ISA Consortium

What's your current funding mix?

Quick one for the construction owners reading 👇

What funds your working capital right now?

🅰️ Overdraft, and not much else
🅱️ Overdraft plus invoice finance
🅲️ A structured mix: overdraft, invoice finance, asset finance, maybe a CBILS legacy loan
🅳️ Honestly, we just live off the cash that comes in

There's no right answer. Different stages need different setups.

But here's what we see often: firms running at £3M+ turnover on an overdraft alone are usually paying for the privilege of being undercapitalised. The interest on £100K of overdraft is real money, and it doesn't scale with you.

If you're A or D and the business is growing, it's worth thinking about. A or B or C or D in the comments?

Quick question. What would actually break your business?

Honest question 👇

What would actually take your business down?

🅰️ Losing your biggest client tomorrow
🅱️ A major subcontractor going under mid-project
🅲️ A 6-month dispute on a contract you've already paid out for
🅳️ All three could probably be absorbed

If you can't answer D with confidence, you've got a resilience gap somewhere.

Not a moral failing. Just a structural one. The good news is they're all addressable, and most owners only realise the gap exists when they're forced to think about it.

Which one are you most exposed to right now? A, B, C or D in the comments.

5 things actually kill construction firms. Most owners worry about the wrong ones.

Most construction owners lose sleep over things that rarely take firms down.

And ignore the things that usually do.

Here's what actually kills UK construction firms, based on insolvency patterns over the last 3 years:

1️⃣ A single client failure that takes 40%+ of revenue with it
2️⃣ A bad contract dispute that ties up cash for 18+ months
3️⃣ An overtrading event that empties the bank in one quarter
4️⃣ A subcontractor or supplier failure mid-project
5️⃣ HMRC arrears that snowball before anyone notices

Notice what's not on the list:
• Recession
• Bad weather
• Loss of a key staff member
• A specific project losing money

Those things hurt. They rarely kill on their own.

The 5 above tend to kill because they all share a feature: they hit cash hard and fast, with no time to react. By the time the owner realises what's happening, the firm is already insolvent on a balance sheet test.

The protection is the same for all 5:
✅ Forecast 13 weeks ahead so you see cash trouble early
✅ Cap client concentration before it caps you
✅ Run credit checks on key partners every 6 months
✅ Set tax aside monthly, never quarterly
✅ Stress-test the business once a year against each scenario

Message us RISK for the construction resilience checklist we use with clients.

Your bank manager isn't reading your accounts the way you think.

When your bank reviews your facility, here's what they're actually looking at.

Not your profit. Not your turnover. Not your order book.

What they really focus on:
• Operating cash flow over the last 24 months
• How volatile your monthly working capital position is
• Debtor concentration (how much depends on 1 or 2 clients)
• Director current account movements
• How accurately you forecasted last year vs what actually happened

That last one matters more than most owners realise.

If you told the bank you'd hit £6M turnover and 12% margin, and you came in at £4.8M and 6%, that's not just a missed target. That's a credibility hit. Next year's facility decision starts from a different place.

The firms that get the cleanest funding terms are usually not the most profitable. They're the most predictable.

Boring is bankable.

Message us BANKING for the funding readiness review we run with clients.

Losing one good site manager costs you £40K. Minimum.

Most construction owners underestimate what staff turnover actually costs them.

Let's do the maths on losing one decent site manager:
• Recruitment fees: £6K to £10K
• 3 months of reduced productivity during the gap: £15K to £20K
• Onboarding and ramp-up of the replacement: £8K to £12K
• Project risk while the new person finds their feet: variable, but easily £10K+

Conservative total: £40K. Often £60K or more.

Now think about how much of that is in your annual budget anywhere.

Most firms don't track it at all. Which means they never invest properly in the things that prevent it:
✅ Clear progression and accountability
✅ Pay structures that are reviewed annually, not when someone threatens to leave
✅ Decent project management tools so good people aren't spending evenings on admin
✅ A culture where the financial picture is shared, not hidden

Retention is a financial control, not just an HR issue.

Comment PEOPLE below if you want the staff cost framework we use with clients.

Case study: how renegotiating supplier terms unlocked £180K of cash.

A £5M groundworks and civils firm came to us last year. Strong order book. Profit healthy on paper. Constantly on the overdraft.

The diagnosis took 30 minutes.

Their supplier payment cycle was 14 days. Their customer payment cycle was 58 days. They were funding a 44-day gap on every job, out of working capital they didn't really have.

Here's what we did:
✅ Audited the top 20 suppliers by spend
✅ Categorised them: strategic, transactional, replaceable
✅ Renegotiated 12 of them from 14 to 30 day terms
✅ Kept 3 strategic suppliers at 14 days, with a small discount built in
✅ Set up a payment run schedule the team could trust

The result:
• £180K of cash freed up within 90 days
• Overdraft reliance dropped to zero
• No supplier relationships damaged. In fact, several were strengthened by the new predictability.

The lesson here isn't 'pay late'. It's 'pay deliberately'. Two completely different things.

If your cash is permanently tight despite a healthy order book, the answer is almost always in the supplier-customer timing gap. Get in touch.

You're underpricing. You probably don't know by how much.

Here's what we see on nearly every pricing review we do.

Contractors price the job. Not the cost of doing the job.

What gets missed:
• Real overhead allocation (not just direct labour and materials)
• Finance cost on the work in progress
• A realistic provision for variations that never get paid
• Retention impact on cash timing
• Risk premium for the specific client or project type

We worked with a £4M contractor recently. Their quoted margin was 14%. Their real net margin, after everything was loaded in properly, was 5.2%.

Same prices. Same clients. Just a more honest cost model.

Once they saw the gap, they could do three things:
✅ Raise prices selectively on lower-margin work
✅ Decline work that wouldn't clear the threshold
✅ Negotiate variations and terms harder

12 months later, they had grown net profit by 60% on roughly the same turnover.

If your prices haven't been pressure-tested in 18 months, they are almost certainly wrong.

Message us PRICING for the cost loading review we run with clients.

How fast do you pay your suppliers?

Honest question for the owners reading this 👇

How fast do you pay your suppliers?

🅰️ Within 14 days. We pride ourselves on it.
🅱️ 30 days, like clockwork.
🅲️ As late as we can without damaging the relationship.

No wrong answer here. But each one says something about how the business runs.

A is generous, sometimes too generous, especially if your customers are paying you at 60 to 90 days. That gap is funded out of your overdraft.

B is disciplined. Steady. Predictable.

C is common. And often necessary. But it gets risky when suppliers start factoring it into their pricing, or when relationships sour at the worst possible moment.

A, B or C in the comments?

If you do nothing else in your business this month, do this.

Every Friday, before you leave, give 10 minutes to 5 numbers:

1️⃣ Bank balance today
2️⃣ Expected receipts next 14 days
3️⃣ Expected payments next 14 days
4️⃣ Any job slipping on margin or programme
5️⃣ Any single risk that could change those numbers

That's it. 10 minutes.

Most construction owners go weeks without looking at those numbers in one place. By the time they check, the surprise has already happened.

The Friday close isn't admin. It's a release valve. You shouldn't carry the whole business in your head over the weekend.

Try it this Friday. See how you sleep on Sunday night.

Comment FRIDAY below if you want the simple template we use with clients.