The construction industry has many inherent ups and downs. But, with the continuingly rocky economy, the ups and downs have been a little (or a lot) more severe in many areas. Because of this, many bonding firms have tightened their requirements considerably. Here are some ways to satisfy your surety in today's tricky economic environment.

Good communication paramount

For starters, keep the lines of communication with your surety wide open at all times. Consider your surety agent part of your overall advisory team, just as you do your accountant and attorney.

To make sure your agent is always aware of what your company's doing, send him or her regular financial reports as well as updates on your current project workload. And even if nothing particularly earthshaking is going on, give him or her a call occasionally just to say hello. Sometimes a little goodwill can go a long way.

Well-ordered financials a must

Every construction company needs to make sure it's providing the right information to its sureties. Bonding firms tend to focus on equity and working capital. If you can demonstrate that you're managing your cash flow, and that you have enough working capital to see you through any unforeseen problems, you'll generally stay on a surety's good side.

Sureties also look for evidence that you've managed to stay profitable over the long term. By nature, the construction business has highs and lows. So if you can consistently demonstrate a steady history of profitability, you'll show your surety that you clearly know how to get through the lean times.

Bear in mind that, to ensure a construction company isn't taking on an unacceptable amount of risk, a surety will sometimes also want to review recently completed contracts as well as those in progress.

Don't ignore your business plan

A sound business plan that clearly indicates not only where you're going, but how and why, can put (and keep) your surety at ease. When a construction company has a written, up-to-date plan, sureties think it's less likely to go off on a risky tangent.

Similarly, a contingency plan that shows how you'll deal with financial emergencies demonstrates your ability to remain cool under fire. Creating a disaster recovery plan that delineates your planned response for natural and manmade catastrophes is also a good move.

Still cautious

In many cases, bonding firms have been able to weather the last few years' economic storms rather well. But they're generally still subject to the cautiousness of the financial sector as a whole. Work with your CPA to ensure your financials and business documentation are in the best shape possible.