This Podcast Is Episode Number 0389, And It's About Proactive Contractors Use Lien Services To Protect Cash Flow Proactive versus reactive are the two methods of getting something done. I find everyone works in a combination of both, I included. Proactive is scheduling and doing everything ahead of time. Nothing is ever waiting until the last minute. Reactive is more emergency driven and are things that need to be done now. As much as we plan, it would be best if you were flexible, adaptable, and reliant. Things happen that are beyond your immediate control. Those of you who want a predictable environment are employees working for a large employer where schedules are fixed, and they are doing the same things every day. It was a different mindset when you became a construction contractor. You wanted to be independent, and part of being independent is that there is no one telling you what to do or when to do it. Your suppliers and government agencies direct you and impose fines and penalties when you get off track. The current economic climate is challenging for other reasons I will not go into. My point is there is a reason why things occur; trust the Universe, and when you are in the middle of it, that is not the time to make rash decisions. If you have time to spare, I sincerely encourage you to work on your systems and processes. Think and write down everything done well in the past and review what needs to be fixed, upgraded, discarded, and improved upon. Be Proactive About "Tactical" Issues - Get your tools and equipment in shape, clean, and ready to roll! Clean out the storage area, return, recycle, and dispose of the material you don't need and will not use. Be Proactive About "Strategic" Issues - If you have thought about firing your Bad Bookkeeper, you are already 15 minutes too late! Replace that wealth prevention tool with a . Develop a  so that when the economy turns, you will be ready. Better yet, if your strategy is right, you may not be as affected by the economy. Food for thought, bread for the head! Let's walk through some scenarios: You choose the type of work that you do.  Are you a General Contractor or a Trade Contractor? Do you hire Trade Contractors (1099 contractors) or have W2 Employees? Additional choices are: New Construction Residential Remodels Service and Repair Commercial. As a brand new contractor, the challenge is getting work to do. Declare all sales, including the tiny ones that you may be tempted to put into "hip national bank."  The amount of tax is nominal; the impact of not doing it can be huge. Part of what you are looking at is Customer Headcount documents; you are a real business. Customer headcount can make all the difference globally, especially if you have only a couple of general contractors you work with.  Hiring an outside bookkeeping firm also counts to prove you are trying to be a "real business" even if you work full time and do contract nights, evenings, and weekends. Starting on the right foot and mindset is essential. Why? - Otherwise, the state worker's comp may reclassify you as an employee of the general contractor. This can lead to additional payroll taxes, fines, penalties, and higher rates as you advance. Be above board and fill out W9.  If your attitude is "It's Not My Problem," please close your company and get out!  No one around you needs the additional liability and stress; being in business is hard enough to keep ahead.  Watch out for the customers who are looking not to pay you the value of your services.  These can be other contractors where you are working as a trade contractor or retail clients. Understand the rules about Notice To The Owner, and each state may have different laws.  On larger jobs, make it a habit to do Notice Of Intent To Lien. The notice is not saying you will lien but protects your rights if you are not getting paid promptly. RED FLAG anytime a homeowner or...