Financial Acumen for Construction Contractors
Updated: Jun 23, 2020
How Financial Acumen puts you ahead
When you gain financial acumen, you understand how to use financial reports along with all the accompanying metrics to monitor your commercial contracting company’s performance and make proper adjustments.
Think about it. When you make decisions based on both historical and predictive indicators you gain a better outlook for success.
Therefore, gaining financial acumen means you possess a solid understanding of what drives your company’s profits. You “get” how financial decisions form the backbone of your business.
Therefore, it is about following the signals – and knowing which signals to follow.
It affects your employees
Your employees and subs want to know that your business is viable and capable. They want a secure company which provides stability for them and their families. Check out this article from businesscollective.
It isn’t enough that you’re a “nice guy” who has an “excellent vision.” If you don’t have the moxie to pull off the difficult financial decisions, finding good people who will stay the course goes up in a puff of smoke.
General Contractors must see your Financial Acumen
While there are different requirements made by different general contractors it is typical that they want to see financial data. They will collect and analyze it to determine the stability and adequacy of your construction company’s financial resources to perform the work.
They will look at your financials in order to gauge annual sales volume and present net worth. Often, they will go on to analyze financial ratios such as working capital, total assets, sales assets, and retained earnings.
This is a quick example of what general contractors are looking for.
You benefit by growing your Financial Acumen
Of course, the down-and-dirty is being able to support yourself and your family. Yet, there are other, more subtle ways you benefit through growing your financial acumen.
Able to hold your own in a conversation with fellow contractors or other business leaders
More ability to analyze data and interpret key performance indicators
Greater understanding when dealing with lenders
Better able to develop business plans or personal objectives in line with your goals and strategy
Growth of decision-making skills
Increases your financial understanding and confidence
It isn’t our job to wipe your plate clean of financial concerns. It is our job to help you put the right things on your plate. We’re here to help you follow the right signals.
The signals which will aid you in building a healthy construction contracting business through gaining financial acumen.
It is our desire this article (among our growing library of construction-centric informational articles) is helpful in assisting commercial construction contractors build better building businesses.
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