The Shields Report: When Too Lean Costs You Green
I understand firsthand the need to keep expenses and costs to a minimum when starting a new business, of any kind, but especially in the construction realm. You do not know how quickly your services will be needed or how lucrative those jobs will prove to be. Often, you pay for supplies upfront and are unsure when you will recoup those funds. Countless variables exist in the regular world, but even more so in this pandemic.
Whether by need, desire, or a combination of both, many business owners go too lean when starting out and stay too lean even after gaining momentum. This can be lean in two ways: 1) financially &/or 2) information gathering. The two are often intertwined, as some folks don’t research on the front end or consult professionals because of a tight budget, understandably, but it’s important to know what you need to run your business and be compliant with regulatory agencies as opposed to what is optional. Not knowing minimum requirements to operate your business, let alone best practices, can cost you some major green (money) down the road. Not knowing is also not an excuse under the law – you are presumed to know what you need, so find out what that looks like.
Contractors starting a new business should check all state, county, and local requirements specific to your type of business or trade. Plumbing is not the same as being a supplier of plumbing materials. Servicing a pool differs from installing a pool. Counties can differ – states certainly differ.
Many contractors get into trouble with the smaller, less known licenses. For example, performing home renovation on a small scale without the proper license can land you in hot water. If you think the first threshold for oversight by a Contractor’s Licensing Board is that for a General Contractor, you’re probably mistaken. Some states have requirements such as a home improvement license, named differently in various states, that is required to touch a house. In some states, this project threshold is extremely low, starting at $3,000.00 in 9 counties in Tennessee, inclusive of labor, services, and materials. As you can imagine, $3,000.00 gets reached quickly.
Having information about the required license saves time, energy, heartache, and money! Better yet, once you have it... you have it! There is no need to reinvent the wheel every month. Mistakes are expensive. However, there is no mistake in being proactive and inquiring into what you need, to get off the ground and be in good standing moving forward. While compliance can be a dreaded task on your to do list - I get it... building things is far more fun! - noncompliance can be costly. You will lose far more green trying to be too lean. The answers are at your fingertips – just ask the questions. All For Contractors is All For You!