I hope that my earlier articles in this series convinced you that construction contractors have challenges that they need help navigating and that you can have success approaching them to sell your services if you understand their businesses and speak their language. But what specific services can (should?) you sell them? We continue the series with a focus on that question.
As you’re probably aware, for many outside bookkeepers/accountants, traditional bookkeeping is giving way to the emerging concept of “CAAS” (Client Accounting and Advisory Services). CAAS redefines the relationship between businesses and their outside accounting service provider. Whereas previously, the bookkeeper had only a narrow role within the business, CAAS imagines a much deeper integration of outside accounting resources into the organization. Increasingly, outside bookkeepers/accountants with CAAS practices act as strategic advisors to their clients, helping them with a much larger set of business issues and challenges than they had historically when they were performing only bookkeeping work. Done well, this expanded relationship benefits both parties: the accountant/bookkeeper can grow their practice and increase their earning potential, and the business owner gets to benefit from the operational expertise the accountant may bring to the table.
This article aims to introduce a few of the CAAS services that are of the highest value to construction clients. Not all of these services may be relevant to you, but remember: you don’t need to sell all of them! In fact, you don’t need to sell any of these—the ‘big picture’ here is for you to imagine what additional expertise/insights you may be able to bring to your clients to help them improve their businesses. If you can find a way to package that and sell it at a price that enables both you and your client to walk away feeling as though they’ve benefited, you have the beginnings of your own CAAS practice.
One quick caveat from the get-go on this one: you may not be able to do a proper business review/performance optimization engagement depending on the quality of the client’s data. Indeed, low-quality job costing or other such financial data deficiencies are often the impetus for a business owner to consider adding modern technology solutions to their business (see next section).
To the extent that the job costing and financial reporting data are sound, however, you can potentially add a lot of value by doing a deep-dive into the business’s performance, looking for insights on where/how the business owner may be able to increase profitability. In the back of your mind, you should be thinking about questions like, “What kind of jobs are making the most money?” or “What kind of work is the estimator/business owner consistently under-estimating?” You might also look at testing a request for a quote process with materials suppliers or a more robust invitation to bid process with subcontractors, aiming to reduce spending in these categories (if applicable).
Ultimately, there are many potential levers one can pull to improve business performance. Identifying the right one(s) will require someone with financial acumen and, ideally, experience working across similar businesses. A successful engagement of this sort can result in significant profitability enhancement for the business and a long-term engagement with the CAAS provider to keep a close eye on the business’s financial performance!
The construction industry has been slow to embrace technology. Increasingly though, they’re under pressure from their clients—residential homeowners, building owners, or more sophisticated commercial general contractors—to do business in a more modern, less disorganized way. Secretly, many contractors will admit that they know their businesses could be more profitable if they could just make better, more technology/data-informed decisions. The trouble is that there are so many tools covering the various (often overlapping) workflows of a construction business that most construction business owners don’t even know where to get started. That’s where you come in.
Good news/bad news, with the bad news first: no one tech stack will work for every construction company. Good news: that complexity—and the need to build real expertise in the available tools and where they fit in—is precisely why someone like you can build a very successful service offering around technology implementation.
This stuff is hard! Selecting the tools, developing the implementation plan, and actually succeeding with the implementation takes a lot of hard, dedicated work. Note that my comment above about there being ‘no one tech stack’ dovetails with my comment in the second article of this series about specializing in a few verticals within construction. You’ll find that if you specialize in, say, residential remodelers and construction-oriented electricians that there will be tools that you’ll come back to over and over again, and, over time, you should expect to get more comfortable driving the implementation of those tools. That familiarity will pay dividends for both you and your clients.
Many people have the misconception that CFOs are just fancy accountants. They’re not. CFOs are masters of money—not only tracking and reporting on money moving through the business, but also raising the right money (both in terms of size, structure, and counterparty) to achieve the business's goals. Yes, you may wrap bookkeeping/accounting services into your CFO service package, BUT, especially in very capital-intensive verticals within the construction industry (eg, earthwork/excavation), your work helping to oversee the company’s capital raising and capital allocation decisions are likely to be more important than your bookkeeping!
A good CFO can help business owners navigate critical strategic questions about how fast they should grow, whether to lease, buy, what startup costs might look like at another location, which lenders to approach for a line of credit, or whether not to add a piece of equipment at all. As a finance expert, you can help business owners model what they’re thinking about and guide them toward realizing their vision for the business on a defined timeline with a budget that makes sense for the business. That work may seem relatively straightforward to you, but it is critically important to get right, lest the business be stagnant or, worse, saddled with financial burdens it can’t bear.
When you pitch your CFO services, mention to the business owner that you plan to help them with much more than just accounting. You’ll be their partner, helping them harness financial resources (both internal and external) to see their business dreams made manifest!
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