Monthly Archives: August 2021

5 Reasons to Consider Hiring an Accountant for Your Contracting Business

If you’re good at money management, you might think that there is no reason to hire an accountant for your contracting business. Some business owners don’t, especially in the first few years when they’re working to get established. But there are reasons you may want to hire one, especially if you struggle to keep your focus on your books. Here are five.

You’re Not a Tax Expert
Many people choose to calculate and file their own taxes. When you start a business, it’s tempting to think that it will be easy to manage your business taxes as well. And if you don’t have a lot of business expenses or purchases to make, that might be close to the truth. On the other hand, hiring an accountant to do your taxes is a relatively minor investment. In exchange, you’re more likely to learn about less-known deductions and credits that your business may be eligible to claim. An accountant is also more likely to get everything correct so that your tax forms are accepted without dispute.

You Need Someone to Manage Your Financial Records
Maintaining financial records is a crucial task for your business. Without it, you may be stuck in a panic when someone asks you for an updated form. For example, if you apply for a loan, you may need an updated profit and loss statement for the application. If you have investors, you’ll need to show them updated financial records for your business activities as well. Just like your taxes, these records can be complicated and easy to make mistakes. In this case, it may make sense to hire a regular accountant who can handle these tasks on your behalf. You’ll need to provide the data, but an accountant can process and use it to generate the required reports.

You’re Not Sure if You’re Following Financial Guidelines
There are a lot of financial guidelines that you may have to follow as a contracting business owner. For example, if you want to bid on public sector projects, you need to confirm that your rate structure for employees complies with local guidelines. Do you know what these guidelines are? Which forms do you need to fill out and submit along with your bid? If these questions fill you with dread, then you might need an accountant to help you sort through them and determine which ones apply to your business. This way, you can avoid the stress of being unsure if you’re following the rules, with extra support in handling these administrative tasks.

You Want Help Planning Your Spending
In the early years of your business, cash flow is everything. Before you increase your own income or invest further in your business, you must make sure that you have adequate funds to keep the business running. The problem is that you may not know what you need to make that happen. And if you make errors in your estimates, you may end up without the money you need to pay yourself or your employees. Accountants do more than just file your taxes or fill out other forms. They can also help you look at your income and expenses, and create a plan that you can follow for several months or the next year.

You Don’t Have Much Business Support
There’s a reason that many licensed contractors are self-employed. In the beginning, you might not have anyone else available to work with you. Being able to make all the decisions can be nice in that you don’t have conflict when it’s time to make a choice. But it also means that you don’t get input from others, which can be a problem when you’re making a decision without a lot of information or experience to guide you. In this case, it makes sense to consider hiring an accountant to help you evaluate financial choices and select the one that works best for your business. This way, you have an objective expert who can provide you with an appropriate level of support.

Handling your business finances is less stressful when you can hire a professional accountant to ensure everything is correct. For more information about starting your own contracting business, visit CSLS today!

Does Your Contracting Business Need an Office Manager?

When you run a contracting business, you’ll spend a lot of your time completing projects for clients. Unfortunately, that isn’t all you need to keep your business going. If you’re not able to spend enough time on office tasks, the flow for your business could come crashing to a halt. Here are a few ways you can tell that you need some administrative support.

Your Business Is Expanding
In the beginning, there may not be all that much to coordinate for your contracting business. After a year or two, or sooner if you’re in a field affected by the labor shortage, you may want to expand. Expanding your business increases opportunities, but it also makes your business more complicated. As you grow, you may need to hire more employees. A dedicated team of professionals could have coordinated schedules and other administrative tasks that take away from your time available to work on projects. At this point, most businesses need to consider hiring someone who can manage the day-to-day functions.

You Need to Coordinate Multiple Projects
If you only work on one project at a time, it may be relatively easy to plan your schedule. On the other hand, many contractors need to book out at least a little bit to keep their business is running. After all, some projects take a few hours, while others may take several weeks. If you are lining up multiple projects, you need to make sure that you aren’t overcommitting yourself, your employees, or your equipment. The last thing that you need is to double-book on two important jobs and end up having to choose one. Instead, having someone coordinate your schedule frees up more of your time for work, while ensuring that each project gets appropriate attention.

Your Response Times Are Lagging
When you run a business, you’ll spend time preparing to do work and doing productive work. While you’re working, you want to be able to focus on the project-related tasks at hand. Unfortunately, having a busy contracting business makes it harder to be available to answer phone calls or respond to customers. Over time, lagging response times may translate into fewer leads and a decrease in available projects. Obviously, it’s a problem you should try to prevent. If you notice that you are taking more than a day or two to get back to people, you may need someone who can handle that correspondence on your behalf.

You’re Forgetting Administrative Tasks
Before you start a business, you may wonder how anybody could possibly forget to complete regular tasks like sending invoices or paying the bills. Then you start a business, and it all begins to make sense. After a long shift on the job site, the last thing on your mind is more work extending into the evening hours. And yet, those administrative tasks are absolutely crucial to keeping your business functioning. If you are late in sending invoices to clients, you may have to wait longer for payment. That can throw your cash flow into chaos, making it harder for you to order supplies or handle expenses. If this becomes a problem, you should plan to solve it as quickly as possible.

You Need Someone to Coordinate Services
There may come a time in your business where you no longer have to perform all the work yourself, but you’re not yet at the point of hiring a dedicated staff. In this case, you might rely on outsourced services for things like payroll or marketing. But even if you have other companies that you pay to handle these aspects of your business, you still have to make sure that the work continues to meet your expectations. This means that you will need to be available to periodically check up on them, and communicate with them as necessary. Hiring someone to coordinate the services for you can give you one point of contact for updates while removing those responsibilities from your daily list.

Running a business involves a variety of jobs that you can’t always complete on your own. Bringing someone onto your team can help take the load off. To learn more about starting your own contracting business, contact CSLS today!

5 Reasons to Incorporate Your Contracting Business

Before you start your contracting business, one of the things you’ll have to think about is how you want to structure it. Some contractors prefer to use a sole proprietorship or S Corp. Others want to create a C Corp. In any case, you should consider incorporating so that you can protect yourself and your business growth over time. Here are a few reasons you’ll be glad you got it right from the beginning.

Keep Your Business and Personal Finances Separate
When you first start your contracting business, you might think that operating as a sole proprietor is the easiest. After all, you’re the one doing the work. Why should you have to incorporate so that your clients can pay you? The answer might surprise you. One of the best things that you can do for your contracting business is to keep your finances for the company separate from your personal finances. You’ll need to have some way to separate them in order to do your taxes, but there are other reasons you can benefit from it. Even if all you do is create an LLC and a separate bank account, you’ll notice the difference come tax time.

Limit Your Personal Liability
Every now and then, you might read something in the news about a client suing a company for some kind of wrongdoing. When you have an established company, you can limit the ways that you are held personally liable. It’s a good form of protection to have, even if you’re not likely to make mistakes or make clients want to sue you. The security of keeping your personal life and your business life separate is vital. Without that separation, clients may be able to go after you personally, as well as your business. Sometimes, it can make the difference between keeping your business running and keeping yourself on stable ground.

Establish Credibility
When you’re first starting out as a business owner, you need all the credibility you can get. It’s common to choose a formal business name, even if it includes your own name, when you incorporate. You’ll also show potential clients, future employees, and other contractors that you have done the work necessary to create an actual business. In a world where almost anyone can design advertisements or business cards, whether they are a licensed contractor or not, that credibility might translate into more opportunities to help your business grow.

Create Opportunities for Funding
In those early years, you might be working hard to keep your cash flow on the level. Having access to funding, even the occasional small business loan or line of credit, can help you get what you need when you need it. But in order to qualify for a lot of these funding options, you’ll need to be an established business. With an active business license and the permits you need to operate in the area, you’ll make it easier to prove to potential lenders that you mean to make good on any loans they are willing to offer.

Make It Easier to Expand
Ultimately, your goal as a business owner will be to expand over time. You might not anticipate becoming a large corporation with thousands of employees, especially not quite yet. But after a few years, you may have a handful of employees and really wish that you had taken the time to incorporate at the start of everything. You’ll notice the difference every time you have to manage payroll. Getting ahead of the process doesn’t put you at risk, and will make it easier for you to grow over the next several years without having to make a big or sudden change.

Incorporating your contracting business as lots of potential benefits, even from the very beginning. To discover how you can run your own contracting business, visit CSLS today!

Are You Shortchanging Your Contracting Business? 5 Ways You Can Tell

When you start a contracting business, it’s not always clear how you should run it to make it successful. There’s a high likelihood that you’ll make a few mistakes, especially as you gain experience. Some mistakes are worse than others, because they make it hard for your business to survive from month to month. With these tips, you’ll know the most common problems to avoid.

You Bid Too Low
One of the worst things that you can do as a contracting business owner is to cut deep into your profit margins. And yet, that is exactly what plenty of contractors do on a regular basis. When money is a little tight and you have a lot of competition, it’s easy to drop your bid in order to secure more work. But the less you earn, more work you have to do in order to keep going. And over time, clients who are accustomed to choosing the lowest bid will be less likely to pay higher prices. You should attempt to stay competitive, but don’t forget what you’re worth.

You Don’t Attract Employees
When you work for yourself, you might find that you develop a kind of tunnel vision about the running of your company. After all, you probably became a licensed contractor so that you could make your own decisions. But eventually, you’ll need to work with other people:

  • Employees
  • Subcontractors
  • Suppliers
  • Other contractors

You can make this a lot easier by setting up a business that you can be proud of. Think about what you would like to see if you were evaluating a subcontractor or a business you’d like to work for. Having processes in place, like business management or safety, make it easier for you to present as an ideally-functioning business.

You Can’t Manage Price Shifts
Shifts in prices for supplies and services are common. They’ve been particularly volatile over the last couple of years. The last thing that clients want is a contractor who isn’t prepared for this eventuality, and has to change prices or back out of the project halfway through. Most experienced businesses establish margins for fluctuating prices, so that they can meet the terms of the contract without having to work for free. It may take you time to figure out the best way to do it, but it’s well worth the effort.

You Don’t Learn New Technology
The construction field has been around for thousands of years, but we don’t build things in exactly the same way we did back then. In fact, building technology and best practices have changed significantly over the last 20 years. If you’re unwilling to adapt, you’re going to make it more difficult for your business to thrive. When you see new technology in your field, you can either embrace it or run from it. Learning more about the developments that relate to your specialty can help you stay current and discover new things that you can incorporate into your business. You might even figure out ways to complete a task more easily or efficiently.

You’re Not Investing in Your Business’s Future
When you are swamped with work or even desperately looking for work, it’s a lot harder to think about the future of your business. But in a year, you’ll be in the future for your business. It doesn’t take long for you to realize that you should have made an investment to make your business run better as you get more established. Making an investment doesn’t necessarily have to involve lots of money. You can invest into your company by learning new skills, improving your business management, or finding employees who can help make your business everything that it could be.

There are lots of ways that you can shortchange your contracting business, but you can learn to avoid them. To find out what you need to run a contracting business, contact CSLS today!

What You Need to Apply for a Contractor License

For many people, applying for a contractor license is the culmination of years of preparation. Wherever you are in that process, it’s important to know all of the steps involved. With this information, you’ll understand the requirements you have to meet in order to apply for a contractor license in California.

Prove Your Experience
Before you can apply to take the exam, you must establish that you have the appropriate amount of experience. As a general rule, you’ll need four years of experience in the class that you’re intending to apply. If you have extensive education in the form of:

  • Professional training
  • An apprenticeship
  • A college education

you may be able to apply to waive up to three years of that requirement. Keep in mind that the amount of credit you can get for education relates closely to the type and extent of the education. You may also be able to use other work to count for part of the experience component, although it depends on the work and how you documented it. You’ll usually need to provide transcripts of your completion of an educational program in order for it to qualify.

Submit an Application
Once you have collected all the evidence of your four years of experience, you can usually apply to take the exam. You should wait until you receive the results of your application before you take any other steps, such as paying for a bond. The application requires a high level of precision, and you must ensure that all the documents are clearly filled out and easy to read. You will pay the application fee at this time. If any parts of your application are incomplete, it may be sent back to you to fix and resubmit.

Take the Exam
Once your application has been processed, you’ll receive a notice that you are cleared to take the examination. The contractor licensing exam only takes a few hours out of your day, but it is intended to test the knowledge you have accumulated through years of work in the field, as well as additional study. Taking an exam prep course is an excellent way to get a better understanding of what you can expect from the exam and confirm that you know what you should. If you complete all parts of the exam with a passing score, you can continue the process to receive your license.

Pay a Bond
Usually, you don’t have to prove that you meet certain financial requirements in order to apply for a contractor license, but you will need to pay for a bond. Specifically, you should have a $15,000 bond paid before you receive your license. The bond exists to protect consumers or employees in the case of faulty actions on the part of your business. In some cases, you may be able to avoid paying for a bond by providing a cashier’s check for the same amount, given to the California State Licensing Board.

Submit a Background Check
One of the last steps you need to complete to receive your contractor license is a background check. The state of California requires that you provide a full set of fingerprints. If you live in the state currently, you can go to a nearby location to provide your fingerprints through a live scan. You’ll pay a small fee for the service. If you live out of state, you’ll need to get a hard copy of your fingerprints to submit. The state submits your fingerprints to the DOJ and the FBI to confirm that your record has no unexpected convictions. In some cases, you may have to submit your fingerprints more than once.

Although applying for a contractor license is a process you began years ago, the last few steps are the most important. By taking each one seriously, you can smooth the path to having your own license. To learn more about how CSLS can help you get ready for the exam, contact us today!

5 Body Language Cues You Can Use in Your Contracting Business Communications

As a business owner, you’d be surprised how much the things people say and the way they feel don’t match up. If you’ve ever had to pretend to be happy in the middle of a frustrating situation, you get the idea. But if you can’t read your clients to get a sense of how they are interpreting your interactions, you’re more likely to get on their bad side. Here are five body language cues that help you determine what they really think.

Direction of the Hands
The way the people use their hands can give you some practical insight into their moods, especially as they relate to the discussion. For example, someone who is using big open gestures may be more interested in what you have to say. Someone who keeps their hands at their sides or pointed down might not be as convinced as you think. In some cases, mimicking these gestures can help you relate to the client. Then, as you explain your points, you can turn your hands upward and see if they do too.

Arm Position
As with your hands, the position of the arms tells you how your client is feeling at the moment. Someone who consistently keeps their arms folded or locked tightly to their sides may be nervous. It’s possible that they either do not trust what you are saying, or do not trust the environment that they are in. This type of position indicates that somebody is feeling awkward or out of place. You may be able to set them at ease by offering them a choice of chairs, or the opportunity to meet in a different room.

Position While Sitting or Standing
Even though the arms can tell you a lot about what a person is thinking, you’ve got to take the rest of their body language into consideration as well. There are times when you will have a conversation with a client and you really need their entire focus. You’ll know that you have it if their upper body is turned toward you. By comparison, if it’s turned away from you, your client may be distracted or uninterested in the conversation. You can usually avoid this type of problem by seeing clients in places away from busy activities and loud noises. That way, they are less likely to keep turning around.

Eye Contact
Many types of body language are forms of communication in and of themselves, and eye contact is a good example. Experts have mixed views about the meaning of looking in particular directions before answering a question. Contrary to popular belief, you can’t necessarily tell if someone is lying simply by the way they look around the room. However, people do pick up social cues from the presence or lack of eye contact. If you never make eye contact with someone, they may wonder how committed you are to working with them. If you make prolonged, constant eye contact, they may feel intimidated.

Facial Expressions
Perhaps the most obvious of body language types is the facial expression. Of course, your facial expression can be a way of expressing a variety of feelings, only some of which may relate to the discussion. If friends or family members often tell you that you seem intimidating or angry, it’s worth paying attention to your facial expressions. Look in the mirror and allow yourself to speak naturally and see what happens. Since facial expressions are difficult to read, be wary of drawing too many conclusions from them based on the way your clients look. If they seem confused or frustrated, it’s fine to offer clarification. Otherwise, they might not have a high degree of control over their expressions generally.

Body language is an important part of interpersonal communication and one you’ll need to understand when you’re working with clients. Knowing how to interpret these cues can help you put customers at ease and make more sales. To learn more about becoming a licensed contractor, contact CSLS today!

How to Maintain a Positive Attitude for Your Contracting Business

Building a solid contracting business takes the right kind of attitude. If you’re generally upbeat, you may find it easier to solve problems and avoid stress. If you’re struggling to find reasons to look up, you might create more issues. And your attitude can also spread to the people around you. Here are a few ways that you can keep a positive attitude for yourself and everyone around you.

Start Work on a High Note
When you were a kid, your parents may have made references to waking up on the wrong side of the bed. This idiom describes what happens when you start the day in a negative way. There are lots of reasons that you might wake up in a bad mood, from a difficult night’s sleep to unfortunate news. On these occasions, it’s important to give yourself the time and the freedom to turn your mood around. Find a pleasant distraction or give yourself a small reward as a way to boost your outlook. That way, you’ll start the day happier and less likely to make mistakes.

Emphasize Qualities During Feedback
Throughout the day, you may have lots of opportunities to give feedback on the state of a particular situation. If you’re coping with a problem that isn’t easily solved, it’s tempting to get stuck in a negative thought pattern. Sometimes, all you can find is problems. But when you’re dealing with people, it’s important to find qualities as well. If you have to give negative feedback or criticism, take the time to come up with one or two genuine compliments that you can give as well. When you’re struggling to find something good to say, see if you can wait to give the feedback until later. People are more receptive to criticism if they feel like you’re not just unloading on them.

Learn Something New
If you watch a small child playing with other children, you’ll often see conflict that ends quickly. Children get frustrated at very small things, and then they completely lose interest once they are distracted by something else. This is a trick that you can use to fool yourself out of a bad mood as well. If you find that you’re getting stuck thinking about all the things that are going wrong, shift gears into a completely new way of thinking. One way that you can do this without compromising productivity is to learn something new. Read an article about a subject that interests you in your field. Test out a new piece of equipment, if you have the opportunity. You may discover a renewed sense of curiosity.

Focus on Solutions, Not Problems
Everyone is going to have to deal with problems on occasion. As a business owner, you may have issues that come up on a daily basis. It’s easy to lose sight of your path when you feel like the road is full of obstacles. Instead, set your sights on what you need to do to get to the other side. If the problem seems too big to solve, ask for help or break it up into smaller pieces. Focus on what you need to do to solve the problem in the most efficient and effective way possible. For chronic problems, write down changes that you can make to your processes to ensure that they are less likely to happen in the future.

Avoid Toxic Positivity
There’s a big difference between maintaining positivity for your business and promoting a culture of toxic positivity. Like a pervasive cloud of negativity, toxic positivity can be really damaging to you and your employees. Toxic positivity describes an environment in which people are discouraged from voicing concerns. You’ll know that a business culture leans in this direction if you hear people saying things like, “Just be positive!” or “Look on the bright side!” Having a positive attitude doesn’t mean that you sweep problems under the rug. Instead, it allows you to address issues as they come up, without letting them sink your day.

Creating a positive workplace is an important part of running a successful business. To find out how you can be your own boss as a licensed contractor, visit CSLS today!