Increasing Your Bonding Capacity
Whether you need a plan for building your bonding capacity depends greatly on the type of work you perform. If you are a general contractor, site utilities contractor, or paving contractor bonding is a critical piece of your business puzzle. If you happen to be a painter, service contractor, or residential contractor, bonding isn't all that important.

Bonding capacity is tied directly to the strength of your balance sheet. How liquid is your business? How much wealth has been left in your business? How much debt do you owe? These are the main three things that drive your bonding capacity.

If bonding is important to your business, you need to create a multi-year plan for growing it. The first step is to run a profitable business. Seriously, don't overlook that requirement. The second step is to leave money in your business.

If you don't run a profitable business, your balance sheet is going to grow ill quickly. Profit is the foundation upon which bonding capacity grows.

Many contractors like to pull their money out of their business to make it less accessible to vultures (litigation prone clients and employees). Pulling your money weakens your business, your balance sheet and it limits your bonding capacity. Make sure your door of opportunity remains open. Create a multi-year bonding plan.