Highly Profitable Plumbing Contractors Use O.P.M. To Fund Working Capital Needs

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One Unique Cash-Flow Strategy of Highly Profitable Plumbing Contractors

Working Capital ? The definitions for working capital as it applies to a Plumbing Contractors Company, small or large, is fairly complex and can take a lot of room to explain and since we are primarily concerned about helping your Plumbing Company generate more cash flow and profits I will keep it nice and easy.

Plumbing Companies ? Need short term liquid working capital such as cash, lines of credit, loans, owner financing, credit cards, supplier accounts and other forms of money to conduct daily operations.

The Larger Your Plumbing Company ? The more likely you could end up operating like a bank without the hundreds of ways to generate revenues from fee income and interest income that banks use.

The Most Popular Method ? Designed by investors and developers and shrewd business people who understand the concept of divide and conquer is for Plumbing Contractors to get little or no down payment for a construction project, do all the work, including change orders and then try to collect their money.

Most Plumbing Contractors Labor Under The Misunderstanding ? That profit comes from installing pipe and fixtures and everything else is overhead. Nothing could be further from the truth; however, like most myths and misunderstandings it is easy to grasp and will slip by the amygdala without hesitation because it ?Sounds Right?.

Overhead Is A ?Trigger Word? ? With many different definitions and depending on who you are and your paradigm or profit. The word ?overhead? triggers a neural link which searches the far reaches of your mind to bring forth a mental image, sound or feeling into depending on how you process information which will prove or disprove your preconceived notions.

Percentage of direct and indirect cost of goods sold as a percentage of income.

Percentage of direct and indirect cost of goods sold as a percentage of income.
Percentage of field labor cost including payroll taxes as a percentage of income.
Industry comparison reports of similar sized firms in their geographic area
Ratio of field employee as a factor of gross sales.
Ratio of field employees to material costs to estimate how much material is being used for side jobs.
Debt to Equity Ratio
Current Ratio
And a lot more?

Your Mental Reasoning Power Is Like A Lawyer ? It will determine what your core beliefs are and gather whatever historical evidence you have stored in your short and long-term memory to argue with intensity for your preconceived notion.

We See It Happen Day In And Day Out ? A contractor will contact us for help because they are on the verge of going out of business. They will upload a copy of their QuickBooks file and we have a process which takes roughly 20 minutes to research their QuickBooks file and issue an internal report about the financial health of the construction company and the likelihood they will be open to change.

Paperwork is the Worst

To Paraphrase A Quote ? And adapt it to Plumbing Contractors ?It is not the strongest, toughest, hardest working Plumbing Contractor that survives, nor the most intelligent among them. It is the Plumbing Contractors that are most adaptable to change.?

The Internal Report We Generate ? Is an opinion of the current state of the Plumbing Contractor?s Company based upon data we find in QuickBooks:

outsourcing the contractors bookkeeping service to a construction accounting firm that understands their industry and focusing their time and effort to understand and interpret the financial and job costing reports to update their business strategy. The medium profitable Plumbing Contractors tend to have in-house bookkeepers and have heard of business strategy but don?t see the value in it. The least profitable ones do everything including their contractors bookkeeping services themselves until something happens to cause them to grow their Plumbing Contracting Company beyond their level of construction accounting competency and go bankrupt or they get to old and tired to keep plumbing and quit.

There is Nothing Like a Joke About Collecting Money

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Most Plumbing Contractors ? And other contractors prefer to keep everything in their head. Then when it comes time to collect their money they find themselves having to re-sell the job and talk their customer into parting with their money after the services have been performed. It is similar to the old bartender joke:

Step #01 ? Man walks into a bar and says ?Hurry up bartender, pour me a double before the trouble starts!?

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