Working capital can be a struggle. If you need to borrow, make smart choices.
Nothing beats solid planning
Ideally, we can handle our finances organically
Control growth / save where you can / plan properly
Liquidate under-utilized assets
Doesn’t always work out that way and we get into situations where we need some capital
When this happens, sometime we need to turn to debt
Common solutions to working capital loans (from good to bad)
Traditional bank loans and lines of credit
Credit cards
Invoice factoring
Merchant loans
Use debt wisely
Try to go with the best route first
Create a solid plan for your debt
How much / how long / how to pay / don’t get trapped
Best way – figure a percentage of future income to pay the debt and take that percentage off of every payment – even if that means making payments several times a month
Specific concerns based on lending type
LOC / Banks
Not paying the loan back within the year
Factoring
Making up for the lost future revenue
Merchant loans
Keeping cash flow going when money comes out of the account each day and giving up the % of revenues
Creating great employ benefits extends far beyond the paycheck.
As Elite Contractors we want to
Have the best employees in our niche
Build a great culture that thrives
Have people excited to come to work
Compensation is a major part and it’s not just the pay
Rate of pay plays a large part but not the only thing – after a certain level other things become more important
Health and welfare is an area that plays into the over package as well
Quality of life is a large part – it’s the icing on the cake and the things that make people love working for your organization
Tips on building a great compensation package
Keep your base pay at a decent, above-average level
Add performance bonuses to get peak performance
Have a decent health care plan
Doesn’t need to be the best and employees will be willing to pay if you explain properly
Consider a wellness program
I got one that saves the employee money, gives them great added benefits like 24/7 on-call doctors and saves the company money (let me know if you are interested)
Quality of life
This is where you can really knock it out of the park without breaking the bank
Create a nice work environment – upgrade the vehicles some
Be flexible with people so they can tend to family events
Proper recognition goes a long way in building a culture of success.
Employees / team members create our successes
It takes a full effort by everyone involved
The smallest task still adds to the product
Look at Steve Jobs’ attention to packaging at Apple
Everyone is an important part of the whole
Build your culture on recognition
Show you care and give thanks
Recognize everyone’s performance, not just the leader
Thank the teams as a whole as well as the individuals
Good recognition and thanks
It doesn’t take much to have a profound effect
Sometimes it’s just “Thanks for all the hard work and effort.”
Awards, bonuses and recognition are nice but you don’t have to break the bank to be effective
Recognize and thank people in front of their peers – it’s good that everyone sees the appreciation
Be sure to recognize the effort versus the achievement
Achievements are important but don’t let extraordinary effort go unnoticed
Compare 2 project managers on 2 different projects
Manager 1 has a difficult project that may end up losing money. She works extra hard, goes above and beyond and pulls it off without a loss but very little profit.
Manager 2 has a homerun project. He’s got the best subs, easy client and a fat budget. When complete the project doubles profits.
Typically, managers will recognize Manager 2 because there were such great margins. How do you think Manager 1 feels when she sees #2 getting accolades?
I think, Manager 1 is the real winner here. She deserves to be employee of the year.
