Small construction contractors find when they open their brand new business, nothing is the same.
You are suddenly working all the time. There is always something that needs to be doing.
Days, nights, evenings, weekends frequently have conflicting needs on your time.
The starting point is the marketing:
- Determine your business name
- Purchase a domain in the name of your business
- Setup business email in the name of your business
- Create an email signature with your contact information
- Enable your cell phone to accept email and text messages
- Setup a website
- Join trade organizations
- Begin Networking
In the beginning, you think you know what type of work you want to do. Over time it usually changes. Each of these has a different flavor, and very few contractors can toggle between the different types:
- Residential or Commercial
- Tenant Improvements
- Service and Repair
- New Construction
- Custom Homes
- Spec Homes
- Remodels
Owners quickly become adaptable and will take on all kinds of work to keep the cash flow going.
Many contractors will work as a trade contractor for a select group of general contractors.
"Please keep it simple marketing" is to pass out flyers in your local neighborhood.
Find senior citizens who need a little assistance.
Decide if cash job is worth it; then declare it.
Labor regulations are different from state to state. Not always easy to hire a bored high school or college student looking for some extra cash. Anyone who earns more than $600 for the year is no longer casual labor. You need to be either issued a 1099 or a W2 at the end of the year.
Recommend using a temporary service until you are sure you need employees on a long term basis.
Employees are very seldom as flexible. Employees who are good at new construction rarely work out in any service and repair type of environment. Think "Outside Voice" versus "Inside Voice."
- Hiring an employee can be expensive.
- Expectations of full-time employment
- Enjoying lots of "Standby Time."
- Being paid during the slow time
- Benefit – Overtime Pay
- Benefit – Vacation Time
- Benefit – PTO (personal time off)
- Benefit – Family Leave Act
- Benefit – Bonus
- Benefit – Other Perks
- Federal Payroll Taxes
- State Payroll Taxes
Being in your own business can be the best time in your life. Alternatively, the worst time! Randal and I have been in our own business, almost our entire marriage. By exception that either of us has had a W2 by some company other than our own. The best way to describe it is: A good time was had by all, not always us!
No one starts a business, especially a contracting business, and have it rolling perfectly with a profit every step of the way. Between regulations, the economy, and other outside forces, always a learning curve.
YouTube and Google can be a great resource. However, it is just that – a resource. Think of Google as an electronic telephone book with white and yellow pages. You can look up anything anywhere.
YouTube video gives you only want the author wants to provide you with. From car repair to accounting, that video cannot look under the hood and hear or see what you can not explain; it can't hear you!
This is precisely why virtual clinics limit the scope of what they treat. Video and audio allow a doctor to see and hear you sneeze. Now it is the common cold, flu, or something more serious. It is the possibility of "more" that the virtual doctor may request an office visit or a trip to the nearest emergency room.
Starting as a brand-new contractor; you will have a little bit of paperwork:
- Sales
- Receipts for material
- Receipts for cell phone
- Receipts for gas and more
As you grow, your construction company paperwork increases and the need for more detailed reports.
Piles of paper are growing. I can see them from here. Why, because I have talked to hundreds of construction contractors regularly. There are common issues and other things specific to you.
Because of this experience, I understand your situation when you call, email, or fill out a form.
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 email sharie@fasteasyaccounting.com.