Flat out all month, and still short of cash

Volume and cash are not the same thing. A full job board can still leave the account empty.

The gap between paying for a job and being paid for it is where the pressure builds. TAG members can open Cash Flow Cycle inside Money & Mindset in The G.O.A.T Tradie® Business App via the partner page below, or call us on 1800 957 154. Real people on the phone ready to support you.

Ask a builder how the month went and the answer often contains two things that should not sit together. Flat out. And broke.

It is the most common story in the trades. The job board is full. The team is stretched. The account is empty.

Volume and cash are not the same thing

A business can be at capacity, winning work and still be short of money at the end of the month. Turnover tells you how much work went through the business. Cash tells you whether you can pay for it this week. Only one of those answers the phone when the supplier rings.

The money always leaves first

Win a project and the spending starts straight away.

• Materials are paid upfront or on short supplier terms
• Wages go out every week
• Fuel, insurance, tools, vehicles and subcontractors keep running

The payment from the builder or the client usually turns up 30, 45 or 60 days after that. Sometimes longer. From the first day on site, the business is funding the project out of its own pocket.

When the terms do not line up

Here is the version most trades businesses will recognise.

The builder pays on 60-day terms. The suppliers want their money in 30. The team has to be paid every Thursday.

Every one of those dates is set by somebody else. The owner is left holding the difference. When the builder pays late, and plenty do, the trades business has quietly become the bank.

The cost turns up in three places

The first is interest. A shortfall that sits on a credit card or an overdraft is a cost sitting on top of a job that was already priced and won.

The second is capacity. Once the limits are used up, the next project cannot be funded, so growth stops even though the work is there for the taking.

The third is the one nobody puts on a balance sheet. Sleep. Weekends. The mood in the ute on the way home.

Why it is hard to see from the tools

Most owners feel this long before they can measure it. The numbers that would explain it sit in three places at once: the accounting file, the job files and the owner’s head.

Reports usually arrive months after the decisions were made. By then the quote has gone out, the materials are ordered and the next project has started. Being busy is exactly what stops an owner from standing back and looking at it.

Where Money & Mindset comes in

Money & Mindset sits inside The G.O.A.T Tradie Business App. It is one of the sections TAG members can get to through the partner link below.

It takes the money side of a trades or building business and puts it in plain English, in short pieces, on the phone already in your pocket. Cash Flow Cycle is the module built for this exact problem. It works through what happens to money in your business, from the day it leaves to the day it finally comes back, and what the distance between those two dates is doing to you.

There is a calculator built into it as well, so the conversation stops being general and starts being about your business.

No spreadsheets. No finance degree. No three-hour webinar.

What members take away from it

• A clear picture of where their cash sits, and how long it sits there
• The language for a straighter conversation with the accountant, the bank and the builder
• A sense of which decisions move the number, and which ones just feel busy
• Something that can be worked through in an evening, not a quarter

From a member

“I could not recommend the G.O.A.T Tradie App enough.”

— Harry Steptoe, True Line Carpentry

Where to start

TAG members can open Money & Mindset through the partner page below. Start with Cash Flow Cycle, then work through the rest at your own pace.

Get Started with The G.O.A.T Tradie®

Get Started: partners.goattradie.app/tag

Need a hand? Call 1800 957 154. Real people on the phone ready to support you.