Accounts Receivable means your customers owe you money. Accounts Payable means you owe money to your suppliers. Net Profit is the money left over. You want lots of Net Profit! You are not a banker! Stop borrowing money using your credit cards, Loans, and Lines of Credit, then finance customers' projects at 0% interest. Final thoughts Money makes the business world go round. Unless you provide a service that others are willing to pay for, you will not collect money to use for goods and services you want. It costs you money when you have uncollected Accounts Receivable. A grocery store will not let you run a tab or give them an IOU for milk. Fast Easy Accounting does the bookkeeping, accounting, and payroll and offers business coaching for small, brand-new Construction Contractors, General Contractors, Trade Contractors, and Handymen across the USA, including Alaska and Hawaii. Do the parts only you can do; leave the rest to us.  You are never too small for us to help, and we can help to begin with your first day in business. We are looking forward to being of assistance. Schedule your free consultation here. About The Author: Sharie DeHart, QPA is the co-founder of Business Consulting And 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 and 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 [email protected]  
9/9/202212 minutes, 47 seconds
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487: Five Effective Ways To Retain Employees And Keep Your Company Healthy

This Podcast Is Episode Number 487, And It's About Five Effective Ways To Retain Employees And Keep Your Company Healthy Traditionally, employers have relied on giving employees raises to retain their staff and reward them for being hard-working and loyal. Raises can get expensive, and there is often an upper limit for what you can offer regarding increasing salaries and wages.   Keeping your employees happy makes business sense. You want to keep your good employees, and it costs money to find, hire and train new staff. Beyond that, satisfied employees who feel valued are more motivated and productive.   Here are some ways to keep your employees happy that don't rely on higher salaries.   1. Pay for professional development Good employees want to improve their skills and grow professionally. Often, other priorities get in the way of upgrading skills. Paying for professional development, for example, by having a fund people can access or by bringing in experts to run workshops, shows your staff you care enough to invest in them. Meanwhile, your construction business benefits by having staff trained on the newest procedures and technologies. An employee's development plan is an action plan that focuses on helping staff improve their knowledge, capabilities, and skills in areas related to your business. Creating such plans shows your staff you're invested in their future, which increases employee satisfaction. It helps them understand their role and gives them a framework for expanding their talents. It enables you to develop your staff, promoting from within and encouraging your employees to grow with your construction company. 2. Encourage work-life balance Employees want a fulfilling life, but finding a balance between work and home isn't easy. Having an employer that encourages a work-life balance makes it more accessible. Avoid messaging (texting, phoning, or emailing) employees after work hours and clarify that people should enjoy their personal time. Encourage employees to take their sick leave and use their vacation days. Be a role model by striving for work-life balance yourself. 3. Be transparent Being open and honest with your workers fosters a sense of trust and belonging among your staff. Have regular meetings where you discuss your organization's goals, strengths, and challenges and receive input and feedback from your team. This encourages engagement and shows your workers that their perspective is valuable. 4. Having a set of values that applies to your staff Sometimes organizations create noble values that they apply to their customers but don't apply to their workers. Employees see clients and customers being treated well but then wonder why those values don't apply to them. Create a set of values that applies to your staff. Set out how you want your team to feel. Do you want them to feel valued? Supported? What does that look like in your organization? 5. Ask your staff what they need It's challenging to come up with solutions that everyone will find meaningful. Ask your staff what would be valuable to them–and what would make them happy enough to stay. For example, they may be pleased with additional vacation days or more banked sick time. Listen to their suggestions and consider whether any options they mention could work for your organization. Final thoughts Nobody likes to feel like a cog in the machine. Anything could be going on behind closed doors. There are, of course, expectations to meet in every job. However, employers would do well to remember that everyone working for them has an entire life outside the company. A construction company that supports and shows compassion to its contractors is likelier to keep the good ones from burning out. While increasing salary is one thing you can do to keep your employees happy, there are other things they may value that you can offer. Employee development plans are a great way to invest in your employees, keep them motivated, and help them acquire new skills that will help them in their careers. It also enables you to promote from within your construction company, saving you time and money in the long run.  About The Author: Sharie DeHart, QPA is the co-founder of Business Consulting And 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 and offers insights on managing the remaining cash flow to operate and grow their construction company sales and profits to put more money in the bank. Call 1-800-361-1770 or [email protected]
9/2/20228 minutes, 31 seconds
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486: Are You Charging Enough? Why You Should Raise Your Prices

This Podcast Is Episode Number 486, And It's About Are You Charging Enough? Why You Should Raise Your Prices There comes a time for every small business to raise its prices. While it may seem scary, remember that it's your job to keep costs fair for you and your customers. That means you have to charge prices that work for you and allow you to remain in business.  Am I Not Charging Enough? Knowledge leads to profits and cash flow. What makes knowledge powerful? Use of knowledge. In this cutthroat construction industry, you may not be able to outgrow your competition forever, but you can always outlearn them. Knowing The 80/20 Rule For Construction Contractors will surely help: 20% of your customers typically generate 80% of your net profit  20% of the goods or services you sell contribute 80% of your revenue 20% or 2 out of 10 of your staff create 80% of the value for your customers The frightening consequence of the 80/20 rule is that 8 out of 10 hours we spend at work drive almost no value to the bottom line, and the most significant drain is trying to save money doing our contractor bookkeeping instead of reviewing the Key Performance Indicator (KPI) Reports.  The essential value good bookkeeping brings to a business is an understanding of where your 20% is hidden.  By generating daily reports that uncover the best clients, jobs, services, or products, you will soon see how you can refocus your internal efforts on doing more good work. You could be asking the same question and still looking for reasons why you should raise your prices: 1. Your costs have grown The thing about inflation is that everyone will feel the pinch – including you. If your construction business supplies are now more costly, you must pass those costs on. Otherwise, you're losing money, and your business will be on the hook.  Nobody likes raising prices on their customers, but it's a necessity. You have to be able to cover your costs and continue supplying your customers with what they expect. 2. You're too busy If you find that you're consistently booked 10-14 days out, it's a sign that you're delivering good value for money. People know your worth and are fighting for your time. That's great! But it also means that your service-based business has evolved. This tells you that your customers are satisfied. And if they're happy, they'll likely spend more on your services. You may lose some clients in the process, and that's okay. You're now attracting higher-quality clients who know your value and are glad to pay more. Beware of getting carried away, however. If you raise your prices by too much too fast, without adding any value, you'll find yourself in trouble. As your skills improve, you'll automatically provide more value for money. This is when raising your prices is justified and will be met with acceptance. 3. Enough time has passed Even without adding more value or skills, raising your prices is okay. It's recommended. A good general rule of thumb is to increase your costs by 5-10% every year and a half or so. This may sound like a lot, but consider that the average inflation rate falls within this bracket. If you don't raise your rates and the cost of your supplies hasn't gone down, you're losing money. 4. Your competitors are doing it Yes, it feels great to offer your customers a fantastic deal. But don't be the one left with rock bottom prices when your peers have all raised theirs. This translates into you working harder to earn the same amount of money. Be aware of what's going on in your industry and adjust. Customers judge a business based on perceived value. If you're at the bottom of the pack price-wise, they're likely to skip over you to get a good deal. Price yourself accordingly to attract quality clients. 5. You've become more valuable You gain more skills, experience, and knowledge as you work in your field. This translates to more value. If your business is better than it was a year ago, it's time to charge accordingly. Don't undervalue yourself. Customers often understand that you're more skillful and are glad to pay for your extra expertise. 6. You're trying to rebrand or reposition your service There may come a time when you want to attract more high-quality, higher-paying clients. This rebranding is meant to raise the perceived value and the prices along with it. One of the most prominent examples where you see this is in the restaurant industry. As a place becomes more sought after, you'll notice that they change the menu to make the descriptions more detailed. Maybe a popular item will change its name to make it sound fancier. But one thing's certain – the price tag will have gone up. Final thoughts There are many reasons why raising your prices is a good idea. It's just good business sense. Likely you're experiencing a combination of the reasons listed above. Whatever the case, ensure you do your research and review your prices often to make sure you position your business correctly. As contractors like you move away from gut-level decisions and begin relying on their construction accounting systems to provide valuable financial and job costing reports, it's time you open a treasure chest busting at the seams with helpful information which can lead you to earn massive profits and by extension increase your wealth exponentially. Now, the power lies within you and what you can do with your knowledge.  About The Author: Sharie DeHart, QPA is the co-founder of Business Consulting And 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 and offers insights on how to manage 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 [email protected]  
8/26/202210 minutes, 30 seconds
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485: Six Tips To Respond Effectively To Construction Client Complaints

This Podcast Is Episode Number 485, And It's About Six Tips To Respond Effectively To Construction Client Complaints Complaints are an unfortunate part of running a business, but they happen. No matter how hard you work to please your clients, eventually, someone will have something negative to say. However, with the right approach, you can turn complaints into a valuable tool to strengthen your business.   When reviews are great, that's a fantastic thing. But unfortunately, when you get negative ones, you have to adjust. You can't please all customers all the time.   Here are six tips for effectively responding to complaints: 1. Remember that this is not an argument The reason that a client complains is a disappointment. It's a symptom of a need that wasn't met. They are not looking to fight with you. Taking the time to complain signals that they wish to continue the relationship. Don't muck it up by getting into a defensive, back-and-forth argument. Nobody wins in that scenario. Your client is allowing you to continue working together. It's tough to keep calm when someone comes in hot with a complaint but remember: feedback is a gift. It just may not feel like it at the moment. 2. Listen The key here is to put explanations aside. Listen until the client has said everything on their mind. Don't start thinking of how to respond while they are still speaking – they'll see your eyes glaze over the moment you do, and that will make matters worse. If it's a written complaint, read it over a few times to make sure you're not inserting a tone or accusation that may not be there. You want and need to understand the complaint. Without this information, you can't move forward in any meaningful way. The moment for explanations and solutions will come. Take this time to really set everything else aside and just listen. 3. Repeat what you heard It's essential to give the information back to the customer to ensure you're on the same page. Make sure you understand the complaint by saying it in your own words. A lot can get lost in translation, so let them know that you hear them. This lets both of you know that you hear and understand the problem. Once they acknowledge that you've got it right, you'll be able to get to a solution. 4. Acknowledge Forget for a moment that you're defending your construction business. Try to imagine how it would feel to be the one making the complaint. You should be able to identify what need wasn't met or how you disappointed them. When you put yourself in their shoes, it becomes clear what solution you expect. You will also be able to see where you fell short and how you can avoid doing that to others in the future. 5. Offer a solution After the work you've done to understand the problem, finding a solution will be the easiest. You know what you'd expect as a customer and what you can offer as a business. This information will create a solution that makes both parties feel good. Let them know sincerely that you want to make it right. After all, this is your business, and reviews spread faster and further when they're negative. But, when a company goes out of its way to fix a problem, people enthusiastically let others know about it.  6. Follow up This may be the most critical step and is also often overlooked. After some time, follow up personally. This shows your client that you care about the outcome and want to ensure they're doing well with the solution. They will remember the time and attention you put into ensuring they were satisfied. They will also likely come back with more business and refer you to others. It doesn't take long, but the effort goes a long way. Likewise, if you receive a bad online review, don't panic. A bad review or two isn't likely to ruin your reputation. On the contrary, a few negative reviews can help you gain trust with potential clients. In addition, you can use the situation to build confidence in your business by being responsive, transparent, and honest. Many prospective clients will look past a few negative reviews if you have more favorable ones. So ensure you consistently provide quality services and encourage happy clients to post a good business reviews. If possible, ensure your responses include: An apology. A statement about your commitment to your clients. A way to continue the conversation offline if further communication is needed. Doing so will show potential customers and clients that you care about their feedback and are willing to take responsibility, but it also allows you to move the conversation to a more private forum if the reviewer isn't happy with your response.  Final thoughts Nobody likes to see a complaint come in at their business. We all work so hard to make sure we're providing a valuable service that is truly helpful, and knowing that we let someone down can be challenging. However, take it as an opportunity to become even better, and you'll find that your construction business continues to grow. About The Author: Sharie DeHart, QPA is the co-founder of Business Consulting And 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 and offers insights on how to manage 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 [email protected]
8/19/202210 minutes, 3 seconds
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484: Power Up Your Construction Company Payroll Processes

This Podcast Is Episode Number 484, And It's About Power Up Your Construction Company Payroll Processes Payroll is one of those things that starts quite simple. You build your construction business, hire a few employees, and things tick along pretty well. It’s straightforward enough to keep everything in line at first, but what happens to most companies is that they grow!   However, having an employee is different than when it’s just you meeting the client, doing the work, and collecting the money. The dynamics change when you hire that outside person. You need to be even more cautious when considering hiring a friend or family member instead of a stranger because success has a thousand fathers while failure is an orphan! Success or failure could mean choosing between peace and harmony in your personal relationships or giving away a portion of your hard-earned fruit.   Paying must run smoothly as an essential aspect of your construction business. This is a great thing, but it also means that payroll becomes more complicated. Getting paid is, after all, the primary reason that most people come to work. Here are some tips for managing payroll effectively: 1. Simplify Payroll is one of those things that can be overly complex, and the importance of simplifying it can’t be overstated. Many small and medium-sized companies have quirks about managing their payroll. This can make it difficult for somebody else to step in or train someone new. Keep things as simple as possible wherever you can. One way to do this is by switching to direct deposit. This will drastically reduce the work put into issuing and tracking payments. 2. Schedule At least once per year, and preferably more, your payroll professional must take some time to create a payroll calendar. This will allow them to highlight any dates that may cause a lag in your employees getting paid. It will also allow you to plan for any potential shortcomings or issues arising from holiday closures or oddities in the calendar. Making a payroll mistake is a surefire way to lower employee morale, so it’s essential to be aware of these dates ahead of time. Once compiled, distribute the calendar to your managers to communicate the information to their employees. This will keep everyone apprised of any potential delays in getting paid that may come up. 3. Automate The computer can be your best friend. Finding the right software to help with payroll can automatically take care of simplifying and scheduling, freeing up valuable time for your payroll specialist. It also eliminates the potential for human error in payroll processing and creates a crystal clear picture of your finances. Many options available these days are easy to learn and straightforward to maintain. 4. Brush up Payroll rules and regulations can change frequently and for any number of reasons. It’s important to stay informed on any changes in your region and proactively plan for them. Much time can go into correcting a payroll error, so know what’s happening ahead of time to avoid this. With more and more employees being hired remotely, it’s also essential to understand any regulations that may pertain to those geographically located in a different area from your construction business. 5. Get help There comes the point for all growing businesses where they have to outsource their payroll processing; if this is you, congratulations! It is truly a milestone. There are many options out there as far as hiring a payroll specialist is concerned, and many of them are available online. Choose the one best suited for you without leaving your desk. This takes the pressure off of you to know all the nitty gritty details about payroll processing. By hiring an outside professional, you can be sure that your employees will be paid correctly and on time. Everything runs smoothly during your regular pay schedule when timecards arrive on schedule. When employees do not turn in their timecards on schedule and expect you to have their checks ready, no worries, we have you covered: Process payroll outside your regular pay schedule fast and easy Track and allocate garnishments Track and report on employee loans Track and report on employee reimbursements Everything for one flat fee and no long-term contract  Final thoughts Payroll is most effectively managed when it’s simple, straightforward, and coordinated. Prospective applicants must complete a formal employment application and the hiring process before working on the job. When it starts getting tough to keep it that way, it’s likely a sign that your company has grown and you’re ready for more robust support. You went into the construction business for various reasons; in most cases, Calculating and Processing Payroll is not one of them. Stop the insanity and let me know how I can help you today.
8/12/20229 minutes, 46 seconds
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483: The Value Of Client Happiness And Ways To Keep Your Construction Clients Happy

This Podcast Is Episode Number 483, And It's About The Value Of Client Happiness And Ways To Keep Your Construction Clients Happy   Construction business owners know that to find a loyal client base, they must stand out from their competitors. One of the best and easiest ways to do that is to have outstanding customer service. How you treat your customers reflects your entire business. People think positively about companies that treat their customers and clients well.    Unfortunately, many small construction business owners focus much on their products and services, with customer service remaining an afterthought.    Take time to learn more about your customers.   Do they mention family members? Ask about their loved ones. Do they have particular concerns? For instance - too many cable cords around the house, and they have small children. Keep track of their issues and be attentive to their needs. Recommend solutions that address their specific problems. Go the extra mile to show your customers they're important to you.  Ask for their input, as well. They'll get to know your products and services and offer insights into what's working and what could be improved. If you engage them--and make changes based on their feedback--you'll develop a loyal customer base. Happier, high-profit clients are encouraged to return because they'll appreciate your thoughtfulness and value your service. The more special your clients feel, the more likely they will hire you again.  The Value of Happy Clients Happy Clients Are Returning Clients Returning clients are fantastic for business. It's less expensive to bring back a happy customer than to attract a new person to your business, and existing customers are more likely to purchase or do business with you than new ones. Some reports suggest loyal clients can be worth as much as ten times their initial investment. So by keeping your existing customers satisfied, you not only save on marketing costs, you increase your chances of making money in the future. Excellent customer service makes your customers feel important. You can have a fantastic product or service, which will go a long way to building your business, but your customers will also remember how you treat them. If you treat them well, they're more likely to be satisfied with their experience, which will keep them coming back. Even better, exceptional customer service can smooth things over and convince them to continue doing business with you if someone has an issue with your product or service.  Happy Clients Tell Their Friends It's not just that a happy customer returns; your happy client will tell their friends, and their friends could also become satisfied customers loyal to your business. They, in turn, will say to their friends about you. The pattern will repeat itself over and over. Marketing costs money. Word-of-mouth is free, and it's far more valuable than advertising. People trust their friends when they recommend a product or service much more than they believe in an advertisement. Offering exceptional customer service is one way to build loyal customers who will tell their friends and colleagues about you.  Happy Clients Write Positive Reviews Happy clients don't just tell their friends how happy they are; they say it to the world through online reviews. Whether posting a review on Yelp or Google, thanking you on your Facebook or Instagram page, or gushing about your fantastic customer service on Twitter, customers can reach their friends and friends of their friends and, in some cases, strangers. If they talk publicly about how happy they are with how you treated them, others will see that and come to your business.  Final thoughts Asking questions is vital to get important information from buyers by helping you understand their needs, priorities, and problems. By showing prospective clients you can listen to and understand their needs, you build an essential connection that will help you provide them with solutions. That connection may also be what keeps them coming back to your business.   Encouraging repeat customers makes solid business sense. To be successful, you need a balance of new and long-term clients. This means building relationships with people, personalizing your attention, sharing relevant information, and remembering your loyal customers.  A great product or service at a reasonable price might bring your customers in, but outstanding construction customer service that gives them a positive, memorable experience will keep them returning.  About The Author: Sharie DeHart, QPA is the co-founder of Business Consulting And 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 and offers insights on how to manage 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 [email protected]    
8/5/20228 minutes, 49 seconds
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482: How To Prevent Employee Theft In Your Construction Company

This Podcast Is Episode Number 482, And It's About How To Prevent Employee Theft In Your Construction Company Recent employee theft statistics are increasing, and small business owners are more vulnerable to the problem. The most common embezzlement methods include billing fraud, cash on hand, and check tampering. You may not know how employees can steal from you as a construction business owner. Some standard methods include: redirecting company checks to personal accounts and altering entries to cover up the theft undercounting change to customers and keeping the balance seeking reimbursement for non-business related expenses or  pocketing inventory or supplies. Just as you can't be 100% secure all the time, there is no way to eliminate 100% of the embezzlement in your contracting company. However, you can limit your losses and avoid most of them with suitable preventative measures. As a small construction business owner, you may not have the significant security budget of a large company, but you can combat employee theft with these simple strategies: 1. Do your due diligence when hiring. This may be one of the most critical steps to combat employee theft. Screen all potential employees carefully. Look into employment history, call references, and run a credit check. Hire someone else you feel comfortable with. Above all, trust your instincts. If you sense someone might risk your business, don't give them the benefit of the doubt. Construction Bookkeeper Embezzlers come of every race, creed, color, gender, and age. There is no definitive profile or absolute way to know which contractor bookkeeper is an embezzler until they have been caught and convicted. Even then, if you do not perform extensive background checks, you may never know it until it is too late. 2. Identify and eliminate opportunities to steal. Think of any opportunities where staff have unsupervised access to sensitive financial data, cash, or anything of value – then brainstorm how you can minimize the risk. For instance, ensure no employee signs any checks. Restrict access to financial records and change your secure company passwords often. We recommend opening three separate checking accounts - one for your central operating funds, one for payroll with just over enough to clear all outstanding payroll checks, and one for the owner's debit card purchases. 3. Conduct ongoing audits In addition to having an annual third-party audit, it's wise to perform random internal audits every few months to spot fraudulent activity early. Your bookkeeper or accountant can help you maintain accurate numbers and flag transactions that appear suspicious.  If you have a cash drawer, balance it daily like a bank account. Bookkeepers who develop the habit of embezzling usually start with taking small amounts, often from petty cash. Keeping track of small amounts of money can help save considerable amounts from disappearing. 4. Keep a close watch on inventory and supplies. Invest in an automated real-time inventory management system or take time to monitor your office supplies and tools in your trucks. Check your records regularly to catch any discrepancies in your physical inventory and recorded data.  5. Invest in security measures.  It only makes sense that when the staff knows they're being watched, they're less likely to steal from you. Critical areas for video surveillance include storage space for inventory and supplies and offices where financial data is kept. Final thoughts There is a lot of work here, but it could save you thousands, if not hundreds of thousands of dollars. One of the best ways to limit your exposure to bookkeeper embezzlement is to outsource your contractor's bookkeeping services to us because we handle all of the construction bookkeeping services chores and never touch your money. Although it's essential to do everything you can to eliminate opportunities for staff to steal from you, one of the most effective ways to avoid employee theft is to nurture a positive relationship with your team.  It is much harder to steal from people you know. So take the time to interact with your employees, fostering goodwill with the people who work for you. A friendly environment where people care about each other creates an atmosphere where criminal behavior is less likely to occur. One final tip: give your staff a way to safely and anonymously report suspicious employee activity. Your staffs are the eyes and ears of your business, but they may not come forward with incriminating information unless they feel safe doing so.  About The Author: Sharie DeHart, QPA is the co-founder of Business Consulting And 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 and offers insights on how to manage 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 [email protected]
7/29/20228 minutes, 53 seconds
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481: Common Construction Contractor Bookkeeping Issues With Accounts Payable

This Podcast Is Episode Number 481, And It's About Common Construction Contractor Bookkeeping Issues With Accounts Payable Accounts Payable keeps track of the bills owed to a supplier or subcontractor.   A proper Construction Contractor Bookkeeping System uses the Accounts Payable feature to track unpaid bills. The bank wants to get paid, and unlike the contractor who is embarrassed to call an old customer, the bank is very willing to call early and often for any outstanding payments due. Again, the banker wants to know how long it takes to pay your bills.   Another reason to keep a proper Construction Contractor Bookkeeping System is to be sure you did not overpay a supplier or subcontractor, cell phone, the internet, liability insurance, vehicle insurance, and more.   The bills keep coming depending on your payment schedule; you may receive the past reminder notice before the original invoice arrives. Some utility companies have a history of what appears to be randomly sending the original bill.   When you do not immediately pay the invoice, some insurance companies will mark this as late and subject you to a late charge. Based on where the Out of State payment needs to be mailed to, it may be impossible to send (by regular mail) and be received on time.  Hence – Online Payments are Accepted. The benefit to The Contractor is proof that the payment was made with a time and date stamp (print) and usually an auto-generated email as backup confirmation that the payment was made.  Overpaying subcontractors can quickly happen if checks are written on the job site. When using handwritten checks, use "Carbon-less Checks" to have a written record of payments made. The charges can be added to the Bookkeeping System without waiting to clear. Bookkeeping Issues Sometimes Accounts Payable will have transactions in Accounts Payable that do not belong there. It is easy to put transactions in the Accounts Payable (A/P) Aging Summary and then forget about them. QuickBooks does not automatically look to see if you put something in Accounts Payable when writing a check. Short-cutting and putting in a bill will distort the financial statements and will not have a clear understanding of details. For example, credit card balances or monthly payments. Credit cards like checking and savings accounts must have all their transactions entered and reconciled. Taxes due to the Internal Revenue Service, State, and Local Payroll taxes or Sales tax-related obligations. Employee or owner's child support payments do not belong in Accounts Payable. Payments to and from the company and between owners are Owners Draw, Loan to Members, or Loan To Shareholder, and related transactions do not belong in Accounts Payable because you are not an outside vendor. Do not create a bill for the company to pay. Anytime it is a company expense, the company should pay direct. There is nothing messier than constant reimbursements to the owner by the company. A bill with no detail looks like a bogus payment to the owner trying to make money out of the company that is being masked as an expense. The old saying "Devil In The Details" Transactions in QuickBooks need to be explainable without any need to have a story problem to go with it. The Memo line in QuickBooks is short for a reason – less is better and more transactions are better than fewer transactions. Annual tax returns are many pages giving the detail (which may be stated repeatedly on numerous pages). As with Accounts Receivable, the same type of detail applies to Accounts Payable (A/P) Aging Summary. Are the transactions Current, 1-30, 31-60, 61-90, >90 and Total? Add in the dimension of payment can be done from multiple banks and credit card accounts, and in the case of suppliers, Credit may be applied. Any time there are unpaid balances, the first place to look is, did the amount get paid directly from the checking account? Was the amount slightly different (including a late charge or additional vendor bill not entered into QuickBooks)? Again if transactions are in as Accounts Payable, they should not appear to be overinflated expenses. To be in QuickBooks under Accounts Payable, the transaction is entered as a bill. Any payments paid directly by the checkbook do not automatically know that a bill has been created. Same with any payment made with a credit card; there is no link between the credit card payment and the bill unless QuickBooks is told the bill was paid by credit card.  Negative numbers in the Accounts Payable (A/P) Summary mean that the vendor was paid as a bill without any bill being entered. The Accounts Payable aging report reflects how long it takes you to pay your bills. Unless you have won the lottery (which we all want to do), you must collect before paying your bills. The favorite way for Contractors to pay their bills is to Collect a job deposit, buy a new vehicle, tools, or equipment and then pay any outstanding invoices. When paying Old Bills with New Money (not money collected from the job that the bills were associated with) is "Robbing Peter To Pay Paul" (author unknown). I get it. It is a more natural number to know. How much the customer owes you (especially if the job is Time and Material or Cost Plus) is hard. Not all of the bills may not have arrived from your Vendors or Subcontractors.  Then there is the issue of how you billed. Was it straightforward for the customer to pay you? You may forget or forgive the bill and receive payment from your customer, but it is unrealistic to expect or hope that your Vendors, Suppliers, or Subcontractors will do the same. What is guaranteed is that the Bills will come and continue to occur. Final thoughts Bills, bills, and more bills are set up on auto-pay so they will get their money. The question is, how will you pay the bills? When will you pay the bills? Are you paying with Income from Customers? Credit Cards racking up your debt? The line of Credit which, again, is racking up debt? Personal savings or investments? (borrowing from tomorrow to pay for yesterday) Borrowing on your House? Borrowing from a Pay Day Type of Lender (some take repayment daily automatically from your banking account)? Borrowing from the Government by not filing and paying by the due dates? Keeping up and paying bills is a challenge in the best of times. With proper bookkeeping, you can know: Whom You Owe, When Your Payment Is Due; if you plan, you can pay the balance in full. Moreover, my favorite is not double pay if it can be avoided. It is a big deal to know the rules. Sometimes asking for a payment plan is the only option. If it is necessary, ask nicely, ask politely, ask as long of time pay as possible, for as small of a monthly payment as they will give you. It is better to double up on a low payment (to pay off sooner) than have a large payment that is impossible to pay.  Again, I am here to help you a little or a lot, depending on your construction business needs. Schedule your free consultation here. About The Author: Sharie DeHart, QPA is the co-founder of Business Consulting And 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 and offers insights on how to manage 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 [email protected]  
7/22/202212 minutes, 33 seconds
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480: How To Make Xero Accounting Work For Your Construction Business

This Podcast Is Episode Number 480, And It's About How To Make Xero Accounting Work For Your Construction Business The key to making Xero Accounting Online work is ensuring your account is correctly set up and maintained. Perhaps you own a service and repair firm specializing in plumbing, electrical, HVAC, or maybe a handyman service or someone who does small construction projects that last from a few hours to a few days, and you only need to give your customer or client one invoice?   Suppose you've just started working with Xero; making a few mistakes while learning is expected. We see pretty common errors - and unfortunately costly - so you should be aware of them if you want to get the most out of Xero's powerful cloud accounting system.    Not connecting all the bank and credit card accounts dedicated to your business Make sure that you keep all your construction business bank and credit card accounts synced to Xero to ensure that you don't miss any sales or expenses in your reports. Also, ensure that you separate your business accounts from your personal ones to avoid hassles during tax season. Doing this also helps you make accurate business decisions. Trust us, your accountant and bookkeeper will thank you! Not reconciling the bank account in Xero to bank statements Run a reconciliation report in Xero regularly and then compare it to your bank statements to ensure there aren't any errors or duplications.  Many business owners miss this critical step, which means they look at inaccurate or incomplete data when they check their reports. Not checking user access and permission levels Many business owners give key team members full access to their business' Xero system and don't review the user permissions at all.  However, the best practice is to provide access on an "as needed" basis and review who has access to the system and what permission level they have quarterly.  Also, when your staff members leave, you should revoke their Xero access immediately.  Not setting financial SOPs (Standard Operating Procedures) Create a proper financial SOP that describes who is responsible for what and by when and the step-by-step process of getting things done. For instance, you can assign your operations manager to run the aged receivables report in the system, so you'll know who owes your construction business money. Then, map out a clear action plan of what happens in specific scenarios, such as a payment that's two weeks late. You can also have standard replies that the team can send as needed. Mishandling transactions when you've paid with your personal money Many construction business owners don't know how to handle transactions using their personal accounts when paying for a business expense. There are actually ways to capture such costs paid on the wrong card in Xero so you can still claim the tax deduction. You may need to get in touch with your advisors to make the adjustments accordingly.  Xero Accounting Online saves us time in data entry, which means we can offer contractors bookkeeping services at substantial savings over QuickBooks bookkeeping services and provide more in-depth financial reporting, with some of the reports being updated within seconds of when the transactions are received. Avoid Xero Mistakes By Working With A Specialist Advisor The best way to ensure that you're taking full advantage of all the features in Xero and avoiding costly financial mistakes is to work with an experienced advisor who knows the ins and outs of this cloud accounting system.  We're Xero Certified and would be happy to look at your file to give you some suggestions. The time, effort, and money you've put into running your construction business is a testament to your commitment to this industry. So, let me end this post by telling you to do what you do best and outsource the rest. The "rest," as you know, is where your cash flow and profit depend – construction bookkeeping and accounting. About The Author: Sharie DeHart, QPA is the co-founder of Business Consulting And 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 and offers insights on how to manage 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 [email protected]  
7/15/20228 minutes, 13 seconds
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479: Reasons Why Contractor Startups Fail And How To Avoid Them

This Podcast Is Episode Number 479, And It's About Ways Reasons Why Contractor Startups Fail And How To Avoid Them Many surveys and reports show that nearly half of all new construction companies close their doors within the first five years of opening them. When we speak with contractors who failed, most say it was due to a lack of cash flow. It was pretty obvious, yet when questioned, all of them said they were "Blind-Sided" and were not aware they were running out of cash until it was too late.   There is a point when a contracting company starts to fail, and nothing short of a massive cash infusion can stop it, and a domino effect begins, which is when a series of similar or related events occur as a direct and inevitable result of one initial event.   Planning is essential to give your business the best chances for success. Planning means anticipating challenges and developing ways to successfully address them, so they don't upset your startup.    Here are three reasons why contractor startups fail and ways you can avoid them.  Lack of market demand Before spending your time, money, and energy starting a construction business, make sure there's a need for it. You need to have a market to make money. That means there needs to be enough people who need your product or service and are willing to pay money to buy or use it. Without that, you won't be able to cover your costs or earn enough to survive.  Some ways you can identify need: Look for competition. If no one else is offering the service, there's a chance there's no market for it. That might not initially stop you from moving forward, but if no one already offers your product or service—or anything close to it—you'll have to do more to prove there's a market.  Conduct market research. Studies and interviews help determine whether people in your target market agree with you that there is a need for your offering and that they would pay for it.  Lack of expertise Entrepreneurs might be tempted to partner with or hire their friends or family—people they genuinely like and would work well with. That doesn't always translate to success, however. For your business to succeed, you need specific expertise and people whose skills complement yours.  It would be best if you also had people willing to discuss your decisions with you and ensure there's a business case for each decision you make. Someone with a differing perspective provides a vital way to double-check whether your choices are best in the long-term for your business or whether other options are available.  Ensure you hire people with balanced competencies. If your roofing business involves installing solar panels, you might need a technical expert to ensure the technology runs smoothly. You'll likely also need a financial expert to help you with bookkeeping and possibly a manager to oversee employees. Hiring people you like is fine, but make sure your team also has the skills to manage your business successfully.  Lack of finances You need money to produce your services and ensure all employees are paid, including you. It's not enough to know how much money you need month-to-month; you need to forecast your development cycle, how inventory moves through your supply chain and variations in seasonal income.  If your construction business doesn't earn as much in the first few months as you predicted, you'll need to bring in more money quickly to save your business.  Lack of cash holds up material deliveries, which causes labor to be idle and continue costing money, and then payroll checks bounce, and your construction workers take your tools and equipment to the pawn shop to get paid that way, and the contracting company spirals down to its end. One accounting tip that could help your new contracting business is opening three business checking accounts. If you were to ask contractors about the big mistakes they made when they started, they wished they had kept their business and personal expenses completely separate. Not only does it make day-to-day contractor bookkeeping easier, but it also makes monthly, quarterly, and annual tax preparation smoother. Checking Account 01 - Your primary checking account should not have any credit or debit cards attached to it. All money is deposited into this account, and you make transfers into the other two versions as needed. Checking Account 02 - The payroll checking account should have just enough money to cover payroll with perhaps a tiny cushion of $100. You can transfer funds into this account as needed from your primary account without needing paper checks. This limits exposure to payroll fraud, and this account should not have any credit or debit cards attached to it. Checking Account 03 - Petty Cash checking account with $500 +/- this account should have debit cards that work like credit cards attached to it for making small purchases in the field; if you want to provide your foreman and forewomen with a debit card to be used as a credit card you can. You can transfer funds into this account as needed from your primary account without needing paper checks. NEVER give out the PIN. Final thoughts Develop your business plan. Focus on the best areas to innovate or improve. By planning, being strategic with whom you hire, ensuring a market for your offerings, and with construction bookkeeping and accounting done right, you can significantly improve your odds of success. Know that in time your company will become legendary to such a degree that your clients will be raving fans, and referrals will be part of your marketing strategy. About The Author: Sharie DeHart, QPA is the co-founder of Business Consulting And 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 and offers insights on how to manage 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 [email protected]
7/8/20229 minutes, 20 seconds
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478: What Every Contractor Needs To Remember When Negotiating Contracts

This Podcast Is Episode Number 476, And It's About What Every Contractor Needs To Remember When Negotiating Contracts Several aspects of the construction business can only be learned through experience. One of them is negotiating contracts.   Most people fear the negotiation procedure because it is an intrinsically uncomfortable process. Asking for more money or making personal demands doesn't come naturally to everyone. But with the right toolkit, you can breeze through contract negotiations. And you'd better get used to it because you'll have to handle many contracts whether you're a construction company owner or employee.   Having the right mindset is critical to contract negotiations. You have to believe that you are going to get your way. Bring a positive attitude and a smile to the table. You're not signing contracts with the enemy. The people you're negotiating with will be your business partners in one capacity or another.   We recommend seeking the advice of a qualified construction attorney to put together a contract that fits your specific needs. Your contracts need a well-defined scope of work, clear payment terms, a reasonable schedule, and a proper change order clause. No work should ever be performed based on verbal agreements. Get everything in writing, always, no exceptions. Let's take a look at some things you need to remember when you're in the process of negotiating contracts: Be patient Don't rush to get a contract signed. Rushed arrangements usually leave one or both parties dissatisfied. It's understandable if you want to get the negotiation done, but taking the extra time to examine your contract will benefit you tremendously in the long run. Involve an expert You might know what you need from a contract regarding overall business output, but you could get trapped by the legalese. Get a lawyer you trust on board to frame the wording in a way that protects your overall interests. Even if you're good at negotiation, involving an expert is always a good idea. Don't forget term sheets Term sheets are a broad overview of the terms of your contract. Before you get into the specifics, it's a good idea to ensure that all parties agree on the big picture. Take it one step at a time Negotiating a complex and lengthy contract is an inherently tedious process. In the beginning, ensure you've agreed upon the necessary details. Making some headway is crucial to the overall success of the negotiations. After establishing a rapport with the other party, you can dive into the deeper, more complicated issues. Think about the specifics The flowery language on a contract might make for good reading if you're of a particular leaning, but you need to understand what it translates to in the real world. How much will you be making? Use the phone Emails are notoriously difficult to decipher at times. You aren't aware of the sender's body language, and sometimes people can confusingly word things because they don't have the best command of the language. If you're unsure about some issues in your contract, pick up the phone, and have a conversation. It will help sort things out. Don't fret too much about the first draft The first draft of your contract is just a starting point. It's called a 'negotiation' because you will be changing certain aspects of the contract. Don't be alarmed if there are certain things in there which aren't to your liking. If you can't make the tough calls, get someone who will If you're not naturally assertive or find it challenging to be demanding when the situation calls for it, ask for help from someone capable. It could be your business partner or even a spouse. Do your research You don't want to make outlandish demands that the negotiating party can't afford. Take some time and do your research. See what similar services or products cost in the industry. Ask some construction experts for advice. Final thoughts It's worth repeating that you should always take care to state clearly in writing the terms of your quote or estimate and offer a client the opportunity to ask questions before approving the work. That way, both parties can avoid misunderstandings about expectations and project costs before the work begins.  Negotiating a contract is like a long game of chess, except both parties need to come from the table victorious. Before you begin the process, figure out your short- and long-term goals. Having a clear vision will help you better navigate the tricky waters of contract negotiation. While nobody knows your contracting business as well as you do, seeking expert financial advice right away is crucial for your survival. For a free initial assessment of your business, please don't hesitate to contact me. About The Author: Sharie DeHart, QPA is the co-founder of Business Consulting And 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 and offers insights on how to manage 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 [email protected]
7/1/20228 minutes, 10 seconds
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477: Ways To Sustain The Life Line Of Your Construction Company

This Podcast Is Episode Number 477, And It's About Ways To Sustain The Life Line Of Your Construction Company   Cash flow refers to the movement of money into and out of your business. It's based on the amount of money you bring in minus the amount you spend. A positive cash flow means bringing in more than you're spending. A negative cash flow means you aren't bringing in enough to cover your expenses.   Your construction company can run into problems by not charging enough for goods or services, having late-paying clients, growing too quickly, or simply spending too much money.   Solid cash flow management is vital to ensuring your contracting business survives, but not everyone understands what cash flow is or how to manage it. That's likely what makes it a leading cause of stress for small business owners.    Cash flow can vary throughout the year, depending on sales cycles or whether you've made a large purchase.  Here are three strategies you can use to gain control over your cash flow. 1. Understand your profitability Managing your cash flow is excellent, but it won't help if your business isn't profitable. Determine where your business is most beneficial and where you're dealing with cost overruns. Look at your services to determine how much they bring into your business compared to how much you spend to provide them. Find any inefficiencies in your processes and eliminate them if possible. A solid cash flow ensures you offer excellent goods and services and help you achieve your goals while reducing those negatively affecting your finances. You may need to increase your prices to reflect the cost of goods sold. Similarly, take a look at your clients. Are there some that you are undercharging or spending too much time and energy on? Can you increase their fees or find higher-paying clients? (I have recently discussed these points in my Tuesday email. If you don't want to miss out, you can subscribe by filling out the form on the right). 2. Write a cash flow forecast. Your cash flow forecast (a cash flow projection) predicts how your construction business will perform financially over a set period. It's a good idea to have a cash flow forecast for a year, broken down into quarters and months. The projection considers your revenue and expenses over those set periods and helps you figure out how much you need to make in that period to cover your costs. It can also allow you to anticipate any upcoming cash flow issues, such as slower periods that may require you to cut back on expenses. If you have any anticipated big-ticket items you'll need to buy or plans to expand your business, include those in your forecast. Periodically check your actual cash position against your projection to see how you're doing and if you need to make any adjustments. 3. Use technology to keep on track. Plenty of software solutions can help you gain insight into your company's cash flow. They can help you build projections and get a real-time view of how your business is doing. This information can then be shared among company managers, so everyone knows how the company is doing financially and where strategies need to be put in place or altered to get you back on track. Additionally, invoicing and project management software can encourage faster, more manageable client payments and keep projects on budget. This will also improve your cash flow. What we can do: A wise business owner once said, "Happiness is a positive cash flow." As a business owner, I'm sure you agree. Everything is better when your cash-in exceeds your cash-out. A cash crisis can be emotionally devastating and even kill your business. You know what I mean if you've ever had to beg, borrow, and steal to cover tomorrow's payroll. Having a proper cash management system allows you to: Know when, where, and how your cash needs will occur. Know what the best sources are for meeting your additional cash needs. Be prepared to meet these needs when they occur by keeping good relationships with bankers and other creditors. The starting point for avoiding a cash crisis is allowing your accountant to develop a cash flow projection for you. Your construction accountant can help you develop both short-term (weekly, monthly) cash flow projections to help you manage daily cash and long-term (annual, 3-5 year) cash flow projections to help you develop the necessary capital strategy to meet your business needs. Also, well-kept historical cash flow statements help you understand where the money went. Accurate cash flow projection has several benefits and will make many procedures easier for your construction company.  Our services can provide you with: Help in obtaining an appropriate line of credit Cash collection acceleration techniques Proven effective collection policies Established effective payment policies Help in getting the maximum rate of return on your idle cash Cash flow is the lifeblood of any construction company and especially the ones with annual sales volume under $1,000,000. Some Construction Company experts even say that healthy cash flow is more critical than your contracting company's ability to complete projects!  While that might seem counterintuitive, consider this: if you fail to satisfy a customer and lose that customer, you can always work harder to please the next customer. If you do not have enough cash reserves to pay your suppliers, creditors, and payroll, your Construction Company is out of business; game over! Final thoughts Many business owners find cash flow management stressful, but with a bit of information and planning, and by using the right tools and the right construction accounting consultant, you can have better insights into your company's financial situation. Those insights will help you make better decisions for your business and gain control over your Construction Company cash flow. About The Author: Sharie DeHart, QPA is the co-founder of Business Consulting And 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 and offers insights on how to manage 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 [email protected]
6/24/202210 minutes, 23 seconds
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476: How High-Profit Jobs Can Make Or Break Your Construction Company

This Podcast Is Episode Number 476, And It's About How High-Profit Jobs Can Make Or Break Your Construction Company Knowing which jobs have the highest probability of success and profit before getting involved moves your construction company from an unpredictable roller coaster to a peaceful merry-go-round.   You have what appears to be a high-profit job, and now you think you have it made, and I hope you are right!   The problem is that high-profit jobs can turn into low or no-profit jobs. In some cases, they can bankrupt your construction company because you bid on the project using whatever model you are accustomed to using, and in the end, you wind up with cash flow problems.   Many problems can be traced back to the "Halo Effect," which happens when a contractor thinks, "We are so good at (fill in the blank) we should expand into (fill in the blank).  The most common situation is when a residential remodel contractor who has built a reputation and a substantial company generating profits of 15% or more decides to start building custom homes. Or the opposite, a home builder who decides to branch out into residential remodeling. Home Builder Doing A Residential Remodel The processes, tools, equipment, materials, skills, and invoicing procedures required to modify a home with people living there are entirely different from building a house from the ground up. New construction workers are more like cave people with a brute force mentality. If something doesn't fit or will not work the way they want it to, they use more brute force until it does. Every problem has one answer "Brute Force." The same goes for managing sub-contractors and suppliers. The home builder bids on a residential remodel project using the exact square foot costs they have continuously operated in building houses and quickly discovers the true meaning of "Hidden Costs." These costs include dry rot, cracked foundations, broken plumbing, bad wiring, worn-out HVAC, and other unpleasant surprises. Homeowners living in the house while the remodel is happening do not ever want to be without water, lights, heat, and privacy, and they don't know how much debris, dust, and noise is involved in a remodel. Homeowners want to believe everything is included in the original contract price, including the little extras they think of along the way. When it comes to change orders, that is something most home builders do not understand. They don't have a process for tracking them, let alone pricing and getting paid for doing them. Most trade contractors and subcontractors who work on residential remodel projects understand change orders and know how to apply pressure on the builder to get paid. Too often, the main reason home builders go bankrupt is cash flow issues. Residential Remodel Contractor Building A Home The processes, tools, equipment, materials, skills, and invoicing procedures required to build a house from the ground up are entirely different from modifying a home with people living in it. They understand brute force will not work, but patience, planning, and being respectful do. Randal spent a few years in residential remodeling, and it did not take long to learn that new construction behavior does not work in residential remodeling. The remodeling contractor uses a form of "Cost Plus" or "Not To Exceed" to provide the homeowner with the scope of work and a contract price the bank needs to finance the construction. That process can work for a residential remodel because the house is already in place, which helps define the size and scope of the project. The size and scope of the homeowner's dream house are limited only by what the building codes will allow. When the labor, material, other costs, and subcontractor bills pile up, the remodeling contractor asks for a construction draw and is told the bank needs a Pay Application filled out and submitted. Then it will take a while for the bank inspector to review the project and approve the draw. This is when the remodel contractor figures out they are providing all the labor, material, other costs, and subcontractor expense up front and getting paid only when and if the building inspectors, architect, bank, and the client agree to the draw request. The Solution For your construction company to survive and thrive in any economy, you must pick a niche market and develop your Strategic Business Process Management System (BPM) with written goals of what you want to accomplish and how much money you want to earn from it. Once you have picked your construction specialty, stick with it no matter what, and in the end, you will have the best chance of making money and retiring wealthy. All contractors who try to do the right thing deserve to be wealthy because they bring value to other people's lives. Lost and tired of your bookkeeping system? If you are using QuickBooks and doing your books (or have staff doing it for you), I recommend you head to our Construction Accounting Academy site and check all available classes immediately. Master the skills needed to generate useful reports, repeat quality performances, and make informed decisions to operate and grow your construction company. About The Author: Sharie DeHart, QPA is the co-founder of Business Consulting And 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 and offers insights on how to manage 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 [email protected]
6/17/20228 minutes, 56 seconds
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475: Proven Construction Business Processes When Creating Your To-Do List

This Podcast Is Episode Number 475, And It's About Proven Construction Business Processes When Creating Your To-Do List When you're a construction business owner, your to-do list is often long and constantly growing longer. You need to do many things, and it can feel like they're all urgent. In such cases, it's easy to push essential tasks to the side and focus on less-vital activities, but that often means you miss deadlines, make mistakes or always feel as though you're trying to catch up.   Construction Companies have two basic leadership styles; wait until an urgent situation occurs and react like a firefighter or develop business processes that allow the company to respond calmly and natural resources and solutions to the issues like a traffic police officer on a sunny afternoon.   Firefighter Leaders - Operate in one of three mental states: Going into a crisis Coming out of crises Waiting for a crisis Traffic Director - Leaders operate in one of four mental states: Preparing for new projects to appear Preventing projects from becoming an emergency Planning for implementation of current and future projects Empowering others and directing the flow of projects to completion and billing The graph below - Is similar to the diagram shown in The 7 Habits of Highly Effective People - Habit 3 Put First Things by Stephen R. Covey to demonstrate this principle. We spend our time in one of four ways, as illustrated in the Time Management Matrix above. This matrix defines activities as Urgent / Not Urgent / Important / Not Important.  With this in mind, creating your business to-do list would be more straightforward. Here are some ways for you to determine the most productive order to complete your tasks.   1. Know all of your tasks It isn't enough to have a running list of tasks in your head; you need to write them out to see them at a glance. Take the time to list all your tasks, and break down large tasks into smaller steps.  Write a list of the activities you need to do for the week—or even the next two weeks—on Monday morning. Include information such as how urgent they are, how long they'll take to complete, and their deadlines.  Now you know what you need to complete and when things need to be done.   2. Determine what tasks are vital There are many methods for determining which tasks are the most vital. We'll go into the Eisenhower Decision Matrix and the ABCDE Method. In the Eisenhower Decision Matrix (similar to the graph above), you classify each task into one of four quadrants. These quadrants are based on whether the task is important, urgent, both, or neither. Tasks that are both important and urgent should be done first, followed by those that are either important but not urgent or urgent but not important, and finally, those that are neither important nor urgent. If possible, delegate tasks that aren't both important and urgent to someone else. Another method is the ABCDE method, in which you assign each task on your list a letter from A through E based on its level of importance. Tasks with a level of A or B are the most important, while D and E are not at all critical. Anything from C down can likely be rescheduled or delegated to someone else.  3. Schedule your tasks Now that you know which tasks are the most critical, schedule your to-do list in that order. Write yourself a daily checklist that puts the most important tasks at the start of your day. Don't overschedule yourself, however. After all, there's a good chance that a new activity that is both important and urgent will arise in the course of your week, and you'll need the space in your calendar to address it.  Give yourself deadlines in the day to get the work done based on a reasonable assessment of how long the activity should take you. You can also chunk your work, setting aside specific, uninterrupted periods to do focused work and then scheduling breaks around that.  Make sure you turn off distractions and let your colleagues know you aren't available during those times. Final thoughts Large, profitable construction companies have known and used some form of Business Process Management (B.P.M.) for hundreds of years. We've always used M.A.P. to help our clients find the treasure hidden inside their construction business. You can download our free toolkit here if you haven't done so. By determining which of your tasks are the most important to you and your construction business and scheduling your day based on that criteria, you can ease the pressure caused when you have a long list of activities to take care of. About The Author: Sharie DeHart, QPA is the co-founder of Business Consulting And 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 and offers insights on how to manage 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 [email protected]
6/10/202210 minutes, 40 seconds
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474: Bad Business Practices In Construction Bookkeeping

This Podcast Is Episode Number 474, And It's About Bad Business Practices In Construction Bookkeeping One of the biggest challenges construction company owners like you have with an in-house bookkeeper is training them to work for your best interest, not theirs, and deliver consistent results and the reports you can trust daily, year after year.   Having been involved with construction and construction accounting and bookkeeping for over thirty years, we have seen a consistent pattern repeated over and over that will turn ordinary, decent, pleasant bookkeepers into a disheveled, broken, mean, nasty, arrogant trolls, and that's a good day when the sun is shining, and the birds are singing!   Here's how it happens:  Someone is assigned the construction bookkeeping duties, and they are typically mild-mannered, shy, and unable to say no. The newly appointed "bookkeeper" opens the QuickBooks Pandora's box and loads the CD in the computer, believing it will be set up and ready to go in ten minutes.  That's when the first of several unpleasant surprises happens; the pop quiz. QuickBooks screens start popping up and asking questions! Nobody said anything about a test or an exam, and panic began to take hold. The bookkeeper thinks, "don't screw this up because I can't afford to lose this job!" The questions keep coming like a raging river, so to put the responsibili