D. Brown Management - Cash Flow Tip 18 - Making Cash Flow a Game

Cash Flow Tip 18 - Making Cash Flow a Game

Imagine creating a culture where everyone ran into work with the same energy that fans and players run into a sporting event.

D. Brown Management

November 1, 2018 2 minute read

There are several key things that must be watched on a contractor’s business scoreboard, including cash flow.

Start by defining what “Winning” looks like for your business when it comes to cash flow.
This is often hard to determine in absolute terms since the levels of cash change with business growth.
A standard metric such as the ratio of Net Project Cash vs. Earned Margin for your open WIP projects is one of the best measures, regardless of size and is within the control of the project team.
Show the team how this is trending over time and include the absolute levels of cash, both positive and negative, at the project level since that is your biggest variable to control.
Identify specific projects that are impacting the score the most, both good and bad.
Like all great coaches, continually provide your team feedback and management on every detail (Cash Flow Tips 1-17) that leads to great cash flow.
Remember that success in cash flow is about the preparation.
Debrief weekly and adjust - just like you do on a project.
Communicate constantly.
Celebrate wins and progress often with the team, singling out individuals who truly solve problems.
Remember that contracting is a business and a very fun game to play.
Don’t relax, no matter how good your cash metric trend is.

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....

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