Top 7 False Beliefs for Contractors

🚧 Attention Contractors: Most of my subscribers are trade contractors. Over the past few weeks I've been devoting my Saturday Newsletters to you.

Running a construction trade business isn’t for the faint of heart. Whether it’s juggling deadlines, managing costs, or chasing down payments, contractors face unique challenges that can make or break their success.

Spotlight: I'm currently working with two electrical trade contractors looking to grow revenue from $3 million to $5 million in 2025, and this list hits home for them.

Here’s a look at the top 7 false beliefs facing trade contractors—and how to turn these obstacles into opportunities.

1. Cash Flow Management

• False Belief: "If I just increase my revenue, my cash flow problems will disappear."

• Reality: Growing revenue without a plan can make cash flow issues worse. Delayed payments and slow project cycles can create gaps, leaving you struggling to cover payroll or material costs.

Tip: Build a cash flow forecast and negotiate favorable payment terms to stay ahead.

2. Labor Shortages

• False Belief: "If I pay more, I’ll automatically attract the right workers."

• Reality: While competitive pay helps, workers also value training, stability, and a positive work environment. Without these, higher pay alone won’t keep them around.

Tip: Invest in training programs and partner with local trade schools to build a reliable talent pipeline.

3. Rising Material Costs

• False Belief: "There’s nothing I can do about rising prices—it’s just the cost of doing business."

• Reality: You can minimize the impact by locking in supplier contracts, exploring alternatives, and passing some costs onto clients in a fair, transparent way.

Tip: Know your Gross Profit Margin and stick to it to maintain profitability! This includes Materials and Labor.

4. Debt Management

• False Belief: "I can grow my way out of debt." Or, "Debt is bad and should be avoided at all costs."

• Reality: The right kind of debt can be a powerful tool for growth when managed wisely. The issue arises when businesses rely on high-interest or short-term loans without a repayment strategy.

Tip: Follow the 10% rule: You should have 10% of annual revenue in the bank to fund growth-that's $300K for a $3 million contractor. This money can come as a permanent working capital loan from banks or investors.

5. Compliance and Regulations

• False Belief: "Compliance is just red tape—I’ll deal with it when I have to."

• Reality: Ignoring compliance upfront leads to expensive fines, legal issues, and project delays. Proactive planning saves time, money, and stress.

Tip: Stay proactive by implementing compliance checklists and investing in training for your team.

6. Cost Overruns

• False Belief: "Cost overruns are just part of the business—you can’t avoid them."

• Reality: While some overruns are inevitable, many can be mitigated with better planning, clear communication, and realistic contingencies.

Tip: Create detailed project plans with contingencies for unexpected costs.

7. Lack of Financial Literacy

• False Belief: "I don’t need to understand my finances—I’ll just leave it to my accountant."

• Reality: While accountants are essential, understanding your own financial reports empowers you to make better business decisions.

Tip: Work with a financial coach to master your profit and loss, cash flow, and balance sheets.

Ready to Overcome These Challenges?

If any of these challenges sound familiar, you’re not alone. The good news? You can take control of your business finances and set yourself up for growth in 2025.

Join me for my LinkedIn Live workshop:
“Investor Ready: How to Make Your Business Attractive to Bankers and Investors”

📅 When: January 7th at 10AM EST
📍 Where: LinkedIn Live (RSVP here)

We’ll cover actionable steps to fix your accounting disconnect, master financial reports, and leverage debt wisely—all to make your business irresistible to investors and bankers.

🎯 Don’t just survive—thrive. See you there!

Patrick Shurney, MBA
Founder, 3P Consulting
📞 443.539.6276
🌐 www.3pcllc.com

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About Me:

As a veteran in financial coaching with over 30 years of corporate banking experience, my mission is to empower small business owners like you to become numbers confident, optimize cash flow, leverage debt, and pay yourself competitively.

Ready for More?

Here’s how I can help you:

1.     Profit Accelerator Program: Master your business numbers in just 30 days, uncovering hidden profits of $25K-$75K+ over the next 3-12 months.

2.     Loan Consulting: Need the best rates and terms on your next loan? With 30+ years of banking experience, I’ll make sure you get a deal that works for you.

3.    Profit Accelerator Digital Course: Become confident with your numbers, boost cash flow, and learn to pay yourself first in just two hours. This course is designed for busy professionals who want immediate results. ($197)

Ready to take your financial strategy to the next level? Let’s connect and make sure you’re running a thriving business while paying yourself what you’re worth.