June 2024- Resource Management

A key element of capturing new work is Resource Management; ensuring that the necessary resources, including personnel, technology, and financial stability, are available to perform the contract fully. Financial stability (consistent cash flow, adequate reserves, access to credit, etc.) prevents a number of issues, from schedule delays to labor challenges, and reduces exposure to penalties and damages due to contract non-compliance.

Properly identifying and mitigating risks by thoroughly reviewing contract clauses, negotiating beneficial terms with vendors and suppliers, and modeling key financial metrics (budget variation, profitability, cash flow, etc.) are essential for understanding and managing financial stability.

Smaller businesses are more susceptible to the impacts of financial instability. Credit is harder to obtain, interest rates are higher, and sometimes, the pricing strategies necessary to win the contract impact on the resources available to perform the work.

However, there are creative financing solutions available for Capture Managers to consider when developing a Resource Management strategy, one of which is Invoice Factoring. Invoice factoring is a financial transaction where a business sells its accounts receivable (invoices) to a third-party financier, called a “factor.” The factor pays the business a percentage of the invoice value, usually within a few days, providing immediate cash flow rather than waiting for customers to pay their invoices. This quick access to funds helps maintain operations and support growth. The cost of the transaction is often lower than the expenses associated with opening and servicing a line of credit.