Contractor Cuts

How Much Money Do I Need to Start a Construction Company?

• ProStruct360

Share episode

Starting a contracting company doesn't require a huge nest egg—smart cash flow management and the right systems are more important than having six figures in the bank.

• Commercial contracting requires significant cash reserves due to 30-60 day payment terms
• Residential contracting has more flexible cash requirements, especially with weekly invoicing
• Basic startup costs include licensing ($200-500), insurance ($1,500-3,000/year), and minimal marketing
• Weekly invoicing strategy: bill for next week's work to maintain positive cash flow
• This approach creates natural client checkpoints and prevents end-of-project issues
• Capture all non-billable hours in your pricing (estimates, material runs, bookkeeping)
• Avoid unnecessary startup expenses like new trucks, office space, or expensive software
• Focus on essentials first: QuickBooks, Google Workspace, and basic marketing materials
• Set up proper systems from day one rather than trying to fix problems later
• If you're young with few responsibilities, now is the time to take the entrepreneurial leap

Ready to get started? Visit prostruct360.com or contractorcuts.com and contact us for help setting up your systems correctly from the beginning.


Join us January 11–13 in Nashville for the Chart the Course 2026 Planning Retreat. Sign up now and get three free coaching sessions before the event to finish 2025 strong and hit 2026 with a clear game plan. At the retreat, you’ll tackle systems, hiring, marketing, and leadership alongside ambitious contractors, leaving with a blueprint for growth. Spots are limited—visit prostruct360.com to learn more!

Have a question or an idea to improve the podcast?
Email us at team@prostruct360.com

Want to learn more about our software or coaching?
Visit our website at ProStruct360.com

SPEAKER_00:

Welcome to Contractor Cuts, where we cover the good, the bad, and the ugly of growing a successful contracting company.

SPEAKER_01:

Welcome to Contractor Cuts. My name is Clark Turner. And I'm James McConnell. Thanks for joining us again this week. So today, we are talking about how much cash do you need to start a contracting company? This is more for the startups, for the younger guys or the older guys that are starting. If you've been doing this for a while, we're going to talk about some money management skills that whether you've been doing it for 20 years or you know, 20 days. 20 minutes. 20 minutes, 20 seconds. How should you be managing 20? How should you be managing your money? Really, less about money management, but more about what do you need to start a company and where do we, how do we get companies off the ground when we're not making a lot of money? So buckle up. It should be a pretty good one. All right. So a lot of people think I got to have a ton of cash to start my company, right? A lot of guys are if I'm starting a company, you know, what? I got to put 100 grand away before I can get started. There's different types of companies in construction that you're starting. Um if you're into commercial jobs, yes, you got to have a lot of money. You gotta commercial are usually 30, 45, 60 day net pay, which means it once you complete the work, you submit your invoices and you're a month away from getting paid. So from start work to payment, you might be 60 days to 90 days. Um so when you're doing commercial projects, it is all about cash flow. Uh most of the companies that I coach that are commercial, they either have a bunch of money in the background, large lines of credit, or they're they're hamstrung on what they can say yes to until they build this nest egg of money. Um, and so they kind of work with different GCs that they're under, or you know, they're not really GCing a lot themselves because those are the guys that, but those companies, when you're doing commercial work, are just as much a financial company as they are a construction company. Uh, because it's money management, it is cash flowing, it's borrowing, it's lines of credit, it's dealing with the with your clients and trying to make sure the payment structures and filling out all the forms and submittals and all that stuff. So on the commercial side, it's a lot more difficult. Sorry. On the commercial side, it's very difficult. I would say you can't start a commercial construction company without dollars behind you. Um, next we go to the residential side, uh, light commercial and residential. Uh on those, there's really kind of two different types that we're dealing with. On the jobs that you do where there's a lot of lending involved, like our VA jobs, uh, anywhere that that you know it's uh new construction where you've got a bank doing lending on it, most of the time those jobs are gonna have to have some cash behind it. Maybe you got 20 to 30 grand, you know, you don't need$200,000, but I need to be able to cash flow those to where I can get to an invoice spot and still wait 10 more days before I get paid. Right. And so, you know, on our VA jobs, what would you say? 20%, 40%, 30%, what how much of a job do you think we gotta have cash flow for that job on a$100,000 job? What would you you budget personally?

SPEAKER_00:

Um, well, the VA is pretty specific with their stuff, and some jobs are like well, for instance, we have one job that's a$30,000 job that we just finished, and then we have a job that we're in the middle of right now that's like an eighty thousand dollar job. But the thirty thousand dollar job we uh we decided to just go straight we're gonna finish it and then invoice for it. Because it didn't make sense to break it up any and the cost was I don't know, fifteen or something like that. So we were able to we were able to handle that one, but the eighty thousand dollar one, the cost was like you know, fifty fifty forty-five, fifty-five. So uh that one we broke up into three invoices. Which slows the job down, makes it where you can't start the next job. It slows it down, but we uh mapping it out is and honestly, I like those jobs because it keeps everything clean and honest, and you end up with cash at the end. Yeah. And you have if you if you manage it right, then everybody gets paid, everybody gets what they need, and then at the end you get a chunk of money that you can then okay, great. Now I have this, I can do this, this, this, and here's the profit we put aside.

SPEAKER_01:

It's almost forced budgeting, because like you break even throughout the job, yeah, and then boom, I got a thirty thousand dollar check at the end that's all straight profit.

SPEAKER_00:

Yeah. Yeah. Which is why it's nice when you have a couple, when you have like a couple jobs that are running that are cash jobs, and then you've got one that you're doing lending on. Yeah. It's a really nice way to kind of even out the the books because you're keeping it you're still tight until that one job closes finally and you get that big chunk of cash at the end. It really just forces you to be more diligent about mapping out your I've got one client out in California that he uh he runs this company.

SPEAKER_01:

They do residential and commercial, but they're doing one commercial job at a time because it's that same way. It's like the residential are making them paying their bills uh to where they're you know they've they've got money coming in off that. The commercial is kind of the side job that puts money in the long-term bank, right? To build to where they can eventually say yes to two commercial jobs at a time. Yeah, but they're not that money is free money for them. It's not like I need that commercial job so I can pay my bills. We got the residential that are paying the bills, and then I got cash flow in the background, and it's kind of my side hobby to grow that commercial, which is the same as like what you're talking about. And I think one of the one of the notes on that is on that$30,000 job where you're out of pocket, 18, 20, somewhere in there, 15, somewhere in that that area. That is like, hey, we can sprint and knock this out in three weeks, or we can make it into three draws and it's gonna take six weeks. And so not only is it helping us to get through it, we can start another job and have another job behind it for another three weeks. And so in six weeks, instead of doing 30 grand, I'm now doing 60 grand. Right. And so we start looking at that way of it's not just I need the cash flow, it's also time is money and opportunity cost. Time is money, babe. Opportunity cost. So it's it's a if I can get these done quicker, what how how long can I go? And also who am I working with? What if I'm working with Bank of America versus the VA, those are two different monsters that I'm dealing with. If I'm working with a local lender or a credit union, it's a totally different animal where I'm talking to the guy that's releasing the funds. Right. And so understanding the lender, understanding who's the borrower, understanding. No, I I remember we actually had some a number of years ago that, like, hey, we can't cash flow this job. And so we go to the client, say, listen, you're gonna give us a deposit, and then on the back end of the job, we refund the deposit. Remember that? There was there was one guy that we did that where it's like, we need more cash flow, so we're we're gonna let the client cash flow his own job. And we we we sold it less of we don't have money and more of like, hey, we'll give you a discount if you want to do it this way, because borrowing money for us is what we do for the cash flow, costs us money. So we'll give you a cheaper job if you want to cash flow it yourself. He gives us 15 grand up front at the end of the job. We refund that 15 grand out of the final check cash flow deals great, right? So being creative like that can help you kind of launch these. But everything we've talked about so far, if you've heard us, it's thinking through, projecting, and making a game plan before even agreeing to terms. And I think that's where guys miss it. It's like, I just need a yes, I need a signature, and I need to get my guys on site. And when you start doing it that way and you haven't thought through where's this money coming from? Where, what do I have? If you just look at your bank account, it says you got$65,000 in your bank account. Well, what you didn't account for is that next week you've got$42,000 of bills going out, you haven't paid rent, you haven't taken money for your own bills, you don't have$62,000 in the bank. Yeah. Right. And I think that's that's something that guys are gonna get shooting themselves in the foot on, where it's like, you gotta look at the job. How are we paying for this? Let's look at our QuickBooks, let's look at our cash flow, let's look at what money is available for us. Credit lines, our credit lines. Hey, that credit line's coming due. I, you know, I can't just borrow more money on it, or hey, we've got money there. That's only gonna be for this job. The final invoice from this job goes to that credit line. But being organized by it, and this doesn't take you five days. This is one hour, sit down and game plan this. Yeah. Uh it's just thinking through it ahead of time. So that's on those sides. Uh, if you're starting a company and you're taking on those type of jobs, you gotta have cash somehow. Um, I don't care if it's a rich uncle, I don't care if you've begged and borrowed and pleaded. I don't want you to take a second mortgage on on your house. Um but there, there you need cash if you're doing those type of jobs. Now, the other type of jobs as a residential general contractor aren't as bad. Now, when we're talking about starting jobs, let's even back up starting the company. Let's go through the cost entailed with starting a company, right? If I'm starting from zero, starting a company as a general contractor, pausing on that, not a specific contractor, which we'll get into later. Yeah. So there's different types of company you're starting. General contractor, meaning I am managing the job, selling the job, making sure everything's happening. I'm the client representative, running crews. I'm I'm there's a second type of general contractor that guys call themselves GCs, but they're swinging the hammer. They're on site, they're doing the work themselves. That's a different animal, right? There's really three day three different categories we're talking about. One, straight GC. I don't own tools. I don't own, uh, I don't, I'm not doing any labor. I'm general contracting. I'm contracting two crews to do the work. I've got subs and vendors, and that's the standard GC. That's where I'm trying to get most guys. Um, the second category is I'm a GC, but I am the main crew. I do one to two houses at a time, get on to the next one. I bring in my flooring guys, I bring in some HVAC and electrical, but I do most of the work myself. I'm a GC. That one needs more money to start because you got to buy your tools, you got to fund some stuff up front. Insurance is higher. Insurance is a lot higher. Uh, and then the third category is trades, right? If you're starting an electrical company, when we start our HVAC company, we got to outfit a truck. We got to have a truck with wrapped uh or a big van uh our HVAC van that was wrapped, and we had probably eight to ten grand worth of stuff in the back of it at minimum, um, worth of tools and gauges and you know the parts that you need to just have on hand instead of running a store. Yes. So those are kind of the three categories of starting in the residential side. The easiest one to start is the GC, but you got to have experience getting there. Uh and the standard GC where you're full contracting. That's the cheapest as well as the most lucrative. When you're doing one job at a time and you're buying all the tools and you're spending all the insurance and you're on site, it's slow, it's a grind. And that's where guys start, and we're trying to get them to the other side. So today we're talking about that other side, the GC that is a true general contractor. I've been swinging a hammer, I've been working with these other guys. A lot of stories I hear from coaching clients coming in that when they're just getting started, especially like on our foundations program, which starts like 500 bucks. Those guys are like, hey, I've been on a crew, I just got this lake house, I just got this project in Atlanta, I just got this job over here, and it's a$130,000 job. I think I'm gonna make the jump and start my own company. Help, right? Like I've got a lot of those guys coming in. Those type of guys, this is where we start with of all right, you need to figure out how to get going. You need to figure out how to make the jump, but we got one big kind of juicy job that we can use to launch you into this. Uh, if you don't have that job and you're just going out on your own, it's a little bit harder because I need some runway. I got my own bills that I got to pay, I got to do some marketing. And maybe the first job I get in a couple of weeks, and it still takes a couple of weeks to actually get on site. So those are a little bit longer. But if we're jumping from being a sub or doing, you know, working for a company, being a PM for a company, now I'm gonna start my own thing and I've got one job. Let's go over what you need to do to do that dollar-wise. First off, licensing, permitting, uh, business license. Uh, I mean, you're spending two to five hundred dollars, right? It's not a lot of money up front, but you got to have something. We got to get license with the state. I've got to file for an EIN. Uh, I've got to get all of that stuff set up. Um, uh usually a business license in the county or city that you're in, depending on your jurisdiction. Um, that's a couple hundred bucks, two, two to five hundred bucks. Next, we're going into insurance. Insurance for a GC when you're getting started should be be between$1,500 and$3,000 a year. That's that's very, very small. You can pay that monthly. Usually it's a 10-month uh contract. Or not contract, it's a 10-month payment, and you have two months where you don't pay where they're reviewing and you're up upping for the next year. Um, you're paying$150 to$300 a month for 10 months. Um, you got to get that in place before your first job. When you grow the company, you got to monitor that too, because we get to a spot where you got to be paying that, you know,$1,500 to$3,000 monthly because you've grown to that size. But when you're first getting started, just get the basics, get the minimums, and and have something in place uh to fall back on in case something bad happens. All right, so we've got the insurance,$1,500. Um, registrations, if you're in a city with contractors' license requirements, that's kind of the big hurdle because you can't just go get that by the weekend. Um, you gotta have experience that takes months to do, but that's also gonna cost some money. You got your training courses, but let's assume that you already have that or you're in a state that doesn't need that. Texas, Kentucky, others. Others. Um, all right, so that's that. The next step, the next list of stuff is marketing, right? I don't need you to go run Google ads for$5,000 a month. I don't want you to go wrap your truck yet. I don't want you to be spending on Facebook ads. What I want in marketing are business cards and yard signs. Maybe a handful of shirts. Give me three collared shirts with your logo on it. Um, that's it. I don't need I don't need multi-thousands of dollars spent on marketing day one, especially if I have a big project to go after. So a couple hundred bucks from VistaPrint for cards, get some yard signs, get three, five, ten yard signs that you can just stick outside that's marketing what you do, um, and then get some shirts. We're spending 500 bucks on that. That's not a lot, that's not a big spend as well, but just a baseline setup.

SPEAKER_00:

And one thing you can do in uh, and this is we spent a little bit extra money on this, but these door knockers go around to the houses around the jobs that we're doing. You can do this with a business card too. Leave behind that. Yeah, but a leave behind where you're like, hey, we're gonna be in the area. If you have any issues, call me a project manager, and you put those around all the houses that you're working around, and really good look. The clients know that you're really thinking about their experience and their your neighbor's experience, which can become problematic. Yep. You're gonna be parking there, you're gonna be having noise. And uh that's like a really inexpensive way to do grassroots marketing in the honey hole. Yep. You want to land more jobs in the in the neighborhood you're in because it's right there.

SPEAKER_01:

People trust who their neighbors use, right? Like if you if the neighbor said yes, and that means you're at least you know, you've got some some wherewithal as a company that that you're gonna show up and do the work because you're promoting from a neighbor's area.

SPEAKER_00:

And if you can if you can fire up a job or two before you even finish that other job, the footprint that you're creating and the uh recognition that you're creating in that neighborhood, the same people are driving in and out, and they're like, I keep seeing these guys, what's going on?

SPEAKER_01:

Four signs that I drove down this road with that person.

SPEAKER_00:

In here, we might as well look into it.

SPEAKER_01:

Yep. Uh next, next when we talk working capital. Um, we got gas that we got to pay for. I got my bills I got to pay for. Outside of that, there's not a lot needed in it here. I mean, we've got on like I said, the residential side, when you're doing that, there's not a lot of working capital because the way we invoice, the way that we set up our systems and processes from day one. And the and the the quick 30,000-foot view of that is I invoice this week of the work I'm doing next week. Next week I invoice for the work I'm doing the following week, which is gonna roll into where I'm going with everything of how we manage our money to make sure we start building that nest egg and the savings and the cash flow in the background.

SPEAKER_00:

Now, if you have any issues with clients that uh when you're trying to pitch that idea of I I need you to pay me for a week ahead of time for the work that's about to take place, the easiest way to just kind of kill that conversation is that's totally fine. If you want us to do the 30% or 50% up front for the project, that's the other route we could go. I I don't like that route because I'm holding more money than I need to be holding, and I don't have seven uh checking accounts to separate all this money into. So the reason I like to get the week ahead of time is so I don't have to ask you for too much money. I'm just asking you for the work that we're about to do and then we're invoicing from there. So it's not we don't have this uh set schedule of when we're invoicing. If this week that work doesn't uh uh plane out and we actually have to work until Wednesday to get that amount of work done, your invoice for this coming week is gonna look different. Yep. So it's it's a it absolutely protects your client from mismanagement of money and it protects you from mismanagement of money.

SPEAKER_01:

And it naturally creates a check-in weekly with your client about progress. And that's kind of the the the hidden bonus of it because when I'm invoicing weekly, the client brings up and says, Hey, you know, I know that you think that the paint's done, but I thought we need one more coat in here. Oh, well, let's go look at that. Let's talk about that. And I show up and we're like, You're right, we're gonna do one more coat. Thanks for bringing that up. Now, instead of three months down the road, when we think, when I say, Hey, we're done, we put the floors in, we did all the trim, we did everything that we need to do, and they say, I think we need one more coat of paint. Well, crap, I gotta cover the floors, I gotta get my painters who've been gone for three months. I probably are I might not be working with them right now, and so I need to pay additional painters to come in and paint, right? So I get too far over my skis and I'm spending a ton of money at the end of the job, right? And so these weekly invoices are the check-ins as well as the cash flow. And what's great about it, I invoice$10,000 this week for what I'm doing next week. I get paid$10,000 on Friday. Guys show up on Monday. I've already ordered materials on Friday, I spend a couple grand on that. Guys do the work, I spend six grand on that. By next Friday, I've got two, three thousand dollars left in my bank account. That's profit. That's mine. Put it in my pocket. I can spend that and not feel not not have to go sell another job to finish this job. Because go ahead, go buy that truck, right? Yes, you've got to uh don't buy that truck. Uh I'm gonna make a hat that says don't buy that truck. Don't buy that truck. Uh so that being said, doing the invoicing like we're talking about, and it there's a lot of intricacies what we're talking about, and we'll dive into that if you come into the coaching program. That being said, this is the best way to build that nest egg because I invoiced 10, I spent seven, I got three left over, and that's my money. I can I I need two grand for my bills this week. I'm gonna put a thousand in the savings account, let's do the next job. I invoice ten, I and so it's bite-sized knowing of where my money is and what is my money and what isn't my money. It's not I I took a a$50,000 check up front for a$120,000 job, and I've got to make sure that over the next six weeks I keep that money to pay my crews and materials. Because the the temptation is gonna be perfect.

SPEAKER_00:

I've got my I've got my Chase card, I need to pay that down, that's five. I got my Home Depot line, I gotta pay that down, that's three.

SPEAKER_01:

My transmission went out.

SPEAKER_00:

Transmission went out, I gotta have that to work. And then by the time you need the cabinet down payment, that's twenty thousand dollars, you've got fifteen, and now you're kind of like now you're invoicing for sighting, so you can pay for the cabinets. Yes. It gets so it gets so messy.

SPEAKER_01:

Yep, yep. So working capital-wise, this is how we suggest doing it. It feels basic, it feels tedious, it feels like a lot of paperwork. It is not any of those things. It's easier because it's it's saving you so much of the reactive paperwork and the reactive headaches and the showing up and the arguments and the lawyers, like all of that goes away. So, yeah, I spent more time this week making seven invoices for the seven projects we're on than I would have if we just would have done it every few weeks as we get to spots. Yes, it took me an extra two hours this week. That being said, those two hours I spent this week is saving me two weeks at the end of the end of the job when I can't get off the job, clients pissed off, I can't get the next job because I've got three bad reviews. Like, it's it we're not saying to do it this way because we like spending your time. It's because this is the way that works. So start start trying trying to do it this way. All right. Next, one thing that guys don't realize though, sweat equity. I think something that I see with guys starting up companies is they invoice and they they bid for the time they're gonna spend on the job. I can do this job in four days. I charge 500 bucks a day. So I'm gonna envoy, I'm gonna charge you, I'm gonna quote you$2,000 for this work. What about today when you're sitting there doing an estimate? What about when you got home and spent another hour on the estimate? What about collecting materials on Monday before we started Tuesday? What about chasing them down for the five? Like, it's not a four-day job. That's a seven-day job when you're gonna be on site for four days. Yeah. So we need to capture that extra time I'm spending. Uh one one coaching client earlier this week, uh, we were talking about they had one job that it was a small job. They were kind of facelift on a bathroom, uh, had a crawl space underneath it. They were just, you know, new toilet, new tile, new uh vanity, new light, right, and paint. Small job. They had they this company has an on-staff crew. I don't suggest it. That's what they want to do. I'm a coach, I'm not an owner. They have an on-staff crew. Their crew is in there doing it, and the homeowner said, Hey, you know what? It'd be great if we can move that toilet over six inches to be right up next to the wall. So we we capture that extra space. They're halfway through the job, right? And so they said, you know, to move that toilet, I gotta pay my plumber 800 bucks to come over here and do that. Great, do it. Well, their crew has a pull-off, their plumber comes in two days and fixes it. So the crew is now three days with no work. Who's paying for that? Right? You can't charge 800 bucks for that change order because that's that's lost time that you're not charging for. So on instances like this, and I'm getting a little off script, but that being said, instances like that, that's a$5,000 change order. And and they were when I was telling them that on the coaching, like, I can't charge$5,000 and move that over. It's super easy. I'm like, that it doesn't, that's what it's costing you. Like, you got three days with the crew not doing work. And so you've got to set that up beforehand in the client engagement agreement, let the client know this is why change orders get so expensive. And then if that happens, tell the try to get the crew on another job, but I've got the money to cover if they're just at home because they're on salary, right? So we need to make sure that those lost times get captured, whether it's your personal time, whether it's your cruise time, whether it's your shopping time, whatever it is, that's part of my quote. I'm not gonna do that for free. And my bookkeeping time. I'm doing quick books and organizing it. Who's paying me for that? Right. So we need to make sure our our our quotes and our pricing accommodate extra time for the job and that I need to be spending on it.

SPEAKER_00:

And that brings up a good point. Um, one one thing that you should absolutely spend time talking about in your CEA and the client engagement agreement is the cascade effect of pausing work, change orders, that type of thing. Because when you especially if you don't have an in-house crew, which again it you shouldn't for a lot of reasons. I'm sure it works for some people. Um when you stop me working to move this toilet over, and now that crew has to stop. I gotta bring the plumber in. Who who are the guys behind the other crew once they can get back going? You don't own their schedule, so you can't say, okay, we'll just move every we'll just shift everything over three days. You gotta talk with that guy. There's time there, you gotta coordinate with him. You then gotta coordinate with the glass guy because they've already done their uh template and they're supposed to install it next week, but now they're gonna have to push that to the following week. Yep. You gotta talk with the countertop guy, all of these, all of these lead time items, you have to push those down. And so that three-day break, yeah, work is gonna get started after that three days, but you've actually lost another three days four days from that day, and then next week. Yeah, yeah. And so there's a cascading effect because the crews that you need to come in after those guys, you don't own their schedule and you need to reorganize the calendar. And so it's not just that day, and but they don't understand that.

SPEAKER_01:

Well, and I'm not having to pay my painter extra to postpone them to next Friday because he can't come back Monday. He's got another job, so it's gonna he's gonna come back next Thursday and Friday. It doesn't cost me anything to pay the painter to reschedule. But what it did cost, the unbillable hours that it cost me, is I could have been off your job by this Friday and starting another job on Monday. Instead, I'm now walking your job next Thursday again and next Friday once the painter's done. And so I'm now doing, I'm driving out there three, four, seven extra times.

SPEAKER_00:

And I'm explaining to the client every time, like what's going on today. It's like it's you did a change order and now everything's messed up, is what happened.

SPEAKER_01:

Part of that too, and I've I I mean, I'm beating a dead horse here because I say this on every podcast. What a horrible image. Oh, I'm tickling on a live pony. I don't know what to try to say. I'm beating a dead horse on saying this every single time. If you don't spend the time in pre-construction preparing the job, it's costing you money. And this is what we're talking about. If I will lay out all of this stuff, if I do the CEA, I lay out this, I organize all this and say, listen, just so you know, we need to lock into this your design. Not they wanted a new bathroom, I quoted it to them, we signed it, and we go. Instead, hey, let's talk about this. We got to get this locked in. If it, if, if it pushes on days, it's gonna cost you a lot of extra money. Uh, use that toilet example. That's in$5,000 change order. If we decide it right now, it's gonna cost you$800. So you're gonna lose$4,200 to move that toilet next week. Right. And so we start laying that out so they understand that. So when it does happen, A, they're like, you know what? I'm not even gonna suggest I don't know, I don't want to pay that extra money. And B, if it does happen, they're like, I get it, I know I got to pay the extra money, but it's worth it for me. Either way, I'm I'm not the bad guy anymore because I spent that pre-construction time talking through it, thinking about it, thinking, hey, what if we move that toilet over? I'm getting an upsell, I can charge them extra, I'm making the bathroom what they want, but I've spent the time, I'm not rushing to get the job started. So, all that being said, there's so many lost billable hours, non-billable hours on these jobs that I see when you're inefficient and when you don't have this the client engagement in place, as well as the ready fire aim mentality of let's just get out there and get the job done. You gotta be able to capture these billable hours, let non-billable hours, lay it out to the client beforehand, get it in agreement, and let them know hey, we're starting tomorrow. Any changes after tomorrow is gonna cost a lot more. Any final thoughts on this? Lay those out and we're we're we're good to go. All right. So the other things I didn't I actually didn't mention on startup costs, I want you to get Google Workspace, Google my business. I want you to set up a Clark at company domain.com. I don't want it to be you know, Clark's Construction at gmail.com. It's very cheap. You're paying eight bucks, ten bucks a month. I'm gonna get Gmail set up. I'm gonna get that tied in.

SPEAKER_00:

Um, I'm also what are are these lights flickering every once in a while?

SPEAKER_01:

No, I'm not saying that.

SPEAKER_00:

Are you having a stroke? That's my question.

SPEAKER_01:

James's gonna lay down on the floor while I finish this podcast. Uh, anyways, the the things I don't want you to spend money on super expensive softwares. I know I I sell software, super expensive softwares. What I want is QuickBooks. We've got a light version that's 89 bucks a month. QuickBooks and our light version is all you need. You don't need fancy softwares, we don't need to spend$1,500 a month on builder trend. You don't even Need our higher end software. Don't, don't, don't spend on the ProTre 360 high-end stuff. We don't need it until you start growing beyond where it makes a lot more sense. What I need you to get on is our light version,$89 a month, a QuickBooks version. Those we're gonna set up now. A lot of times there's like, well, I'll set up QuickBooks when I, you know, at the end of the year when my account needs it. We're we're already setting up your processes wrong. Let's get how we manage money set up day one so it doesn't become this huge hornet's nest by the end of the year. Um, what we're not buying, new truck. Don't buy a new truck. Don't buy a new truck. Stay in your truck. I've still got my 10-year-old truck and I love it. Paid off. It's a free truck to drive. I love it. Don't don't rent office space. You don't need office space. You got Starbucks, you got your living room, you got your job sites. Do not rent office space day one. Office space is needed once you have employees. And even then, it's questionable. So do not do not go, all right, we're gonna get the company going. I'm gonna rent an office, I'm gonna get this stuff set up, I'm gonna have a storage space for all my tools. I'm gonna rent like I'm gonna buy the Costco pack of pens. Yes. Like, no, don't. Just don't do it. Like we're gonna spend money when we have cash to spend, not if I spend it, the business will come. We're we're we're not doing it that way. Um finally, I think my last piece of advice is that guys use money and cash as a barrier to say, yes, I'm gonna get going. Don't let that happen. If we can help you get this set up, and again, I'm uh this is an anti, this is an anti-commercial. Don't hire a consultant yet. Don't hire a coach yet. Let's get you going. I've got some free stuff I'll give you if you're starting a company. Come on our retreat in January. We'll figure that stuff out. There's stuff you can do to get some basic structure, let's get you going. Our like our foundations program. I wouldn't even say get that going yet. Let's get you some money to pay for that. But that's basic stuff to help you get your structure in place. And it starts at 500 bucks. So there's some basic stuff to do to get the structure in place, some bare bone skeleton of what you need to do, and let's start growing from there. Once you get the cash, then we can spend on stuff. But I don't want you to spend on that. I don't want you to come into coaching yet. Let's get some systems, basic systems in place, basic paperwork in place, figure out a CEA. We'll we'll work on that with you. But make sure you understand you don't have to have six figures in the bank to get a company started. It's it's a risk. It's I do it early. You know, a lot of guys wait. I'll do this, you know, later on when I have the money, and all of a sudden they're 35 with two kids. And it's like, bro, if you go out on your own and doesn't work, where are you buying buying formula from for your kid? So if you're in your 20s and you're considering making the jump, make the jump. Now's the time. Explore, fail, lose. That's okay. You're in your 20s, do that before you you have a lot more responsibilities. If you're in your 30s, 40s, and you're looking to do it, let's get a game plan together. If you got responsibilities, if you got people depending on you, let me help you with that. But it doesn't take a lot of cash to start a contracting company. So don't let that be a barrier. That's all I got. You got any final words on that?

SPEAKER_00:

No.

SPEAKER_01:

I I think it's a manage your money well, get some systems in place that you're following. I think one of the biggest things to think about is uh that I hear that's the wrong statement from guys is if I I will start doing it that way once I get there. And it's like you're not gonna get there unless you're doing it the right way. Yeah, you you you're gonna hit a ceiling and your whole foundation of what you've uh the metaphor that I always use, like beating a dead horse. Beating a dead horse, tickling a unicorn. Uh no, the foundation is such a good metaphor of like, hey, I'm gonna pour the foundation once I build the structure of the house. You can't do that. You can't build the structure until you have that foundation poured and set at the right size. So let's build a foundation. That's why we have a foundations program, but let's get some systems in place, basic money management that you're committing to uh some accountability, whether it's a spouse, a friend, or us, to where this is how we're managing money. We're not gonna spend on stuff that we don't have money for. Uh, and we're gonna really utilize our jobs to fund ourselves, not us to fund our jobs. If you want to help set that up, go to proshook360.com, hit us up at the contact us, we'd love to help you out. Go to contractorcuts.com. We'd love to talk to you. That's all I got. Thank you guys for listening this week, and we'll talk to you next week. Bye. Bye.

Head Shot

Clark Turner

Host