Contractor Success Map With Randal Dehart | Contractor Bookkeeping And Accounting Services

This Podcast Is Episode Number 444, And It's About Job Costing - Your Construction Company's Competitive Advantage Every contractor has a Job Costing Library; some keep it in their head, some keep it on paper with names like completed jobs, bids, estimates. Other contractors keep it in their QuickBooks For Contractors' software records. Still, other contractors rely on places like RS Means for comprehensive databases of construction costs. These are similar to the "Flat Rate Books" used by car repair shops for decades.   A tiny fraction of contractors understand the actual value of a customized cost library and invest the time, energy, and resources to build and maintain one. Having done several, I can tell you it is a painful, arduous task. I will tell you a story to make it crystal clear.   The Treasure Box That Saved Four Contractor's Lives! In the mid-1800s, an archeologist left New York City on a journey into the heart of the African jungle in search of a lost civilization. He intended to find and bring

This Podcast Is Episode Number 443, And It's About Succession Planning A Will For Your Construction Company You may be getting your construction projects done with sheer willpower, but the lack of processes, business plans, and strategy will eventually wear you down. You can either keep on "Powering Through"- spend your life endlessly chasing details, missing appointments, suffer untold losses in cash flow and profits, or you can start developing a plan and work on your business.   Successful contractors improve processes all year long. Your construction company can benefit from an excellent system that other successful contractors are using now, which means there is no need to "Reinvent The Wheel." As your construction company grows and evolves, your processes can support the controlled and planned expansion.   Along with trying to keep on top of your construction business, the unfortunate reality is that most business owners don't take proper holidays. Usually, this is because their business relies on them,

This Podcast Is Episode Number 442, And It's About Four Things To Consider Before Expanding Your Service Offerings Balancing customer experience and setting client expectations against your time and budget is a difficult task. It would be best if you had excellent planning, efficient project managing, and perhaps the right amount of staff working to keep customers happy, but not so many people that workers are standing around looking for things to do.    If your customers have long wait times, that's good news for you initially—it means your business is popular. The bad news is that homeowners won't wait around forever for you to fix your time management issues. If they like your services, they'll be a bit forgiving, but too many long waits will send them to your competition.   For instance, when a homeowner decides to remodel their living space, they dream about how it will look and feel when it is done, but they have no idea what an emotional roller coaster is in store.    Surprises were great when you we

This Podcast Is Episode Number 441, And It's About Four Things To Consider Before Expanding Your Service Offerings If you're looking to grow your construction business, you might consider expanding your service offerings. Adding additional services is an excellent way to increase your profitability, diversify your income and expand your market. But there are essential things to consider before adding to your income streams.   First things first - find the money. If you don't have savings earmarked to fund your ideas, you'll want to make sure your "scaling my construction business" plan includes adequate financial planning. Applying to a lender for a business loan is one option. In this case, you'll want to include up-to-date cash flow reports, income statements, budgets, and projections in your plan for a potential lender.   If your construction business doesn't have a credit history, you may need to look at other options for financing your plans. Using a business credit card regularly and paying off the bal

This Podcast Is Episode Number 440, And It's About How Construction Business Owners Gain Personal Time By Working Smarter You’ve probably heard the maxim that it’s better to work smarter than harder. Working smarter means allocating your time, energy, and money so vital tasks get done more efficiently, freeing up your time.   Too many construction business owners think they must keep working harder—taking on more responsibilities and working longer hours to succeed. It makes sense because you’re responsible for your business, but that route leads to work overload and burnout. Ultimately, your business will be unsustainable if you keep pushing yourself to work harder.   It doesn't matter how many times you are knocked down; it only matters that you learn your lessons, get up, and go again. Some lessons we already took note of years ago, having owned and operated 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 c

This Podcast Is Episode Number 439, And It's About Understanding Roles And Why It Makes Sense To Hire Us I will start by quoting a short sentence found in the all-time best-seller "Basic Instructions Before Leaving Earth" That is an acronym; take the first letter of each word and put it together to form a different word. "No one can serve two masters, for either he will hate the one and love the other, or he will be devoted to the one and despise the other.." there is more to that, and the point is that concept applies to accounting.   How many times have you hired someone with the expectation they knew how construction works, and then you found out they did not have a clue about it or your particular type of construction? It happens all the time, and the first thing that crosses your mind cannot be posted on this blog. We know how much you would like to take action and fix it immediately. But before you do all that, let's go back to understanding roles to know which one you need.   Three Skill Sets = Three

This Podcast Is Episode Number 438, And It's About Proven Proactive Contractors Formula To Get Things Done And Get Paid As much as we plan, it would be best if you were flexible, adaptable, and reliant. Things happen that are beyond your immediate control. Those of you who want a predictable environment are employees working for a large employer where schedules are fixed and doing the same things every day.      It was a different mindset when you became a Construction Business owner. You wanted to be independent, and part of being independent is that there is no one telling you what to do or when to do it. Your suppliers and government agencies direct you and impose fines and penalties when you get off track.   Proactive versus reactive are the two methods of getting something done. I find everyone works in a combination of both, I included. Proactive is scheduling and doing everything ahead of time. Nothing is ever waiting until the last minute. Reactive is more emergency-driven and are things that need to

This Podcast Is Episode Number 437, And It's About How A Bookkeeper's Incompetence Can Ruin Your Construction Business Contractors, by nature, are tenacious, resilient, and have a tremendous amount of "Grit And Determination To Succeed," which means they are not easily disturbed or prone to react hastily or rashly at the first sign of trouble. This is just one of the many qualities I sincerely admire about these remarkable men and women.   Like you, we have callouses on our hands, having owned and operated construction companies, and some of us have served an apprenticeship in one of the construction trades. In other words, when it comes to owning, managing, and making a substantial amount of money with construction and contractor service companies, we know what we are talking about.   Incompetent bookkeepers can destroy your construction company and your finances. Unfortunately, until a contractor has gotten to know us, they tend to think of us as just another contractor's bookkeeping service. This means som

This Podcast Is Episode Number 436, And It's About The Advantages Of Healthy Competition For Your Contracting Business Starting a construction business means you'll compete with other companies that already exist. It's a good thing if you have a competition to go up against. Competition pushes you to be innovative. It also means there's an established community for your services.   What about if you're considered a veteran at this stage? Understand that you cannot outwork your competition forever because you will grow old and tired in time, and there will always be someone else who is newer, younger and works cheaper than you can.   Being aware and mindful 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, so your company earns a profit effectively. Here are some ways to get ahead of your comp

This Podcast Is Episode Number 435, And It's About Construction Company Recovery After A Financial Setback You started your construction business with plans of earning a living and being successful, but an unfortunate fact of business life is that companies suffer financial hardships. Whether those hardships are pandemic-related or linked to other urgent situations, the effect is still the same. Your finances are negatively affected, and it's up to you to lead the recovery.   Almost all business sectors have experienced declining profits, liquidity that is drying out, and even bankruptcy. Although the short-term outlook varies depending on your industry sector, all business leaders need to set up a strategy to guide their way towards recovery.    Here are five steps you can take to help your business recover after a financial setback. 1. Find areas to cut back. As a business owner, you'll always have expenses, but there are ways to reduce your spending and save money. Negotiate rates with your suppliers or

This Podcast Is Episode Number 434, And It's About The Actual Net Worth Of Your Construction Company Have you been in business as a construction contractor or specialty contractor for a while, and now you are wondering what your construction company is worth?   Nothing is ever as good or as bad as it appears. If you are like most contractors, you learned a trade, skill, or craft, and after a while, you decided to go into business for yourself and make "The Big Bucks," which was one of the happiest days of your life. I've heard It said that boat owners experience two of the happiest days in their lives; the day they bought their boat and the day they sold it.   So, how much is your construction contracting company worth?  Accounting Value: Equity Which Is [Assets or What You Own] (Cash, Tools, Material, Loans The Company Made) - [Liabilities or What You Owe] (Payables, Credit Card Balances) = [Equity or what is left Over]. These numbers are found on your construction company Balance Sheet. See the example be

This Podcast Is Episode Number 433, And It's About Why Smart Construction Business Owners Never Stop Marketing One classic mistake construction business owners make when money gets tight is stopping marketing or cutting their budgets. At first glance, it seems logical to cut down your expenses during harsh economic conditions. However, in reality, it's the opposite of what you should do.   When your construction company is struggling, cutting your marketing budget will further hurt your business. During this time, you should go the extra mile to be at the forefront of the minds of your clients and prospects. With an effective marketing strategy, you should be able to increase sales.   However, if you need to tighten your belt, here are some steps you can take instead of putting a pause on your marketing efforts. 1. Be strategic about how you spend your money. First of all, don't waste money. This sounds simple, but in reality, many construction business owners are not mindful of their spending. Be strategi

This Podcast Is Episode Number 432, And It's About Cash Flow Advice For Construction Businesses Solid cash flow management is vital to ensuring your 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 construction business owners.   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 you're bringing in more than you're spending. A negative cash flow means you aren't bringing in enough to cover your expenses. Your company can run into problems by not charging enough for goods or services, having late-paying clients chronically, growing too quickly, or simply spending too much money.   Without proper tracking and matching of income and expenses, most construction companies never know if they made a profit until the job is over. Cash flow can vary throughout the year, depending on sales cycles or w

This Podcast Is Episode Number 431, And It's About Consequences Of Avoiding Your Construction Bookkeeping Every business needs a financial plan. Your financial plan gives you a way to monitor and review your cash flow, make adjustments to your spending, and anticipate any upcoming economic issues. It can also make you more prepared to request funding or find investors so you can bring more money into your construction business.   Although many business owners are aware that financial planning is essential, it is often overlooked. Without a financial plan, however, you could find your business doesn't make the money you expected it to—or you could wind up with unanticipated expenses and no way of paying for them.   If you are a contractor, you are most likely a "doer," someone who gets things done, not now but right now! When you see anyone not swinging a hammer, drilling holes, pouring concrete, laying carpet, putting paint on the walls, or a thousand other construction tasks, the first thing you think is the

This Podcast Is Episode Number 430 And It's About Five Key Points To Optimize Construction Sales And Profits Owning a construction company and being an employee requires different mindsets and attitudes or paradigms. Both positions are natural enemies and generate tension, leading to various diseases; mental, physical, emotional, and spiritual.   Construction workers live in the real world, where everything can be seen, heard, felt, tasted, and sometimes smelled. They can look around and see evidence of their activities. Their long-term time horizon in years past was two weeks, which is why most payrolls are paid every two weeks. With various check cashing and payday loan outlets, their long-term time horizon has been replaced with now and right now!   However, construction company owners like you work in a world that is intangible and imaginary, where nothing is real or solid. Nothing in this part of their world can be perceived with any of your five senses: Sight, Sound, Feel, Taste or Smell. Your long-te

This Podcast Is Episode Number 429, And It's About The Challenges Of Construction Business Partnership Randalism: A Partnership is the only ship designed to sink. However, we understand your preference, so I would like to talk about it in this blog post. Joint ventures are a bit like change orders. They can be an incredible opportunity to make or lose much money very quickly. Almost as quick as betting money on a roulette wheel in a casino. Joint Ventures have their own accounting rules. The devil is in the details. How costs and profits are shared among the participants depends on how the joint venture is structured and the terms of the agreement. Contractors with annual sales of less than $10,000,000 often get together to work on a specific project. They find a friendly competitor to supply labor and equipment for a percentage of the job, hourly fee, or a flat number. This could technically be a "Joint Venture"; however, the time and scope are generally short and sweet. For example, a concrete contractor ma

This Podcast Is Episode Number 428, And It's About Managing Field Workers Effectively In Your Construction Business The construction manager is conditioned to avoid emergencies by being proactive. It is necessary to have systems in place to deal with emergencies when they arise. After the crisis has passed, the effective project manager evaluates the root cause of the trouble and implements change in the system to avoid a repeat performance. It’s also one thing to manage workers when they’re all in the same place at the same time. However, when you run a construction business with field workers, things can get a lot more challenging. Not only are you typically not on the same job site as them, but you might also have workers scattered over a variety of sites and projects.  Managing them doesn’t just mean scheduling them and making sure they’re progressing on the project, but also knowing how to shift people and equipment between sites to boost productivity. Here are three things you can do to manage field wo

This Podcast Is Episode Number 427, And It's About Consequences Of Avoiding Your Construction Bookkeeping If you ask 100 business owners what they like least about running a business, the chances are good that bookkeeping will rank high on the list. It's an annoying and frustrating chore that takes up much time and is easy to put off until tomorrow. Moreover, Construction Companies have unique bookkeeping needs. Some bookkeepers and bookkeeping systems may cost you more than they are worth in salary, fees, and loss profits because you cannot get QuickBooks reports and financial reports when you need them. Chances are, you are suffering from bookkeeping pain, and your bookkeeper or accountant is overwhelmed trying to figure out how to do construction accounting. Good bookkeeping leads to informed decisions. Avoiding your bookkeeping is dangerous, however. For example, not knowing your construction company's financial situation can result in a series of missteps that could ultimately cost you your business. H

This Podcast Is Episode Number 426, And It's About Construction Business Mid-Year Reminder For Setting And Reviewing Goals How are you and your construction business? Have you considered what you'd like to achieve in the coming twelve to eighteen months? Or maybe your set of priorities for the next half of 2021?   Contractors like you are typically highly creative and optimistic; thus, you often have difficulty narrowing down your ideas from among all the exciting possibilities, whether it's an opportunity to expand to a new market or choose a better time management strategy.    While some of you love planning, others feel overwhelmed by the process. So how do you decide on just a handful of goals that take priority, with so many moving parts that make up a construction business?   1. Set SMART Goals Focus your efforts and increase your chances of achieving your goals by the SMART guideline: Specific, Measurable, Achievable (Attainable), Realistic, and Time-Bound. Start by defining your top three business g

This Podcast Is Episode Number 425, And It's About Digital Disaster Recovery For Your Construction Company Hiring or not hiring employees is one of the few optional things the business owner chooses, changes their mind, or changes direction as needed. With so much discussion about employees, payroll, and payroll taxes, you may feel that you miss out on not hiring many employees. The reality is that as a small business owner, you do not have to hire employees. The two extremes in any business are "Too Many People" (with many looking busy) and "Too Few" (a handful are overloaded). An example of Too Many People is for a midsized firm having everyone with access to the accounting. I mean everyone from the "Shop Guy," Warehouse, Outside Salesman to Accounting Staff. Depending on the size of the construction business, this might be necessary. However, for most companies letting everyone have access to the balance in the company checkbook creates "White Noise" and causes friction. "The company is making all this m