Before 2025 gets too much further along, it’s a good idea to check in on your business plan. The smart move isn’t clinging to outdated projections but proactively anticipating challenges. For example, consider how disruptions from the California fires could impact your business, no matter where you operate. Read on for expert guidance on navigating ahead with a healthy cash flow.
Impacted By the California Fires?
If you’re in construction, but not in Southern California, do not be too quick to say this winter’s fires won’t impact your plans. As Garry Bartecki of GB Financial Services observes, the fires are actually quite likely to disrupt business plans across the country in numerous ways:
Changes that may take place in terms of materials, delivery dates, inflation, interest rates, insurance, lack of equipment, financing, and a lack of personnel, could affect your operation in both the short and long term. In other words, the road ahead will not only be winding but may also lead to troublesome financial issues…..Which means you need to plan out where your pain points will be — some of which are not visible now — and prepare a list of solutions to choose from to put you back on the right road going forward.
Being proactive and realistic about the potential pain points for your business is much wiser than forging full steam ahead with your initial plans for 2025. Determining what you could shift, and understanding the resulting impact on your bottom line, can make all the difference to your cash situation in the year ahead. Specifically, as you reconsider your 2025 plan, Bartecki advises focusing on these potential impacts stemming from the disruption caused by the California fires:
- The California wildfires will impact material costs and delivery due dates … .To protect yourself, consider contacting your primary vendors…to have an idea about how these issues may affect their service levels…. Consider making an appointment with your banker to discuss your terms for a working capital loan, along with the related interest rate. This threat alone may make you rethink the type of work you want to do this year.
- Keep an eye out for a rise in insurance rates…. Consider reviewing your policies to see what you may be able to do to reduce premiums. One sure way is to get rid of assets you are not using but are still paying insurance on.
- There may be a lack of equipment if most used units wind up in the west. Check in with your rental companies to ensure they have what you need and that it will be there when you call.
Good To Do: Plan and Update
At Construction Business Coaching, George Hedley reminds us that having a strategic business plan, and periodically updating it, is essential to success, so make sure your plan includes:
- Clearly tracked targets and goals including growth, revenue, gross profit, net profit, mark-up, margin, job size, equity, and return.
- Specific action plans for improvement including systems, talent, recruiting, hiring, organizational structure, meetings, customer development, sales, estimating, project management, field operations, production, job cost tracking, equipment, customers, and marketing.
- Regular management team strategic planning sessions to develop updated business plans and strategies to improve, monitor results, and achieve goals.
Capacity Building?
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