Cash Flow Tip 1 - The Right Markets and Customers

A contractor needs to be sure to find the right markets and customers for them.

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Keeping in mind that you can’t have great cash flow without great profitability the first thing you have to look at is your market strategy.  

Cash Flow: Tip 1 Finding the Right Markets and Customers

Each market and each customer within that market will have dramatically different profitability and cash flow curves with all other factors being equal.  Knowing this and making the right strategic decisions is the most highly leveraged decision you will make.  

This must be looked at from the perspective of both the typical project, annual cycles and stability throughout different economic cycles.  

For example some national builders like mobile phone networks will tend to rush through builds as soon as their annual budget is approved but then if they run out of budget you can experience a slow couple months or quarter while they wait for their new budget to be approved.  That has a seriously negative impact on the contractor’s overall cash flow. 

That is neither good nor bad; it is just one of many factors to consider when selecting your market strategy.  

How well does your market strategy support great cash flow?  

How effectively are you executing against that strategy?


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