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- This topic has 39 replies, 1 voice, and was last updated April 9, 2007 at 6:16 pm by .
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- April 9, 2007 at 6:16 pm #251482Guest
Dear jennifer, I could focus on the budget part of this and how to save money blah, blah, blah, but you’re already doing that by being on list and reading everything you can get your hands on.
(On the envelope budgeting, this works best if you know what your income IS each week, if it’s not reliable (or changes every week) then it’s not as easy to do. Here is an outline: https://www.budget101.com/art251.htm
Instead, lets change the focus a little towards your hubbies business. The following is from my own personal experience. .1st– He should have a WRITTEN contract with Everyone that he does work for regardless of whether it’s a $500 job or a $500,000 job- this is for several reasons:
- It outlines Exactly what he will and Won’t be doing.
- It assures that ALL parties involved know exactly what is covered and helps prevent misunderstandings down the road.
- Any and ALL changes to the initial contract should be added with both parties having signed or initialed it.
- If, for any reason, you EVER have to go to court and you don’t have a signed contract, the Judge will more than likely laugh in your face and ask you if you learned anything. A Very good friend of ours (another contractor) went through this. He did work for someone he considered as a buddy, so they had a verbal agreement. He got stiffed for over $50,000 and the judge literally laughed in his face. It sure changed how we managed our business!
- He isn’t a discount contractor, he doesn’t do “discount” work, so why should he get paid half of what he’s worth?
- He has overhead to pay for, work-truck, work trailer, equipment wear and tear, insurance, licenses, etc
- On the other hand, if he is charging $20 more an hour than the competition, chances are, he’s not going to have work lined up as fast
- Newspapers tend to bring in the deadbeats, the ones that want to hire you to work and then don’t pay. You’ll end up fighting through court, etc to try to get paid, or taking out loans to cover your expenses.
- Or, you get the tire kickers.. You know the ones I mean, where he spends 45% of his time running back and forth doing Free estimates and in the process spends $75 in gas for his worktruck and 2 hours figuring the cost of materials and labor only to have them
- If you get referrals from people he has already done work for, chances are, his business will grow & grow and you’ll avoid most of the problems.
- Again, you need a contract- make sure it has a clause that they get paid ONLY by You/Your Company.
- 2nd, this is tax thing (Employee/Employer vs Contractor/Subcontractor)(I can go more on that if you need)
- This is one area that is a must. If you can’t afford for someone else to do this ( I refuse to pay someone else to do MY Book-keeping!) I HIGHLY, HIGHLY, HIGHLY recommend Quickbooks Premier Contractor Edition. I will forewarn you, it is ridiculously expensive. But here is what it does:
- Tracks ALL of your Vendors, Subcontractors, Receipts, Invoices, Estimates, Estimates into Invoices, customers, jobs, hours on the job, mileage, etc
- You Name it, you can track it. At the end of the year, you can hit a single little button, and it will send Everything right to your accountant so you can file your taxes in 2 minutes flat. I don’t even send it off to an accountant, with everything right here I use TurboTax.
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2nd: He should be charging based on the competition. Is he overcharging for the area? Is he undercharging? Undercharging is just as bad. Why?[/list][/list]3
A. Not respond at all, just leave your estimate sitting on their counter
B.C
. Tell you that yes they want the work done, 6 months down the road when the prices of materials have doubled because of hurricanes, tornadoes or any other natural disaster. (Then they’re mad because the price didn’t stay the same!)
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4. Some points If he hires sub-contractors…[/list][/list]
5. Book-Keeping, Accounting, Tracking Customers[/list][/list][/list]I’m a little more proficient at the computer than dear hubby, so I input all the invoices, receipts, and info into QB. I also print out all his estimates (once he has done the figuring) and the invoices. He keeps a small notebook in his truck that marks what time he starts at a jobsite, what time he leaves. Sometimes in the middle of the day you have to switch jobsites. For instance, you pour a foundation in the morning, by afternoon, you’re hanging drywall at the thompsons.
Why?Because he needs to know whether he is really getting paid for his time, what he is really making per hour. He may charge $30 an hour, but if he did a roof estimate of $3,500 (materials included) and he spent 9 hours stripping the roof because it had 4 layers on it, by the time he’s done, he may have only actually gotten about $8 an hour. He needs to keep track of his profit per job.When I do those things, he does well. Is it possible for you to take a more active role in his business? I’m not going to tell you it’s thrilling, stress free or fun; But I will tell you that he isn’t going to get anywhere without you building him up.You might think I am out of my mind, but at the time, the man was MISERABLE. He was an ass to live with, didn’t sleep at night, growled at me and the kids, etc. I figured, even if we’re broke and I have to hold everything together, it’s got to be better than living with him hating his life.Liss
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