Is Your Mobile Service Meeting Your Contracting Business Obligations?

These days, mobile coverage is everything. Although you may still be wandering around the jobsite asking a client if they can hear you now, you’re also probably using your coverage as a mobile hotspot. It might be the only communication device you have for your contracting business. This means that your mobile service is much more important than it might have been even a few years ago. Here’s how you can evaluate whether you are getting what you need from your mobile provider.

Coverage
The last thing you want is for your mobile coverage to cut out at the office or in most jobsites. This is why coverage is going to be one of the first things you look at. The trouble is that it’s hard to evaluate coverage from the various mobile providers until you’re running on that network. There are points where the signal from one cell tower gets too weak, and your phone isn’t connecting to another one. This creates a coverage dead zone where you might have little or no coverage at all. Figure out where you will be working most often, and make sure that your mobile provider has good coverage there, at least.

Bandwidth and Reception
Coverage primarily relates to where you can use your phone’s service. Reception determines what quality of service you get while you’re there. This might feel like one and the same, but it isn’t. One mobile provider might have thorough coverage in the area but then give you slow network speeds or bad reception. If you can, it might be worth bringing friends or associates with different providers to see who’s got the best ability to stream video at the jobsite. If yours seems to be arriving late to everything, you might need to consider switching.

Plans
Each mobile provider offers a variety of plans, especially for businesses. Once you start a business, you might get options that you wouldn’t have heard about as an individual consumer. Evaluate what you need, like talk, text and data. Keep in mind that you might not need all of these. If you’re never going to talk on the business line, data may be enough. Compare plans online to see which one is going to be best for you. Don’t pick a cheap service just because it costs the least, because it might not give you the features you need. If you will open more than one line, see if you can get any discounts for it.

Other Services
Besides the actual coverage, mobile providers often offer a variety of services you may or may not want. For example, if you’re going to be using your phone as a mobile hotspot to connect your computer or tablet and transmit important documents, added security may be a worthwhile feature. If you’ve got a need to travel outside the country for business, having the ability to do so seamlessly makes life easier. Even having a plan to provide devices like smartphones for your team is an important consideration. Some providers bundle equipment and plans for businesses so that you can save money over buying them separately.

Wi-Fi Hotspots
Beyond using your mobile phone service for communicating with employees and clients, you may need it as a Wi-Fi hotspot. Construction sites aren’t always known as the most connected places, which means that you probably need extra support from your mobile service or other methods. Obviously, using your phone to seamlessly connect a device to the Internet is usually the easiest. If your mobile provider simply can’t get you the level of connection you need, you might need to consider something more formal like a portable Wi-Fi system. These typically require something permanent to connect, like a landline or a cable.

Mobile service is probably going to be one of the most important decisions you’ll make in the daily running of your business. Choosing the right provider makes all the difference. To start building your own contracting business, contact CSLS today!

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Is Your Contracting Business Prepared for a Power Outage?

Periodic power outages happen. You know that rolling blackouts can be a big problem, particularly during summer and wildfire season. When PG&E is shutting down your jobsite, you’ve got issues you need to solve. Your workday doesn’t stop just because the lights aren’t on, so you must be prepared. These tips help you evaluate your energy needs for your business, with a few solutions you can consider.

Consider Your Power Needs
In order to find the best approaches to take during a power outage, you have to know what you need. Make a list of equipment you use for common projects. Don’t forget to include the tools that you use on a daily basis but may not rely on for regular work, like your smartphone or computer. Take note of the power source for each piece of equipment. For tools and devices that run solely on electricity, figure out how many amps they need. This will help you determine how fast you’ll burn through power running them.

Choose Batteries vs. Fuel-Powered
If the plugs aren’t working and you don’t know when they’ll turn back on, you need some kind of backup. Many construction tools run on fuel, but others can run on batteries. In some cases, you may be able to choose between them. It’s a trick to keep batteries charged, particularly if you can run through them in less than an hour or two. If you pick battery-powered options, you’ll need to find a way to recharge them. If you choose fuel-powered, you’ll need to ensure that you can provide a regular supply of the right kind of fuel. Keep in mind that fuel-powered tools may not need electricity, but they need ventilation if you’re using them indoors.

Find Ways to Recharge
Some aspects of your system simply cannot work without electric power. For that, you may need to invest in a generator. Lots of people buy a generator as an emergency backup but then never learn how to use it. Typically, a generator uses fuel to run an alternator that creates an electrical current that can be converted to energy to run devices that are connected to the right circuits. If you don’t have enough fuel or the right fuel, it’s useless. If you buy a generator that is too small for your needs, you’ll run out of energy and be back where you started. Make sure that you know how to use it and periodically test it to confirm it still meets your needs.

Watch for Planned Outages
They say luck favors the prepared, and this is because having a plan makes all the difference. Planned outages can be extremely frustrating for everyone in the region affected by them. But if you don’t know that they are coming, you may be caught unprepared. When the weather is hot and everyone’s running an air conditioner, get ready for brownouts or rolling blackouts. Keep an eye on the weather forecast, particularly during seasons when big storms are common. If you know about it in advance and can do some work from a safer place, you may save yourself some time and hassle.

Build-in Extra Time
Power outages can cause delays in your project delivery, but they also create other problems. Failing to plan for them and not giving yourself adequate time to complete the project can cause you to take risks that you wouldn’t do otherwise. Being in a hurry is a major cause of workplace injury. For example, if you’re relying on a building’s ventilation system to keep the jobsite safe for you and your employees, you might not think about that system going down during a power outage. You’re more likely to make that mistake when you’re already behind schedule. Instead, build in some padding for problems like this, and you’ll have more room to plan.

Power outages are a part of life in California, but they don’t have to bring your business screeching to a halt. For more tips about getting your contracting business started, visit CSLS today!

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Is Your Contracting Business’s Substance Use Policy Due for an Overhaul?

Minimizing the use of substances that affect people’s ability to operate construction equipment seems to make sense at the construction site. In reality, it’s a mess of conflicting guidelines. For example, at the federal level, marijuana is still illegal. At the state level, it may be approved for recreational use. This creates a situation that can be tricky to navigate. Zero tolerance used to seem like an easy practice to implement, but it’s not always legal to enforce. Here’s a few things you should consider when setting a policy concerning substance use in your contracting business.

Understand the Law
If you want to know the latest California laws concerning the growth, sale and use of cannabis, you’ve got to check back on a regular basis. The California state government has passed or refined legislation concerning what people are allowed to do with marijuana every year since 2015. At present, adults over age 21 are allowed to produce and consume cannabis products in the state. There are limitations on how, where and when they can do this.

Federal vs. State Regulations
Although many states have relaxed their laws related to the sale or consumption of cannabis, it’s still illegal at the federal level. This is more of an issue of enforcement, depending on who’s calling the shots. For example, the Obama administration directed federal agencies to ease up on enforcing federal drug policies in states that had legalized marijuana for medicinal or adult use. The Trump administration rescinded that in 2018. It remains to be seen how the federal government will take action concerning this conflict in laws.

Medicinal vs. Adult Use
The way you set substance use policies depends greatly on the reason employees might be using it. With recreational use, you’re not obligated to allow people to smoke or consume cannabis products while they’re on the clock. In that way, it’s similar to a policy you might set for alcohol consumption.

Medicinal use is a different matter entirely. Employers are bound by law not to discriminate against employees for health concerns or treatment for conditions. And considering that marijuana may be prescribed to treat conditions ranging from injury to chronic pain and cancer, you could encounter people with a legitimate prescription for medicinal marijuana at any time. This means that you might not legally be able to enforce a zero-tolerance drug policy, even if that seems the easiest path to take. If you’re not sure what to do, consulting a lawyer who specializes in human resources policies may be a worthwhile investment.

Make Safety Paramount
Instead of putting yourself at risk for discrimination, it may be a good time to rethink your substance use policy. In construction, marijuana use for any reason can be a serious risk to life and limb. The National Institute on Drug Abuse notes that workers who test positive for cannabis are more likely to be involved in accidents or receive injuries while on the job. As an employer, you may need to evaluate each situation on a case-by-case basis. It might not make sense to test people for cannabis that they may consume in their off-hours anymore. But you definitely need them sober and attentive while they’re operating heavy machinery or in a dangerous area of the jobsite, for their own safety and yours.

Consider Flexible Job Requirements
If you want to hire an employee who needs to use marijuana in a medicinal context, it may help to consider creating some flexibility in job requirements for all positions. People working in a small business tend to fill several roles at the same time anyway. You can reduce your risk of problems by acknowledging that people may have a legal reason for using cannabis, and helping them find a way to accommodate it. This way, you aren’t putting them, yourself or your projects at risk.

Creating substance use policies that work with the changing times is just one part of running a contracting business. Getting a solid grounding in the various aspects of your field is another. For more information about how our programs can help you get started, contact CSLS today!

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Does Your Contracting Business Security Extend Beyond the Job site?

You’d never leave the warehouse or jobsite without confirming that the door was locked and security activated. Are you as careful with your electronic devices? Scammers are getting better at finding the weaknesses in people’s workflow, and they may be coming for your contracting business. Officials say that businesses are often the biggest targets for cyberattacks, and that they can seem more real and innocent than you think. Here’s what to watch out for, and a few ways you can protect yourself.

Remember: It’s Easy to Get Scammed
Practically everyone has received an email from a prince offering millions of dollars to anyone willing to give sensitive bank account information. While most people know not to fall for something like this, most modern scams are much less obvious. Scammers look for weaknesses in the system and figure out the most effective ways to exploit them. They’ve spent years getting better at it. This means that when you get an email from a contractor you know asking for your routing number for a wire transfer, it might look entirely legit. As a general rule, you want to assume that many communications like this can be faulty.

Lock Down Your Passwords
If you’re not changing your passwords regularly, or if you’re using the defaults on the devices you buy, you’re putting yourself at risk. You hear about hackers using conventional passwords on smart home technology to break through a home’s security. This is just as easy to do for your security cameras on the jobsite. Good passwords should be:

  • long, at least eight and preferably 12 characters
  • a combination of numbers, letters and symbols
  • different between accounts
  • difficult for anyone to guess

Strong passwords are hard to remember. If you’re constantly forgetting them, or choosing easy ones so you don’t, it’s time to get a password manager.

Never Share Confidential Information Over Phone or Email
People expect scams to look over-the-top fake because they assume scammers are sending it to hundreds of thousands of people. At the business level, identity thieves only need to get one hit to get a huge payout. This encourages them to make it as personal and realistic as possible, knowing that you’ll be more likely to take the bait if there’s a real person on the other end. Just like you wouldn’t believe someone making a prank phone call, you should treat all unexpected communications with suspicion. That texter can’t fix your student loans, your bank would never email you to ask for your password, and the IRS doesn’t make phone calls.

Use Multiple Means of Verification
Phishing scams, where the person uses some correct information about you to try to get more, are so slick these days you might not even see it. Sure, you might think that you should log into your business bank account to make sure the email is correct, but how do you get there? Clicking on the link in the email is how they get you. Instead, find the contact information for the institution through their regular website or from an official communication like a bank statement. As an added layer of protection, use a different device to verify it. If your phone or computer is already compromised, using the same machine might still put you at risk.

Watch What You Download
When a random website asks you to download something, you may already know not to do so. What happens if you get an email from someone on your team asking you to review documents in a ZIP file? This is where being a little more suspicious comes in handy. Scammers hide ransomware and malware in certain types of files that seem reasonable and related to your business. If you download them, they’ll often create hours or days of trouble for you. When you’re not expecting the files, don’t click on them. And if you are, install anti-virus software to help identify problems.

Keeping your business secure is getting harder and harder, especially in the construction field. By taking this advice, you can protect your information and your money. To discover the benefits of a career in construction, visit CSLS today!

 

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How to Structure the Workday for Your Contracting Business

If you do most of your work outside, it makes sense to try to stick to the sun when planning out your regular work schedule. During the summer, this is fairly easy to do. Once winter hits, it’s harder to make enough time in the day with the hours of daylight. Throw in employees who need to battle rush hour and other scheduling concerns, and you might need to completely rethink it. Here’s a few ways you can approach scheduling your workday in your business, so that everyone can get their work done with the least hassle.

Understand Flexible Scheduling
If the concept of “flex time” feels like something more suited to a tech startup, it might need a little clarification. Many people believe that keeping a flexible schedule means that you never know when someone is going to show up or leave. In reality, offering a flexible schedule to your employees usually requires a clearly-defined schedule. That way, everyone knows when they’re supposed to be at work. Giving people the flexibility to determine if they need to show up early so they can leave early can make it easier for them to maintain a work-life balance.

Determine Your Priorities
Before you start changing the schedule, you want to set a few priorities. After all, you may be flexible enough to allow some of your employees to burn the midnight oil. Your customers, on the other hand, might expect communication during normal business hours. Start with the things you need to keep your business going, like sending invoices, following up on sales leads or submitting bids. Make sure you have someone on the clock at the right time who can be responsible for the most crucial daily tasks, even if it comes at the start or end of their shift.

Rethink Your Existing Schedule
If you’re thinking, “My schedule is already flexible because I am literally always here,” it might be time to rethink how you approach your own workday. Burnout is a big deal in construction, in part because people tend to work such long hours. But 15-hour days for weeks on end aren’t a very good long-term strategy, especially for people who have obligations outside of work. Taking this as an opportunity to improve efficiency might be an ideal path to getting the same amount of work done without running yourself into the ground.

Consider Different Scheduling Options
If you’ve ever done shift work, you know that this is a standard in a variety of industries. There’s the day shift, the swing shift that starts in the afternoon and the graveyard shift running overnight. When you’ve got a big push to get a project done and you’re working some long hours, building in two separate shifts for your employees can allow you to stay on schedule. Otherwise, you might consider operating a 12-hour workday where people are expected to show up at a specific time during that interval. Just make sure that your workflow permits having one skilled worker showing up later or earlier than another.

Evaluate How You Attract New Employees
With a labor shortage, you’ve always got to think about how you bring people on and keep them for the long-term. Offering a flexible schedule might be an effective way to entice students or others with limited time to get on board early. Give yourself some time to work out the details, so you don’t have to change the schedule on a whim if it’s not working. In the long run, giving your employees flexibility could open up different demographics of workers who might never have considered your business beforehand.

Keeping a business running is a lot of work, but sometimes tweaking the schedule makes a big difference. These tips can help, as well as a solid grounding in the construction field. To start your career, visit CSLS today!

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Is Design-Build-Automate the Next Step for Construction?

You may already know that automation is shaving months or years off construction projects. As technological innovations improve, the degree of accuracy in various tools allows contracting businesses to consider how they can use automation to get their work done faster. Here are a few reasons automation deserves an important role in your design phase, and how you can best take advantage of it.

Why It’s Time to Automate
Whether you’ve been working in the industry for years or you’re just starting out, there are plenty of reasons to rethink the way you do things. The construction labor shortage exploded by the housing crisis and was made worse by increasing numbers of construction professionals heading into retirement. It’s getting better but it’s still a big problem in a lot of fields. Automation isn’t just gaining popularity–it’s improving in accuracy. This means that you can automate processes that will do the work nearly as well or, in some cases, better than you could do with a skilled worker.

Tips to Incorporate Automation Into Your Workflow
When you aren’t sure what is out there, it’s hard to imagine how automation could possibly make your work faster and more effective. That’s where a little research comes in. You wouldn’t think of hand-writing an invoice that you could easily input into a tool, because this technology has been around for decades. Here’s how you can find ways to make automation a seamless part of your workflow:

  1. Identify where your projects are falling behind schedule (or over budget).
  2. Research the best solutions to your current issues.
  3. Don’t jump at the first option you find, because there may be better ones on the horizon.
  4. Take opportunities to test out products before you buy.
  5. Read reviews of tools and software systems, to get a sense for their success rates.
  6. Test it out on low-impact projects before you automate full-time.
  7. Offer employees training in the latest methods.

Give yourself the time to adjust, and you might be surprised how quickly it changes your perspective.

Fields Where Automation Is Taking Off
Even 10 years ago, automation wasn’t a big deal in many areas in construction. With changes happening every year, you’ll find more and more businesses adapting technology to make projects go faster. Automation is currently driving:

  • increases in the use and efficacy of modular construction
  • availability of self-driving construction equipment
  • innovations in drone technology, which allows workers to perform complex tasks from a distance

Right now, a lot of the technology is proprietary. This means that one company’s approach might be completely different from another’s. Within the next few years, you’ll see the best performers rising to the top and spreading to other fields.

Keep Watching for News
Although automation is picking up speed in all kinds of fields, it’s also changing rapidly. This means that if you there aren’t many options in your specialty, or if most of the choices you have are pretty sketchy, just wait six months or a year. You can probably remember a time when drones were terrifying at worst and vaguely helpful at best. They’re now shifting from surveying the scene to interacting with it. Imagine how much better tools and systems will be in five years.

Make Workers a Priority
Although automation is often feared as the killer of jobs, it doesn’t have to be. In a world where there’s years more work available than qualified people to do it, efficiency is king. Automation isn’t going to force or even allow you to get rid of your whole staff in a year. Instead, it will make you and your employees’ jobs easier. That means you can take on more projects and satisfy more clients with reliable deadlines and a shorter turnaround.

Construction automation is becoming an integral part of the industry, and you should consider how it will affect your contracting business. To discover more about the latest tools and technology used by licensed contractors, contact CSLS today!

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Who’s Your Contracting Business Team?

When you first start your contracting business, you might be going it alone. Yet, it’s often impossible for people to do all the work to keep a business running on their own. You’ll need a team, and sometimes it’s hard to decide which jobs can be filled by you and which ones require support. Here’s the basic components of the team you’ll want to have for your contracting business.

Marketing and Sales
To a certain extent, it’s true that you can build a business based on word of mouth. In other words, pick up a few happy clients and they’ll let other people know to hire you for their own projects. However, construction can be a competitive industry, with lots of small businesses you’ve got to compete with to get a client’s contract. This is where brand management comes in. Knowing how to find your target demographic and the best ways to secure their business takes experience that you might not have. A sales and marketing manager can handle leads, but also advertise your services in the right places.

Cash Flow Management
Every business needs a person who can collect payments, handle the bills and maintain the budgets. When you first start your business, this person will often be you. However, in order to make that work, you’ve got to be reasonably good with numbers. This is an administrative task that will bring your business crashing to a halt if you forget to take care of it, though. If you’re too busy completing projects to make this a priority, you’ll need an administrative support person to keep track of the general cash flow of the business.

Accounting and Payroll
Although handling the finances for the business seems like it could easily be done by one person, this usually isn’t true. There’s a reason many businesses outsource their tax accounting and payroll work to a service or accountant. If you get it wrong, you may be held legally liable for mistakes. There are lots of rules you have to follow to pay your employees and take care of your taxes each year, and they can be tricky to understand or remember. Paying a service to handle it for you ensures that everyone gets paid on time, including you and the IRS.

Skilled Workers
Contracting businesses that serve homeowners for relatively minor tasks may be able to get by with just one person doing the work. However, it’s worth considering a second person, if you have enough work available and you can pay them reliably. When all the work depends on you, you’re on the hook to get the job done around the clock and in any kind of condition. Failure to meet the terms of the project can make it harder for you to secure clients in the future. Adding a skilled worker who can duplicate most of the work you do can improve your efficiency and provide a cushion for when you need to focus on administrative tasks.

Subcontractors
Although subcontractors aren’t technically a part of your business, many of the projects you do wouldn’t succeed without them. You’ll hire subcontractors to do the jobs that require skills you don’t have, or to fill roles that you cannot do simultaneously. There are rules for the way the state allows you to classify contractors compared to employees, so you want to make sure you’re doing it correctly. A reliable subcontractor who does good work is worth their weight in gold. They make it easy to take on more-complicated projects, without you having to provide regular work for them.

Being an independent contractor feels like a business of one, but it often takes a team to make it a success. Understanding the different roles your business needs will help you build a fulfilling career. To get started, visit CSLS today!

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How to Get the Most from a Construction Conference

There are dozens of construction industry trade conferences across the country each year. If you want to know the latest trends and insight into the newest best practices, you might want to attend one on occasion. Travel for work isn’t cheap when you run your own business, so you want to choose wisely and come prepared. Here’s what to expect from a conference, and how you can get the most out of it.

Research the Best Options
With many construction-related conferences each year, you should be able to find one that works well with your timing and goals. Fortunately, many of them are held in California or in nearby cities like Las Vegas. The right one for you depends on your field, your interests and your funds for travel. Keep in mind that the best choice may not be located within easy driving distance. Several conferences aim to provide a variety of choices to suit almost any construction professional. There are also specialties targeting attendees who work in areas like modular construction or concrete.

Find Out Who’s Presenting
Some conferences mostly feature an exhibit floor that you can browse at your convenience, but many also offer presentations, demonstrations or classes. Since conferences often have limited opportunities to talk to people presenting, do a little homework in advance. Find out which of the major industry influencers will be there. If you can, research what they have been working on and get ideas for questions you’d like to ask in a question and answer session. Bring these notes to the conference. This will help you retain more information from the sessions.

Be Flexible About Scheduling
Depending on the conference, you may have a lot of flexibility in the sessions that you attend. There’s little point in occupying space in a presentation that doesn’t fit your field or give you new information, even if the company presenting is important or well-known. It’s important to get a vibe for conference etiquette, so that you’re not disrupting others. Just keep in mind it’s not uncommon to slip out at the beginning of a speech when you realize it’s not for you. If you’re not sure, it’s best to sit or stand near the back so you can make a discreet exit when necessary.

Save Time for Browsing Exhibits
In this industry, there’s a lot of innovation with new tools and approaches you can try. The exhibit floor is going to be the place to go when you want to take a crack at something you’ve never tried. Conferences, like World of Concrete in Las Vegas, may have as many as 1,500 exhibitors. Depending on the schedule, you might only have a few hours between sessions each day. Make sure to dedicate extra time to browse, and get a list of vendors in advance. That way, you’ll know which ones you definitely want to see first.

Prepare to Network
Whether you’re headed to a conference near you or one that requires a plane flight, networking is still an important idea. Networking is how you build relationships with other construction industry professionals that will help you keep your business going. Don’t skip the social lunches or coffee breaks, especially if they mean you get an opportunity to talk to other people who live in your area. Track down presenters on the exhibit floor and make sure they get your business card. This may be your best chance to get your name out there, find subcontractors and learn more about the latest news in the industry.

Once you get your contractor license, you need to keep building knowledge and connections. Passing the exam is one of the first steps. To establish a construction career that can thrive for decades, visit CSLS today!

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What Is Your Contracting Business Leadership Style?

Everyone has had that boss who seems to know exactly what they need and gives it to them. Similarly, practically everyone has had a boss whose management approach cut them off at the knees. Running your own business requires developing a leadership style that allows you to get work done without alienating everyone underneath you. Read more about these common leadership styles to see which one fits you the best, and how you can use it.

Collaborative
When you have a collaborative leadership style, you like to get lots of input from the people working under you. You want to work as a team and it shows through your efforts to get employees involved in the decision-making that affects their own tasks. This leadership style can help you maximize the benefits you get from the people you hire. Just make sure that you are getting input from everyone on the team, not just one or two people. Develop a few strategies to refine vague or problematic suggestions, so that collaboration doesn’t slow your workflow.

Easygoing
With an easygoing leadership style, you’re going to let your employees mostly take care of their own jobs. You hired them for their skills and you expect them to use it. If you’re extremely busy with your own tasks, this approach can help you free up time you need to get things done. On the other hand, you’re putting a lot of trust in people who might not work as well in this kind of environment. Periodically check in with your employees to make sure they have everything they need and keep basic tabs on their progress. Consider a different approach with entry-level hires or anyone who needs extra support.

Authoritarian
The opposite of easygoing, an authoritarian leadership leads alone. They make decisions without much consultation from employees and often without considering their needs. Most people probably wouldn’t want to classify themselves in this group. However, as you first start out, you might develop this style by default. When you work for yourself and have no employees, this may be the only style you can choose. It might also make sense if you hire someone with very limited experience. Just make sure you’re giving your employees enough opportunities to learn and grow within the position.

Incentivizing
As an incentivizing leader, you are goal-oriented and you want your employees to reach those goals. To do so, you set benchmarks and provide incentives like prizes or bonuses to people who work within those limits. This can be an effective leadership strategy as it gives employees an extra reason to push through the next obstacle. Mix up the rewards so that everyone feels like their needs or wants get representation. Just keep in mind that people can get stuck when you ratchet up the goals too far or too fast. Make incremental improvements that people can stretch to grasp but still reach.

Leadership by Example
Many people like to build a rapport and respect as a leader by not being much of a leader at all. If you love to get down into the equipment with your employees and work as hard as they do, you can inspire them by your commitment. People who lead by example tend to teach as they go, giving less-experienced workers the benefit of your knowledge. It’s important to make sure that you don’t get too distracted by the job to let others take turns. It can be difficult to let go of some tasks you’ve done 1,000 times. If you remember to give them the opportunity, they’ll reward you by making your job easier.

Becoming a leader isn’t something that happens overnight. You have to evaluate your leadership style and develop ways to motivate your employees to make your business a success. For more information about what you need to start your own contracting business, contact CSLS today!

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How Your Contracting Business Can Handle Sudden Price Increases in Construction Materials

As a contractor, you know that prices for materials fluctuate regularly. Most of the time, you can anticipate what’s likely to happen and plan ahead. At other times, you get hit with a surprise new tariff that dramatically increases costs. When you’re bidding on projects that won’t be completed for a year or two (or longer), it’s hard to predict now what you’ll pay for the things you need. Here are a few ways you can manage it without losing your profit margins.

Keep an Eye on Rising Prices
Prices don’t always go up with inflation. Sometimes they go down. On occasion, they’ll fluctuate, especially if there is some event like a disaster that forces everyone in the supply chain to accommodate. Sometimes, price increases mean that certain businesses will struggle to keep up. If you want to avoid being one of them, you should keep tabs on the news and regional prices for all materials you use regularly. Update your estimates as prices change so you don’t accidentally use last year’s numbers.

Round Up, Not Down
A good rule of thumb for many construction materials is to estimate how much you’ll need and add an extra 10 percent. You might want to do something similar for material prices, as well. You can’t predict when the federal government will institute a tariff that increases the cost of materials you bring overseas by a margin as large as 25 percent. But you can guess that prices will go up year after year. Look at price averages in your region and how they’ve changed over the past five years. Use that data to inform your estimates, and always round up. Underbidding on materials may make your bid more appealing to clients looking for a bargain. But you’ll pay for it with less money to keep your business going.

Consider an Escalation Clause
Once you sign a contract, generally you’re committed to doing the work at the price you specified. An escalation clause gives you a way to renegotiate the contract based on price increases. The terms are usually very specific, which means that you’ll have limits on the time you can raise prices, how much you can increase them, and how soon you can get payment for the difference. If you can’t reasonably predict what materials will cost you for the project, the clause may make the difference between safeguarding your profits and shaving them off entirely.

Evaluate the Best Terms
In an industry with fluctuating material prices, using escalation clauses can be a way for contractors to avoid cutting into their profits when prices go up. It’s important to choose the right one based on the project. For example, you might opt to share the risk up to a certain point. If the project is relatively short and you don’t anticipate rapid changes, you can offer to shoulder the increase unless it passes a certain percentage.

During longer projects, it may make more sense to activate an escalation clause past a certain amount of time. That helps to accommodate price changes that happen months or years later. Some escalation clauses allow you to raise the price the day it changes. If you want or need this level of flexibility, expect to show your work in your original price estimate.

Keeping a contracting business above water involves careful attention to the prices of materials you use. By tracking material costs and adding escalation clauses to certain contracts, you can protect your income and profits. To discover more benefits of running your own business, contact CSLS today!

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