Financial Education Improves Cash Flow Management
A commercial masonry construction firm organized as a limited liability company and principally serving Virginia clients contacted the SBDC for financial management assistance. The client has a long experience in the industry and established his own company in 2002. The client has a proven reputation for quality work and an ability to meet deadlines. The client enjoys a reliable workforce and stream of subcontract referrals.
The client’s growth rate has been too fast for the available working capital. Other challenges include a need for technical assistance and training in the areas of financial management and commercial banking relations. Two contract defaults by general contractors and a lingering payroll tax liability substantially eliminated all cash reserves.
The RRSBDC-Fredericksburg office has been able to assist the client with renegotiating a short term factoring relationship with a key general contractor. The client is being trained in cash flow management, financial projections, receivables timing, and “Right Banking” practices. The RRSBDC-Fredericksburg office is currently assisting the client with establishing a banking hierarchy that will initiate an expandable line of credit to combat new project cash flow fluctuations.
Since engaging the RRSBDC-Fredericksburg, the client has grown the business from $288,000 to $1.522 million in 2004 sales.
Updated 10/2/2008 2:37:30 PM | BJohnson