Managing your cash flow is a constant balancing act in the construction industry. Once you’re simultaneously overseeing multiple projects, the pressure to manage your finances properly rises exponentially. If you fail to facilitate a continuous flow of cash between your various projects, you’ll eventually find yourself embroiled in a legal dispute with an owner who is wondering why you’ve fallen behind schedule or altered the scope of work.
Obviously, the best way to prevent this from happening is to work with Denver construction lawyers who understand the cash flow needs of your business and can help you take a proactive approach to avoid these issues. This entails a variety of services including negotiating and reviewing your contracts, helping you stay on top of your legal obligations, and more.
In this three-part series, a Denver construction lawyer from Cotney Construction Law will discuss an array of cash flow solutions that contractors can utilize to keep their money moving without slowing down. When your cash dries up, your company suffers. If you think cash flow issues are on the horizon for your business, consult a Denver construction attorney today.
Cash Flow Issues Are a Burden for Small Business Owners
According to Intuit’s State of Cash Flow Report, 61 percent of small businesses globally are experiencing difficulties with managing their cash flow. Most of these cases are a result of business owners being unable to pay vendors, pending loans, or themselves or their employees because their cash flow has skidded to a halt. This includes contractors running independent building operations. The first step is to take a step back and analyze your business, noting the amount of cash you have available and the amount of time it will take to generate more cash. Once you have assessed the state of your business, you can take the necessary steps to dig yourself out of the hole you’re in.
Borrow Before a Cash Flow Crisis Occurs
If you wait until the last minute to borrow money, you will likely find that your cash flow issues are too far gone to recover from. Generally, cash flow issues compound over time, growing more and more severe with each passing day. Because of this, waiting to borrow is rarely advised as the only thing that will increase is the amount of money you need to borrow to get back on track. Taking a proactive approach to your cash flow issues can help stifle them before they get out of hand and will help you keep your company running smoothly in the meantime. Borrowing early can help you avoid being rejected once your financial situation has turned grim and lenders grow hesitant.
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.