Growing with your company

Now you must make the decision about what you are going to do. If you work in residential remodeling, maybe it’s time to open up to the commercial construction, and if you already work in commercial, maybe it’s time to look for larger contracts.

In either case, you are going to need a lot of financing. The growth process of the company also requires planning and strategy. You should know that in commercial construction the payments are less frequent than in residential construction, especially when you are starting out. Then, you must have the money to cover all the expenses of your company until you receive the check from your commercial client. In the beginning it can be 45 - 60 days or more. If you do not have that money in your bank account, it would be wise to save money and continue working in residential construction to get the cash flow to finance your entrance in a commercial project. Once you are established with your commercial client and your business has a steady cash flow, then you can decide whether to continue in residential construction or to focus exclusively on commercial construction.

Now, if you are in commercial construction and feel ready to take on larger projects, then you might want to create a business plan to establish exactly how much money you are going to need. The risk of forgetting about some expenses or making an evaluation only considering the optimal scenario, could mean the failure of the initiative, the end of the relationship with your client and God forbids, a trial in court for breach of contract, because you couldn’t pay your workers, they left, and you were unable to complete the project. Let's look at this example, you calculated that you needed a certain amount of money, thinking that you would complete the job in 6 weeks with 25 workers in the best-case scenario. But there were some inconveniences and delays, and now you see that you are going to need 8 weeks to finish the job and instead of 25 you are going to need 30 workers, but since you didn't think that something like this would happen, you ran out of money and can't pay your employees and they end up leaving. How will the job end? And now your relationship with your customer is damaged, you know you are going to lose it.

This problem originated from not planning correctly: you must have considered the different scenarios, not just the positive one, and you must have had an alternative plan in case things didn’t go as planned.

How to prevent this? You need professional advice and guidance to succeed with your company.

As Benjamin Franklin said it: “If you fail to plan, you’re planning to fail”.