Niagara ReporterThe experience of managing a contractor business is shared by millions across the global, and they’ve all had their experience with contending with its difficulties. The industry can be as steady as it is volatile. The best practice is to do the essentials well. Plenty has been said and recorded which can help warn and guide others in how to avoid making the same mistakes that others did. Here, common mistakes contractor businesses make are outlined, as is how to avoid them.
Be Up-to-Date with the Industry
Keeping an eye on the industry is essential. It’s easily missed as the workload can be constant and checking what the competition is doing quickly becomes pushed to the bottom of the to-do list. However, business owners should make time for it.
Pricing the business out of covering running costs or customers is no way to sustain itself. It can be tempting to be the more affordable option. Profit margins in some contractor markets – for instance, construction – are low enough as it is, so if the price the business is charging becomes too close to operating costs then the business’s risk becomes too great.
Not only this, but tax legislation changes and grants and bursaries become available. The chance to capitalise on these types of opportunities, which could be the key to the business’s future, can pass the business by if they are out-of-touch with the wider picture.
Insurance
Insurance is the cornerstone of any business’s future and a legal requirement. If something bad should happen, insurance covers the cost, rather than the business. Not having insurance isn’t a common mistake. What is a common mistake, though, is that businesses don’t personalise their policies. This often means that they are paying for coverage which is unnecessary. For instance, reliable insurance for construction contractors can be had without paying for full general liability insurance, but, rather, adjusting for number employees, location, type(s) of work, and property, making it more affordable.
Taxes
Taxes are often a last-minute job. They are made more difficult if the business’s administration has been lax or ad hoc due to priorities or workload. There are ways to sort it out.
Hiring an accountant will help. Obviously, this requires a fee. However, it could be worth it for the time you’ll get back and the clarity of your books.
There are also cloud computing alternatives. Bookkeeping software is accessible via the internet from any device, and will enable anyone who can accurately fill in details to accomplish this task. Also, going paperless means that data is more securely stored – making it easier to meet data privacy laws – and the workplace or home a lot tidier.
Employees
Some businesses do not value their employees or do not appreciate the process of hiring them. This can happen for a number of reasons, consciously or not.
One is that businesses pay low wages. Therefore, keeping skilled workers becomes difficult as other job prospects with better pay become more tempting and worthwhile.
Two is the matter of training. If the business relies on a few people for their expertise, there will be a void if they leave. This could lead to projects and work being completed to a lower quality, which will have knock-on effects. There has to be a process to ensure knowledge is contained within a training system, rather than in the heads of select employees, which results in a healthy long-term business.
