0347: How To Achieve Business Success With A Construction Accounting Mentor

This Podcast Is Episode Number 0344, And It's About How To Achieve Business Success With A Construction Accounting Mentor As the year ends and another page is turning, it is important to learn and listen from trusted people who have come to assist you and guide you in your personal and professional endeavors. Your construction business's financial board, mainly your accountant, is one of them.   Ideally, you and your accountant are more than just an "adviser" and a "client" to each other. With your combined skills, expertise, and a shared mission to support a thriving business, you're more like strategic partners.    The key to achieving success in any partnership is, of course, healthy communication. Before the year ends or at your next meeting, be sure to ask your construction accountant these four important questions:  

1. What's my best strategy for increasing revenue?

Every construction business owner strives to improve profit margins – but the best way to quickly and sustainably grow revenue will vary from business to business.

When reviewing your financials, ask your accountant to pinpoint and suggest smart strategies for driving higher revenue. For your unique construction company, that might mean focusing on new leads, encouraging customers to hire you more frequently, incorporating cross-selling or up-selling, or re-thinking your pricing strategy.

2. How would you assess our financial performance this quarter/year?

It's part of your accountant's job to stay current with your company's financial statements and reports (i.e., your balance sheet, income statement, profit and loss statement, and cash flow reports). 

Some small business owners – especially those who lack confidence in their financial literacy skills – may only want to know the basics, in simplest terms. Let your accountant know you'd like a more thorough analysis of your finances when you next meet and help in understanding what the numbers mean. 

Ask for key ratios, like your gross profit percentage, and an assessment of the big picture, drawing comparisons with past performance as well as trends in your industry

Also, ask for any insights your accountant might have into the reasons for new or surprising developments, and what you can do to correct areas where your business is falling short – as well as what actions you can take to continue any positive trends.

3. How can you help me grow my construction business?

Your accountant should be prepared to offer professional advice to help your business expand and grow over time.

Scaling a business can be tricky as it requires a company to do everything it must to keep their customers happy while adapting to change – such as new staff and new systems to accommodate a higher volume of clients. 

Financial systems may need to change as your business expands; likewise, your company's financial management may need additional support as you transition to a larger company.

Ask your accountant how you can best work together to facilitate smooth, sustainable growth with minimal disruption to operations, and for tips on how to successfully scale based on experience with other small business clients.

4. What are your most successful clients doing?

Chances are your accountant serves as a trusted advisor to several clients – and therefore, will be privy to the inner workings of companies who are struggling and others who are thriving.

Neglecting to ask your accountant about their clients' success stories is a missed learning opportunity. Even if a business has little in common with yours – operating in a different industry, or as a seller of products versus services – there's value in learning what yielded impressive results for another company.

Alternately, you might ask your accountant how their clients overcame challenges similar to yours to help you brainstorm possible solutions.

The opportunity to learn from not just an accountant but your Construction Accounting mentor can do more for your business than any course, educational program, or degree. Being a mentee means you get the benefit of first-hand experience without having to make all the mistakes yourself. 

There are, in fact, many reasons why a well-matched mentor is an invaluable asset for a business owner. You'll have someone you can trust and confide in, lean on for advice, bounce new ideas off of, and get help refining your construction business plans. 

So how do you connect with a mentor and get the most out of your mentor-mentee relationship?

Perhaps you already have an accountant, but would like a Construction Accounting mentor in particular. The first step to seeking out a mentor is to know the kind of guidance you and your business would most benefit from right now. 

For construction business owners in the early start-up stage, someone who can provide advice for surviving the first few lean years—and someone you can touch base with more often—may be the perfect fit. 

In this scenario, finding a mentor with a background in your industry is a plus. Mentors with relevant experience have been where you are now and understand all your issues and frustrations.

Let's face it: all business owners are busy people. And although it's most beneficial to meet with a mentor consistently, doing so in person on a regular basis can be a challenge for both parties. For some mentors and mentees, what works best is video calls. Our Contractor Bookkeeping Review, for instance, offers consultation and mentoring from Randal and works well through an online conference.

To get the most out of mentoring—and to demonstrate how valuable your mentor's help has been—be sure to follow up on your progress. A mentor will appreciate hearing how you've put their advice to work, your milestones and successes, and the goals you'd like to work on in the future. Acknowledging your progress will help you stay motivated, too, by seeing how far you've come.

Final thoughts

Your accountant is an incredibly valuable resource for your business – and not just at tax time. Be sure to check in every quarter, so you have the up to date financial info you need, and your accountant's professional advice when it comes to making key business decisions.

About The Author:

Sharie DeHart, QPA is the co-founder of Business Consulting And Accounting in Lynnwood, Washington. She is the leading expert in managing outsourced construction bookkeeping and accounting services companies and cash management accounting for small construction companies across the USA. She encourages Contractors and Construction Company Owners to stay current on their tax obligations and offers insights on how to manage the remaining cash flow to operate and grow their construction company sales and profits so they can put more money in the bank. Call 1-800-361-1770 or sharie@fasteasyaccounting.com