A Texas subcontractor we work with once shared his pricing secret over a job site lunch: "Every bid I submit has an 8% cushion built in. Not for profit, just to survive." He wasn't embarrassed; he was exhausted from years of chasing payments while juggling payroll and suppliers. He wasn't alone. Our analysis of 200+ construction firms shows 73% pad bids by 6-10% to stay afloat. It's not greed, it's a survival tactic against delayed payments, retainage, and unpredictable costs

A contractor who runs out of cash three weeks into a project faces mechanic's liens, abandoned work, and possible business failure. This is why construction deposit requirements exist. You've landed a $750,000 commercial renovation. Contract signed, client excited but no deposit required. Now you're scrambling to cover $125,000 in immediate outlays out of pocket while your first progress payment won't arrive for 60+ days. This cash-flow squeeze happens daily. The problem: su

Your profits are leaking and you might not even know it. Every year, construction companies lose 5-15% of potential profit to poor budget planning. Cost overruns, cash flow gaps, and inaccurate estimates silently drain your bottom line. But this year doesn't have to follow the same pattern. This comprehensive guide shows construction owners, general contractors, and subcontractors exactly how to set realistic financial goals that actually work, not generic targets that disapp

A general contractor three weeks into excavation discovers unstable soil conditions. The property owner verbally approves additional foundation work $15,000 for the scope change. Six months later, that construction change order becomes a $45,000 payment dispute. Meanwhile, cash flow suffers, subcontractors threaten liens, and the line of credit reaches its limit. This scenario affects over 70% of construction companies experiencing cash flow disruptions from change order dela

Cash flow problems kill more construction businesses than bad bids ever will. The difference between waiting 90 days for payment and getting paid every two weeks isn't just convenience, it's the margin between making payroll or laying off your crew. Your billing structure determines whether you're funding your client's project with your own money or maintaining healthy cash reserves throughout the job. Table of Content: Why Your Billing Structure Matters More Than You Think W

A contractor called us last month about a confusing problem. His WIP report showed his commercial renovation at 22% profit $74,000 in the green. But he'd maxed out his credit line and couldn't pay his concrete supplier. We found $68,000 in July costs that wouldn't hit his books until September. His plumber had worked three weeks but hadn't invoiced. Materials sat in "uninvoiced receipts" because his supplier batched invoices monthly. His WIP showed profit that didn't exist.

Picture this: You've just completed a $500,000 construction project. The work is done, your crew has moved on, but you've only received $450,000. Where's the other $50,000? It's sitting in retention and if you're not tracking it properly, you might never see it. For construction owners, general contractors, and subcontractors working with AIA contracts, retention isn't just a line item on payment applications. It's working capital that's temporarily out of reach, and in today

Cash Flow  is the lifeblood of any construction business. Even the most profitable projects can face crippling financial constraints if cash is not properly managed. The biggest challenge often isn’t generating revenue but keeping working capital flowing. Long payment cycles from clients, coupled with inefficient internal processes, can quickly choke your liquidity and stall growth. But what if we told you that Accounts Payable (Construction AP) the routine task of paying bi

Days Sales Outstanding (DSO)  is a crucial financial metric measuring the average number of days it takes a construction company to...

In the fast paced construction industry, managing Accounts Payable (AP) efficiently is crucial for maintaining strong supplier...

As a construction business owner, you’ve likely faced questions like, “Why does it feel like I’m always running out of cash despite...

Securing construction bonding  is a crucial step for contractors, especially in public works projects. But several financial issues can...