You are busy. The phone rings, the quotes go out, the jobs get won. On paper the year looks decent.
And there is nothing in the bank.
If that is where you are, this is written for you. Not for someone thinking about starting a construction company one day. For the owner who already has the trucks, the crew and the payroll run, and who is quietly wondering how a business this busy can be this broke.
The first thing worth saying is that you are not bad at this. Cash disappearing in a growing trades business is close to normal. It happens for reasons that have nothing to do with how hard you work, and it will keep happening until somebody goes and finds it.
Busy and broke are not opposites
Revenue is not money. It is a promise of money.
You bought the material, paid the crew, ran the truck, and carried the job. All of that left your account weeks before the invoice went out, and the invoice will not be paid for another thirty days if you are lucky. The bigger the job, the longer you carry it, and the more of your own cash is sitting on somebody else’s site.
Growth eats cash. That is not a warning, it is arithmetic. The faster you grow, the more of your money is out there in other people’s buildings. Owners who do not understand this believe they have a sales problem, so they go and win more work, which makes it worse.
The four places the money actually goes
Jobs you priced before you knew what they cost. Most trades owners quote off a number in their head, or last year’s number, and never go back afterwards to see what the job actually cost. Not the material, the whole thing. The truck, the fuel, the hours nobody logged, the two days of rework nobody wrote down. Until you know what a job costs you, every quote you write is a guess, and some of those guesses are losing you money on purpose.
Rework. Nobody puts rework on an invoice. It comes straight out of your margin and it does it silently. A crew going back to fix something is a crew not earning on the next job, and you are paying for both.
The job mix. Not all work is equal, and most owners have never separated it. You very likely have a category of work that feels busy, keeps everyone occupied, and makes almost nothing. It survives because it is familiar. Somebody has to go and look at it honestly.
Money leaving quietly. Interest, fees, financing charges, subscriptions nobody remembers signing up for, equipment being paid for that is not being used. It is boring and it is real, and in most books I look at there is more of it than the owner expects.
The uncomfortable part
Here is the honest thing. If you have no money in the bank, you do not have a marketing problem, a hiring problem, or a motivation problem. You have a measurement problem. You cannot fix what you cannot see, and right now you cannot see where the money is going.
That is not a criticism. Nobody hands a tradesperson a set of books and explains them. You learnt the trade, you got good at it, people started paying you, and the business grew around you faster than the systems did. That is the normal path and it is the reason so many good operators are broke.
What to actually do this week
Take your last three finished jobs. Not the biggest, not the best, just the last three. Work out what each one truly cost you: material, labour including the hours nobody logged, the truck, the rework, the callbacks, all of it. Then put that against what you actually invoiced.
You will find one of two things. Either the margin is there and it is leaking somewhere else, in which case you go looking at the second list above. Or the margin was never there in the first place, and you have been pricing work below cost without knowing it.
Either way, you will know more about your business by Friday than you did on Monday, and you will know it from your own numbers rather than from a feeling.
That is the whole discipline. Look at the money honestly, find where it goes, and stop the leak before you go and win more work to plug it.
If you would rather not do it alone
I sit down with trades and construction owners in Edmonton and go through exactly this, using their own books. Not a sales pitch and not a lecture. We look at where the money is actually going, and most owners are surprised by what turns up.
If you are busy and still short at payroll, that is the conversation worth having.
