OK, so you might be dubious but stay with me. Today’s video is This is the MAGIC Business Model in Construction. You can watch it here or continue with this quick read.
Whether or not you believe in magic, I promise that if you pay attention to this model, you’ll be successful.
OK so to kick things off what’s the WORST BUSINESS MODEL?
You do 1 soft work
1 piece of work…
You do this all and finance it yourself for AT LEAST 30-90 days depending on the terms of the contract.
This scenario means you have TERRIBLE CASH FLOW.
To make things worse there’ll probably be some form of retainer.
So how do we change this?
I worked for an oil and gas company and I learned that they got a huge sum of money upfront to secure the turbines. They also got money for the turbines themselves. And then they got money to service and maintain the turbines.
The question is HOW CAN WE APPLY THIS MODEL TO TRADITIONAL CONSTRUCTION COMPANIES?
- Start getting pre-payment on every project that you do.
Getting prepayment liquidates your cost of acquisition.
Cost of acquisition is basically everything you spend on acquiring a particular client. So bidding costs, marketing costs, etc. etc.
The quicker you can recoup these costs the quicker you will start to make money.
Prepayment also secures materials and people a lot quicker and at better rates.
And all of this is EXCELLENT NEWS FOR YOUR CASH FLOW!!
Prepayment also delivers a better outcome for your client.
When you’re not cash-strapped you can do the job properly and not cut corners.
We want you to be the MOST SUCCESSFUL you can possibly be. That’s why we put together content with tips and advice that is tried and tested.
For more contractual advice, Quantum Contract Solutions is here to guide and assist you through everything contract related. Let’s reduce risk in your contracts and save time and money, just click this link to get our FREE case study to show you how clients just like you are doing it.
