BONDING & ACCESS TO CAPITAL SMALL CONTRACTORS INITIATIVE

SESSION 8 WRAP-UP

U.S. Dept. of Housing and Urban Development - Community Planning and Development U.S. Small Business Administration INTRODUCTION −This session will focus on realizing the plans you have developed −First part focuses on how to show a continuing capacity to perform −Second part on final preparations, including seeing how far you’ve come 3

4 U.S. Dept. of Housing and Urban Development - Community Planning and Development U.S. Small Business Administration PART A: CONTINUING CAPACITY

U.S. Dept. of Housing and Urban Development - Community Planning and Development U.S. Small Business Administration LEARNING OBJECTIVES 1.Understand how to be prepared for challenges and inspire the confidence of bonding agents and loan officers 2.Gain knowledge to continue planning through the current job and beyond 5

U.S. Dept. of Housing and Urban Development - Community Planning and Development U.S. Small Business Administration CHALLENGES IN ACHIEVING GOALS −Construction contractors face numerous challenges that impede performance ○ Skilled labor ○ Cash flow ○ Administrative support ○ Forces of nature −Bond agents and loan officers know this −Getting bonded or accessing capital does not always ensure continuing capacity to perform – questions remain 6

U.S. Dept. of Housing and Urban Development - Community Planning and Development U.S. Small Business Administration QUESTIONS 7 −Do you have a capacity to implement your plans after getting bonded or accessing capital? ○ Current contract ○ Those to come −How will you achieve your goals when challenged? −Can you convince bond agents/lenders that you’re prepared?

U.S. Dept. of Housing and Urban Development - Community Planning and Development U.S. Small Business Administration PLANNING AHEAD To deal with challenges, successful contractors, use proven business techniques −Manage strategically −Track progress −Analyze results −Decide to change direction (contingency planning) −Take action −Keep lines of communication open ○ Bond agents ○ Loan officers 8

U.S. Dept. of Housing and Urban Development - Community Planning and Development U.S. Small Business Administration STRATEGIC MANAGEMENT – AT A GLANCE PLANNING Set reasonable goals, and have a clear plan and timeline for attaining them INFORMATION Keep track of your progress EVALUATION Identify the problems and figure out why they are happenings 9 DECISION MAKING Adjust the allocation of resources as needed and modify the goals and timetable ACTION Implement the updated plans with an eye on overcoming the obstacles STRATEGIC MANAGEMENT HAPPENS EVERY DAY!

U.S. Dept. of Housing and Urban Development - Community Planning and Development U.S. Small Business Administration THE STRATEGIC MANAGEMENT CYCLE 10

U.S. Dept. of Housing and Urban Development - Community Planning and Development U.S. Small Business Administration EXAMPLES OF GOALS 11

U.S. Dept. of Housing and Urban Development - Community Planning and Development U.S. Small Business Administration TRACKING PROGRESS 12 −Information systems are key −Timely reports −Make sure you get the information you need

U.S. Dept. of Housing and Urban Development - Community Planning and Development U.S. Small Business Administration ANALYSIS −Identify problem areas −Trouble shooting – why is this happening? −Is there time to get back on track? 13

U.S. Dept. of Housing and Urban Development - Community Planning and Development U.S. Small Business Administration DECIDING WHEN TO MAKE CHANGES −Where are changes needed? ○ Allocation of resources (human, equipment, financial) ○ Adjust goals to be more realistic ○ Update “What if?” contingency planning, based on recent experience −Bring other stakeholders on board with the changes ○ Management Team ○ Owners ○ Bonding agent ○ Lender 14

U.S. Dept. of Housing and Urban Development - Community Planning and Development U.S. Small Business Administration TAKE ACTION −Clear action plans ○ Specific steps ○ Assign responsibility ○ Set timelines −Notify other stakeholders −Adjust cash flow and revenue projections −Implement the changes 15

U.S. Dept. of Housing and Urban Development - Community Planning and Development U.S. Small Business Administration EXERCISE Small Group Exercise −3-4 participants work together −Each group is given a sample problem −Results are presented to the entire cohort 16

U.S. Dept. of Housing and Urban Development - Community Planning and Development U.S. Small Business Administration TAKE AWAY −Small organizations needs to be agile, adaptable, and flexible enough to develop new strengths and capture niche opportunities within competitive industry often with bigger players −Strategies often incorporate flexibility to capture new opportunities as they arise 17

U.S. Dept. of Housing and Urban Development - Community Planning and Development U.S. Small Business Administration KEYS TO IMPLEMENTATION 18 −Keep everyone aware of the goals and the plans for achieving them −Regular progress updates for management that compare results to projections −Communicating concerns, and working together on ways to address the issues that come up −Maintain a clear “Action List”, assign specific tasks and timelines, and keep on top of it

U.S. Dept. of Housing and Urban Development - Community Planning and Development U.S. Small Business Administration RESOURCES 19 These links provide additional information: −“Ten Most Common Causes of Construction Contractor Failures”, Robert A. Davidson, CPA and Martin G. Maguire, CPA −“Differences Between Strategic Planning at Small Versus Large Firms.” Boundless Management

20 U.S. Dept. of Housing and Urban Development - Community Planning and Development U.S. Small Business Administration PART B: PULLING IT ALL TOGETHER

U.S. Dept. of Housing and Urban Development - Community Planning and Development U.S. Small Business Administration LEARNING OBJECTIVES 1.Identify those areas needing more work and support 2.Acknowledge accomplishments and progress through participation in this initiative 21

U.S. Dept. of Housing and Urban Development - Community Planning and Development U.S. Small Business Administration 22 −What have I achieved? −Am I now “bondable”? −Can I get a working capital loan? −What steps remain? −Where will I get help? FINAL QUESTIONS

U.S. Dept. of Housing and Urban Development - Community Planning and Development U.S. Small Business Administration ACTION PLANS: A LAST LOOK −Participants review their company’s Action Plan – 5 minutes −Using examples from participants, the group discusses the questions on Slide 22 23

U.S. Dept. of Housing and Urban Development - Community Planning and Development U.S. Small Business Administration WHAT HAVE I ACHIEVED? −Mark it as “DONE”, for now −These will still need to be revisited Example Certification as a Small Business - DONE But the work isn’t coming in, so consider seeking other certifications. Example Obtain bonding for current job - DONE But to get bonding for larger jobs, I’ll need to add to my working capital. 24

U.S. Dept. of Housing and Urban Development - Community Planning and Development U.S. Small Business Administration AM I NOW BONDABLE? −If yes, for what level? −Prequalified? −Identified an agent to work with? −Yes – we have a bond in place! 25 U.S. Dept. of Housing and Urban Development - Community Planning and Development U.S. Small Business Administration

U.S. Dept. of Housing and Urban Development - Community Planning and Development U.S. Small Business Administration WORKING CAPITAL LOAN? −If yes, for what amount? −Qualified? −Identified an lender to work with? −Yes – we been approved for a loan! 26 U.S. Dept. of Housing and Urban Development - Community Planning and Development U.S. Small Business Administration

U.S. Dept. of Housing and Urban Development - Community Planning and Development U.S. Small Business Administration WHAT STEPS REMAIN? −Completing items on the Action Plan −Submitting forms and documents to the Agent −Satisfying working capital needs −Getting bonded for an actual contract 27 U.S. Dept. of Housing and Urban Development - Community Planning and Development U.S. Small Business Administration

U.S. Dept. of Housing and Urban Development - Community Planning and Development U.S. Small Business Administration WHERE TO GO FOR HELP? −Consultants – CPA, attorney −Bonding agent −Loan officer −SBA website −Local organization – SBDC 28 U.S. Dept. of Housing and Urban Development - Community Planning and Development U.S. Small Business Administration

U.S. Dept. of Housing and Urban Development - Community Planning and Development U.S. Small Business Administration HOW FAR HAVE I COME? −Take the self-assessment −How much has your knowledge grown since starting this course? −The results will be compared to the one you did before the course started 29 U.S. Dept. of Housing and Urban Development - Community Planning and Development U.S. Small Business Administration

U.S. Dept. of Housing and Urban Development - Community Planning and Development U.S. Small Business Administration COURSE EVALUATION −Did this course meet your needs? −Was the material helpful? −Were the facilitators and mentors helpful? −Please complete the course evaluation form and turn it in before leaving 30 U.S. Dept. of Housing and Urban Development - Community Planning and Development U.S. Small Business Administration

31 U.S. Dept. of Housing and Urban Development - Community Planning and Development U.S. Small Business Administration THANK YOU BEST WISHES IN GROWING YOUR BUSINESS