Cash Flow and the 5Cs of Credit - Overview

Contractors need strong financial partners, including banking, surety, and insurance to grow sustainably.

D. Brown Management Profile Picture
Share

They are putting their capital at risk, making a calculated bet on the business generating consistent financial returns at the lowest risk possible.  

Cash Flow: 5C's of Credit. Character, Capital. Capacity, Collateral, and Conditions.

Whether you are an equity owner in a contracting business, plan to be or are choosing to invest your professional “career equity” into the business, you should look at the same factors an outside financial partner does. This will truly align everyone’s interests and make the business run more successfully.  

Greg Martin does a great job of describing the 5 C’s of Credit in a series of articles below.  

Effectively managing cash flow is about balancing what you can do internally while building and maintaining strong external financial partner relationships.  

  • What are your internal capital management policies? 
  • Are they in alignment with your outside financial partners?  
  • How does this look over the next 5 years or during succession if that is on the horizon for you?

Cash Flow
Great cash flow is a key driver of valuation and successful successions. Running out of cash is is the #1 reason contractors fail. Improving cash flow improves your Return on Equity. Protect yourself and never let cash flow be the limitation to your profitable growth....

Cash Flow
Great cash flow is a key driver of valuation and successful successions. Running out of cash is is the #1 reason contractors fail. Improving cash flow improves your Return on Equity. Protect yourself and never let cash flow be the limitation to your profitable growth....

Four Dimensions of Effective Improvement Teams
Construction project owners are demanding more complex projects delivered faster, with higher quality and at a competitive cost. There are four major dimensions we look for when putting together effective improvement teams.
Building a Systems Development Team - Balance
Striking a balance between immediacy and scalability is a constant decision with Systems Development and will be ever-changing in most organizations. The needs of your organization may necessitate erring on one side of that balance or the other.
Predictable - Productive - Scalable
Look at every task and process including your business as a whole as developing in three major interrelated stages.