Capital Use Policies

Capital is to contractors what blood is to our bodies.

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We can survive days without water and weeks without food but seconds after losing blood flow we lose consciousness with death following in minutes.

Leadership Tools: Three Basic Constraints of a Contracting Business.

Conservative capital management enables the execution of effective talent and market strategies for sustainable growth.  It is important to both have high-level capital management policies as well as rigorous daily cash management processes to create this foundation.  

On the policy side consider putting in place internal covenants (rules) similar to what your bank or surety has in place.  Create policies and controls that will enable future successions to take place. At a high-level consider at least the following basics:

  • How much working capital do you need for the amount of work you are doing?
  • How much of a credit line do you need?  How should it be used?
  • What is the maximum debt:equity ratio you should run at?
  • When there is excess capital in the business beyond required needs how is it used?

We help contractors put the right levels of financial controls in place to protect the business in all economic conditions providing for smooth successions and sustainable growth. 

Schedule a call with us to learn more




Feeling Safe and Being Safe
These are not the same. Both must be managed. Know which of your actions contribute to each and to what degree. Know that your actions may be interpreted dramatically differently by different people.
Cash Flow Tip 9 - The Project Schedule and Cash Flow
The smoother the project schedule is, the smoother your cash flow will be. Large variations in the resource loading across a project’s duration impact cash and productivity.
Our Promises
We love the construction industry. We believe in aggressive business and talent development balanced with conservative operations and financial management. We make six promises to the industry, to our clients, to each other, and to ourselves: