If you are doing big weeks, the calendar is full, and you are still watching cash like a hawk, there is a good chance you are dealing with the real tradie killer:
You are financing your clients’ jobs.
That is exactly what Matt and Kurt Hegeschweiler unpack in Episode 488.
Kurt has observed numerous builders and tradesmen operating stable businesses from the outside, yet the financial aspect silently drains them.
And his message is blunt: do not bankroll someone else’s project.
The cashflow trap most tradies do not notice
This usually starts innocently.
You order materials; your subbies need to pay, and the client payment is “coming soon.”
Then soon becomes later.
Then you find yourself covering the gaps with your cash, using your overdraft, or relying on the next deposit from another job.
Kurt calls it out for what it is:
“I can finance the jobs until the bank pays. That’s a death trap right there.”
The scary part is you can feel like you are winning because you are busy.
But busy does not mean healthy.
Why more work does not fix it
If your margins are too thin or your job costing is fuzzy, adding more jobs is like pouring more water into a bucket with holes.
It looks productive, but it just increases the speed of the leak.
A lot of tradespeople have never been taught how to properly separate job costs from overhead or how to read a P&L in a way that actually helps decision-making.
Kurt explains that if you do not separate cost of sales (direct job costs) from overheads, you cannot calculate a true gross margin, which means you cannot calculate break-even properly either.
The simple rule behind a profitable trade business
One of the biggest takeaways from this episode is Kurt’s focus on getting your margin right before you chase growth.
He talks about a simple benchmark framework builders use to keep the business stable and profitable:
- 25% gross margin,
- 10% overheads (as a percentage of turnover),
- and a 15% net profit target once those first two are in line.
Even if your trade is not building, the principle still holds. You can only grow what you can measure, and you can only keep cash in the business if your pricing covers reality.
The shift that stops you funding the job
This is where most tradies need to get ruthless: your payment schedule must protect your cash flow.
It is not about being difficult. It is imperative that the business remains solvent, enabling you to complete the job effectively.
Kurt puts it in plain English: “Money needs to come in before it goes out. There’s just no other way around it.”
If you are getting paid after the big costs hit, you are exposed.
If you are getting paid before the big costs hit, you are in control.
Profit First, without overthinking it
Once your cash timing improves, the next step is to allocate your money wisely to ensure it does not disappear.
Matt introduces the concept of Profit First, and Kurt strongly supports it as an immediate action.
As Kurt says,
“If you speak to anyone who’s worked with me, it’s profit first. We do that straight away.”
The point is not to become a finance nerd overnight.
The point is to build a simple system that keeps tax, profit, and operating cash clear, so you stop getting surprised.
What to do next (quick action plan)
Here is one simple way to stop financing your clients’ jobs, starting this week:
- Examine your previous five jobs and determine the actual amount remaining after direct job expenses.
- Tighten your payment schedule so deposits and progress payments match your cost timeline
- Separate cost of sales from overheads so you can see your real gross margin
- Set up a basic Profit-First style structure so money is allocated on purpose, not by accident
You did not start your business to become a bank for your clients.
If you want less stress, more control, and a business that actually pays you properly, it’s time to raise your margins.
📚 Resources from this Episode
Get in touch with Kurt Hegetschweiler:
Website: https://builderscoach.com/
Instagram: @builders_coach
Facebook: @masterbuilderscoach
LinkedIn: Kurt Hegetschweiler
Books mentioned in the episode:
Million Dollar Builder 2.0 (Amazon and Audible): https://amzn.to/4pv6rd3
Psycho-Cybernetics: https://amzn.to/3LCOviK
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