Apr 24, 2015
Many business consultants contact us after they start working with Handymen, Contractors and Construction Company because they are frustrated with contractors who are having trouble earning a profit.
The primary root cause is most contractors do not understand their overhead costs and breakeven. In turn, contractors are frustrated with Bean Counters and Desk Jockeys who do not understand how construction works.
Perhaps this article will shed some light that will help consultants and contractors understand each other and offer some tips that will benefit everyone.
Business consultants live in a world where successful companies have a Business Strategy of M.A.P. or Marketing First, Accounting Second, Production Third and that is completely opposite of what most contractors do.
Contractors, bless their hearts, we love them all! Most contractors operate their companies as if they were job superintendents not business owners. Which means they subscribe to P.A.M. Production First, Accounting Second (and only after the year is over and it is time to file tax return) and Marketing (rarely if at all since they believe the best advertising in referrals and word-of-mouth)
Bob The Contractor, (not his real name), has a small company they provides a decent middle income living for his family of four but not much hope of building a business that will run without him constantly being involved and running himself ragged. He is a skilled technician who learned his trade in an apprenticeship program, working for another contractor and by his own experiences.
Over the years, Bob developed a Paradigm, Mindset, Understanding, Perception or whatever word makes the most sense to you about how construction companies operate.
Some of the building blocks of his Paradigm were from personal experience and the rest came from several meetings of the Business Round Table; the little round table in the local bar and grill with four chairs, a pitcher of beer, four glasses and three of his contractor friends.
All of them agree that production, getting work done is the most important part of the business because that is what they always did when they worked for someone else and that is what they expect of their employees.
All learning is comes from connecting new things to things we already know and Bob has settled into a rut; which is a grave with gradual slopes on each end. He only knows what he knows and does not know what he does not know.
Learning to own and operate a successful construction company is very similar to learning a construction trade. There are only two ways to do it. Self-taught and learning from someone who is already mastered the skill.
Self-taught means making many mistakes and it takes a lifetime before you get good at it, and then it is too late. Learning from a master is much faster and in the end allows the student the opportunity to go beyond the teachings of the master and have an even greater success.
Bob has this nagging feeling he is missing something and so he contacts a Business Consultant...
John The Business Consultant, (not his real name), got decent grades in school and graduated college with a Business Management Degree. John has a lot of energy and loves to solve problems and make the world a better place.
After graduation John went to work for a Mega Company which is a large multi-national company expecting to be on the fast track to promotions, bonuses, fast cars and long vacations in the sun. It did not take long for John to realize that if he put his college degree in one hand and five dollars in the other he could buy a cup of coffee and have something to read and admire.
The problem with large multi-national companies like Mega Company is they rarely hire talent; rather they hire fresh college graduates, work them hard and fast until they realize they're on an endless treadmill deep inside a downtown high-rise building also known as a "Vertical Salt-Mine" with fluorescent lighting and little or no possibility for advancement. Somewhere between 5-10 years, the good ones wake up and ask themselves "Is there someplace better I could be?" "Perhaps I should leave Mega Company and start my own consulting firm and fulfill my life's ambition!"
They put together a Business Plan using a form of M.A.P. or Marketing First, Accounting Second, Production Third and get to work. Very quickly, they acquire a few clients and just as quickly, they lose them because they work 9AM to 5PM not 5AM to 9PM like their business owner clients.
They are "Idea People" full of good ideas and projects and tons of new Strategic Planning Initiatives they expect their customers and clients to embrace and implement by dropping everything else they are doing and getting to work on this new life-changing path.
Example E-Mail Frustrated Business Consultants Send Us
The following email was changed to protect the identity of the sender and is typical of the ones we get:
I am consulting for a local contractor and I'm trying my best to get him to hire your firm for his bookkeeping and accounting needs. He is running things by the seat of his pants and writing things on scraps of paper that ends up on the dashboard of his truck, under the seat, behind the seat, on the floor, in the toolbox and stuffed into the overhead sun-visor.
I understand this is how contractors do things, but I am trying to help him get organized and it's difficult. I have helped several businesses, and he thinks he has a "ballpark" number of his construction company monthly overhead. I need to know exactly what his overhead expenses are, so I can help him increase cash inflow and profits. He needs to know if he is pricing jobs in such a way that he will remain profitable and grow his business so he can have a better lifestyle and retire someday.
You offer a One Hour No Charge Consultation For Contractors would you extend that to me and help me understand how to help him?
Sharie did spend just over an hour consulting with this Business Consultant and he gained a tremendous amount of insights and as I understand it the Business Consultant and his contractor client are still working together and we are providing some much needed outsourced contractor bookkeeping services.
One Answer Is For Business Consultant's Spend Two Months Working For A Contractor
At this point, you either agree with me wholeheartedly or believe I am a crazy nutter or just looking to get free labor for contractors. Your perception or your Paradigm is reality so whatever you believe is true.
I was blessed with having grown up in a construction family and have spent most of my adult life in and around contractors and construction. Learn more... I have started construction companies, made a lot of mistakes, made a lot of money, spent many years acquiring formal education and certifications, (I have more degrees than a thermometer) so I have a foot in both camps as a Contractor and Business Consultant.
A Business Consultant who will invest two months working side by side with a contractor will, in my opinion, gain such tremendous insights, knowledge and humility that will be more valuable than spending 100 years trying to figure out contractors from the outside looking in.
I trust you will find value in this podcast and please understand it comes from the heart of someone who really loves contractors and has a deep commitment to helping as many as I can. The same goes for my business partner, best friend and spouse of over 40 years, Sharie. Moreover, everyone on staff here at Fast Easy Accounting goes the extra mile to do everything we can to help and support all contractors.
Our commitment stays the same to all contractors regardless of whether or not you ever hire our services because we are all in this world together and cooperation will do a lot more good than competition. "The Rising Tide Raises All Ships" which means when contractors do well everyone benefits.
I trust this podcast helps you understand that outsourcing your contractors bookkeeping services to us is about more than just “doing the bookkeeping”; it is about taking holistic approach to your entire construction company and helping support you as a contractor and as a person.
We understand the good, bad and the ugly about owning and operating construction companies because we have had several of them and we sincerely care about you and your construction company!
That is all I have for now and if you have listened this far please do me the honor of commenting and rating podcast www.FastEasyAccounting.com/podcast Tell me what you liked, did not like, tell it as you see it because your feedback is crucial and I thank you in advance.
I trust this will be of value to you and your feedback is always welcome at www.FastEasyAccounting.com/podcast
This is one more example of how Fast Easy Accounting is helping construction company owners across the USA including Alaska and Hawaii put more money in the bank to operate and grow your construction company. Construction accounting is not rocket science; it is a lot harder than that and a lot more valuable to construction contractors like you so stop missing out and call Sharie 206-361-3950 or email email@example.com
Thinking About Outsourcing Your Contractors Bookkeeping Services?
Click On The Link Below:
Need Help Now?
Call Sharie 206-361-3950
In closing, I want to caution you that we may or may not be a good fit for your contracting company. This guide will help you learn what to look for in outsourced construction accounting.
Thank you very much and I hope you understand
we really do care about you and all contractors regardless of
whether or not you ever hire our services.
Bye for now until our next episode here on the Contractors Success MAP Podcast.
Randal DeHart | Contractors Accountant