How many contractors do you know that are skilled craftsman in their trade, yet still struggle to make ends meet at the end of every month? Running a company and building a home require two very different skill sets, yet contractors who own their own business must have both. Often time, contractors battle themselves to balance between completing a job and managing office work. When cash flow and profits are not carefully managed, businesses fail.
American Management Services, a turnaround management company, helps with this problem often experienced by professionals in the construction industry. Many contractors work harder and harder each year but never make any progress. The reason many construction businesses fail is that the contractors never learned how to manage employees, cash flow, and profits. Having quality craftsmanship isn’t enough to keep a business a float.
Case Study for American Management Services
Lou Mosca, the EVP and COO of American Management Services, told a story of a construction company they have been working with.
“We recently worked with a general contractor in the Mid-Atlantic states who had seen his revenue fall from $70 million in 2010 to $14 million in 2013 to an estimated $10 million in 2014. Margins were shrinking and field labor controls were nonexistent. On top of all this, cash was declining and borrowing was increasing. Ultimately to right the ship we implemented some basic but firm controls. Cash management became critical and paramount. No payments went out of the building without two sign-offs and any payment had to be part of weekly cash forecast. Next, we established a team approach to estimating jobs. All bids/estimates over $25K in value required a second sign-off and anything over $100K in value required the owner’s approval. As far as field labor controls, we immediately began the process of daily reporting along with weekly reviews of each job. The project is still underway but preliminary results are positive. More results will be measured over the next couple of months.”
American Management Services Can Help
Companies like American Management Services have helped turn around many failing businesses, including construction companies. Contractors turn to the experts in turnaround management to help get their business back on track and profitable again. After an initial business analysis, they will create a customized plan to organize every aspect of your company. Learning how to manage cash flow and profits is essential for sustaining and growing any enterprise.
Common Problems with Contractors Face
- Selling work and then not being able to start production due to cash management
- Not sending out proper invoices
- Not having time to sell
- Not having a plan for success
If any of these problems sound familiar, the best thing to do would be call a company like American Management Services. For over 25 years their experts have helped make thousands of struggling businesses profitable again. Stop struggling and call today to increase your sales, profits, cash flow, and organizational effectiveness.