Success in construction is no easy task.
Of course you should invest in your business, get the word out with marketing and find your niche. You need good people, too. From top to bottom you need people who are dependable, skilled and knowledgeable. And don’t forget quality or delivering on good customer service. Sometimes you can’t do it all, and that’s understandable.
Establishing a strong construction team—and business—is difficult, but it can be done.
Here are three key business partners you may not be considering when it comes to building a successful construction team.
1. A construction CPA
Why? Because a proficient CPA can balance accounting, bookkeeping and tax advice.
In construction, financial management and accounting is a complex job with various rules. Understanding revenue recognition and industry changes like new tax laws are important, but it’s so much more than that. It’s thinking about ways to enhance standard practice and what type of ratios make a construction business healthy.
Here are some example questions to think about when it comes to your financials:
- Think about overhead allocation. Are you measuring how overhead impacts each project? If not, you may not be getting a clear picture on the real cost of each job.
- What if you run into a problem which results in liquidated damages? Do you have a financial plan for that?
- What are your thoughts on early completion bonuses? Although they might not always come to fruition, how should you recognize that revenue to pay less in taxes?
There are many reasons to hire a good construction-focused CPA firm. And there are a lot of factors to consider when making your selection. Here are a few that should be at the top of your list:
- Do they have employees who have obtained the Certified Construction Industry Financial Professional designation (CCIFP)? Also, do they have employees who are members of the Construction Financial Management Association (CFMA)?
- Do they emphasize sound financial measures or are they motivated by tax considerations?
- Do their fees seem reasonable? How do they compare to other construction CPA firms?
Have you grown to the point where you need to have a CPA on staff?
2. Construction attorney
Why? Because contract negotiation, OSHA regulations and property damage liability can all have an effect on your business.
When dealing in an industry that has so many moving parts—both literally and figuratively—you may want to make sure you have a good legal team. Engaging with a good lawyer may not only save you time, but save you money as well. Construction lawyers represent companies, workers, property owners and more. On any given day, a construction attorney may address contract law, contract scope disagreements, employment law, worker’s compensation, torts, property law, dispute resolution, litigation, arbitration or mediation.
The point is that you need a good attorney on your side.
QUESTION: SHOULD I HIRE AN ATTORNEY AS PART OF MY STAFF OR SHOULD WE CONTRACT THIS OUT WITH A LEGAL SERVICES PROVIDER?
Answer: It depends on how big your company is and how much legal advice you need. Additional questions may need consideration. Are you a larger company with several different contracts coming in the door? Have you been awarded a project with an owner who is known to be difficult? Is your firm expanding into a new territory?
3. Surety agent
Why? A good surety agent can play a vital role as both an advisor & an educator to enhance a contractor’s surety credit. Obtaining surety credit starts with a professional bond producer aiding in the prequalification process with a US government approved surety.
It’s imperative that contractors find a great surety agent. Think of them as an extension of your executive team. Other than securing bonds, a surety specialist can help position your company to reach your business goals. Plus, they can also help you raise your bonding capacity.
Surety agents can introduce you to the correct surety company for your business. They can help you find a good construction CPA, introduce you to lenders that understand construction lending and arrange meetings with law firms that specialize in construction law.