Capital is to contractors what blood is to our bodies. We can survive days without water and weeks without food but seconds after losing blood flow we lose consciousness. 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: https://dbmgt.co/contact
D. Brown Management’s Post
More Relevant Posts
-
Defining what you want in quantifiable outcomes is extremely difficult. It's 10X harder to define those outcomes throughout the whole company from field to CEO. Defining the leading activities that create those outcomes is another 10X more difficult. #businessmanagement #metrics #dbmteam
Contractor Scoreboard - Disciplined Execution
dbmteam.com
-
If you are having consistent difficulty finding the right person for a role, you may be looking for a unicorn. Requiring unicorns to grow is a bad plan. If you do find a unicorn, just ask them where the pot of gold is and forget about construction! #organizationaldevelopment #talent #dbmteam
Unicorns and the Growing Contractor
dbmteam.com
-
A standardized report originated in the military to provide a concise, clear update on the current situation, typically in a combat environment. The principles can be applied to projects and construction businesses. #definitions #dbmteam
Definition - SITREP (Situation Report)
dbmteam.com
-
Standards progress through six basic levels as a contractor grows based on impact, frequency, and quantity of different people doing them. Optimum outcomes including scalability are based on choosing the right level - higher is not always better. #businessmanagement #dbmteam
6 Progressive Levels of Standards Development
dbmteam.com
-
Are you responsible for in involved in making the decisions about moving a person into a management role? Are you considering a move into a first-time, different, or higher-level management role? Use this 8-step checklist to help you evaluate. #businessmanagment #organizationaldevelopment #talent #dbmteam
Management Role Promotion Checklist (8 Steps)
dbmteam.com
-
The OODA Loop is a decision-making framework originally developed for the military to make agility a competitive advantage. The focus on rapid, localized decisions in rapidly changing environments aligns well with construction projects and businesses. #management #strategy #talent #dbmteam
Observe, Orient, Decide, and Act (The OODA Loop)
dbmteam.com
-
Psychology is materials science for people. Engineers use materials science to design and build construction projects that are both safe and meet the needs of their owners. Organizational Development is the engineering of individuals into effective teams. #organizationaldevelopment #talent #dbmteam
Construction Contracting, Materials Science, and "People Science"
dbmteam.com
-
Decision Rights define the business decisions that need to be made; who is involved in making them; and how they will be made through processes, tools, and operating rhythms. #organizationaldevelopment #talent #dbmteam
Definition - Decision Rights
dbmteam.com
-
Alignment of strategy, management structure, decision rights, and information systems creates consistently good outcomes for growing contractors including faster development of talent. #businessmanagement #organizationaldevelopment #scoreboard #talent #dbmteam
Structure, Decision Rights, and Information Systems
dbmteam.com
