Daniel Hunnan, a CPA and former painting contractor, outlines four cash-flow strategies for painting businesses. Most painting companies fail not from unprofitability but from running out of cash before profits arrive. His plays include collecting receivables aggressively, requiring deposits that cover payroll and customer-acquisition costs, and paying subcontractors only after you get paid.
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If your painting business is busy but your bank account feels like it's always on life support, this video is for you. Most painting contractors don't fail because they're unprofitable, they fail because they run out of cash before the profit shows up. Today I'm going to walk you through 4 cash flow plays that let you scale without ever running out of money, even when you're growing fast. And this video is especially for you if you're super low on cash right now, need to know what to do this week not next quarter. 2, you're in a state with legally limited deposits like California, Nevada, Maryland, Maine, or Massachusetts, and you're not sure how to manage cash legally. Or 3, you're trying to scale with employees or subcontractors and payroll keeps stressing the business. These are the exact plays we use with painting businesses when cash gets tight or growth starts stressing the business. So let's get into it. Hey, I'm Daniel Hunnan. I'm a CPA and former painting business owner. For the last 10 years, I've helped hundreds of painting contractors grow from startup to multimillion-dollar businesses, and here's what I've learned: cash flow is almost always the bottleneck before systems, people, and before marketing. So think of this video as a cash flow playbook. Each play starts with a situation, and if that situation sounds like you, run the play. Quick note before we dive in: if you want a more structured breakdown of budgeting, pricing, cash flow, and taxes, I wrote a book called Profitable Painter that walks you through the exact financial frameworks we use with our private clients. You can get a free copy. It's usually $20 on Amazon. All you gotta do is click the link in the description and just cover the shipping. Now let's fix your cash flow. Play number 1, DEFCON 1 cash flow play. Situation, you have less than 1 month of overhead costs as cash in the bank. If this is you, nothing else matters. You're in cash survival mode. Here's the play. Step 1: Collect every dollar of accounts receivable. This is not the time to be polite. Overdue invoices should already be paid. Cash you've earned but haven't collected is the most expensive loan you're giving out. Step 2: Raise deposits to the legal limit. If your state allows a 30%, 40%, or 50% deposit, take it. Deposits aren't greed, they're working capital. Step 3: Install progress payments. Weekly progress payments, phase-based, mile-based. If work is happening and cash isn't moving, you've built a broken system. Step 4, pay subs after you get paid. If a subcontractor gets paid faster than your customer pays you, your cash flow will always be upside down. Step 5, change payroll timing. If legally allowed in your state, pay employees on the 1st and the 15th, not weekly. That alone can buy you 2 extra weeks of float. Step 6: Stack vendor float. Use vendor accounts like Sherwin-Williams or Benjamin Moore for 30 days, then pay with a business credit card. That's another 30 days of interest float. This play isn't elegant, it's about survival. Once you have oxygen, then you can scale. Play number 2: Deposits Legally Limited Play. Here's the situation: your state caps deposits, like California, Nevada, Massachusetts, Maryland, or Maine. If this is you, You don't panic, you get smarter. Step 1, collect the maximum legal deposit. Whatever the law allows, take that. Step 2, keep a card or ACH on file. Every customer, you have them sign a payment authorization form, no exceptions. That way you never have to chase money. You just charge them when you complete the work. Step 3, charge progress payments aggressively, daily if needed, or phase-based, milestone-based. Bottom line is you're not waiting till the end of the job to get paid. You get paid as the value is delivered. This is especially helpful for painting businesses in California and Nevada where you're limited to 10% or $1,000, whichever is less, as a deposit. This one change alone dramatically reduces accounts receivable stress, cash crunches, and this is how you legally operate and keep cash moving. Play number 3. Scale with employees. Here's the situation. You're scaling fast with employee painters. Employees are not the cash flow enemy. Bad deposits are. Now here's the play. Your deposit needs to cover two things: your customer acquisition costs, which is your marketing plus your sales cost, and your employee labor. For most employee-based models, that usually means about a 50% deposit. If it doesn't cover those two things, you're financing payroll with hope. You can downsell strategically. For example, you might say something like this to your potential customer: we'll do a 40% deposit down instead of 50% if you agree to a video testimonial after the job, assuming that you're happy. So if they have some hesitancy about a 50% deposit, you can just simply do a downsell if they promise to do a video testimonial. So you preserve your cash and build marketing assets. That upfront cash covers customer acquisition cost, direct labor, and lets you scale crews without cash strain. This is how employee-based painting businesses grow without payroll anxiety. Play number 4, scale with subcontractors. Here's the situation. You're scaling fast with subcontractors. This is the fastest cash flow positive model in painting if you do it right. Step 1, collect a 30% deposit or higher, and that deposit should cover your customer acquisition cost for the job, and the customer acquisition costs for the next job. Step 2, pay subs after you get paid. Always. If you flip on this, you will permanently struggle with cash. Step 3, front marketing with owner cash. If deposits fund your customer acquisition costs, you're no longer floating growth on your credit card. This is why a well-run sub model often feels flush with cash. So let's recap the plays. Play 1, cash emergency. You collect, delay, float, and survive. Play 2: deposit limits. If you're in Nevada, California, Massachusetts, Maine, Maryland, you get a payment authorization form and you do progress payments aggressively. Play number 3: scaling with employees. Deposits should fund your customer acquisition cost and your payroll up front. Play number 4: subcontractors. Deposits should fund your customer acquisition costs for this customer that you're getting and the next customer. Cash flow isn't luck, it's designed. Most painters don't have a revenue problem, they have a timing problem. If this video helps you understand how to control your cash flow, the next step is knowing how much you should actually be making in your painting business. In the next video, I break down how much you should be making in your painting business based off the revenue and the roles you play in your business. Click the video on the screen now to watch how much you should be making in your painting business. Fix the timing and the money starts to behave.
