A lot of people start their own contractor business because they want to become their own boss. You can take on work that you enjoy and start to employ your own team. It can be a very rewarding and profitable venture. However, there are common mistakes that we notice a lot of contractor businesses make. They can end in disaster. So, here are 4 mistakes that you must avoid.
Relying on Verbal Agreements
Unfortunately, relying on a verbal agreement can end up being a bad idea. It does not matter how much you think you trust a client, there is always the risk that something goes wrong. Of course, there is no written contract as proof when you have a verbal agreement. This means that anything could be disputed and you may not be paid for the work you have done.
Therefore, always ensure that you have a signed contract before beginning any work. In particular, have all of the specific details outlined in that contract. For example, this could be the location of the work or length of the contract.
Operating Without Insurance
There are a lot of contractor businesses that operate without insurance. They believe that taking this risk can save them money. However, this is a huge risk that often goes wrong. It can result in businesses having to shut down after a bad lawsuit. Is this something you really want to risk? When you have worked hard to start a contractor business and build a reputation, you want to protect yourself for the future. Having a good insurance policy is the only way to do this. This is going to provide you with business protection and you can know that a lawsuit or accident is not going to shut down your company.
Ignoring Your Accounting
The one thing that everybody hates doing is record keeping after a long day. However, it is something that is very important when it comes to paying taxes. You can do your accounting yourself using apps when you first start a contracting business and do not have a lot of clients. However, when you start to grow, this is going to become very time-consuming. The best thing you can do for your business is to invest in an accountant. They have the expertise you need for peace of mind and to take care of all the books. This allows you more time for other tasks.
Taking on Too Many Clients
You may be thinking; how can having too many clients be a bad thing? Well, sudden growth in your business that you are not prepared for can lead to substandard work. If you do not have the team and equipment to complete a lot of jobs at the same time, you may be risking your good reputation. Do not be afraid to say no to contracts or delay work for another time. This is going to avoid any short-term and long-term problems from occurring.