Quick Tips From Success Coach Mike Eisenhuth – Profit versus Cash

Do you know the difference between cash flow and profit? Many small business owners assume that cash flow will be at least as positive as profitability at any given time. Additionally, they assume they can count on their financing requirements to be predicted by their expected profits and losses as indicated on the Income Statement. But this is incorrect and a dangerous assumption to make. As a contractor, you have other business dynamics occurring that may require cash availability greatly beyond what you would predict from the Income Statement. These dynamics include:

· customer invoicing schedules in arrears of incurred cost

· slow-paying customers

· significant retention withheld by customers

· disputes about change orders and extra work

· cash flow required to carry out succession planning arrangements

It is these dynamics, among others, that make the Cash Flow Statement and proactive cash flow planning indispensable tools in your business.




Mike Eisenhuth
Mike Eisenhuth

As a Success Coach, Mike works closely with the Success Coaching team to deliver products and services to the LandOpt Network of Contractors. This includes providing the coaching, training and mentoring support necessary to guide each contractor from the initial kick-off phase through the transformation process. This includes, but is not limited to, weekly PAR calls, monthly site visits and role-specific training in the Pittsburgh training center

  • isonomia
    Posted at 15:13h, 16 February Reply

    Thanks. Let’s hope i do a bit better with February’s goals.

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