Let?s Face it Most Plumbing Contractors Were Plumbers
In all of my years in the plumbing business I know of only a few plumbing contractors whose founders were not actual plumbers. How many non-plumbers do you know that have said, ?man I?ve got some money saved up and I think I?d like to start a plumbing company?? This is a rhetorical question by the way. Most plumbing companies are founded by plumbers for two reasons:
2) This reason is escalating at an alarming rate. A plumber is forced to start his or her own business because the market is such that they have found themselves unemployed for long stretches of time. They have no choice, they are trained to perform a trade and most times licensed in the trade and they have to feed their family so they hang their shingle.
Regardless of which one of the above categories you fall into, it is safe to assume that most have little or no experience in running a plumbing company or any company for that matter. That doesn?t make you bad or stupid or a bad businessperson it just means that the odds are stacked against you from the moment you send your first invoice.
Are there exceptions? For sure, I?ve seen quite a few. A real sharp person tip toes through the business minefield with some innate business ability, clearing each hurdle with hard work and a ton of luck.
When I say luck I don?t mean the company didn?t deserve the success, I mean that the company?s ability to pick the right customers or have a windfall job allowed for mistakes to be made along the way that didn?t put them out of business. All businesses/business owners make mistakes but its the frequency and severity that separates the wealthy/comfortable ones from the struggling or out of business.
I?ve spoken to many contractors over the years and a large majority say that accounting/ bookkeeping and choosing the right construction accounting software is the largest hurdle they have separating them from success. Again this is no knock against an individual or partnership. If there has never been any formal or on the job training regarding contracting bookkeeping, accounting and computer skills how would you know? Plumbers aren?t the only businesses faced with this issue, there are doctors, lawyers, engineers etc., that have no idea how to manage the finances of their business. However, construction accounting is quite a bit different than every other type of business.
Well I wouldn?t be writing this if I didn?t know how to ease the pain. Believe me it is with humility that I say I wish I?d had the insight to know better years ago, but yes there is a better way.ÿHow difficult is it to enter all of the receipts and accounts payable and work up Extra Work Order Tickets and invoices and do weekly tax filings in addition to doing the estimating and business development? Pretty difficult, in fact even with a small company whose billings are in the 1,000,000 range it can be overwhelming for an owner to keep it all straight. I mean we start plumbing companies to do plumbing not all the other stuff right? Unfortunately, the other stuff is as important as getting the work. I?ve always had interactions with accountants and tax preparers which are usually the same and I?ve been around bookkeepers since I began in the business in 1993. However, I never knew that there are highly regarded firms out there that take ALL of the bookkeeping and payroll away from the business owner for a very affordable monthly fee. In fact because of technology you as an owner can sit at your desk scan your receipts and literally let the firm do the work. You can see all of the accounts and make sure things are going where they are supposed to go but you do none of the manual input. Even correct job costing is set up for you so you know exactly what your true costs are.
Gratuitous Picture of the Finest QB Expert and Plumbing Accountant in the US.
I am sure there are others out there but I have found no better construction accounting and financial management team than
Randal DeHart provides with www.fasteasyaccounting.com. His knowledge of the business is uncanny because he?s owned his own plumbing/mechanical firm in the 80s and 90s. After having many conversations with Randal, I?ve found myself saying ?man I wish I would have know this guy five or ten years ago?. He?s the Gandalf of construction accounting. Be that as it may, that is why I?m here now telling you that there is a better way, a way that allows you to do what you?re good at. Randal does all of it, WIP reports, progress billing, certified payroll, payroll tax preparation, accounts payables and receivables and most of all he is like a personal consigliore. If you aren?t charging enough he?ll suggest ways to increase billable rates or suggest ways to lower your costs to make you more efficient.
So Who is This Construction Accounting and Financial Management Magician?