Construction projects are a big task to handle especially given their size and sensitivity. A wrong move in the planning process especially in poor financial planning could lead to heavy losses which pose a huge threat to your project. A financial blunder by the construction manager or planner could mean endangering the business due to a lack of capital to keep operations running. In this piece, we are going to share with you some tips to keep you afloat as a construction manager in order to keep your project alive.
Tips to avoid running out of cash
To keep your project running, you need to have a means of keeping cash flowing and minimizing losses. These tips will serve as a compass for navigation
- Re-negotiate With Vendors and Suppliers
Do not settle for what you have agreed with your vendors or suppliers when beginning the partnership. If you feel that the deal does not serve you anymore, you can sit down with them and negotiate with them again for a better deal that is pocket friendly. We also recommend looking for new partners and suppliers if the ones you have are charging high prices.
- Ask Your Customers for a Deposit
Once you have agreed to a construction project for your client, ask them to make a deposit for the project which could be a percentage of the amount you have charged. This not only ensures that you secure their commitment to the project but also ensures that you’ll have the cash you need to start their project, and order materials among other things.
- Develop Good Cash Flow
In developing a good cash flow, you must first know where your cash is coming from and where it is going.
- Diversify Your Client Base
More clients mean more money coming in. This will work to keep your business afloat and projects running. The profits realized from one project could be used for another project for another client and so on. We recommend growing a large customer base in order to generate more income for the business.
Conclusion
Bankruptcy is the worst nightmare you can encounter as a player in the construction industry. We recommend the above tips in order to keep you afloat and save your business from insolvency.
References: Revenued, Levelset, LevelsetCashflow
