The Small Business Administration says that 50% of new businesses will not last 5 years. As they say, it takes money to make money. As a contractor and small business owner, you have to invest in your business in order for it to be successful. But you have to be smart about it.
Whether your contracting business has been in operation for several years or you are just starting up, it's important to understand the types of expenditures that can impact small businesses in a good way. Here are a few ideas that can help.
Delegate Important Jobs
Your specialty is your business, and vice versa. If you are a roofing contractor, your specialty is roofing. If you are a plumber, your specialty is plumbing. Unless you've gone to business school for accounting, your specialty is not accounting and record keeping. At first, accounting could be simple enough to do yourself. But, since finances are so important to the longevity of any business, it's a good idea to hire a certified accountant or record-keeping service.
In order for your business to be successful, you need online marketing. Today, people no longer flip open the phone book to look for contractors and small businesses, and when they do they are more likely to thumb through an out-dated book that doesn't have your business listed. Hire a marketing firm that specializes in social media marketing and establishing a presence on the Internet.
With the high cost of equipment today, it makes more sense to rent than to buy. When you buy, you have to be concerned with carrying enough insurance to satisfy the lien holder, the costs of maintaining and repairing the equipment, and the loss of value from depreciation.
You also have to think about how often you would use the equipment. There will be times when certain pieces of equipment won't be necessary for, what could be, extensive periods of time. This means that you would need space to store the equipment when it's not in use and keep the equipment secure from theft and vandalism.
Rent the equipment you need when you need it and easily annotate it in your records as an operating expense. If you were to buy equipment, you would need to keep accurate tax records for each purchase for itemization purposes, along with all the maintenance fees and repair costs that may be involved.
Renting equipment is also a great way to figure out which models and brands you like best. That way, when/if you decide to purchase equipment at some point in the future, you'll already have a good idea of what you want. You may even know exactly what you want, which will save valuable time that can be better spent running your business.
Another key thing to think about is that you will not be responsible for repair costs of the equipment when it is normally operated. Of course, anyone who intentionally damages equipment can expect to pay for the repair costs. To avoid this possibility if you have employees who are new to your industry or trade, work with your contractor equipment rental company to provides on-site operator training.
Use an equipment rental company that provides maintenance on the equipment or offers it for an additional fee. That way, you won't have to spend time performing maintenance yourself. After all, time is money when you own and operate a business. The small amount of additional money it costs for the extra services will likely pale in comparison to what you can financially bring into your business when you are focused on your specialty.Share