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This Podcast Is Episode Number 0376, And It's About Brace Your Construction Business From Recession The pains caused by an economic downturn can be excruciating, which is why most of us dread it. A recession can mean massive layoffs, jobs becoming harder to find, and wages frozen, which means consumers hunker down and spend less-- often worsening the slowdown unknowingly.  For most businesses, especially small businesses, recessions can be brutal. Just take, for example, the Global Financial Crisis (GFC) that struck the world in 2008. Between December 2008 and December 2010, approximately 1.8 million small businesses shut down. When Investopedia looked into the financial crisis's impact on small businesses after a decade, they found out that business creation has not yet returned to pre-crisis levels.  As the battle against COVID-19 is far from over, global financial markets have been impacted, consumers are tightening their belts, and global demand is falling. All these signs point to one thing: the next eco

This Podcast Is Episode Number 0375, And It's About What To Do If Your Construction Business Is Operating At A Loss Operating at a loss means you’re spending more money than you’re making. And while it’s not uncommon, especially for new businesses, it’s still not an ideal situation and shouldn’t continue in the long term. Otherwise, you will eventually run out of cash reserves and be out of business. So the first thing you need to identify is why you’re operating at a loss. If it’s because you’re still in the start-up phase, then you might not need to worry too much as long as you’ve got enough cash to meet your costs. But if the losses are due to a decline in sales, then it’s time to review your construction business and, if necessary, get professional help. You’re operating at a loss if you: Don’t have enough money to pay your bills; You’re in overdraft without a plan to pay it off; You’re not selling as much as you anticipated. Do any of the above apply to you? Let’s look at ways you can remedy the situa

This Podcast Is Episode Number 0374, And It's About Questions To Ask As Your Construction Business Reopens As small business owners look to operations after reopening, there are some critical business questions to ask. These questions will help you determine what adaptations you want to keep, whether your construction business model is working, if there are additional changes you want to make to keep your company operational through future economic downturns.   It's not always fun to do this sort of examination, but the answers to these questions will help you make the best possible future decisions.   1. What worked and what didn't work in my construction business model? Almost all small business owners had to make changes to their business model. Whether it was hosting meetings with clients on Zoom or learning about encryption technology to allow employees access to sensitive information from home, most small businesses adapted in some way.   Ask yourself: Did I have to adapt to my construction business m

This Podcast Is Episode Number 0373, And It's About Tax Tips For New Construction Business Owners The tax deadline is postponed to July 15, 2020. If you just started your construction business last year and haven't filed yours yet, this post would be helpful.    Your tax bill is based on reports produced by your accounting system. Want to avoid paying more than you should come tax time? Or a frantic last-minute search for missing financial records?    New construction business owners have a lot on their plate, and can quickly lose track of an approaching tax deadline or financial data needed to submit their return.   Organization is key when preparing for tax time, as is taking advantage of the many tools and resources out there to support new entrepreneurs.   Set yourself up for success by following these four pillars of painless tax prep.  Commit to clean bookkeeping from day one Year-round, effective bookkeeping is the best way new construction business owners can minimize tax season stress. With the ful

This Podcast Is Episode Number 0372, And It's About Sure-fire Construction Marketing Plan In Eight Easy Steps If you're serious about getting the best value you can for your marketing budget, you'll need to develop a marketing plan. Many contractors are having challenges adapting to this ever-changing economy. Trade contractors who rely on the same general contractors they did a few years ago to supply jobs to bid on are finding it more difficult to recover and find work.   It appears that history is repeating itself. Instead of yellow pages, I see many well-intentioned people with their minds and hearts in the right place with a lot of really great ideas on what works and fails in social media. I certainly don't know what works for every contractor; however, what I do know is that every construction company is unique, and what works for your competitor may not work for you.   Below we outline eight simple steps for making your marketing efforts more effective. 1. Know your customers Firstly, you need to ide

This Podcast Is Episode Number 0371, And It's About Beyond COVID-19 - How To Build Value In Your Construction Business We've said it before, and we'll say it again – this has been a challenging few months for all of us, but there is no better time to think seriously about your business.    We all understand the economy has been tough for construction owners. I know you have made severe adjustments in your lifestyle and your businesses; however, remember this too shall pass because there is nothing new under the sun.   The key to building value in your construction business is to plan the process in a systematic way, whether you're aiming to grow your business in any economy or groom it to get a better price from a buyer. In this article, we have compiled a few tips to create value in your industry.   1. Looking through the eyes of buyers Whether you just want to build a more substantial business or looking ahead to the day when you might want to sell it, it helps to think of your business through the eyes of

This Podcast Is Episode Number 0370, And It's About How Cash Flow Forecasts Help Contractors Managing cash flow is a vital part of running a successful construction business. Some contractors think managing cash flow means keeping track of how much money enters and leaves their business, but there's actually more that goes into it.  [Starting Cash + Cash In - Cash Out] = Cash Flow Contractors and sub-contractors know there is more to profits than what is shown above, and most of you rely on your "gut feel" to see when the project has made a profit or not.   Cash flow forecasting is an incredibly valuable tool that helps you anticipate cash flow issues, plan for days when your cash flow is limited, and show the bank that you are prepared. It's a necessary process that you shouldn't ignore.   Here are some ways cash flow forecasts help construction business owners. They help identify cash flow issues before they happen. Most construction companies go through slow periods. Sometimes, those periods are appar

This Podcast Is Episode Number 0369, And It's About Working Out An Effective Marketing Budget For Your Service-Based Company “How much should I spend on marketing?” Most construction business people ask me this question at some stage. Many small company owners find working out how much to spend on marketing a tricky exercise to calculate.    Generally, there are five ways to work out a marketing budget for the year. Remember that these are marketing budgets, not advertising budgets. Marketing covers everything you do in your business that creates awareness, including such activities as advertising, brochures, competitions, trade shows, demonstrations, travel, direct mail, email campaigns, your website, and sponsorship.   1, No idea at all method Some service-based businesses don’t have any budgets. They just advertise either when they feel that sales have slipped that they need an extra project, or when they get duped into advertising by some advertising salesperson (“Buy now, and we will give you 50% extra

This Podcast Is Episode Number 0368, And It's About Build Or Rebuild Your Construction Company By Bootstrapping   Bootstrapping is figuring out how to reduce the cash you need to start or re-start your business, by eliminating any unnecessary overheads while finding out who will give you a hand.   If for whatever reason, you're not able to raise enough capital to start-up, you might be able to get what you need by 'bootstrapping' (finding what you need through unconventional or low-cost methods):   Have others lend what you need   You don't have to purchase new equipment to start your business. Think about what items you might be able to borrow over the short term or do without until the business grows.   Draw up a list of your asset needs and make a determined effort to borrow from others what you can while searching online for second-hand items that will save your business money. Are there people you know that are already in the construction business who could lend you what you need?   Call in favors Time

This Podcast Is Episode Number 0367, And It's About Boosting The Social Proof Of Your Construction Business Online While the world is staying six feet apart, most small businesses are staying afloat and connected online. Now is a great time to boost the social proof of your construction business virtually.   You won't build a loyal client base if you can't earn your visitors' trust, which is why companies value social proof so highly. But proving your construction business's value online takes a unique skill set, one you can nurture by learning from the marketing industry professionals.   Befriend Experts Experts love teaching others what they know. While they do make money from their knowledge, they also offer discounts to friends. If an expert loves you enough, you might even convince them to talk with you, free of charge.   Experts are people, and make friends like anyone else. Since you are looking to build social proof online, joining an expert's Internet community is the first step toward meeting them.

This Podcast Is Episode Number 0366, And It's About Construction Business Communication Strategies During A Pandemic Most small business owners face a time in their career when they have to communicate in ways or about topics they aren't confident with. COVID-19 has put construction business owners in the position of having many conversations that are uncomfortable and stressful.    Whether you're communicating with employees about company issues during the pandemic, hoping to negotiate a rent reduction to the landowner, or changes to credit terms to your banker, here are some strategies that will help you be more effective in your communications.    1. Be transparent It's vital during a crisis that you're transparent about your company's situation. You might not feel good telling your suppliers that the business has slowed considerably. Still, honesty and transparency will help them understand your situation and encourage them to work with you on a solution. The same is true of employees. Your staff needs

This Podcast Is Episode Number 0365, And It's About How To Manage Your Construction Firm's Cash Flow During Crisis Dealing with unexpected cash-flow difficulties, even if you're working hard to avoid shortfalls, is hugely distracting. A formerly reliable client might take much longer to pay than anticipated leaving you out of pocket. If you're starting a construction business, it could simply be taking longer than expected to turn a profit in these trying times.   Red light warnings Develop red light systems to warn you automatically if something needs querying: Check as early as possible if leads, orders, or sales, fall below a certain threshold, or a substantial customer ends their subscription (recurring service). Pay attention to your Key Performance Indicators. Make sure you have regular feeds of how your business is performing. You also need to know about any substantial invoices that are in dispute, particularly overdue debts and clients exceeding their credit limits. Building productive relationshi

This Podcast Is Episode Number 0364, And It's About Bridging Generation Gap In The Construction Industry   These days, it’s inevitable that a diverse group of older and younger workers cross paths in the construction industry. After all, the young, tech-savvy, socially conscious demographic known as Gen Y (Millennials) and Gen Z are currently the largest living generation in the U.S., navigating the workforce in record numbers. And the boomers may be retirement age, but that doesn’t mean they’re ready to stop working. Many baby boomers are choosing to enjoy “encore careers” – jobs that allow them to continue to apply their skills and experience to personally meaningful projects. Here are a few ways to help these two groups work together, so your construction business benefits from their unique and complementary skills.  Baby boomers and millennials in the construction business Millennials offer incredible potential to the businesses they work for. Young, tech-savvy, and interested in making a difference in th

This Podcast Is Episode Number 0363, And It's About Could Your Construction Business Benefit From The Gig Economy? At some point, every business owner needs outside help to improve efficiency – or to free up their time so they can take steps toward future growth.    The trouble is, the cost of hiring regular staff, even on a part-time basis, can eat up a company's budget – especially in the early years when you're still just finding your feet.     The rise of the remote freelance worker (otherwise known as the "gig economy"), especially during this time, can offer construction business owners a simple, cost-effective solution when they need extra help with a one-off "gig" or short-term contract.   A look at the pros  For many construction company owners, the bottom line is often their most significant motivation for hiring independent contractors. It's a much less costly option than taking on an employee – and this can be especially true with international workers whose rates reflect a lower cost of living. 

This Podcast Is Episode Number 0362, And It's About Cybersecurity Tips For Construction Business Owners   It's natural for small business owners to think that they won't be victims of cyber attacks. Most of the news surrounding hacking and data breaches involve large corporations, but that is because that's where a high number of victims are affected. Hackers may find they have an easier time going after small businesses and start-ups that aren't prepared for a security breach.    So while they might get less information from a small business, thieves will have an easier time accessing that information. If your construction company keeps any time-sensitive information on a computer network—whether that is personal information, credit card details, or other vital data—you need to ensure your cybersecurity is top-notch, so you, your business and your clients are fully protected.    Here are some tips for enhancing your cybersecurity.  1. Keep your employees informed  The unfortunate truth is that human error

This Podcast Is Episode Number 0361, And It's About What To Do When Your Construction Company's Supply Chain Faces Disruption   Having a family-owned construction business in times of uncertainty, we spent many sleepless nights wondering how we were going to make payroll. Where would our next job come from? Would it be profitable, or would something terrible happen to cause us to go bankrupt?   If your company relies on material suppliers in various geographic locations, it's likely that at some point, your construction business will face a supply chain disruption. Whether that disturbance is caused by a virus, regulatory lockdown, international tensions, changes in local laws, or a natural disaster, there will probably be scenarios in which your suppliers or transporters face obstacles that affect your company.    Here are some steps you can take to respond to such situations and even prepare ahead of time for them.    1. Know your supply chain   An essential first step to any preventive or reactive plan is

This Podcast Is Episode Number 0360, And It's About 7 Ways To Improve Construction Workplace Productivity The success of any business, large or small, depends considerably on nurturing an efficient, productive workplace.  Some contractors and construction company owners believe in maximizing production by driving everyone from the laborers to the Project Managers to work harder, longer, faster, hustle, and run. And if they are giving less than 110% to the company, they are not doing enough. While improving employee productivity should always be a priority when the ultimate goal is a sustainable and profitable business, the process is easier said than done.   Below are some of the most effective methods of managing a productive, happy workplace while increasing output: Establish Accountability Productivity depends on every employee's understanding that the jobs they do come with specific responsibilities, and that their actions have consequences. Employees that lack accountability are more likely to slack off,

This Podcast Is Episode Number 0359, And It's About How A Business Dashboard Can Help You Drive Your Construction Company Business dashboards are a valuable business intelligence tool, offering an "at-a-glance" big picture view of a company's performance.   Some construction business owners use a dashboard to track KPIs (Key Performance Indicators) relevant to just one aspect of their business, such as sales growth, marketing, or financial data. Others rely on an executive dashboard for an overview of data culled from various sources (e.g., their accounting software, CRM tools, and website analytics).   The great advantage of a dashboard is that it presents and compares complex data drawn from several sources using visual tools (i.e., tables, line graphs, and bar graphs). With access to this consolidated data – information that would take hours to compile and analyze on your own – business owners are empowered to make more informed real-time business decisions.   Here are a few more reasons to consider inves

This Podcast Is Episode Number 0358, And It's About Tips For Getting Your Construction Business Through Tough Times If you're a small business owner whose construction company hasn't gone through hard times, that's great, but it's likely to happen at some point. As much as we dream about being brilliant enough in this industry that we'll never face slow times, there are many things beyond our control that can negatively affect our organization.   Here are six tips for getting your business through difficult periods so you can look forward to many more years of construction business ownership:   1. Take care of your employees   Workdays lost to sickness are a considerable cost to the company and a threat to productivity. Regardless of health threats and virus spread, the workplace itself is a source of infection, and you can reduce the risk of causing absence in your employees by implementing control measures to ensure the environment is clean and safe.   Introduce a culture that dictates employees take res

This Podcast Is Episode Number 0357, And It's About Annual Tax Return Pointers For Construction Contractors Preparing for tax season is a year-round endeavor. Well-organized small businesses are better positioned to minimize their tax bill while avoiding penalties associated with missing or inaccurate information.   Tip number one for construction company owners is to update financials every month, using a streamlined software or cloud-based system. This way, come tax time, everything you need is all in one place.    Second - The Profit And Loss Balance Sheet is what Tax Accountants use.   The numbers on these reports offer a summary snapshot of your business. They are referred to and reviewed over and over by banks and others.   Below is a copy of the "Schedule C” it is the standardized format from the Internal Revenue Service.  Besides the bottom number, what does it tell you? I suspect minimal information. Why? Because the Internal Revenue Service has rules/regulations/restrictions about their forms and a