Mike AndesFounder, Augusta Lawn Care and Homeworks · Founder of Homeworks and Augusta Lawn Care

Preventing Cashflow DISASTERS! #homeservice #smallbusiness

11 Jul 2024 · 1 min

Watch on YouTube

0:54

Mike Andes presents a short YouTube video case study about cash-flow risk in home-service businesses. He describes a lawn care and landscaping company with over $2 million in annual revenue that took a large headquarters project (over $200,000) where newly installed trees were explicitly not warrantied and required customer watering/maintenance. The customer refused to pay the final $58,000 after the trees died; the loss and cost overruns hurt the company’s cash flow for about the first half of the year. Andes’ point: large projects can be profitable but create significant cash-flow exposure for smaller firms if contracts and contingency planning aren’t managed.

Questions this video answers

Over $2 million per year.

Over $200,000 for the project.

$58,000 (final invoice amount withheld).

July 11, 2024.

Chapters

Check out this deer. Let's go. Yesterday, I was talking to a business owner in lawn care and landscaping. There's over $2 million in annual revenue. He had a big project for a headquarter building. It was over $200,000 for the project itself. Turns out, inside the contract, he had said that the. The trees they installed were not warrantied, and it was up to the customer to water the plants, make sure they were fine. Well, they ended up dying, and of course, the company decided they were not going to pay the last $58,000 of the invoice because these trees had died, even though it was in the contract and it said that they were not warrantied. Turns out, fortunately, because he had a $2 million business, they was able to stay afloat and only hurt him for a few months. Hurt cash flow for the first half of the year, however, for small businesses, that could wipe them out. So I'm not against big projects. Make sure, you know, you get yourself into in terms of cash flow management, cost of materials that went way over budget on the job and lost a lot of money.