Tony's construction company grew through acquisitions but now has cash-flow problems and declining profits. Evan advises cutting low-value services, focusing on top customers, and asking them what else they need. Trim the business down, strengthen key relationships, and build new revenue from there.
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Hi, I'm Evan Carmichael. Welcome to another edition of Ask Evan. In today's episode, I'm going to answer a question from one of my newsletter readers, Tony, who runs a construction company. And he found as he was starting up, he ran a successful company, wanted to offer more services, so he partnered up and acquired a whole bunch of other businesses to be a one-stop shop, but now it's finding that it's falling apart and people aren't paying their bills on time and it's losing money and wanted some advice on how to, you know, fix the situation and get back on track. So Tony, thanks for the question. Really sorry to hear about your situation. It can be common for a lot of entrepreneurs to try to grow too quickly or grow in too many areas and then be faced with a cash crunch. I think one of the most important rules in business is you want to build around your customer. And it sounds like you were trying to do that and you had your construction company and wanted to bring on partners and bring on other businesses to provide more value to your customers. But I would rethink all of the different services that you have and see if, you know, maybe some of them are not revenue-producing or they're not really adding a lot of value to your customers. Especially if you're in a cash crunch situation, I'd look at your top customers, see what value they're getting from you, and, you know, which services that you're offering that you may have to cut loose. And those are tough decisions because that's money lost and employee jobs potentially as well. But you want to make sure that you're able to continue on as a business. And I try to build it— again, go back to that mindset of building around your customers and focus on only the services that are really adding a lot of value to your major clients. So look at every business that you brought on and see, do we really need to have all of these businesses still as part of what we do? And can we trim the areas, you know, cut them out that are not really adding a lot of value to the business. Remember that to, to make money, you have to provide a lot of value. And the more value you make, the more value you provide, the more money you're gonna make, right? So talk to your top clients, see maybe if there's still things that you're not doing that you could do to help solve some of their problems. And that could be another path of additional revenue coming into your business to help get your company up to the next level and also provide, you know, more value to your clients. They're gonna like you more, they're gonna give you bigger deals, they're They're gonna stay with you for longer, they're gonna refer more business to you. So you wanna tie your business around your customers, really focus on their needs, their pains, and cut everything else in the business so you can get back to profitability. Hopefully that helps. Uh, if you guys like the video, please give it a thumbs up below. If you have some thoughts, if you have a question as well, I'd love to hear it. If you wanna leave a comment under the video and stay tuned for next episode.
