You’re Making Sales… So Where’s the Profit?

Distinguish between cash flow (for running your business) and profit (your personal take-home portion). Don't lump them together; separate them into different accounts.

Implement a 'Profit First' system by setting up dedicated bank accounts for income, operating expenses, taxes, and profit, then allocate percentages of your income to each.

Calculate 'real revenue' by subtracting materials and subcontractor costs from your total revenue. This is the true figure you should base your business operations and decisions on.

Prioritize profit by adopting the formula: Revenue - Profit = Expenses. This mindset shift ensures profit is considered first, not last.

For snow removal companies, create specific accounts for equipment or to cover potential increases in seasonal costs (like salt prices) to manage upfront expenses effectively.

Allocate a separate 'owner's pay' from your profit distributions. Your compensation as an employee should be distinct from the profit you take from the business.

Engage with industry peer groups, like those offered by SIMA, to share best practices and gain insights from other contractors, even if you're not a formal member.