0399: Smart Contractors Spend Money On Marketing, Accounting, And Production

This Podcast Is Episode Number 0399, And It's About Smart Contractors Spend Money On Marketing Accounting And Production

There is no better time to reflect and think seriously about your construction business. Excellent organization systems add considerable value to any business because they allow you to spend more time working on your business rather than on it.

Year over year and regardless of the economy, one thing never changes; 20% of the contractors earn and keep 80% of the profits because they have a Business Process Management Strategy like our Contractors Success M.A.P. that tells them how, what, when, where and why to focus their limited resources on the M.A.P. = Marketing / Accounting / Production.

As a construction company owner, investing your money in these three things can immensely help your business and help you protect it from slower times:

Marketing

Many construction business owners think marketing is about finding clients today, but a good marketing strategy looks to the future. Just because your business is busy today doesn't mean it will be tomorrow, and if you only focus on your marketing when things are slow, your downturns will last longer than they should. Unfortunately, too many construction business owners only gear up their marketing efforts when business slows down.

By then, it's too late.

No matter how busy you are today, marketing should be one of your financial priorities. It would be best if you marketed yourself today to ensure clients tomorrow, next week, and next month. Spend your money on a proven marketing strategy that draws customers in, and you might be able to avoid future downturns or at least stop them from lasting as long.

Stop, Look, Listen And Think - Understand the impact of the 80-20 Rule for contractors

20% of your customers usually generate 80% of your net profit.  20% of the goods or services you sell contribute 80% of your revenue 20% or 2 out of 10 of your staff create 80% of your customers' value.

Accounting (Administrative Tasks)

There's a lot to running a business that can be outsourced. Yes, outsourcing costs you money. But it also saves you valuable time and energy. It may also prevent needless headaches.

There are many service providers out there that offer valuable assistance, freeing up your time for the things you love to do and are more skilled at. You can outsource your payroll, invoicing, bookkeeping, accounting, legal advice, and marketing. You can even hire an administrative assistant to help you with day-to-day business tasks.

These outsourced service providers are specialists in their field and can provide you with the services you need when you need them. If you're not an expert in those fields - primarily legal and accounting - outsourcing those tasks can prevent costly errors.

Your time is valuable. Spending money so someone else can take care of the mundane tasks you dislike is worth the expense.

Production (Employees)

Your business is nothing without your employees, and happy employees are more productive, motivated, and loyal. Smart construction business owners know that it's worth spending a little extra money to ensure you have the best employees on your staff and reward them for their hard work. 

When you can, spend money on your employees. Offer bonuses or gifts for meeting their goals or exceptional service, provide better-than-average benefits plans, give them opportunities for training, or increase their salaries.

Happy employees give more to your business. They reduce the turnover rate, saving you the cost and headache of finding and training new workers. Plus, your clients and customers like seeing consistency in your staff, so they'll appreciate that you keep your workers happy.

At this point, you have some basic operation manuals in place for your field and office employees. It is the document that answers the same questions you will be asked 100's times. It is the Wikipedia of your company. "This is Who We Are, And This Is How Things Are Done Here."

Final thoughts

Smart construction business owners know there are a time and a place to spend money. Spending your money in intelligent ways saves you time and energy. It can even save you money in the long run by reducing turnover and preventing expensive mistakes.

Consider whether you could help your business, and yourself, by spending money on your employees, marketing, or administrative tasks. Now, you have a road MAP to success, and all you have left is to assemble the tools, equipment, and staff to set up your trucks and vans and go to work!

And of course, treating everyone a little nicer will make the challenges of the day go easier. I invite you all to join me in the Celebration of the Holiday Season, of Living Well and being Happy. Merry Christmas to all!

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