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It's all in the Numbers

Tradies - It's all in the Numbers

Have you ever found yourself staring at your company's bank statement, wondering why the numbers don't add up?  Where has all the money gone and why am I paying so much tax?

Believe me, you're not alone.

The term cashflow is thrown around so much in the building industry, and it's often misunderstood.

The truth is, cashflow is more than just money moving in and out of your bank accounts – it's the lifeblood of any business.

And the key to solving your cashflow problem might just be where you least expect it.

Understanding the Real Issue

Many builders look at their bank balance and equate a healthy number with profit. But cash is not profit, and profit is not cash.

This misunderstanding can lead to reckless spending, like buying that new truck, new tools or worse still a new boat, without considering the true financial health of the business.

So, what's really at the heart of cashflow problems?

It’s typically a symptom of issues that run deeper,  like and inadequate understanding of the numbers, and poor financial management, a lack understanding and not knowing how to read your financial reports.

So, if you're feeling a bit like a mushroom and in the dark about your business's financial numbers, you're more likely to face a cashflow crisis. We can help you demystify business reports and cashflow.

When cashflow tightens, tunnel vision often sets in.

You are hustling to get work done, paying the bills, and not noticing the strategic aspects required in your business. It is like a revolving door that you cannot get out of, right.

You might even accept low-margin jobs, thinking it's better than nothing, labour only work just to get through, only to find yourself in a worse position further down the line. It's like running on a treadmill – you're moving but not getting anywhere.

It's All in the Numbers

The key to solving your cashflow challenges lies in understanding and managing your numbers. This isn't just about monitoring your bank balance. It's about understanding every aspect of your business finances.

You should also aim for a reserve of cashflow, with multiple bank accounts setup to assist with tax management payments, bill payments, staff leave and of course paying yourself.  Invoicing regularly and shorter payment terms to maintain a steady cash inflow are a must as well.

Regularly track and analyse your workflow. This insight allows you to scale resources up or down, maintaining a healthy balance between expenses and revenue.

Start with a thorough analysis of your financials, build those reserves, and ensure your growth is sustainable now and into the future.

Ready to transform your business's financial health?