The Profit Builder Unscripted
Welcome to "The Profit Builder Unscripted" - a podcast dedicated to helping construction industry leaders transform their businesses and rediscover the passion in their work. This show is tailored for construction business owners and leaders who are looking to boost their bottom line, develop strong, ownership-driven teams, and revitalize their love for the craft. Each episode of "The Profit Builder Unscripted" dives into the critical aspects of growing and managing a profitable construction business. We cover everything from financial management and goal setting to fostering a culture of accountability and innovation within your teams. Our discussions focus on practical strategies and tools that you can implement immediately to see tangible improvements in your business operation.
The Profit Builder Unscripted
Contractors, Why Your Bank Balance Lies to You
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Ever looked at your bank balance and thought, “We’re doing great” — only to be scrambling for payroll a few weeks later? You’re not alone. Many contractors mistake the number in their bank account for a sign of profitability, when in reality it can be hiding serious cash flow problems.
In this episode of The Profit Builder Unscripted, I share a real conversation with a contractor facing that exact challenge. His profit and loss statement said he was profitable, but his cash flow told a completely different story. The fix? A simple change in how he reviewed his numbers that gave him a clear picture of true profitability — and a path to more predictable cash flow.
If you’ve ever felt like your bank balance is playing tricks on you, this episode will help you see the truth, take control, and stop the cash flow roller coaster for good.
Book a Financial Health Assessment with Vicki: https://calendly.com/vickisuiter/discovery
Resources:
- Want to increase your profitability? Grab my book “The Profit Bleed.“
- Looking to grow your construction business? Check out our exclusive group "The Contractors Collective.”
- Want employees to take more ownership? Check out our course - “Build Your Dream Team.”
- Are you struggling to hire the right people? Check out our “Contractors Hiring Blueprint” course.
Connect with Vicki on social media:
- YouTube: Vicki Suiter
- LinkedIn: https://www.linkedin.com/in/vickisuiter
- Facebook: https://www.facebook.com/SuiterBusinessBuilders
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Hey, contractors. Are you struggling with cash flow in your business? If so, make sure to listen to this episode because what I'm going to share with you is critically important to help you understand what the problem might be and how to fix it. Hi, I'm Vicki Souter, and welcome back to the Profit Builder Unscripted.
This week, I had a conversation with a new client of mine who was talking about this challenge that they had with cash flow and that they felt like there was like that the cash in the bank was sort of this roller coaster of there would be money there and then there wasn't any money there. And then they were struggling to like try to stay ahead and make sure that they had money for payroll. And then they were trying to collect deposits to make sure that they had money. And I said, well, so tell me.
A little bit about how you like, how do you, do you know if you're profitable? And they said, well, it looks like we are. And he pulled up a profit and loss statement and the profit and loss statement he ran was on a cash basis. And I said, so do you always look at it on a cash basis? And he said, yeah, that's just how my bookkeeper always runs it. That we always look at our profit and loss on a cash basis. said, the problem with that is you don't really know how profitable you are when you run your profit and loss on a cash basis. If you're, if I said, you know, if you have somebody who has deposits, gives you deposits on projects, then you're going to get money in. And you might think that if, if you were just looking at your bank balance, right. And then you go, we have this cash in the bank. Then you think you can spend it.
But then, like a couple weeks or a couple months later the expenses that correspond with that deposit the cash is now gone but now you have to pay the bills and What I explained to him and this is what I would encourage you to really stop and think about is Do you know what your real profitability is and the way to know that is? By running a profit and loss statement on an accrual basis and an accrual basis is basically hey, I billed it, but maybe I haven't collected. But if I billed it, I earned it. And I'm talking about work that you actually produced, right? And then if the costs have hit, right, I've entered the credit cards or I've entered the vendor bills or the material bills, I have those costs in there. Maybe I haven't paid them all yet because I'm waiting for the client to get paid. But now I have a more accurate idea of, what are my costs for the month? So getting a profit and loss on an accrual basis really gives you a better idea of how profitable you actually are in the operations of your business, as opposed to just the cash flow in your business. And let's face it, what you're in the business for is to be able to make a profit, right?
And so if you want to start to have more control over cash flow, because profits
follow, cash follows profits, then start looking at your profit and loss statement every month on an accrual basis so that you can really see, you actually profitable? Because profits is the thing that's going to allow you to make distributions. It's going to allow you to make estimated tax payments. It's going to allow you to pay down debt. It's going to allow you to purchase assets. It's going to allow you to reinvest back in your business.
It's going to allow you to build cash reserves. Having a clear idea in your head of knowing, hey, how profitable am I actually, is critically important to the success of your contracting business. And if you're somebody who isn't sure about, like, if you would like some help with this, I would like to make this offer to you. I do something called a financial health assessment.
And the financial health assessment can help ⁓ you identify where is the place in my business where I could be increasing the profitability on my bottom line or building a more financially healthy business. And what I do is I do an analysis on your business. I get some data from you. And then my analysis helps evaluate your business based on previous history, based on industry standards, based on
what a financially healthy construction business should look like based on my 30 years of doing this work with contractors. And then I do that analysis and then we sit down and we go through it. So if you're interested in finding out more about that, make sure to, I've dropped a link below for a link to my calendar where we can hop on a call and I can tell you a little bit more about it. There's no obligation.
But what I have found is that when I do this with people, it is so eye opening to help you understand, okay, how can I affect my bottom line? How can I increase my profitability? How can I think about cashflow and start to have more ease and peace in my business around cashflow? Because there's also, as I said, net profits cash follows net profits, but then what do you do with that? So then we talk about that as well and about how do you be more intentional and purposeful in your contracting business in order to have the money when you need it in your bank account. All right, so feel free to, if you wanna hop on a call with me, again, no obligation, it's just a discovery call, I can tell you more about it. There's a link below and I encourage you to do that.
All right, thanks. I appreciate you being here. I appreciate you being part of this community and I look forward to seeing you next time on the Profit Builder Unscripted.
