Attention Builders, what is your system for positive cash-flow?

What is Your System For Positive Cash-Flow?

I recently worked with a builder who a few years ago made the move from working as a sole trader with one labourer doing smallish jobs to building a small team and working on bigger residential renovations and additions.

At first the growth was slow but eventually things started
to snowball as more referral work came in. He soon found
himself with seven or eight jobs on the books and doing more
turnover than he’s ever dreamt of, except he was in financial hell.

Money was going out faster than it was coming in and although he was pricing his work right with a solid 27% margin, there was no money in the bank account. He was either hemorrhaging money somewhere or there were significant
Cash-flow problems. All I wanted was the truth, so the first thing I did was book a time to sit down with his accountant and have a Close look at the numbers. Lets face it the numbers don’t lie and we all know the old adage “The truth will set you free”. I’ve done this on a number of occasions with clients but on this occasion something wasn’t quite right. First of all at the meeting the accountant looked really nervous, not a good sign!

I was struggling to understand the complexity of some of the
Financials and whenever I asked a straight question like what is the
WIP? Or what is the current cash position? Can we look at the
Gross margin on individual jobs and compare? I got a blank stare,
I think “stunned mullet’s” the term.

Long story short, there was a massive “Cash Gap” in the guys business,
things were moving too quickly, accurate financial were non existent and
they were flying blind. The end result almost wasn’t pretty, luckily we were able to make some adjustments and get him back on the right side of the line.

There are two important lessons here, firstly you need accurate numbers
And financial controls otherwise you risk crashing hard, even in good times. Also choose your bookkeeper and accountant wisely. I don’t have time to go into detail on this now but I’ll be sending out something in the coming weeks so watch his space.

Secondly; do you have a solid strategy for ensuring your money comes in before it goes out? That is a system for ensuring positive cash-flow? If you can relate to any of this and would like a free copy of the 21 Cash-flow strategies for your business enter your name and email address on the Builders Coach home page at www.builderscoach.com

What’s it costing you?

A very wealthy Australian was recently heard saying ‘its easy to make money. To make money you just need
to do the things that make money.’ Simple but right on the money!

What is your plan for doing the things that will make you more money this year?

Click link to watch or review the 12 critical areas for making more money in your business in 2013. ()

As fascinating, simple and profound as it is it begs the question, what percentage of your time do you
(or your team) spend on the tasks that make money and how well are you doing them?

I bet you can think of half a dozen things that you (or your team) are NOT doing that you could be doing
to make more money, right? Here’s a small list of questions to prompt you;

1) Could you be more efficient with your time?
2) Could you shop around to increase your margins?
3) Do all your invoices go out on time?
4) Could you qualify your prospects better?
5) Could you do more marketing to generate better quality enquiries, even if its just one more phone call a day?
6) Could you manage your finances better so you build more working capital?

If you stop working on a job what happens? You lose money, right. The same applies to working ‘ON’ your
business and the things that make you money.

If you wanted to make an extra $100,000 profit this year what would it take, one extra job? Maybe two or three
jobs. How many more jobs would you need to price and what would you need to do to price those extra jobs?

Lets say you put in an extra four hours / week focusing on generating that extra $100,000. Thats a total of 192
hours focused on generating more work. If its a focused 192 hours, I’d put money on you making the extra
$100,000. If we divide $100,000 by 192 hours thats $520 / hour. But here’s the clincher, once you’ve set up
the systems you should generate the extra $100,000 for the rest of your career!

The most common objection I hear when I recommend spending 4 or 5 hours working “ON” their business is, “I
don’t have time”. If its worth $520 an hour (conservatively) then its costing you $520 / hr. So could you find the
time?

Click link to watch or review the 12 critical areas for making more money in your business in 2013. ()

Are you doing the things to make more money in your business and if not, whats it costing you?

To your ongoing success

Kurt

MASTER BUSINESS COACH
E: kurt@builderscoach.com
www.builderscoach.com