This is how capital (cash) flows in and out of the business over time.  Poor cash flow is a primary reason for contractors failing or their profitable growth being seriously constrained.  

When we looked at the basics of project profitability and compared it to a paycheck of $1,000 per week we saw that we only had $50 per week for taxes, savings, unexpected expenses and discretionary spending.  For a contractor discretionary spending includes things like investment in new tools, equipment and technologies.  

We all know the pressures of managing a household budget that was that tight.  We were thankful for the weeks of overtime and dreaded the weeks with rain or no work.  

• How much more money would you have to have saved if you got paid monthly instead of weekly?
• What if it were every 45, 60 or even 90 days like many contractors?  
• What if 10% of your gross income ($100 per week) were held back from your payment for a year or more?  That’s retention!  

Remember that a contracting business has three major constraints to growth.  Sustainable growth is about systematically removing each of those constraints:

• Available Market - Getting quality work
• Qualified Labor in a tight market
• Capital - Essentially the “savings” required because cash flow follows profitability