Financial planning for construction
January 14, 2011
Increasing efficiency is a benefit to a company from any industry, but for a builder dealing with an extremely weak construction market, improving financial efficiency is even more essential.
The National Association of Home Builders Business Management Information Technology Committee held a seminar at the International Builders' Show for attendees to share their best practices, Builder magazine reports.
When discussing financial planning advice, the importance of careful cost estimation when asking for funding from a bank was emphasized, according to the source. Construction software can help builders create more accurate estimates and make it easy to document the company's estimating track record. This documentation will show banks the company's bidding strategy and success rate.
For firms that cannot acquire funding from a bank, some creative financing methods were recommended, notes the magazine. One option mentioned was partnering with a developer, who may be able to help with financing.
The cost of materials rose in December, according to to producer price index figures released by the Associated General Contractors of America, adding more financial pressure on contractors.