“Overhead schmoverhead! Who cares?” Your profits  care.  Your cash flow  cares. And if you want to stay in business long-term, you   should too . Most contractors understand what profit is and why cash flow matters. However, the critical junction of the two often gets overlooked: your overhead and how you allocate it when pricing jobs. Overhead isn’t just a number your accounting professional tracks. It’s a real cash eater  if it’s not adequately accounted for—and it directly

The Bridge You can walk onto several construction job sites and find a few tools that serve multiple purposes. For instance, a power drill   can be used for drilling holes, and by changing the bit, it can also be used to tighten or loosen screws. Similarly, a pipe wrench can be adjusted to various sizes, and a circular saw performs different tasks with a blade change. In each case, the tool is the bridge. Same tool, different uses. In construction accounting, the tool known a

Weak cash management habits can push subcontractors into risky financing. Yet, healthy reserves allow construction contractors to regain control of their cash flow management.  So, the big question is – how do construction contractors get to the point of having a healthy reserve when, by gosh and by golly, they have to borrow money to meet payroll, or pay the taxes, or purchase the equipment, or – you name it – spend money? They use a cash management tool, of course!  And I w

The use of WIP reports for construction contractors is much like that of a lighthouse for guiding ships. The National Oceanic and Atmospheric Administration (NOAA) has this to say about lighthouses: “The messages of these long-trusted aids to navigation are simple: either STAY AWAY, DANGER, BEWARE! or COME THIS WAY!”  For construction contractors, percentage of completion WIP reports act like a lighthouse and reveal much concerning what’s ahead. By paying attention to the si

Debt Feels Like an Easy Solution – But It’s Not! Got a cut on your hand? Clean it up, put on a bandage, and go about your day. But...

Before we proceed, let’s define risk mitigation. Note that it  is NOT the same as risk elimination. Risk mitigation : the process of...

Let’s break it down. Using your noodle  means using your intelligence, brainpower, and thinking ability. Using your books  means using...

Labor Burden Belongs Factual labor burden should be included in creating estimates because it affects how your construction business...

You, your construction company, and how you do business are all different from your fellow contractors. That’s because you (and your...

Figuring out what an employee costs means paying attention to all the price tags accompanying his or her base wage or salary. Those tags...

The Hidden Costs of Labor: Building a Better Labor Burden Most construction contractors underestimate labor burden because they don’t...

Choose a Viable Business Model Whether you choose to be a general contractor, a specialized subcontractor, or a production provider (such...

When subcontractors find that pieces of the money puzzle are missing, it could be because they are pricing the same way their GC prices,...

In our last post concerning Margin vs. Markup , we told you that we would “show you how to convert markup to margin so you can price your...

This vs. That Because you’re in construction, you know the difference between certain things that many others often get confused about....

Just as a good set of binoculars allowed the leaders of pioneer groups to see what they were moving toward, what was on the horizon, and...

Don’t let estimates and spending plans get confused. While they work together, they have different roles to play in managing construction...

You’ve heard the saying “Not my circus, not my monkeys.” And you know what it means – it’s about a problem that is not your...

You probably don’t remember all the times you “got it” as you were growing up. From learning  how to walk to understanding  how to read,...

If you or someone you know has ever had a leg injury that called for the use of crutches to move about, you know how difficult and...