Cash Flow and the 5Cs of Credit - Overview

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

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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....

Michael Jordan and Failure
When it comes to our personal learning and coaching others, it is critical to stay in the “Learning Zone” as much as possible. Maximum benefit comes from pushing the outer limits of the learning zone into the panic zone where you will fail.
10 Jugs of Wine - A Tale from Japan
Diffusion of personal responsibility can occur quickly on teams. Everyone must contribute. This is a simple tale from Japan that elegantly illustrates the point and includes how people react even when the failed results are clear.
Managing Communications During the Preconstruction Process
Customer satisfaction and project success is largely determined by how effective the communications are managed during the preconstruction process.