A construction company building both new homes and remodeling needs to calculate a separate markup for each type of work.
Michael addresses a few different questions we’ve heard recently, primarily dealing with taxes and profit and calculating your markup.
There is a measure you can use to determine how financially solid your company is at any given point in time. It’s called the current ratio, and it’s a good idea to check it regularly.
When you own a small business you wear a lot of hats. Understanding the numbers might not be your favorite hat, but numbers are important because they show where you stand financially.
The best way to avoid paying taxes is to not make a profit at all, but it’s a rough way to live.
When your books are set up properly, it’s easy to calculate your markup, and it’s also easy to compare your actual results to your estimates.
Taxes are the price you pay for being profitable. It’s a good thing when your business is in the black and you need to pay taxes on it. It’s not good when you’re taken by surprise.
We hear many stories from business owners who have had to recover from the theft of funds by their own employees. Today we’re sharing a list of things you can do to protect yourself and your business.
An Operating Capital Reserve Account helps keep you and your family free from financial worries, which helps you sleep better.
I’ve seen contractors try to apportion overhead on a daily basis when compiling their estimates. Others try to apportion overhead on a weekly, monthly or per job basis. I don’t recommend any of those approaches.
Using the wrong labor rate, or using someone else’s markup when you don’t know their assumptions, is one of the biggest mistakes we see and the difference can be thousands of dollars.
It is a fact of life that when you sell construction-related services, you’ll have clients tell you that your price is too high. Bless their hearts. They have no idea what would be a fair price for the work they want done, they just know that your price is too high.
This week I want to catch up on a few things that have been bothering me.
It’s easy to know if you’ve made a profit when every transaction is complete in a day. It isn’t as easy in construction, where a job might take a week, a month, or even more than a year to complete.
Why is it important to know the burdened labor rate when you estimate your work? Because the labor burden cost is the one that often falls through the cracks.
If your construction business isn’t profitable, it won’t survive. You have an option of being competitive in construction. You don’t have the option of being profitable.
You’re in business to provide a service and make a profit doing it. Having the financial info you need to make decisions is critical for your business success.
A contractor last week told me they'd just heard from their CPA that they had a tax bill due the next day. It was a surprise.
A contractor friend just went through an IRS audit. After going through all his records and asking a ton of questions, they said, "In my opinion, you owe us $22,000."
I was reminded again this week by a dear friend who is an expert in the use of QuickBooks of the necessary care that needs to be taken when you set up your accounting.