Capital Use Policies

Capital is to contractors what blood is to our bodies.

D. Brown Management Profile Picture
Share

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




Succession Process and Architectural Design Phases
As contractors prepare for succession, they should use the same lessons they have learned in developing and then building projects.
Average is Rare and Rarely Valuable
Study the differences between the varying levels of performance and work to close those gaps. Seeing how the average is trending can be very valuable to visualizing the trajectory, and that goes for every element on a Contractor's Scoreboard.
Our Approach
We take a very hands-on approach with our clients, providing a valuable third-party perspective, unbiased facilitation, and specialty expertise. We look at every aspect of your business to identify the biggest growth constraints and eliminate them.