constructionaccounting

[constructionaccounting]

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]

Check out this episode about Contractors Marketing - Accounting - Production (M.A.P.)!

[constructionaccounting]

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].

  Check out this episode about Contractors Marketing - Accounting - Production (M.A.P.)!

[constructionaccounting]

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]

Check out this episode about Contractors Marketing - Accounting - Production (M.A.P.)!

[constructionaccounting]

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]

Check out this episode about Contractors Marketing - Accounting - Production (M.A.P.)!

[constructionaccounting]

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]

Check out this episode about Contractors Marketing - Accounting - Production (M.A.P.)!

[constructionaccounting]

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]

  Check out this episode about Contractors Marketing - Accounting - Production (M.A.P.)!

[constructionaccounting]

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]

    Check out this episode about Contractors Marketing - Accounting - Production (M.A.P.)!

[constructionaccounting]

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]

Check out this episode about Contractors Marketing - Accounting - Production (M.A.P.)!

[constructionaccounting]

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]

  Check out this episode about Contractors Marketing - Accounting - Production (M.A.P.)!

[constructionaccounting]

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]

Check out this episode about Contractors Marketing - Accounting - Production (M.A.P.)!

[constructionaccounting]

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]

Check out this episode about Contractors Marketing - Accounting - Production (M.A.P.)!

[constructionaccounting]

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].

Check out this episode about Contractors Marketing - Accounting - Production (M.A.P.)!

[constructionaccounting]

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]

Check out this episode about Contractors Marketing - Accounting - Production (M.A.P.)!

[constructionaccounting]

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]

  Check out this episode about Contractors Marketing - Accounting - Production (M.A.P.)!

[constructionaccounting]

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]

Check out this episode about Contractors Marketing - Accounting - Production (M.A.P.)!

[constructionaccounting]

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]

Check out this episode about Contractors Marketing - Accounting - Production (M.A.P.)!

[constructionaccounting]

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 

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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]

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