Month: January 2013

What is a Reasonable Profit in Construction?

For any company, profit is based on the risk reward concept.  So in construction, what should be the profit (reward) given the risk?  What is a reasonable expectation given the industry and the particular business?  There is no single correct answer.  The construction industry is divided into several significant branches.  This article is focused on …

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Methods to Reduce Costs in New Home Construction

This article describes methods to reduce the overall cost of construction for a new home.  The new home construction industry has been hit hard by the devaluing of real estate during the four year period of 2008 to 2012.  There is no reliable source indicating any increase in real estate market value for the foreseeable …

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Capitalizing a New Home Builder Business

Bankrolling any startup business is difficult enough.  Capitalizing a new home builder operation is a leap forward in required funds.  Typically, small businesses can be capitalized on a shoestring budget, for a new home contractor, just a little bit isn’t going to work.  Most lending institutions require that the project is funded to the tune …

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How to Read a Balance Sheet – Equity Section (Simple Format)

The equity section of the balance sheet equals assets minus liabilities.  Traditionally the equity section is referred to as the net worth of the company.  If you were to dispose of all the assets through a sale and pay off liabilities, the money left over would be available for distribution to the shareholders.  The shareholders …

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The 1099 Subcontractor

The Internal Revenue Service promulgates rules and regulations concerning the employment status of workers.  In general, workers are classed as W-2 employees and certain tests must be met to have the worker classed as a 1099 subcontractor.  All 1099 subcontractors should be issued a Form 1099 in January of each year for the prior calendar …

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Small Business Model Series Entry #7 – Location, Location, Location

The e-mails keep coming.  A few days ago I asked my friends and family to be on the lookout for ATM’s.  I describe the difference between a bank owned ATM and an independent ATM.  I was strictly interested in the independents.  I wanted to know exactly where the ATM is located, the name of the …

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