Win Cost Plus Awards With the Right Cost Accounting System

Winning cost plus awards can be a time to celebrate… or to groan. With the right cost accounting system and appropriate processes in place it is a time to revel in your new-found business growth. It is important to have the right system in place, but also what it takes to make it through the audit and sail through your future bids and ongoing revenue stream.

The right cost accounting system is a necessity when you are going after cost plus contracts. That is, if you expect to win them and get revenue from them. When you have the right system along with the attendant accounting policies and practices, you have a path to more cost plus awards. While the right cost accounting system does not guarantee you awards, it paves the way to making those awards easier to obtain… and keep. Let’s explore three components of what is involved.

1. Consistency
All Government contractors, whether or not they are subject to Cost Accounting Standards (CAS), must be compliant with CAS 401 and 402. This issue is typically lost on most small contractors. Most believe that because they are not subject to CAS they do not have to comply with CAS 401 and 402. Both standards require contractors to be consistent in estimating, accumulating and reporting costs as well as in allocating costs incurred for the same purpose. What is important here is that your estimating system, including practices, be disciplined by your consistently-applied cost accounting methods. What you do in practice to adhere to your cost accounting system methods will apply to what you do in estimating your new projects. This solid practice will decrease your chances for defective pricing. Be consistent in your pricing and cost accumulation methods.

2. Credibility
To be a credible Government contractor, you not only need the right accounting system but the “other” parts that make you a complete package, have an acceptable compliant system, and allow you to move more freely in the cost plus environment. Most contractors think it is just about the system itself. The system is not complete without adequate accounting policies, procedures/practices and people – an employee benefits manual will not do. Real credible contractors have written accounting policies and procedures. Your best pricing estimates should be supported by data from your managed cost accounting database. When you support your estimates with real live historical data, you are credible. You must include profitable bid considerations in designing your bid rates – otherwise why stay in business. DCAA emphasizes solid business systems which are supportable by good historical data and estimating that uses that data. You must have reliable source integrity to support the credibility of your estimates.

3. Conflict
When you have the right accounting system, along with appropriate accounting policies, procedures/practices and people, you greatly improve your chances for your outside auditor (be it DCAA or otherwise) to agree with almost all, if not all, of what you are doing. Once the auditor buys in to your adequate system, your audits will proceed much more smoothly and effortlessly. Your system will produce the results they are looking for and they already know that your policies and practices are up to par. This means that the amount of time the auditor spends with you is greatly reduced. That spells more productive time for you and your staff – not answering questions that are easily solved. Your staff’s interaction time with auditors to comply with their requests is tremendously diminished. Your accepted policies and practices already lay out the road map that shows your consistency.

These three elements are only the beginning of making it possible to win cost plus awards with the right accounting system. While there are several other factors, these three comprise a solid backbone of practices you will call on to support your bids. When you combine these factors with a well-designed accounting system, you are on the road to being able to win more awards.

Lead Generation Keeps Your Contracting Business Fresh

Everyone in the contractor business knows finding new customers is just as important as keeping your regular customer happy. There are few contractors that would say they have too much business especially in this economy, so it is more important than ever to have a good systems of lead generation flowing. These days the right mix of lead generation for contractors includes a mix of the old and of the new. Finding the mix may be easier than you think, it just takes a little planning and the right execution.

First, your best lead generators are your current customers. That is why all contractors should make sure their product is of the utmost quality and customer service is premium. Because your current customers will tell others and word of mouth, although not as sexy as some marketing techniques, is still the best way to generate new business. When you do a good job for someone they will talk about it to other potential customers, especially in the contractor business. This will pay dividends for many many years to come. A good reputation in the contracting business is like money in the bank.

Even though it may be tempting to go high tech with your contractor business and start a major online marketing campaign, don’t throw out those lawn signs and business cards just yet. Traditional methods of getting your name out there still work. OK, maybe you should spend less on the yellow pages and shrink the ad a bit. That’ll save you money and quite frankly you don’t need it anymore. Think about it. How many people do you know who still use the yellow pages, besides your great great Aunt Myrtle? That is what was meant earlier by mixing the old with the new.

Bringing contractors into the internet age has been a little more difficult than other businesses. Why? Because the contractor business is hands on real world stuff and the internet really only applies for marketing reasons. And, that’s a good thing. You can get a great competitive advantage in lead generation over your competition by understanding and using the internet to get new business. There are all sorts of ways to drive people to your website both free and paid. It just takes a little time setting up and implementing an internet campaign. But, it will be time well spent and you will get business.

Blueprint Your Business by Creating an Operations Manual

Can Your Business Run Without You?

What would happen to your business if you became ill for an extended period of time? Could someone else man the shop for you easily? Would you be more relaxed on vacation (or at the very least, take a vacation!) if you knew that the business could be better taken care of while you are away? Have you ever thought about hiring an employee or assistant, but are overwhelmed with the thought of training someone in all of your business systems and processes? Are you holding onto too many tasks that you know you could be delegating, but don’t have the infrastructure in place to effectively delegate without taking up too much of your precious time as the business owner? If you answered yes to any of the above questions, you are in need of a business blueprint! It’s time to create an Operations Manual.

What is an Operations Manual and Why Do I Need One For My Business?

Before you started your business and in the early stages, you probably did a lot of planning. Most likely, you were told to draft a business plan, and you may have even done so. Unfortunately, most small business owners rarely look at their business plan after creating it, thereby rendering it meaningless on a daily basis. A business plan is a static document, as opposed to a living and breathing one that serves as a guide to your business systems and processes. Developing systems and taking the extra step to document them is vital to a business running smoothly and automatically. Unfortunately, most businesses are lacking in this area. Business owners get caught up in the daily activities of running the business, and do not take the time to document or blueprint the systems in place. In the E-Myth Revisited, author Michael Gerber sets forth the idea that all businesses need to be “franchised” in the sense that they can run automatically, deliver a consistent experience to customers, and can be maintained, at least to some extent, without the owner’s hands-on involvement. While you may not literally be franchising your business, Gerber’s concept broadly translates into developing an Operations Manual for your business.

What Are the Advantages of an Operations Manual?

An Operations Manual makes it easier to delegate and run your business. However, even if you have no employees, independent contractors, or assistants of any kind, the importance of an Operations Manual should not be overlooked. It provides structure and clarity by helping you examine the big picture and how each part fits into the whole. It is also a handy tool for reminding yourself of your business systems when things get busy and you are overwhelmed. The manual serves as a central location for vital business information, making it easier for you to find what you need in one fell swoop. In a nutshell, an Operations Manual helps promote a consistent experience for your clients, and helps you avoid reinventing the wheel.

What Format Should an Operations Manual Be Stored In?

An Operations Manual can be hand written if that is your absolute preference, but I would not recommend it. As this document is so vitally important to your business, you should maintain it in electronic format. It is easier to revise, send as an attachment when necessary, and be backed up to avoid loss of data. Some clients prefer to create their Operations Manual using a 3-ring binder approach. While this may be tempting, if that binder is destroyed or lost, there goes all of your hard work in creating an Operations Manual. Do yourself a favor and store the manual on a computer (and back it up!) or online at a secure site.

What Should an Operations Manual Include?

An Operations Manual is the manual of all manuals. It can be as comprehensive as you want and need it to be. It should serve as a blueprint of your business for you, your employees, assistants (virtual or on-site), and anyone else that is on a need-to-know basis. The Operations Manual essentially covers everything that goes on behind-the-scenes of your business. Here are some examples of what an Operations Manual may include, but as you develop one for your business, you will undoubtedly think of many more items to include.

  • Passwords to all of your online and offline business accounts (be sure to give some thought to maintaining proper security measures);
  • List of frequently used business supplies with purchasing/ordering information;
  • List of business documents;
  • Prospects intake process;
  • Client intake process;
  • Sample email templates;
  • List of all team members and their contact information;
  • Procedures for hiring new team members and training them;
  • Preparing for client sessions, proposal pitches, speaking engagements, professional association meetings, etc.
  • Client follow-up process.

Take the time to draft an Operations Manual. It will be time well spent, and you will reap the benefits of it long after you finish the blueprint.

The Home Based Business Phenomena: Is It Right for You?

If you’re one of the many people looking to find a business to work from home then you should consider if it’s right for you. No doubt if you are looking into this type of revenue generation, then you’re probably tired of working long hours for little pay, building someone else’s dreams. Have you ever heard that whoever owns the business owns the dream? Well I believe that’s true and if you spend most of your time working to build someone else’s dreams then I hope you understand that you don’t have a shot in the dark of making it big financially in this country! It will never happen! Most people are so busy making a living that they forget to live a life and before they know it they’re older, their kids are grown and they don’t have much to show for the “40/40” plan, working 40 hours a week for forty years of their lives. We live in the richest country in the world, so why do so many people scrape by? If you want to be successful in life, find out where 98% of the people are going and go the other way. Almost all successful people have built assets rather than work for a paycheck. They’ve owned their own businesses and built pipelines. So the question isn’t whether a home based business is right for you, but rather can you build a successful home based business. The answer is an undoubted YES YOU CAN. But how, you may ask? First you need to decide what kind of business you’d like to operate. With so many different businesses to choose from, how do you know what’s right for you? To answer this question, you must see the difference between a traditional “brick and mortar” type small business, a franchise, and a non-traditional, e-commerce type business usually referred to as MLM (multi-level marketing or Network Marketing).

First off, with traditional small businesses, there are four factors to consider: time… money… knowledge… risk.

Time: To show a profit, you’d have to be open for business for long hours every day, including weekends. Usually, a 70-90 hour work week is very realistic in this type of business model. As the owner, you’d have to be there that long, or at least hire a manager that you could trust to run most of your day to day operations and pay that person enough to stay reliable.

Money: As an owner, your overhead in this business model is fairly substantial. You have leased space for your business, insurance, paid electric/utilities, heat and water. Then you have inventory and computer and software to manage it. Usually a cash register, and you must register with a bank as a merchant to process Visa, MC, Amex, and Discover Card payments. Not to mention any other equipment needed to maintain the business.

Knowledge: How to run a small business is not taught in college. If a person does not have a relative under whose tutelage he/she can learn, they must be self-taught… in the school of Hard Knocks. Most small business beginners are shocked to find that filling out paperwork takes the equivalent of one day per week. If they don’t know basic bookkeeping, they hire an Accountant. If they need advice on business structure, whether and how to use a Corporation, a Limited Partnership, or a Limited Liability Company (LLC), they hire an attorney.

In either case, they exchange money which they need for knowledge which they also need. This is a wise trade, since a small mistake made early can compound to a big problem later, but it is costly. Not to mention the sole proprietor cannot approach the competitor down the street for guidance on how best to organize his/her store. So like a person entering a dark room, they must feel their way carefully or they will trip over what they can’t see. Even with care, ignorance is not bliss and can cost the owner dearly… maybe cost the enterprise to fail. Take a look at this article ( http://www.usatoday.com/story/money/business/2013/02/01/retailers-close-stores-24-7/1873745/ ).

Risk: The new businessman has “tied up” in the venture several thousands of dollars which they cannot afford to lose. Also, hundreds or even thousands of hours of their lives invested as well… which in time can never be recaptured. Look at what happened to Hostess, maker of Twinkies and Wonder Bread.

As you can see, the traditional small business venture can run upwards of tens of thousands of dollars with more “work” involved than having a job. You simply bought yourself a job with the business.

Franchising, on the other hand, is that you plug into an already proven system. People think you are “buying a franchise”, but actually you invest your assets in a system to utilize the brand name operating system, and ongoing support. Think of one of the largest franchises of our time, McDonald’s. People who buy a McDonald’s franchise buy into the system already in place of producing Big Mac’s and Filet o Fish without having to “reinvent the wheel”. All you have to do is follow the “system” and your franchise will be successful, so they say. But the desire to “be my own boss” is not fully satisfied by a franchise. Franchisees cannot think of themselves as an independent owner. If they do they will be tempted to try to change the system. Does Mickey D’s sell hot dogs at all? Of course not! The home office does not permit anyone to “tinker” with their formula. The franchisee owns the assets of their own franchise, but is licensed only to run someone else’s business system. The desire to become a franchisee is grounded on belief that they can be more successful using someone else’s brand, and operating according to their methods, than they would be if they opened up their own independent business and competed against them. The problems with most franchises like McDonald’s, is that: it costs substantially more than a small business, there are royalty fees (usually 5-10% gross profit), loss of personal control… need to quit your full time job and be “locked in” to suppliers chosen by the franchisor, the inability to will your business to your family, a one-sided contract drafted by franchisor that may not fully protect your territory and interests. However, a franchise allows for: opening more quickly, developing a profitable customer base faster, has less risk, national advertising presence, built-in name recognition, strong support system that can be called upon for advice, readily identifiable trade name and goodwill associated with it, centralized, and collective buying power.

Now that you understand the differences between the two, what we need is a home based business that can adapt the best of both worlds: a way to generate full-time income with part-time work, a system that produces residual income that keeps coming in although one’s advancing age eventually prevents putting in much, if any, time.

More and more companies are entering forms of innovative cooperation with outside marketers. Reducing their own in house personnel has prompted them to enter strategic business alliances or joint ventures in which two or more business entities help each other. Since the 80’s, three powerful trends have converged.

First, threatened by corporate layoffs, highly capable men and women are looking for ways to diversify their income. Quite a few have asked themselves, “why go back to a corporation, even if I can find one to hire me, and risk being cut by the same layoff axe in a couple of years? Why not become an Independent Contractor?”

Second, not everyone laid off was “dead wood”. When companies cut their ranks by tens of thousands, they also cut thousands who were productive. They need to hang on to the productivity of the people they did not keep. So they started scrambling to find Independent Contractors to reach their market

Third, since the early 90’s, the introduction of the personal computer and soon after, the internet have allowed small, part-time businesses with few or no employees to compete on a level playing field with anyone in the world. Some of the smartest businessmen in the world have found a unique way to harness these trends to their advantage.

This is where MLM and e-commerce come in. Successful business models that harness the power of the internet and e-commerce along with the concept of independent contractors has made MLM companies a major power house in business today. Companies like Avon, Mary Kay, Herbalife, Amway, Melaleuca, Primerica, Pampered Chef, Ambit Energy, and many others have all realized the top 20 reasons for non-traditional business.

1) Low investment- usually less than $500 to start, depending on the Home Based Business opportunity..

2) No Boss-the independent contractor determines how much money to make and how hard they want to work.

3) Ability to work from home- daily commute consists of walking to your coffee pot on your kitchen counter. (That’s why it’s called Home Based Business!)

4) Fewer, more flexible hours- people are just too busy now a days!

5) Time-compounding through duplication- what you do and teach others to do the same adds to your business exponentially. Would you rather have 100% of your own efforts or 1% of 100 people’s efforts?

6) Minimal legal liability- no person in a “downline” can create vicarious liability for the sponsor.

7) No special licenses or training to join- unlike a realtor or insurance agent.

8) No discrimination-8) No discrimination-a Network Marketing type of Home Based Business rewards a person for movement of product and sponsoring others to do the same, regardless of sex, race, creed, or religion.

9) Tax Benefits- ability to claim home office deductions, utilities, gas and mileage, and business conferences, even while on vacation as deductions.

10) No employees- one works with, but not for the parent company.

11) No risk- startup costs are trivial compared to traditional small businesses and franchises.

12) No accounts receivable and collection headache- “cash and carry” type business.

13) Inexpensive, usually free training- upline mentor has vested interest in helping downline grow so the mentor will provide any and all training to help their downline. Like a good parent guiding their child teaching them what and what not to do.

14) Early Income-possibility to recoup initial investment in first month in business.

15) Unlimited income potential- Network Marketing has no floor. You could make nothing at all. It is because of no floor that it has no ceiling either. The sky’s the limit!

16) Inelastic Demand- a good Network Marketing company offers products or services that are top-quality, which people want, need and can afford, and have to buy again. Repeat business.

17) No regulatory Problems- the Parent Company takes care of all of the regulators and taxing authorities so the individual marketer is freed up to be creative.

18) Insulated against disaster- no single location; rather, it connects the country and the world with small individual participant-outlets.

19) Time flexibility of training/support system-time cost super small compared to medical school, business school, or even law school. You are in business for yourself but never by yourself.

20) Willable to one’s children- Network Marketing business can be transferred to one’s heirs usually estate-tax free. It’s the transfer of cash flow not assets that allows your heirs to keep the wealth.

Now that you see the many benefits of Network Marketing compared to traditional business, it is clear that this concept is by far the simplest and fastest form of generating extra income, regardless of what your mother-in-law, or brother-in-law think they know. So, again the question is, is this right for you? Only you can answer that, however, if it is right for you, how do you get exposure for your new MLM business? Very simply put, you need powerful training at little or no cost that will flood your inbox with potential customers and business partners in the easiest way possible. For a step-by step guide on developing this plan and maximizing your income from your MLM opportunity,

click here to access a free training series.

. “Small opportunities are often the beginning of great enterprises.” – Demosthenes

Things To Look For In Painting Contractors

Residential painting is something that every house would need to go through, at one point, so it’s something that every owner would have to think about. We all know that paint colours won’t last forever, do we not? Should we find ourselves at that point, though, we also know that house painters and painting contractors can help us take care of the problem. We know that they can do a lot to bring back the old grandeur of our houses and, in fact, turn them into something better.

Today, you can find so many painting companies and painting contractors that can help you with your house painting project. A little time on the Web would give you access to them. Then, you can just look through all the available choices that you have so that you can find the best one that would take care of your needs properly.

If you’re not sure, though, of what you should do to get that one good painter, the following information may be of use. These are some of the things that you should look for in the people that would take care of your residential painting project.

Technical capacities. House painting involves a lot of things and factors that are best handled by those who know how to handle them. These things and factors are not the exact stuff that just anybody can do. Thus, it’s important that the painter that you’d commission for it be someone with an established name in the business. So, if you’re scouting for painting companies and painting contractors, select the one that has already impressed a lot of customers; it’s bound to impress you, too.

Reasonable pricing. It’s also extremely recommended that you settle on good pricing from the painter that you would be choosing. No two painters have the same pricing scheme for their work. Some painters issue call-out charges when they’re asked to examine a possible painting job; other painters do not. Thus, it’s necessary that you check the painter’s pricing first before you consider hiring him or her for your house painting project.

Excellent business system. Finally, choose a painter that you personally believe in. See, the painter just won’t have the chance to refresh your house colours, he or she would have the chance to change your house. And, whatever the result, you’d have to live with it. It’s important, thus, to go for a painter with a really credible business system. If you feel secured about what he or she can do, you would feel secured about the fact that when he or she is through, your house would be the home that you want it to be.