By Pam Wismer, Fractional CFO, Ascent CFO Solutions
This article was originally published in Construction Business Owner Magazine.
The very mention of fluctuating cash flow can cause anxiety for construction company owners. Without sufficient planning for a slow season, even seasoned businesses may find themselves in a cash crisis from time to time. While weather can be an obvious culprit for midsized general contractors — particularly those in nonresidential construction such as commercial, road and highway, or heavy construction — a slow season can also be related to factors such as project life cycles, regional labor shortages, or a poorly quoted or scoped job. In severe circumstances, a company must be strong enough to survive the cash drought without becoming insolvent and remain well-positioned for new projects as the market improves.
Consider these tips to financially prepare for and navigate an unexpected slow season.