Top 5 habits of successful construction businesses
Posted on 1st April 2021 by David Rudd
We work with some incredibly successful clients in the construction industry, and over the years have given some valuable small business growth advice that allowed them to grow. Given this, we wanted to share our 5 top tips for running a successful construction business:
1) Subcontractor/employee status check and protection
In order to run a successful construction business, we all know that getting the right labour is critical. Once you have found your labour, ensuring you engage with them via the correct status can be the difference between making a profit and having lengthy (and possibly costly) conversations with HMRC to prove their status. Get the status of your team (external and internal) checked as soon as you can.
2) Sending sales invoices via Xero
You know the drill, do the work then get the invoice out. What happens when you forget to invoice a job? What if the customer doesn’t pay? Getting into a habit of sending all your sales invoices via Xero will mean you can manage your cash inflows much quicker. In our experience sales invoices via Xero means:
- Less bad debt
- Reduced time spent on admin
- Higher profit margins as you have more time to crack on with the next job
Get the Xero app on your phone and tablet. Create your invoice and get it gone! Here at Steven Burton, we are experts in migrating your accounts to Xero.
3) Capture the costs before you lose them
We appreciate this one is dull, but leaving your invoices on the dashboard of your Van means potentially missing out on tax and VAT relief. Have you factored in paying HMRC more than the standard rates of VAT and Tax into your quotes? Probably not. Dext Prepare (formerly Receipt Bank) is a great piece of software which captures your costs via email, photo or scanning receipts. Not only will this habit save you tax, capturing your costs daily will save you a tonne of time over the year. Speak to us about integrating Dext.
4) Get the right level of insurance
“A pandemic will never affect us” said a very high percentage of people in the UK! Would you take the same approach with insurance cover? Probably not. Our advice for businesses of any size, not just small, is to get your insurance sorted before starting that big job you’ve just won. It’s worthwhile using a broker who has experience in your trade, they will ensure you have the right amount of cover.
5) Profit margins on each job
Wouldn’t it be interesting to know how much profit you make on each job? This used to be a pipedream for many small and medium sized construction businesses. Now, this is not only a possibility, but something which is open to every business using the right technology. Using our range of cloud accounting integrations you’re able to check the profitability of each job. Once you know your most profitable jobs, it gives you incredible power to then look at how to repeat that process and win the next job. It’s how small business growth leads to more business.
Remember, the Steven Burton & Co team have many decades of experience between us helping business owners just like you. If you need a sounding board, some advice or a steer in the right direction, then get in touch.
David is an Accountant with over 15 years’ experience in helping a large number of different business owners in numerous sectors from consulting agencies to every area of construction you can think of.
At home dealing with numerous different types of accounting software from Xero to QBO and everything in between. David is always on the lookout for new technology to help business owners to create more time for themselves and their teams.
With a healthy ambition of never resting on the results of yesterday, David is at his best when working with ambitious business owners who want to improve their businesses for eventual sale.
In his spare time, David is often found cheering on his two boys at football, building Lego (which he pretends is for his boys) or watching the latest TV series on Netflix.