If I Managed Your Business
It is in our human nature to want to help people that sometimes struggle with things. As a finance expert I often see contractors struggling with their business and I’d like to say ‘If I Managed Your Business, Here’s what I would do.”
…I would ensure the following key strategies were implemented and used in order to maintain and improve your profits: aggressive revenue drive, timely billings, assertive account collections, negotiating skills, timely cost reports, cash flow forecasts, internal controls plus many others.
…I would review forecast revenue to ensure that it was adequate to achieve profit expectations.
…I would ensure that all billings were prepared and delivered in a timely manner – after I had reviewed each one to determine if all costs and all extras were included.
…I would ensure billings are monitored for timely payments and would aggressively pursue all accounts past their due dates.
…I would ensure that we negotiated all major material and equipment purchases for best price and delivery dates. Negotiating skills take time and practice but I am certain that job profits will improve by the techniques discussed in this course.
…I would insist on timely, effective cost reports that would allow the project manager to prepare cost trends that would guide him to corrective action prior to the job completion.
…I would forecast weekly cash flows for the next eight weeks and the following three months, to serve as guides to cash shortfall and surpluses and I would appoint a cash manager.
…I would implement internal controls to safeguard your assets with the most notable being: signing all cheques after viewing supporting documentation, reviewing all billings, open and view all bank statements and review gross profits and cash flows on all new estimates.
…I would conduct post-job close out meetings to discover what went wrong, what caused the problems and how the company will avoid those issues during the next job. If a job went well, we would use this time to identify what went right and ways to recreate that experience on the next project.
…I would accept that my primary responsibility as your manager is to earn a profit. By following these strategies, I expect to meet that responsibility and ensure that your profits will increase.
(Published in Construction Comment – publication of Ottawa Construction Association)
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