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Financial Cornerstones: Money Management for Small Construction Firms

Updated: Mar 22

Starting a small construction business is not a walk in the park, especially if you're juggling fewer than 20 employees. Like many small business owners, one of the biggest battles you might be fighting is the art of money management. Trying to keep income and expenses on an even keel can feel like a high-stakes balancing act.

Getting an initial deposit and having a clear payment schedule is good news. However, the costs of each job can seem like a never-ending uphill climb, especially if you don't have a dedicated person handling your finances. But don't worry, here are some down-to-earth tips for business owners to help get a handle on their construction finances:

good money management for running a successful construction company

Kick-off with a Solid Plan

“Proper pre-construction planning is arguably the most critical project phase any owner can undertake,” says Brandon Hurd, managing director at Hurd Construction Management, a general contractor and construction management company. “Unqualified schedules, scopes, specifications, and particularly budgets are recipes for legal and financial disasters.”

Whether you're in construction or any other business, planning is your number one priority. The world of construction is like a giant jigsaw puzzle, with each piece potentially costing you big bucks if something unexpected trips you up.

Put Some Money Aside for Rainy Days

Just like any other business, things go wrong in construction firms. And when things go wrong in construction businesses, they can be much costlier than other industries.

“There will be times when something goes wrong, and there should be a line item in your budget or estimate to cover that,” says Nichola Landau, president of Landau Consulting Solutions.

Keep a Tight Rein on Spending

While the deposit can help you cover costs, don’t try to overspend at the onset. Many contractors get a check for a lot of money, which somehow turns into thinking that they have a lot of money on hand. They don’t think of the costs that are associated with payment.

If you’ve already forecast your weekly, monthly, or long-term cash flows for the project, it could be easier to avoid the cash crisis later on.

Your Personal Finances Might be on the Hook

Having a loan with the bank without proper planning and a good payment solution will make it difficult for your small construction business.

When your construction business takes on a loan to invest in a project, you (and your partners or your financing team) will have to sign a personal guarantee for the loan. That means even when the loan and project are in the name of your business, you agree to pay the loan from your personal finance if the project doesn’t go as planned.

Think About Outsourcing Your Finance Work

Many of you are business owners, and you build your business so that you don’t have to worry about financing works.

Good financial management is needed so that construction businesses have a long future with positive financial flows. However, it doesn’t mean that the business owners have time – or don’t want to – manage their financial situation.

Experts can help you:

  1. Keep Accurate Books: They'll take care of organizing and cleaning up your financial records, making sure everything is in order.

  2. Secure Funding: When seeking funding for your projects, having well-organized financial documents can speed up the process.

  3. Financial Planning: Experts can help you create effective financial strategies to improve profitability and cash flow.

Pro Tip: CCA's Bookkeeping Services can be your reliable financial partner, leaving you free to focus on growing your construction business while they handle the financial side of things.


Mastering finance is essential for the success of your construction business. You'll be on the right path by starting with a solid plan, setting up a contingency fund, avoiding overspending, and protecting your finances. And don't forget, expert help is available to make your financial journey smoother and more successful. So, implement these tips today, and watch your construction business flourish!

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