Stay on top of your cash flow with proper planning and projections.
- Cash flow is the biggest small business killer
- As contractors we often have to spend money before we can invoice
- On some projects it can take 90+ days to get payments
- This struggle often causes us to Rob peter to pay Paul – a bad habit
- Avoid these issues with good planning
- Start with the project – create a cash flow projection for each project
- Track costs, billings and receipts – both planned and actual
- Summarize the information on a single spreadsheet for the company
- Know your numbers
- Start with the project – create a cash flow projection for each project
- When we plan ahead we can prepare for short-falls
- Get the best terms you can on suppliers and subcontractors
- Set aside funds from every payment to build a reserve – I recommend at least 3 months of overhead costs in reserve
- Control spending when you see a downturn coming
- Borrow only when necessary