How to Keep Control of your Self-Build Cash Flow

Cash is king is a phrase you hear a lot in business. Without the liquidity offered by cash, everything grinds to a halt: bills don’t get paid; suppliers stop supplying; and your project stalls.

It’s no different with self-building, where keeping a positive cash flow throughout the process is critical. If you run out of funds and fail to pay the bills, problems will quickly stack up and your project could start to become a Grand Designs-style burden. It doesn’t have to be like that, though. Hopefully these tips will help you keep things on track and make your scheme a success.

Budgeting

You can’t expect me to write an article involving money without making my standard pleas about setting a realistic budget. Starting out with rose-tinted glasses firmly in place and inadequate funds for what you want to build is a basic error – and the one that’s most likely to cause your project to fail.

Construct a home that reflects your true budget; not what you think you’d like to have. You can’t assume a limited amount of money will simply stretch to suit your scheme, regardless of size, quality and complexity. It won’t. In fact, it will run out very quickly.

Self-building can be an affordable route to getting a high-quality home, but as a rule it still tends to cost a bit (and sometimes a lot) more than you think it will. For this reason, it’s always sensible to allocate a contingency of 10% into your overall construction costs (excluding land).

The ‘into’ part of that sentence is important. This isn’t something to raid for frivolous extras; it’s there as cover should something go awry. Trust me, you’ll use it and when you do, you’ll be grateful it’s there.

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