My syllabus starts with The E-Myth Contractor: Why Most Contractors’ Businesses Don’t Work and What to Do About It
However on further thought it might be a good idea to read The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It first so that you get a better more thorough grasp about the importance of what the book is getting at.
What is The EMyth all about and what are the two books getting at? They’re teaching you that you have to approach designing and setting up your business operation as a “turnkey” business operation and can operate by itself without you in it. Seems nuts to even think about it that way when you’re setting out on your own for the first time but there is very good reasoning and logic behind that thinking.
New on this list (added October, 2008) I’m inserting Run Your Business So It Doesn’t Run You by Linda Leigh Francis
While the E-Myth books are about the concept that most contracting businesses fail because the founders are technicians (trades men and women) that were inspired to start a business but didn’t have the business knowledge about how to run a successful businesses Run Your Business So It Doesn’t Run You teaches you the same lessons but also provides some actual plans (checklists) and management tools for you to work within making sure you develop your own systems and don’t fall prey to the “Entrepreneurial Trap” .
The next two book on my list are all about the numbers. The basic understanding of finance and the nuts and bolts behind figuring out what you need to charge for your services. Where Did The Money Go?- Easy Accounting Basics for the Business Owner Who Hates Numbers $19.99 and How Much Should I Charge?: Pricing Basics for Making Money Doing What You Lovealso $19.99 were written by Ellen Rohr who is a well known writer and lecturer to readers of the roofing, electrical and HVAC trade magazines but the principles apply to any contracting business.
You can also order them through her Bare Bones Business web site and one of the great things about getting them that way is in addition to getting a paperback version of her books sent to you-you wont have to wait for them to arrive in that right after purchasing the books she’ll send you an email with a URL where you can download a PDF version of the books and start in on reading them right away.
“Where Did the Money Go? will teach you the accounting basics you need to keep track of your business…and find out where the money goes!“. In it you’ll follow a character Bob Bird as he sets out on his own as a first time business-owner-contractor and it will give you a basic overview of the accounting principles you absolutely need to know and understand. In the section of the book entitled If My Accounting System Is Computerized, Do I Need To Know This Stuff? she writes ” You don’t need to know everything about accounting. You do need to know everything in this book…as a bare minimum!” and with that I wholeheartedly agree.
When you’re ready to get down to the actual work of setting you hourly rate there is an Excel spreadsheet I created that you can download from the Shareware section on my 360 Difference Software site. It’s called the “The Capacity Based Markup Worksheet (aka the PILAO Worksheet)” which is an acronym for PROOF/Indexed/Labor Allocated Overhead. It works right along with the principles that Ellen Rohr talks about in her books and Irv Chasen of PROOF Management Consultants talks about in his seminars. Thinking of that you’ll probably want to read an article Mr. Chasen wrote about this type of markup method in last January’s JLC called Allocating Overhead to Labor Makes Financial Sense.
I think the stuff I’ve mentioned up to this point while perhaps the most important stuff for someone just starting out is not necessarily what really interests them but BELIEVE me when I say IT IS THE MOST IMPORTANT STUFF TO GET DOWN AND UNDER YOUR BELT, it is!
Then you can move on to David Gerstel’s Running a Successful Construction Company. One of the really good things you’ll find in this book is in the first or second chapter he he presents a suggested step-by-step month-by-month plan for setting up a company with things to do and take care of before you really takeoff. I have a few changes and additions I would make to the order of things he presents but it pretty close to perfect for where you’re at as far as a getting a startup plan of action.
Look over and read The Contractor’s Legal Kit: The Complete User-Friendly Legal Guide for Home Builders and Remodelers
by Gary Ransone. There are some excellent sample agreements in this book with instructions on how he suggests you should use them and after looking at them and thinking about them you can go to you attorney and talk to him or her intelligently about any modifications he or she thinks you should make with them. Do not just go out and literally use them without having an attorney look them over first though because different regions of the county have different laws that you will need to comply with.
And while we’re on it another good book on the legal aspect of contracting is Smart Business for Contractors: A Guide to Money and the Law (For Pros by Pros) by Jim Kramon. This has some really great information on insurance that doesn’t appear in any of the other books that I can think of in addition to it’s general content.
Managing the Small Construction Business
is compilation of JLC articles with builders and remodelers describing the techniques that have worked for them. Just a general great resource. It could also very well be titled the best of The Journal of Light Construction Management Articles.
As an alternative to this book you might want to consider a JLC Online Membership which give you access to all the article ever published by the Journal of Light Construction either though their website, or via a CD or DVD data disk, or both. With a JLC Membership you’ll have not only the selected business articles that are in Managing the Small Construction Business but all of them along with all the article on trade and construction techniques too.
Mastering the Business of Remodeling, An Action Plan for Profit, Progress and Peace of Mind by Linda Case & Victoria Downing of Remodelers Advantage A good overview of the business of remodeling that will introduce you to marketing your services in addition to what it has to say about the general managing and operation of the business.
Linda Case also has another book entitled The Remodeler’s Guide To Making & Managing Money: A Common Sense Approach To Optimizing Compensation & Profit
which is a good read too.
Michael C. Stone’s book Markup & Profit: A Contractor’s Guide. While a real good book I have one problem with it in that I think the markup and pricing methodology that he describes and advocates which I often refer too as a Uniform Percentage Markup is tragically flawed and could be a silent but deadly killer to a contractor just starting out. See my the Quitely Re-Thinking Out Loud blog post The Potential Problem Using a Traditional Volume Based Markup to learn more about just what that problem is. Instead, I recommend consulting Ellen Rohr’s How Much Should I Charge? and David Gerstel’s The Builders Guide to Running a Successful Construction Company (Capacity Based Markup ) for a markup and pricing methodology. Still, the book has a lot of good general information on all the other aspects of running a small building and or remodeling business so they’re worth the putting in your library.