SERVICES & ADVICE
INDUSTRY WAKE-UP CALL -TIME FOR A BUSINESS HEALTH CHECK
F
or an industry that has always operated on narrow margins, price rises and delays over the last few years have bought many businesses to the brink. But is this just the tip of the iceberg? Mick Renton from Xact Accounting says that strong demand has covered up a looming crisis - with revenues continuing to grow, businesses have been able to cover losses from previous jobs with cashflow from the next job. “It’s a vicious cycle of robbing Peter to pay Paul… a strategy that works when the market is on the way up, but if demand starts to drop, as interest rate rises and cost of living pressures kick in, we are bound to see more collapses”. Mick has seen his fair share of failures and economic cycles, working as an insolvency expert before specialising in building and construction. He recommends business owners take the following test to see if they’re
showing tell-tale signs of financial stress: •
Are you using receipts from new jobs to cover costs from previous jobs – i.e., robbing Peter to pay Paul?
•
Are you spending a significant amount of your time looking at and worrying about your short-term cashflow (i.e., next two weeks)? Do you have outstanding debt to the ATO for tax and superannuation? Are you unable to specify the actual profit on your last 5 jobs?
• •
Mick warns that if these questions raise your anxiety levels, then it’s likely you need to ask for help to further diagnose your current financial position. “The construction game is an unforgiving one. Because of QBCC financial requirements there are fewer levers we can pull to help businesses trade back to health when they’re in trouble… it can be done though, but only
if you get help before it’s too late, and that means before the market starts to drop”. If you are concerned you might be on the edge of a financial crisis in your business, it’s important to seek help immediately rather than hoping things will work themselves out.
AS PART OF OUR RELATIONSHIP WITH XACT ACCOUNTING, ALL MASTER BUILDERS’ MEMBERS ARE ELIGIBLE FOR A FREE ONE-HOUR CONSULTATION.
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Steeline Roofing Products are a locally owned and operated manufacturer of COLORBOND® and ZINCALUME® steel roofing, flashings, fascia, gutter and related accessories. We are also a supplier of leading brand names of insulation, polycarbonate and fibreglass translucent sheeting, ventilators and fasteners. Call us today to discuss your next project and our friendly staff will assist you with expert advice and knowledge. al, with years Phone [07] 3200 8122 | Fax [07] 3200 8566 | 36-54 Badu Court, Meadowbrook, Qld 4131 edge for you roofingproducts@steeline.com.au | www.steeline.com.au COLORBOND® and ZINCALUME® are registered trademarks of BlueScope Steel Limited. ABN 16 000 011 058. All rights reserved.
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