Contractor Success Map with Randal DeHart | Contractor Bookkeeping And Accounting Services Randal DeHart | Construction Accountant |PMP | QPA

This Podcast Is Episode Number 515, And It's About What Every Trade Business Owner Should Know About Raising Prices Raising prices can be a sore subject. Many construction business owners like you assume doing so will spell the end of your competitiveness. But by not raising prices, you're simply letting inflation and your suppliers' maintenance of your margins quietly eat away at profitability. The bottom line is that costs will always rise long-term - at least with inflation.

That means you have to pass on the costs to your customers or consume those costs yourself to the point where one day, you'll have to either suddenly raise prices or accept the eventual failure of your business.

The worst thing you can do is avoid measuring your costs by sticking your head in the sand. Cost rises will catch up with you eventually, so take action to maintain your margins.
Analyze and reduce your costs Regularly check the accuracy of the prices you use in your forecasts and break-even calculations. If you're using outdated costs, your predictions could be dangerously off course from the actual performance of your business.
Ideally, you should have your figures analyzed by a professional accountant with experience in the construction industry - and even then, you should remain directly involved to maintain an understanding of your books.
But if that's impossible and you have to make your own costs and margin analysis, try using the following tips to help you resolve any profit issues.
Analyze costs and profits on an individual product and service level first before looking at the business as a whole. You may miss critical financial details if you try and cut straight to the chase. Try making minor, subtle adjustments throughout your range rather than hiking prices on one service, even if the margin on that particular item is the one causing the biggest headache. Sharp, sudden price rises are more likely to attract a long-term adverse reaction from the target market than almost imperceptible ones they can easily accept. If you find a loss-making product in your books, don't immediately delete it. Consider first whether it's required to aid sales of profitable services. Schedule small price increases every six months or years rather than waiting every few years to raise prices more noticeably. Increase your prices If your costs are optimal, look at the other end of your margin - the price.
You may be hesitant to raise prices because you think any price advantage you have over the competition is too significant to lose, but if you give customers more compelling reasons to hire you, you may be able to justify a higher price.
Remember, it's all about positioning. Premium pricing reinforces the value of a premium service. If your market research tells you there's a gap in the market for a value alternative, fill it. But if there's also a gap for a superior choice, take that option if you can deliver a product or service to the required standards.
Why? Put simply; there's always someone willing to go cheaper. Look at how large shopping outlets use their buying power to find ultra-cheap stock and take customers away from smaller businesses with tighter margins.
Many small business owners take it as gospel that the last thing they should do is raise prices, but the opposite is true more often than not.
Just make sure that if you do raise your prices, you do so:
At a fair pace and intervals instead of raising prices in a way that will shock the market With consideration of the market's price tolerance Alter your product or service mix Any two margins are rarely the same in a range of products, so why focus equally on selling them all if concentrating on the higher-margin products will increase your income?
If costs and pricing are optimal, altering your product mix is the only way to maintain or increase your margins.
This means being ruthless and chopping products or services that may be close to your heart to focus instead

This Podcast Is Episode Number 514, And It's About How To Attract Profitable Construction Clients  

This Podcast Is Episode Number 513, And It's About Seven Ways Your Construction Business Can Market Its Services When you go into business as a tradesperson, you often focus on performing your trade to the best of your ability – as it should be. With time, the quality of your work will speak for itself, which is the most valuable testimonial of all.

Before the internet was commercially available, just as many experts advised contractors about the layout and design of yellow page ads and which books to spend money on, I say you spend money because that is what it was - Marketing.

Many of us who owned and operated construction companies spent thousands of dollars on these experts. Based on their recommendations, we spent tens of thousands of dollars annually in full-page yellow page ads as close to the first position.
Spending Money Is Easy, Investing Money Takes Work
However, any trades accountant or bookkeeper will tell you there's more to it now. While your good reputation preceding you is undoubtedly essential, there are a few other ways that you'll want to market your services to ensure that you have a steady stream of work. Read on to learn seven paths you can market your construction business.

1. Appear in directories

Since setting up a new business is usually a digital experience, it's easy to overlook the step of making sure you appear on a physical list where people can find you. Ensure your trade business is on relevant trade directories in your area.

Additionally, make sure you appear in the online equivalent. Yelp, Google, and Facebook each have business directories. And let's not forget the old standby: the phone book. Yes, they still exist! They are valuable resources for some people looking to hire a tradesperson.

2. Have a website

Some website-building platforms are very user-friendly, but hire someone if you feel that's beyond you. Almost everyone does an online search before they hire a business, and not having a website is like waving a giant flag that says you're out of touch, old-fashioned, or possibly not legitimate. Meanwhile, having a website reassures people that you are who you say you are and can provide the services they need. 
3. Leverage social media

Nothing is more substantial than a good referral, and people naturally turn to social media to find out what your customers are saying if they don't know someone who's used your services personally.

Keep your social media presence strong and engaged. If you're uncomfortable doing this, hire someone to do it for you. It's critical when doing business today.

4. Offer referral promotions

When you wind up with a happy client, give them an easy way to speak positively about you and suggest you to their friends. A card or a thank-you email with a discount code will do the trick.

5. Run ads

Construction marketing can be tricky because, typically, your services aren't always needed. But when you are required, it's usually urgent. 

If your trade business doesn't appear on the first page of Google, it might be worth your while to take out an online ad. That way, when someone searches for a tradesperson in your area, your business will appear next to their search. The only way someone can click on your information is if they see it – so make sure they have that chance, whether through an organic search or a paid ad.

6. Make yourself visible in the real world

Make sure your construction business's name and logo appear on any equipment you use, and make clothes for your team to wear when they're out and about.

It may be smaller than a billboard, but driving and walking around letting people know who you are, what you do, and how to contact you will go a long way to marketing your company. If people become familiar with your business name, they'll likely turn to you when needed. 

7. Good old-fashioned snail mail

Believe it or not, print campaigns are alive and well! If you operate a construction b

This Podcast Is Episode Number 512, And It's About Understanding Cultural Differences Within Your Company And Clients
 
We're in a dynamic, multicultural country with many different races of people from diverse origins, just within the domestic market; it's vital that you know who might be interested in your goods or services and how they could perceive particular messages.

Whichever specialty your construction business is in, cultural differences can directly impact your profitability. If you try to understand your crew's and clients' cultures – their customs and differences – you'll have a better chance of keeping them and gaining more, respectively.
 
Suppliers, vendors, and service providers respect leaders who have a vision, mindful and considerate, and can power through every obstacle to achieve success. They will support you in ways you cannot even imagine because it is in their best interest. Decide how you want to lead, how you want to be respected, and the work culture you want to create.
 
Ensure certain business areas don't offend potential subcontractors and clients from different cultures.
Body language – it's important to know what body language to communicate to potential staff or clients you meet or in visual advertising directed at your customers. For example, if your business has a sizable Indian customer segment, be aware that a typical western hand wave meaning 'hello' is usually interpreted by Indians as 'go away' or 'no.'

Communication – the secret to success in any business. If your company can communicate on the same level as your local customers, you're already heading in the right direction. One example that failed miserably was when PepsiCo marketed Pepsi in Taiwan using an ad tagline, "Come alive with Pepsi!" They didn't realize the Chinese translation meant, "Pepsi brings your ancestors back from the dead!"

Awareness – simply being aware of your prospective customers' cultural backgrounds will allow your business to convey its messages more accurately and with less chance of offending. By drawing up some personas of the main types of clients in your target market, you'll begin to break down what each kind of personal values. You may even find their trigger points – those that make the purchase.
Ensure you're familiar with each persona:
Etiquette – such as getting to know the culture of Chinese customers and being patient when conducting business.
Dress – if you have significant customers in the Pacific Islands, it's more common to dress informally when doing business.

Business and religious customs – familiarity can go a long way toward a successful business. For example, Japanese people consider it rude to make demands when doing business, while Indonesian people prefer to do business face-to-face.

History – if you're kicking off an advertising campaign that uses an aspect of history to get your message across, make sure it's accurate and not likely to offend a particular demographic. Simple acts of mindfulness promote a positive reputation for your construction company. One common example: When working on residential projects, it is important to note that Asians, in general, and most Eastern Europeans, dislike wearing outdoor footwear inside their houses. It is customary to remove your shoes or wear shoe covers to show respect as you enter; not only that, it ensures the floors and carpets are clean and clear of possible mud and dirt.
Often businesses don't take sufficient time to have people on the ground interacting with their potential customers. There are language barriers and different customs that need to be considered.
Speaking with advisers who have the exact origins of your major market segments is a brilliant idea. The advice could prove invaluable – ensuring you don't offend through ignorance or lack of knowledge.
You must ensure all aspects of your marketing work together, delivering the same message – one that's awa

This Podcast Is Episode Number 511, And It's About The Difference Between A Construction Accountant And A Tax Accountant How often have you hired someone with the expectation that they know how construction works, and then you found out they did not know about it? You are a master in the construction industry, so you recognize what to look for in your particular field and quickly observe if someone has the skillsets, and you proceed accordingly.

You know what happens when you send your best Rough Carpenter that you pay piece work for framing spec from the ground up in all kinds of weather and working conditions to install some custom-made cherry wood cabinets with gold plated pulls and knobs in the home of your best client (who happens to be in the wealthiest neighborhood in your town). It is not a pretty sight.

Have you pictured a crew with muddy work gear and boots stepping onto your client's pristine floors? The dirty secret is that Tax Accountants operate like Rough Carpenters because they work fast and furious, and they are paid piece work. The main difference is that they earn the bulk of their annual income in three and a half months. This means they do not waste time going through your receipts to ensure you get all the deductions you are entitled to.
 
Both Groups Are Important, And Each One Fills A Need
Project Management Construction Accounting Professionals (PMP) work above the line and focus on generating positive outcomes and results for contractors:
Increase Sales Reduces Expenses Increase Net Income Certified Public Accountants (CPA) work below the line focused on filling out annual income tax forms, ensuring contractors pay their fair share of taxes, preparing certified financial statements, and performing audits on your QuickBooks contractor file. 
Three Times Construction Contractors Need A CPA In Their QuickBooks For Contractors File:
You apply for a large loan or line of credit over a million dollars You need certified financial statements to get a performance bond Your construction company is so large that you are required to have an annual audit Most construction contractors with annual sales under $10,000,000 and less than 20 employees will never have those issues.
Preparing end-of-year reports and filing taxes can be complicated. If you're not doing it right, you could be liable for penalties or, at the very least, not take advantage of tax gains and financial opportunities. A Construction Accountant can ensure your business remains compliant (and pay as little tax as possible), help you analyze your business performance, and work with you to achieve your goals.
On the other hand, Tax Accountants can kill more cash flow and profit in your construction business (in less than an hour) by preparing your annual tax return using a messed up QuickBooks file than you can make up for with hard work in several months, if not years. This is because saving you money on your tax bill is not what they are paid to do; they are paid to fill out tax returns.
Why does it need to be separate?
Trust but verify! When you need financing, most bankers and finance sources like to see a separation of duties. They want to see two different firms involved because it reduces the chance of errors, collusion, cover-up, and fraud. They may not say a word to you; however, we often hear about it!
We insist our construction contractor clients use an outside CPA or tax preparer to review the QuickBooks Contractor's bookkeeping services that we have performed and prepare the annual income tax return. As a result, we have developed good working relationships with several CPA firms and yearly qualified tax preparers.
It is good to know our contractor clients trust us and know that we have their best interest in our minds and hearts; however, we are human, make mistakes, and welcome input from CPAs and tax preparers. It is all about teamwork and people working together to ensure everything in your construction

This Podcast Is Episode Number 510, And It's About How To Protect Yourself And Your Construction Business From Fraud Unfortunately, fraudsters are out there. They want your money and identity, and they're getting more sophisticated. There's a wealth of opportunity for swindlers to take advantage of people because so much of what we do is now online. There are ways for you to protect yourself, both by taking action and being aware of what's going on. 

While they might get less information from a small business, thieves will easily access it. If your construction company keeps any time-sensitive information on a computer network—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. 
 
As a small construction business owner, you may not have the significant security budget of a large company, but you can combat employee theft and protect yourself from financial losses if you can identify red flags and follow suitable preventive measures. 
 
Here are eight ways to protect yourself from personal and construction business financial fraud.
1. Protect your identity
Getting someone's identity is often the first step to running up enormous charges in their name. Scary as it is, you can go bankrupt if someone opens credit cards using your ID and maxes them out before you know anything has happened.
Shred your mail and dispose of records securely. Dispose of any documents with your name or other information carefully. It may take extra time, but these small steps can save you a world of headaches.
2. Don't click on unknown links
Whether sent to you in an email or via text message – don't click! It's a popular tactic for fraudsters to send a normal-looking link that's harmful. Before you know it, you're freely giving away your information. Just don't do it. Instead, take the extra step to visit a website through its legitimate homepage or call customer service if you suspect a link is a scam.
3. Check your bills
With so many bills offered online, it's easy to forget to review them. Make sure to check your statements for accuracy every month. It's the only way to identify fraudulent charges and correct them.
4. Don't put your personal information online carelessly
Think of this like putting the toothpaste back in the tube – it just can't be done once you've squeezed it out. The same goes for putting your personal information online. Fraudsters can use something as innocuous as your birthdate or workplace to verify your identity and expose you to financial fraud.
5. Never give up information over email or on the phone
The pandemic made us especially susceptible to being taken advantage of because so much was changing at once. Extra government programs were in place, vaccination campaigns were underway, and this administration meant more phone calls, text reminders, and emails.
Trustworthy institutions typically do not ask for your personal information in these ways. If you get a suspicious phone call or email, hang up and call them directly. That extra step can save you a lot of money and stress. It's too easy to fall victim to one of these scams, especially if the caller claims that a loved one is in trouble and needs help – a common tactic these days.
6. Be cautious when shopping online
Fraudsters are getting savvy when it comes to tricking us online. It's not uncommon for a fraudulent website to appear exactly like a legitimate place to shop. Double-check web addresses and question deals that seem good to be true.
Be aware of spelling mistakes or awkward grammar on these websites. They're often a giveaway that it's a lookalike designed to trick you into handing over your information.
7. Check your credit report periodically
If you live in a region where you can get free credit reports that don't harm your credit score, take advantage of this from time to time. It's an excellent