The final item on our list of things you can do to assure positive cash flow is to avoid debt. If you are in debt, set the goal of becoming debt-free.
Steps to Positive Cash Flow
Far too often when contractors come to us for help they are behind paying one or more of their taxes. Don’t let this happen to you.
It's important to set goals for your business. It's also important to track, on a month by month basis, how close your actual finances are to those goals.
You need to have enough cash on hand at any point in time to pay all your bills, but sometimes the cash flowing in stops.
In order to have a positive cash flow, it helps to know what your cash needs are today, in six months, and a year from now.
If you find yourself struggling to make payroll, there could be a lot of things wrong and one of them might be that you have too many people on that payroll.
Don’t forget your Change Work Orders. When a client requests a CWO, you need to make sure the paperwork includes a payment schedule that keeps your cash flow positive.
If you want positive cash flow in your construction business, make sure you're using the right payment schedule on your contracts.
If you forget to include the cost of insulation, you’ll be paying for it out of your own pocket.
It’s a basic principle: Cash flows into your construction business when you sell a job. Cash flows out when you pay the costs of the job and your overhead expenses.