How One Construction Company Grew from $250K to $12 Million in 5 Years
In a capital-intensive industry like construction, startups face numerous challenges on their path to growth and success. But strategic planning, backed by expert guidance, can establish a strong foundation for growth.
One such company, assisted by guidance from James Moore’s expert construction accounting advisors, grew from $250,000 to a $12 million valuation in just five years.
Challenge
In mid-2018, a determined entrepreneur approached James Moore & Co. with a bold vision. Armed with a $250,000 loan, he had established a construction company with aspirations to become a Florida Department of Transportation (FDOT) prequalified contractor.
This designation would allow the company to bid on lucrative state highway construction projects, opening doors to larger-scale, government-funded contracts and significantly enhancing its credibility in the industry.
However, the path to FDOT prequalification is a difficult one, especially for a young company. Chief among the obstacles is the requirement for audited financial statements for prime contractors on projects over $2 million. For a startup barely off the ground — with little available to audit in the first place — fulfilling this obligation was no small feat.
Strategy
Recognizing the company's potential and the founder's commitment to growth, the founder worked with James Moore’s construction accounting CPAs to develop a two-pronged strategy, which would:
- Address the immediate need for an audit
- Establish robust financial systems for long-term success
This strategy involved:
- Setting up a tailored chart of accounts
- Implementing a strategic work in progress (WIP) schedule for ongoing projects
- Designing and implementing robust yet efficient internal controls
- Establishing proper financial monitoring and recording systems
This solid foundation prepared the company for its audit, positioned it for efficient financial management and scalable growth, and proactively mitigated risk.
Results
In 2019, just a year after engaging with James Moore, the construction company underwent its first full-year audit. This milestone marked a crucial step toward FDOT prequalification and demonstrated the company's commitment to financial transparency and professionalism.
Investing in expert financial guidance and proactively establishing accounting systems and internal controls paid off handsomely. Within five years of its inception, the company was valued at an impressive $12 million — a testament to the power of strategic financial planning and management.
Keys to Success
The rapid growth of this construction startup highlights several crucial factors for success:
- Early investment in the success of the company: By investing in expert guidance from the outset, the company built a solid financial foundation for growth.
- Commitment to best practices: Implementing robust financial systems and controls positioned the company for efficient management and scalability, while mitigating future risk.
- Focus on strategic goals: Pursuing FDOT prequalification provided a clear objective, driving the company's financial and operational decisions.
- Trust in expertise: The founder's willingness to invest in professional services (despite their cost) ultimately yielded significant returns.
By partnering with experienced professionals and implementing best practices in accounting and financial management, construction companies can build a solid foundation for long-term success.
Whether you're a startup aiming for rapid growth or an established firm looking to optimize your financial operations, James Moore is here to provide the expertise and support you need to achieve your goals. Let us help you build a stronger financial future for your construction business. Contact us today to learn more about our accounting, audit, and advisory services for construction companies.
Jeremy Wright, CPA
Partner
Jeremy’s work at James Moore includes audit and assurance services, due diligence support for mergers and acquisitions, cash flow forecasting, outsourced accounting services and more. As a partner, he also provides guidance to our accounting and assurance staff as an instructor and mentor.
Jeremy leads the Construction Service Team and is a member of the Healthcare Services Team at James Moore & Co. He is a member of several industry-specific associations including the Builders Association of North Central Florida (BANCF), the Construction Industry CPAs and Consultants (CICPAC), the Florida Surety Association, and StartupGNV (where he serves as Treasurer). He also regularly holds office hours at UF Innovate to help guide area startup businesses as they grow.
In addition to the areas mentioned above, Jeremy also serves multiple federally qualified health centers, condo/homeowner associations and other commercial entities.