194. Cashflow Control With Andy Skarda

Understand that not all cash in your bank account is 'yours'; a significant portion is often pre-allocated for subcontractors and suppliers. Misusing this leads to financial instability.

Know your numbers beyond just revenue. Focus on gross margin and ensure it converts into actual cash, as revenue alone is a 'vanity metric' that doesn't guarantee profit or stability.

Implement a 12-month rolling cash flow plan. This helps anticipate financial needs, such as seasonal payments and overheads, allowing you to build reserves during surplus months.

Employ a specialized bookkeeper with construction industry experience. They understand nuances like 'work-in-progress accounting adjustments' and can provide accurate, timely financial reports.

Prioritize building cash reserves equal to at least 12 months of overheads. This acts as an 'insurance policy,' reducing stress and allowing you to be more selective with projects, choosing those with better margins.