Cash Flow...

is Like A Copter Landing In a Rough Ocean

By Eugene Peterson

Pilots today seldom fly by the seat of their pants, without instruments to guide them. I wish I could say the same about today’s contractor/businessman.  Many of you are flying by the seat of your pants, often with only one indicator – how much you have in the bank. Many of you go months or longer without checking your financials.  Set up a process to get financials monthly – no later than the 15th of each month.  Set an appointment with yourself to “Touch Your Money,” and review your numbers.  Learn to read them and understand what information they are giving you.  Establish a PROFIT goal of 8% to 12%.  Manage profit by one or more of the following:  Controlling expenses (direct costs as well as general and administrative expenses). Every dollar saved in these areas goes directly to the bottom line.  Increase productivity.  Increase sales.  Raise prices. (A good friend, Michael Stone, once told me: “When you charge enough for what you do, you can afford the best employees, the best subcontractors, the best materials. And you can give the best value for your work.”)  Even when in control, there are lots of bumps along the flight path. But when you know how to control them, it is much easier to make a safe and profitable landing, even in rough seas.