Set Aside Time to Think Strategically About Your Business ExpensesPublished April 26th 2018 at 9:25am
Don't let your finances fall into the background of running your business. While marketing and completing jobs are more immediate or urgent, keeping your monthly expenses and cash flow clear is important. Keeping finances organized is even more important for the first few years of a small business, which are the most likely to involve months without profit, inconsistent revenue, and potential audit triggers. Here are three tips to keep your finances in order:
Set non-negotiable meetings with yourself or your business partner.
Running a small business is hectic, especially in the construction industry. So instead of leaving your financial to-do list as a growing document of things you haven't gotten around to yet, set up a consistent meeting time on your calendar. Set a weekly block of time for issues that have come up throughout the week, and a separate block of time for improvements and strategies. Just like in the first paragraphs, there are problems that are urgent and there are problems that are important . Separate them so you can address both types.
If non-negotiable meetings sound stressful or impossible because you're the first line of troubleshooting, set the meetings on your calendar and make a list of exclusions that can delay the meeting. Having that list makes keeping the schedule less stressful, and it's easier to build up the habit if you don't make unplanned exceptions.
Know your fixed costs and your project-based costs.
Your insurance premiums are probably a fixed monthly cost, and so is your lease agreement, equipment financing, and employee salaries. But if you rental specialty equipment for one job, hire a few contractors for another, and ask an employee to work overtime at the end of each quarter, those vary from month to month. Instead of grouping all of your expenses together, find out the true cost of running your basic business each month and the true cost of different types of jobs. Then you can start to decide which expenses are bringing you the best return.