Subcontractor Citisite has tackled some cash flow challenges. Invoice finance has been one solution.
One of the joys of working in this industry is learning about all the different types of businesses in each industry. Last week we spoke to Marko who runs a business that installs high-end fitouts.
When we talk to our clients I am always surprised at the wealth of value that other clients can derive form their experience.
Marko had the following key points to make to any person working as a subcontractor:
- Build strong relationships with key customers.
- Obtain good people and keep them working for you.
- Focus on doing all the small things correctly as they all add up in the end.
- Price your goods and services so there is a healthy gross profit, and don’t take on the work if you are not happy with the price (seems obvious, but often overlooked).
- Cross your t’s and dot your i’s in your service agreements, change anything in your supply agreement if you are not happy with it. If your supply agreement is given to you by your customer, then get a lawyer to look over it as they are usually written in the customer’s favour.
- Make sure that if a particular client does not pay, your business will survive and not “blow up”.
- When you do work or take on a large order, written approval should always be given (when it is installations, variations should always have written sign off).
Citisite is a great comeback story and Marko has made it this way as he has learned from his past experiences.
For me Marko’s advice about pricing is especially true. You simply must fight to maintain a healthy gross profit in your products and services.