Ghost written article:

Six Tips to Improve Your Financial Management

The way a construction company manages its money will mean the difference between success or failure, profit or loss. So, in trying to meet your company's financial goals, keep in mind these six basic considerations.

1. Oversee the overhead.

Keep a watchful eye on overhead expenses by sticking to a firm budget. Monitor your no people expenses, and don't be timid about eliminating unprofitable or nonperforming staff. A contractor should plan for cost overruns because they will usually happen.  When the contractor goes for a loan, the financial company will want to see some evidence that they can cover overruns. If you figure 15 percent over what you think it will cost, you'll be happy if you come in under.

And, recognize that sales and marketing are an investment, not an expense.

2. Fish as if the fish are biting.

Make your existing clients and former clients a part of a permanent network. This leads to new clients.  Work hard to show network members how your construction company can help them solve their business issues, get to know their businesses. Cherish them so you don't lose them.

3. Watch your risk tolerance.

By its nature, construction is a risky business, but taking unnecessary financial risks shouldn't be the industry norm. Avoid unnecessary risk by not tying up all your cash in a few projects and accepting a new assignment simply because it's available.
Ask yourself: Where is the job located? Can my staff handle another project? If not, can you hire additional qualified people to get the job done?

Do what you do best. That's the way to provide your employees with the opportunity to create value in your company.

4. Manage your cash flow.

Monitor your cash flow regularly, and ensure that your company's financial executives manage it carefully. Be clear and precise with contracts. Expectations should be established and agreed to up front. Work diligently to avoid confusion on such items as change orders.

5. Eliminate write-offs.

Profit-eroding write-offs are common in the construction industry, and they often are the result of poor financial management. Make sure your crew understands that write-offs affect the company's bottom line - and their bonus potential.

6. Motivate and encourage your employees.

If you work continually to instill a sense of teamwork among your workers, they won't view asking for help or guidance as a sign of weakness. There is a variety of ways to accomplish this goal. For example, provide your employees with effective and constructive feedback when appropriate, and share with them relevant information, knowledge and experience.

Remember: Positive leadership motivates employees to be loyal, committed and hard working.

~~~~~~~~