Construction Economy: What Does the Future Hold?

By Garry Bartecki | GB Financial Services, LLC Construction business owners should continue to expect high prices and need to keep a close eye on their balance sheets in Q4 2023 and Q1 2024. Are you as sick and tired of listening to the financial and business gurus pontificate about the economy, interest rates, inflation and the price oil and the need to go to electric vehicles (EV) as I am? It is mind boggling, making it that much tougher for business management to plan revenues, costs, profits (we hope) and cash flow. In case you didn’t get it: YOU are probably the one that is required to provide direction and guidance about the future of your company. Since planning for the future will be tough this year, I thought I would run through some of the basics you will need to consider regarding the balance of 2023 and the outlook for the year 2024. First, it is the POSITIVE CASH FLOW you are planning for. Budgets and net income are nice to have around, but do not provide proof of producing positive cash flow. You understand, of course, that you can “sell” yourself into bankruptcy, where you put yourself into a situation where you do not collect enough to cover your bill payments in a timely fashion. Planning for cash flow will keep you out of that situation. How about we discuss how to budget for expenses now that we hear that inflation is slowing down. As you know, inflation forces prices for goods and services higher. During the past couple of years, prices have gotten quite a bit higher. Getting the inflation rate down to 2% does not necessarily mean prices go back to what they were pre-pandemic. They will stay where they are at and “normalize” at this new, higher priced standard of living. This, of course, means your cash flow budget needs to use these higher prices for costing out your work. READ FULL ARTICLE >>