Have You accidentally “dammed” your cash flow?

Have you accidentally damned your cash flow in your business? I don’t mean like doomed it to Hades. I mean damned. Have you stopped somehow the flow of cash that ultimately ends up in your bank account? Chances are if you’re not making money, the answer is absolutely yes. So where is the money stopping? Most people really don’t understand, do not have a good conceptual understanding of how money moves through a home service business, specifically painting.

So, I want to paint the picture for you here, and maybe this will help you figure out, okay, where’s the money being lost? First off, money starts coming in first with marketing. Meaning you have to take some level of money and you have to invest it in marketing so that you can generate leads. Now you may have a lot of word of mouth marketing.

Maybe you don’t market much at all. That’s a another conversation for another time. That will also lead you to a bad place. It’s very risky and it certainly won’t help you sell your business or build a fortune. But you’ve got to put the money first into marketing. Okay? It generates leads and then guess what? the money from marketing.

And even if you’ve just been in business and you’ve been painting and you’ve got vans and you’ve got equipment and you’re out there sweating and running estimates, that’s still money because it’s your personal time. If you paid someone else to do that, it would be real money, right? You can’t think that your time is not valuable. You can’t fail to put a value on your time with these activities you do that make the phone ring.

Even if it’s just how you work and what you do. Well, guess what? That money goes into marketing. Where does it go next? Sales. If you’ve got a bad sales process, if you’re a bad salesperson, if your technique is not good, if you’re failing to do the things that we know, sell painting at high prices and high conversion rates, then guess what? That money gets here to marketing.

And then you’ve got a little bitty place where the money can go from sales to operations. In operations, where does the money get lost? poor field management, no job costing, guessing how long it takes to do things, not managing your crews properly. You can sell it high, you can market it well, but if it gets to operations and the budget and the budget rather gets blown, there’s no money left.

We’ve all worked on large projects, small projects where things get out of hand and basically we have paid to paint something for someone else. And then once it goes from operations, it goes into finance. What’s finance? I see a lot of folks that have good gross profits, decent marketing, decent sales, but then they blow all their money in overhead.

Whether it’s staff or death by a thousand cuts, you accumulate these obligations monthly and they slowly build. And after a while, you’ll find that what you’re doing is you’re painting houses for people and you are employing people, but you’re not making any money commiserate with the risk and time that you spend as the owner.

So, you’ve got to financially manage your overhead. And then finally the last place money goes is into customer reactivation and retention which goes back to marketing. And this aspect creates the loop again and it goes round and round. If you don’t do this at the end, what happens is the money kind of fizzles and fades.

And then when you look at the marketing now you’re marketing to people that are net new who do not know you. And in those situations when they’re not repeat and referral, the jobs are 60% smaller, they close at lower rates and the acquisition cost is anywhere from 10 to 20 times more than the money that would be spent here.

And I guess there is one final place where money gets lost and that is in equity. And that is when you fail to buy your own shop. You’re paying rent. When you don’t invest your money properly, where you spend more personally, where you accumulate business and personal debt, that can also rob you of money left over. Even if you’re killing it, you can squander it and waste it.

So, if you’re not reaching your financial goals, chances are somewhere in this pathway, something’s broken. The good news is I have looked at this pathway so many times that if you and I spend an hour on the phone, I can say here and here are your biggest dams that’s blocking your cash flow. If you do this and this and this here and this and this here, we’re going to open up the floodgates financially.
But chances are you will never see that because you simply lack the experience of having analyzed business systems and finances for painting companies hundreds of times.

So if you would like for me to look at your business and find where the cash is being killed, email me brandon@painersacademy.com or visit painainersacademy.com. download our free resources and we will get you the help you need or one of our CLE coaches, the highest level of experience of any coaching team in the industry can come right beside you and tell you what to do so you don’t have to go it alone. I’m standing by for your call.