Growing too quickly and not having the appropriate resources to sustain growth can become a financial burden on your business. On the other hand, growing too slowly in a rapidly changing industry can negatively impact your financials too. Josh Tinaglia, Solar Engine Program Manager at Soligent, says one way to manage this risk is by utilizing financial tools responsibly to increase leverage and build relationships with your customers. Leverage allows you to “fight outside your weight class” and take on bigger jobs, more jobs, and be confident that you have the resources for sustainable growth.
Traditional 30-, 60-, or 90-day terms create risks for distributors. If you are able to mitigate those risks, your distributors and suppliers will likely return the favor. From the distributor’s perspective, distributing supplies across multiple different parties increases risk, so it’s important to have systematic setups that maintain standards internally and help reduce this risk. Finding new tools that minimize risk helps Soligent, who – in turn – is better able to help contractors take on more fruitful jobs and grow their businesses.
This is especially important considering the threats posed by heavy rates of inflation. As a contractor, one way to mitigate risk is to understand that although it’s good to have some cash on hand, leaving all of your liquid capital in a bank account isn’t the wisest (or safest) use of those funds. Use your cash instead for items that will propel your business forward such as purchasing and maintaining equipment.
“Leverage is helping subcontractors realize that they can do more than what they are currently capable of. It’s not just a coaching and manager mentality to help folks realize they can grow: it’s giving them the gifts and tools so they can get there…. Helping them realize that leverage is one tiny step forward that allows them to ‘fight outside their weight-class’, while maintaining the lean-and-meanness to do bigger jobs.” – Josh Tinaglia, Solar Engine Program Manager, Soligent