Trade companies that succeed with small jobs often crash when they scale up without changing how they operate. Taking on bigger contracts, new markets, or new services at once multiplies the risk, especially without forecasting and contingency plans.
A lot of times when business, especially in the trades, when a company goes out of business and everybody talks about cash flow being the reason, cash flow problems are really a result. And they're a result of decisions that were made months, sometimes years in advance, right? You could have a company that is successful over and over again doing $45,000 jobs, $50,000 jobs. And then they make a decision that, okay, we're going to go into a new geographic location, or we're going to do a $450,000 job, or we're going to do a different type of job. We're successful at what we're doing. We can change course and add things to our arsenal of work. And what happens is they go into, they make those decisions and they go into them under the same processes, the same mentality, the same ideas and way of working and doing business. That got them to the successful $45,000 job low, right? They didn't make the changes necessary. And by the time that— what— by the time that reality hits, there's problems. And that gets compounded when they stack these changes, right? They do a new type of work in a new location and it's a foreign— and it's a 10x revenue type of job. That those decisions need to be planned out and worst-case scenarios need to be forecasted out and looked at and at least have plans in place in case the worst happens, right? But if you just go into those decisions and you make— you start changing things up without planning it well in advance, you're going to see that the wheels start falling off and ultimately it becomes a problem. Talk soon.
Estimated Payments.. What are they? Why you should care. #construction #trades #taxes
