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“Show Me the Money” Cash Flow for Handling Growth

“Show Me the Money” Cash Flow for Handling Growth. Agenda. Construction industry Show me the money Why am I not getting paid? Cash during growth – an example What do I do when I am temporarily short of cash Capital sourcing to finance growth. Construction Industry. Cyclical

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“Show Me the Money” Cash Flow for Handling Growth

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  1. “Show Me the Money” Cash Flow for Handling Growth

  2. Agenda • Construction industry • Show me the money • Why am I not getting paid? • Cash during growth – an example • What do I do when I am temporarily short of cash • Capital sourcing to finance growth

  3. Construction Industry • Cyclical • During bad times, we take jobs we shouldn’t • During good times, we hire people we shouldn’t • Competitive • Entrepreneurial • Next great opportunity is just around the corner • Risk/reward imbalance

  4. Construction Industry in 4 Words VOLUME KILLS CASH THRILLS

  5. Show Me the Money • Unbilled (unapproved?) change orders • Underbillings • Aging receivables • Precon • Self-performed work versus subcontracting • Equipment • Overhead

  6. Show Me the Money Growth version • Expansion • Non-core investments

  7. Why am I not getting paid? • Is your bill easy to pay? • Back-up is complete • Percentage completion agreed upon • Collections • Who is responsible for collections? • Relationships, relationships, relationships • When to ask for help • Job Close-Out and Retention

  8. Contractor Balance Sheet

  9. Backlog

  10. One Job - Cash

  11. Borrowing Requirements

  12. What do I do when I am temporarily short of cash? • Know that you are not alone • Relationships with subcontractors and suppliers • Relationship with banks • Defer some payments

  13. Capital Sourcing • Burke Capital Corporation’s 5 principles: • It’s always about the relationship • Beauty is in the eye of the beholder • Be prepared • Cast a wide net • Competition brings out the best

  14. Final Words • Strategic growth is a great thing • Long-term sustainable (and profitable) growth creates competitive advantage • Always keep the next cycle in mind • There are legitimate reasons for using external capital

  15. Contact Us… Jim Burke Michael Ong Burke Capital Corp. Burke Capital Corp. jmburke@burkecapital.net mong@burkecapital.net 650-579-5699 650-988-9650 Sandra Waechter Waechter LLC sandra@swaechter.com 650-868-0681

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