The Builders Fight

 In Coaching, Education, Finance

Going into 2022 after a massively exhausting 2021 seems like a relief, however, this is likely not the case.

The year 2021 had it all. There is no need to explain everything that happened, however everything that Covid threw at us came with huge emotional highs and lows, financial wins and losses, relationship rollercoasters, and I am sure plenty of health highs and lows too.

The joy of having a nice break and coming up for air is everything a business and person needs. The problem with 2022 is the hangover we are all about to have.

We are going to see massive financial, emotional, and structural movements this year. 

Firstly, financial movements are going to cause the initial pain. After a profitable year for many builders, the pain started in July 2021, and you probably didn’t even know it.

It was a super busy year, and a heap of contracts were signed and clients were throwing money at you to hurry and get started. A lot of builders felt indestructible. The problem with this is you felt rich and come June the profits looked good (well for now) and you thought you had better burn some cash quickly by buying some assets so you don’t pay huge amounts of tax. The concerning part of your brain was removed when your accountant possibly agreed with this decision to help say they helped reduce your tax.

Now the pain! You have bought some assets, so you don’t pay huge taxes. You now have destroyed your cash flow a little, you then get hit with end-of-financial year GST, BAS, super, etc.

That is okay, you have plenty of work, however you need more materials to get to your next progress claims, they cannot come soon enough, so you start another job to offset this and take a huge deposit. Phew, now cash flow is fine again. The problem with this is, it is not your money to use because it belongs to the client’s job. You should know this, but most small businesses just look at their bank account, and as long as it shows well you think you are fine right!

Okay, so we live to survive another day because cash is okay, however now it is starting to disappear because we cannot get the materials we need to get to our next progress claim, so we put in an early claim trying our luck, and then the bank says sorry you have not hit what the contract states. Crap, now what do we do? So, we just get more trades and throw more at it in the hope of making it happen. That is okay because their bills will come after my claims come through.

Cool, but now we must do this for all jobs at once but now we don’t have any more trades or supplies to make this all happen. 

Phew, we got a couple of claims through and now I can have a good Christmas and not think about it. You enjoy the token caravan trip and smile at Christmas, enjoy time with the kids, and take some summer selfies but now the emails start coming through requesting that overdue payment. 

It is a new year, so we set some big goals to do it right, as more emails come through asking for payment. 

Big goals equal good intentions, however, is it too late already because cash is drying up and you are unsure what to do???

You are too busy to think of the future and just want to finish your current jobs because your brain is fried with everything that happened in 2021 and now 2022 has started the same way except you have a bit more energy due to the break. You are just tricking yourself though because your brain didn’t really settle, did it?

The problem now is, you are close to finishing your jobs but you are scraping the barrel. Cash is super dry.

Don’t worry, my next few jobs will fix this. 

Oh wait, I was too busy to market and I was too busy to meet with clients. 

Now I don’t have the cash to be able to advertise. So, I’ll throw together some quick social ads that might work. Nope, they don’t. So now what do I do?

Wait, I’ll send out some emails and reach out to some people who I didn’t have time for.

They slowly respond and eventually have a meeting with you, however now they are in the box seat because they have time to choose their builder and negotiate the price.

But you don’t have time. You have overheads to pay for while nothing is coming in.

So, you accept a crappy job, at a low margin and now the approvals and banks are taking forever. More overheads to pay while nothing is coming in.

Ooh, I’ll take a deposit again just to get some cash in the bank.

Is this all sounding familiar?

Guess what, post this last comment you probably have 2 months left at most before you shut up shop. You are already ready to have a nervous breakdown and your family is probably ready to leave you because you are not fun to be around. So you reach out to your mates, what mates? You don’t have any because you have been too busy for them.

Don’t let yourself get to this position because so many builders do, and I see it all too often.

Everything is fixable; however, prevention is better than cure.

Don’t leave it until the death because it could be the death of you.

This can be a builder’s typical journey, don’t let it be yours!

I am personally so passionate about this topic and making sure builders don’t go through this pain of running a business.

A little while ago I spoke at multiple HIA events and highlighted some key areas that can help builders and the benefit it brought to so many builders was huge. So I want to do this again.

If you feel like you are constantly having the builders fight like above or want to avoid it like the plague, reach out to us because I would like to offer you to join us for FREE at a builders event where we are going to share on the following: 

  • Knowing your true financial position 
  • Ways to help cashflow
  • How to grow your profits and margin

This is purely us wanting to help the industry.

Sometimes we just need a nudge. This could be your nudge to make a difference in your life.

Register here