Dispatch #50 - How do we plan when things change so quickly?

How do we plan when things change so quickly?

What can we count on?

Where’s the solid ground?

These days we’re all straining to see inside a cloudy crystal ball:

Small business owners are living through the greatest economic challenge they may ever face. The Covid-19 pandemic won't play out like an ordinary recession--there are no models that can account for the near-infinite variables affecting the United States' ability to contain the pandemic and get the economy back to normal.

That’s from an op-ed piece by Jared Hecht, CEO of Fundera, in Inc. Magazine. His advice?

• Hold on to cash

• Plan for both best- and worst-case revenue scenarios

• Update plans frequently

I agree, and it's why I’ve been relying more heavily than ever on the 13-month cash flow forecast.

If I learn something important from a contractor’s sales or operations team, I update the forecast that day; I don’t wait until our monthly business review. What if we get a call from a nervous banker about their line of credit? I want the most current business intelligence at my fingertips.

So what can we count on?

For me, as CFO, it’s this fluid process of quickly folding important new sales, operations, and financial information into our decision-making, observing the results, and then course correcting as new data comes in.

That’s solid ground to stand on.

Need help with this or other financial matters faced by construction contractors? Let’s talk!

David Stern CFO makes every effort to provide useful and accurate information. This content, however, is not intended as a substitute for specific business-related financial advice. We disclaim all warranties and liabilities from its use.