Month: July 2018

Successful Construction Companies Use Business Management Software to Manage Equipment and Ultimately Reduce Expenses, Improve Utilization, and Minimize Downtime.

Effectively managing heavy equipment can make the difference between a profitable company and an unprofitable one. Successful construction companies are always looking for ways to increase profits, reduce maintenance and operating expenses, optimize utilization, and minimize downtime. This can be achieved through better equipment asset management.

Equipment Asset Management provides information to make decisions about rebuilding or replacing machines, balancing fleet average age, and adjusting fleet size and composition to meet changing company demands. In practical terms, this means getting as much production as possible from the equipment, at the lowest per hour cost, over the longest period of time, while obtaining the highest sales value at the end of life. This is achieved through the use of business management software to effectively manage equipment.

The equipment asset in a heavy construction company accounts for about one-third of total corporate assets, and the cost of owning and operating the fleet is frequently larger than any other expense. This makes it the largest expense in a construction project, more than labor and materials costs. This makes effectively managing heavy equipment even a more critical factor for project profitability. Equipment must be at the right place at the right time; it must achieve stated levels of reliability and uptime; and total owning and operating costs must be kept to a minimum, thereby giving the contractor a competitive advantage.

Common Challenges Before Using Software for Equipment Management

Prior to adopting software, most companies do not know what the hourly cost of a piece of equipment charged to a job really is. Therefore, they do not know if they are recapturing the cost of each individual equipment piece, which makes it difficult to make well-informed business decisions about investing in software to manage that aspect of the business.

Very small companies with only a few pieces of equipment might be able to get away with not knowing their equipment cost, fuel cost, and utilization information. But as a company grows, they have to use the best practices available to ensure they make money. One of the problems is that a job may be showing a profit due to incorrect equipment costing and rates, but this can negatively impact the bottom line.

Typically, companies that can benefit from the use of equipment management capabilities of business management software share similar conditions. These often include:

– Do not know if an individual piece of equipment is profitable or not and lack information to make repair-replace decisions.

– If software is being used to manage equipment, it’s not integrated with job cost information or the accounting system.

– There is no preventive maintenance scheduling or it is done manually.

– No ability to track parts inventory.

– Do not create purchase orders or they are written by hand, which inhibits workflow and accuracy of procurement, scheduling, A/P, and A/R.

– No tracking of utilization or equipment hours.

– It takes much time and effort to product reports for owners because it requires gathering information from various places and then more analysis to tabulate what’s needed. Equipment rates are set for a machine based on someone else’s price.

– Projects are charged the same no matter which equipment is used or brought to the job.

– Don’t track fuel used or burn rates for equipment or per projects.

Benefits of Using Software to Manage Equipment

Construction business owners interested in improving profitability by using software for better equipment management can anticipate positive improvements in a variety of areas. When evaluating software options, consider and compare these capabilities that your solution should include for optimum benefit:

Equipment Utilization

Nothing impacts the economics of equipment ownership more than utilization. The number of hours a machine works in a year determines the rate at which fixed annual costs are recovered. Underutilized equipment does not have costs accurately reflected in Job Cost while greater utilization increases revenue.

Invest in software that continually monitors the utilization of each piece of equipment and puts the equipment manager in a position to measure the impact of low utilization and to develop strategies to control and correct it.

Equipment Downtime

Equipment downtime is one of the most significant problems faced by construction companies that specialize in heavy and highway jobs. When a piece of equipment unexpectedly breaks down, not only is the project schedule disrupted and costing money, but multiple employees’ schedules are interrupted since everyone is in crisis mode. The company has to scramble to get mechanics on the job site and get parts delivered to fix the breakdown. An unexpected repair is much more expensive to perform than to monitor and schedule maintenance.

Identifying and predicting necessary maintenance is critically important for any equipment software solution. Invest in software that will provide the equipment manager with information to predict repairs, which helps avoid equipment breakdown and thus saves cost and ensures reliability.

Repair – Replace – Rebuild

The process of reviewing the equipment fleet; deciding which units to sell, replace, or rebuild; and developing a capital expenditure plan are the most important tasks an equipment manager performs. Frequently it takes days to gather the required information (from multiple places) to make decisions about Accounts Payable, Finance, Payroll, and so on.

Invest in software that automatically synchronizes the operational, financial, and mechanical history of each piece of equipment and makes the data easily available in one place, with the ability to drill down to the lowest level of detail. You will be confident that the information is always up-to-date and at the equipment manager’s fingertips, allowing intelligent and timely decisions.

Preventive Maintenance

Some companies view preventive maintenance as an investment as opposed to a cost. Effective preventive maintenance improves reliability and reduces future repair costs.

Be sure that your software choice includes preventive maintenance scheduling and you’ll be equipped to improve quality and consistency on every job.

Warranty Tracking

Many times a mechanic will unknowingly replace or repair a part that is still under warranty. Today’s software helps you track parts under warranty, which allows you to recoup repair costs and not spend money unnecessarily.

Fuel Tracking

The ability to analyze equipment fuel use can reduce fuel losses, resulting in major savings. This equipment management feature should be a component of your business management software.

Improve Profitability With Better Equipment Management

In conclusion, effective equipment management can dramatically improve the profitability of any construction company. With the increasingly competitive business environment, contractors must look at every opportunity to reduce expenses, optimize utilization, and minimize downtime. Software for equipment management has proven to be a valuable tool that can make the difference between being a profitable business or taking a hard financial loss.

Your Tesco broadband router is a key piece of equipment when it comes to getting online. Without the router, you can’t connect your laptop or other device to the DSL service being channeled through your phone line. The router can disseminate data via wired connection or a wireless network. In either case, you are responsible for the care of your router and must pay to replace it if you cause damage. For this reason and many more, it’s important to know a little something about your Tesco broadband router before you connect it and start using Tesco Internet service. All new broadband customers receive the Wireless Technicolor 582N Pro.

Ethernet Ports

The router has four independent Ethernet ports. Ethernet ports are slightly wider than other ports such as telephone jacks, and the cables to which they belong are often brightly coloured. An Ethernet cable connects to your router port on one end, while the other end of the cord attaches to your laptop or desktop computer. Your DSL travels through this cord, supplying an online connection to your devices. You only need the Ethernet ports if you are using wired Internet. If you choose to use Tesco broadband wirelessly, you won’t need to use these ports or their corresponding cables.

Wireless Capabilities

The Tesco router is also Wi-Fi certified, so you can connect to the Internet wirelessly. A wireless network communicates over a signal, and will require your computer to have a network adapter card. You can use wireless Internet on a broad range of devices, including tablets and smartphones. The router supports Wi-Fi protected set up, which allows you to get online without the need to pair your device with the router. Your router will automatically choose the best wireless channel available in your area, so you don’t need to hassle with manually finding the right channel. You can use the router wirelessly for up to 15 devices at once.

Speed

Tesco promises that their current router has a new N specification which doubles the speeds of older G routers that were once used. While the speed you can achieve online depends on a variety of factors, this router will support fast browsing and also gives a wider range of signal, so you can still browse quickly from another room. Other factors that influence your speed include where you live and the size of the files and programs that you download.

Security Standards

The router given by Tesco has a built in firewall which is able to monitor the data that is being passed into your network and refuse harmful data. This can help you avoid viruses on your computer and other malware which might place you at risk. You can also password protect your wireless network, which is an added layer of security. With a network password, people in the vicinity will not be able to jump onto your wireless network using their own device. For instance, your neighbour may be able to see your network on his own network connections, but he won’t be able to sign on to the wireless network without the password.

Associated Costs

You are not charged to use the router, but there is a one-time 5 pound charge when the router is sent to your home. The fee is assigned to your first broadband bill. Because Tesco retains ownership of the router, you will be responsible for handing it back if you ever switch to a different broadband provider or cause it damage. Most routers can last for many years if treated properly. If your router becomes obsolete for any reason, Tesco will provide you with a new model that allows you to stay online.

Your Tesco router will work best when it is attached to the master phone line jack in your home – the router also serves as the modem, and when you use a phone jack that is not the master port your download speeds can suffer. Tesco also recommends using the provided filter when you attach the router to the phone line. This will help separate the data used over your landline and the data that is use for broadband Internet service. Your router must stay connected to your landline at all times, and the line must be actively working for your broadband to stay live.

There is little question that anger can be a strong motivator, pushing one to great lengths. Certainly one can achieve admirable goals while motivated by an inner rage. Some of the most famous people in the world have been motivated by a personal fury. But I would not classify such people as successful. I was once angry at the world for all the chaos, turmoil, hatred and crime that I observed. It was easy to remain that way for years, but I came to learn the truth about being motivated by anger.

Perhaps anger is good for the professional athlete; as far as physical exertion and athletic accomplishment are concerned, anger could be positive to a large extent. But winning the sports game is not the same as the lifelong success game.

There are lessons to be learned from being angry. Rage or fury is very often used as a substitute for confidence, or perhaps a replacement for insecurity or fear. But ultimately anger is a false motivator; although it can bring about some level of achievement, anger clouds judgment and skews perception. Anger makes one totally subjective and does not allow for the possibility of objectivity. Therefore, any goal achieved at the hand of anger, is not a success to be enjoyed in the long term. One cannot truly enjoy anything if angry.

A strong Abundant Life Coach will suggest that mental Preparation (having our emotional house in order) is a necessary step within sustained success. But like all mental/emotional barriers, we must realize and accept its existence in order to eliminate. Illumination leads to elimination. Anger is an enemy of love and therefore an enemy of success in life. To overcome anger is to remove one obstacle from a pathway to success.

The IIBMS or The Indian Institute of Business Management & Studies is an online educational service providing everyone the opportunity to learn the right methodologies and techniques regarding business management and its related fields and industries. The establishment believes that everyone has the right to recognize the essential needs of the management field, thus providing everyone this one of a kind opportunity to learn through the internet.

The common problem of individuals is the fact that they are willing to study management and its related field, nonetheless cannot find time to do so. Thus, IIBMS opened up its course enabling everyone to learn through the comforts of their own home, with added flexibility and convenience advantages.

One of the goals of IIBMS is to make sure that each and every individual will be given the chance to study their distance learning educational courses enabling each and every single one of them to attain a higher and a much more professional degree with regard to business management and studies. Who says that this degree can just be attained by merely going to a university or a college? With the help of technology, everything for everyone is possible. This makes The Indian Institute of Business Management & Studies clearly unique than every other university that is out there.

Enrolling, or rather I should say applying for a course through the internet is made a lot easier. All that needs to be done is to visit the official IIBMS website, and all the information that every aspiring student needs is already indicated there. (Remember to beware of IIBMS fake sites, as there are so many web pages in the internet aspiring and claiming to be one. Always make sure to visit the official site itself)

Although some people have doubts in online learning, IIBMS would like to prove each and every individual that online learning should not be judged. It has been a misconception that there is nothing much to learn with online learning, wherein the fact is, it is the other way around. As a matter of fact, this is one of the advantages of applying for a course with IIBMS. Studies have shown that students who are not much comfortable with the learning environment tend to forget or tend to get bored during classes. This means that the environment plays a significant role concerning to the effectiveness of the course and the learning experience itself. As to the Indian Institute of Business Management & Studies, every student is given the chance to choose their own time, as well as choose an environment which is conductive for their learning process.

IIBMS offers a 24 / 7 web support for inquiries about the services, as well as for the people who are still doubtful about these services. By merely going through their site, a friendly customer service representative will be more than pleased to assist each and every single inquiry and clear all those doubts that you may have in mind.

When it comes Business Management and fields related, there is no doubt that IIBMS can produce graduates that are able to meet the expectations and standards of companies requiring from applicants on these fields. IIBMS can produce highly competitive students globally and without a doubt produce the best out there.

IIBMS or The Indian Institute of Business Management & Studies offer various courses in the field of management and related industries. Apply online through their website or contact them for more inquiries.

The 3 most commonly used valuation methods are the Income, Market, & Asset approach. With the income approach, a business value is based upon the earnings the enterprise generates. Buyers are most concerned with the amount of earnings that the company produces should they acquire the business. The net ordinary income, utilized for tax reporting purposes, does not properly reflect the true earnings of the company based on the non-cash, discretionary & non-recurring items that are expensed by the business owner. Earnings are kept low to achieve the goal of reducing taxes. Therefore, to calculate the true earning capacity of the company, the P&L statements need to be adjusted during a valuation to determine SDE or EBITDA. Re-casting the financial statements will standardize (or normalize) the company earnings through the exclusion of discretionary, variable and non-recurring components, allowing an objective comparison to be made between two or more companies. By applying a multiple to the EBITDA or SDE amount, consistent with the industry sector and a weighting of the issues affecting the business, will derive the business value.

What is Sellers Discretionary Earnings (SDE)?
Sellers Discretionary Earnings is utilized for businesses with under $1mm in adjusted earnings. These businesses often have the owner managing the company and receiving a salary. With these small enterprises it is critical to determine what the owner benefit is as opposed to the earnings of the company. This is accomplished through a series of profit and loss statement adjustments termed add-backs that are made to the pre-tax company earnings. In some instances, there are negative add-backs as in the case with a business that owns real property (e.g. the building & land) where the owner is compensating himself a below market rent or a family employee working for the company who is receiving a below market salary. In both of these cases, an adjustment is made to normalize the expense to the current market value.

The most common adjustments used during the re-casting process are:
1. Add-back one owner’s total compensation
a. Salary
b. Payroll Taxes
c. Retirement Contributions e.g. 401K
d. Insurance
e. Perks (Health Club, etc)

2. Add-back interest expense

3. Add-back discretionary expenses
a. Donations
b. Personal Cell Phones
c. Travel, Meals, & Entertainment
d. Owners Vehicles (not used in business)

4. Add-back non-cash expenses
a. Depreciation
b. Amortization

5. Add-back Non-recurring expenses
a. Fines / Bank Penalties
b. Attorney fees (e.g. sale of business consultation)

6. Adjust Lease to Fair Market Value

What is Earnings Before Interest Taxes Depreciation Amortization (EBITDA)?
EBITDA is used to define the earnings of the company for businesses with adjusted income greater than $1mm. Here, the owner/investor is typically not active in the direction or daily management of the business and will hire a general manager to perform that function. Therefore, the EBITDA calculation will differ from SDE as it incorporates the general managers salary in the earnings calculation as an expense. EBITDA is a non-GAAP measure that is used to determine profitability and to make comparisons between companies and industries as it eliminates the impact of the financing and accounting decisions made. An easy way to determine EBITDA is to subtract the owners compensation and benefits from SDE. The EBITDA dollar amount will be lower than SDE but the multiple used in the valuation formula will be higher, often 2-2.5 times the SDE multiple. Therefore, as one would anticipate the FMV of the same business calculated using either method should be very close to each other. If not, an assessment as to why and which (or what other method(s)) must be undertaken.