Take Back Control: Don’t Let Slow Payments Interrupt Your Business Part 2
It is a pleasant surprise to get paid promptly following a project’s completion. More often than not, getting paid on time is a source of contention in the construction industry. Getting paid will depend on different factors. While you are waiting, you have to find cash to float your upfront costs to continue your projects, if not, certain aspects of your business will suffer.
Our Fort Lauderdale construction attorneys understand your frustration and we know that it can have a direct impact on the areas as discussed in part one of our article. This second part will conclude our discussion.
No Marketing or Lead Generation
Word of mouth is the best way to gain new customers, but you should not rely on this alone. It takes money to market your business. Many customers rely on the internet to find a reputable contractor, so make sure you have some sort of presence. If you have no online presence or at least an industry association affiliation, you are virtually invisible to potential clients. From here, you will have to rely on past clients to vouch for your credibility.
No New Equipment Purchases
You may currently have an adequate amount of tools and equipment, but there will come a time when you will have to think about repairing or replacing these same items. When you are strapped for cash, you will likely “make do” until you can purchase more equipment. However, poor tools and equipment can cause delays and affect the quality of your work.
How to Fight Back
Manage your cash flow in the good and bad seasons of your business. The immediate approach to safeguarding your business is to address late payments and improve your payment schedule and system. First, you must project your cash flow by visualizing the money that will go in and out of your business. Use this cash flow projection to determine ways to mitigate risks. For example, you may need to hire more workers or reinvest money into your business.
To get a handle on your payments, look to your contract. Contact a Fort Lauderdale construction attorney to ensure your payments terms are outlined properly. Next, you need to be sure you are managing your projects well by completing projects on time, invoicing clients immediately, and consistently following up with payment reminders and late penalties when necessary.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.