Picture this: You’re looking at your profit and loss statement. $2.3 million in revenue. $340,000 in profit. You should be celebrating, right?

But here you are, putting your truck payment on a credit card. Again. Sound familiar?

Last week, a contractor showed me exactly this situation. On paper, he was killing it. In his bank account? Less than $8,000. He’s not alone. And neither are you. If you’re a contractor who’s booked solid but can’t figure out why you’re always broke, this article is going to change everything. I’m talking about real money – like having $40,000 sitting in your account instead of scrambling to make payroll every Friday.

Let’s fix this mess.

Why Profitable Contractors Have Empty Bank Accounts

Here’s what nobody tells you when you start your contracting business: Profit and cash are two completely different animals. Think of it like this – profit is like your report card. It tells you how well you did. Cash is like your lunch money. It’s what you actually have to spend today. You can have straight A’s (profit) and still have no lunch money (cash). That’s exactly what’s happening to most contractors right now.

The Three Big Projects That Almost Bankrupted a Successful Contractor

Let me tell you about this contractor I mentioned. He had three beautiful projects running:

• A $400,000 office renovation
• A $300,000 restaurant buildout
• A $250,000 custom home addition

His profit margins? A solid 15%. The math says he should be making $150,000 profit on these jobs combined. But his bank account had $8,000. He wasn’t bad at business. He had a cash flow problem. And if you’re reading this thinking “that sounds exactly like me,” keep reading. Because the solution is simpler than you think.

The Bathtub Theory: Why Your Money Disappears

Imagine your business cash flow is like a bathtub. (Stay with me here – this is going to make everything crystal clear.) Money flows IN from the faucet – that’s your customers paying you. Money drains OUT the bottom – that’s you paying your bills, suppliers, and crew.

Simple, right? Here’s the problem: Your faucet and your drain aren’t synced up.

The $100,000 Kitchen Remodel That Nearly Broke a Contractor

Let’s use real numbers to show you exactly what I mean. You land a $100,000 kitchen remodel. Awesome! You’re thinking about that $15,000 profit you’ll make.

But here’s what actually happens:

Day 1: You order $30,000 in cabinets and materials. Money leaves your bathtub immediately.
Week 1: You pay your crew $5,000. Another drain on the tub.
Week 2: Another $5,000 to your crew. The tub’s getting empty.
Week 3: Crew again – $5,000. Plus another $10,000 in materials.
Week 4: Final crew payment this month – $5,000.

So far, you’ve spent $50,000 in the first month. But what came IN during that month? Maybe $10,000 upfront if you’re lucky. The next payment? Not for another 30 days. You’ve spent $50,000 but only collected $10,000. Your bathtub is draining five times faster than it’s filling.

The $200,000 Hidden in Other People’s Pockets

Now here’s where it gets really painful. Multiply this problem by three or four projects. Right now, you probably have $200,000 or more sitting out there “in the field”:

• Unpaid invoices waiting 30-60 days
• Materials you’ve installed but haven’t billed yet
• Work that’s 80% done but not collectible
• Change orders that haven’t been approved
• Retainage being held for months

That’s YOUR money. You’ve earned it. It’s just stuck in other people’s pockets right now.

Meanwhile:

• Home Depot wants payment in 30 days (or they cut you off)
• Your crew needs paychecks every single Friday (or they walk)
• The concrete supplier gives you Net 15 if you’re lucky
• Your truck payment is due on the 1st
• Insurance is hitting on the 15th

Your profit is real. It’s just not in your bank account yet.

How Jake the Framer Went From Panic to $42,000 in the Bank

Let me show you exactly how one contractor fixed this problem. Jake runs a framing company. $1.8 million a year, mostly framing houses for production builders. Eight guys on the crew. Solid business. But Jake was dying a slow death from cash flow problems.

The 67-Day Death Cycle

Here was Jake’s problem: He’d frame an entire house, send an invoice for $15,000, then wait 45-60 days to get paid. Meanwhile, his 8-person crew cost him $12,000 every two weeks. We sat down and mapped out his cash cycle. From the moment he spent a dollar to the moment he got it back: 67 days. By the time he got paid for job one, he’d already fronted payroll for jobs two, three, and four. He was basically giving his customers a free loan for two months. No wonder he was checking his bank balance every morning in full panic mode.

Three Changes That Put $42,000 in Jake’s Account

Here’s exactly what we changed:

Change #1: Progress Billing
Instead of billing $15,000 when the framing was complete, Jake now bills:

• $5,000 when the foundation is ready
• $5,000 when the walls go up
• $5,000 at completion

This ONE change cut his cash cycle from 67 days to 31 days. That’s 36 days faster to get his money.

Change #2: Supplier Negotiations
We called his lumber supplier. Jake had been with them for 6 years, always paid on time. We asked for 45-day terms instead of 15. They said yes. That bought him another 30 days of breathing room on his biggest expense.

Change #3: Smart Line of Credit
We set up a $75,000 line of credit. Not to live on. Not for new trucks. Just as a bridge. When payroll hits and he’s waiting on three invoices, he’s covered. When the invoice gets paid, he pays back the line. Simple.

The Result?

Jake went from checking his bank balance in terror every morning to having $42,000 consistently in his operating account. Same business. Same profit. Just better timing. He didn’t work harder. He didn’t get more jobs. He just got his money faster.

Your Action Plan: Stop Being Profitable But Broke This Week

You don’t need a fancy consultant or expensive software. You need to do these three things THIS WEEK:

Step 1: Map Your Cash Cycle (30 Minutes)

Take ONE typical job. Grab a piece of paper. Draw two columns.

Left column: Every dollar that goes OUT and what day it leaves
Right column: Every dollar that comes IN and what day it arrives

The gap between these columns? That’s why you’re broke. Most contractors discover they’re floating their customers for 45-60 days without realizing it.

Step 2: Fix Your Billing Today (1 Phone Call)

If you’re billing at completion, stop. Today.

Switch to progress billing immediately:

• Foundation: 25%
• Framing/Rough-in: 25%
• Mechanicals complete: 25%
• Final: 25%

Or whatever makes sense for your trade. The point is to get money moving through your bathtub faster. Call your next customer. Tell them about the new billing structure. Most won’t even blink.

Step 3: Negotiate Better Terms (3 Phone Calls)

Call your top three suppliers right now. Say this: “I’ve been a customer for X years. I always pay on time. I need better payment terms. Can we move from Net 15 to Net 45?”

If you’re paying in 10 days, ask for 30. If you’re at 30, ask for 45. If you’re at 45, ask for 60. The worst they can say is no. But most will work with good contractors who pay their bills.

Bonus Step: Stop Being Your Customer’s Bank

That “final payment due in 30 days” nonsense? Kill it. Make final payment due on completion. Period. You’re a contractor, not Wells Fargo. You’re not in the business of giving interest-free loans. If they need 30 days to pay, they can get a loan from an actual bank.

The Bottom Line: You Can Fix This Today

Being profitable but broke isn’t a curse. It’s not because you’re bad at business. It’s not because construction is hard. It’s because your timing is off. Your money is out there. It exists. It’s just stuck in the wrong pockets at the wrong time. Fix your cash cycle, and you fix your business. It really is that simple.

Jake did it. That contractor with $8,000 in the bank did it. Hundreds of my clients have done it.

Tomorrow morning, you could wake up and NOT check your bank balance in fear. You could actually take a vacation without worrying about making payroll. You could stop putting truck payments on credit cards. All it takes is getting your money to show up when you need it, not 60 days later.

Your profitable business is waiting. Time to let it actually put money in your bank account.

Ready to fix your cash flow for good?

Stop being the contractor who’s booked solid but broke. I help contractors like you find the money that’s already in your business – it’s just stuck in the wrong places.

Let’s map out your cash cycle and find that hidden money. Book a free 15-minute Cash Flow Review call and I’ll show you exactly where your money is hiding.

Because being profitable shouldn’t mean being broke.