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Current financial markets also add to your problems. A lack of borrowing power or financing means a lack of working capital and higher equity requirements to run and finance your business properly.

Making the adjustments
There is no doubt profit is very important. However, it's only half of the equation, because maintaining adequate working capital, equity and cash flow are also critical. This being the case, it is imperative to have meaningful 30-, 60- and 90-day cash flow estimates, along with a plan to keep cash flow positive.

The current market environment produces less work and more competition, which translates into lower gross profits, as well as patterns of slower pay. In addition, backlogs are decreasing, which means annual revenues will decrease and cost reductions are necessary to maintain cash flow. This same scenario applies to any contractors you work for and those working for you, making it your business to perform the due diligence to ensure they can complete their assigned tasks.

The questions now are "can you do this" and "can you make adjustments as required?" If not, you may need a guy like Ken to help you out. Considering what's at stake, it may not be a bad idea.

According to Ken's list of priorities, you should do the obvious cuts first. Then, based on conservative 30-, 60- and 90-day cash flow projections, proactively review each administrative expense and further reduce the cost; eliminate non-performers next; proceed to cuts in pay, benefits and/or hours; and keep adjusting until your projections show positive cash flow.