Archives 2025

2025 is a fist fight for the construction industry. 

John, our 60-year-old plumber with a $4M firm, and Bob, our 42-year-old electrician with an $8M shop, battle 20% tariffs, 15% labor shortages, and 5 to 6% interest rates. Last post, we unveiled Extraction versus Builder Mindsets. John hoards cash for a quiet retirement. Bob bets big for a $10M exit. Neither is the better path: your goals and context call the shots.

Why does John pick Extraction? Loss aversion owns him. The 2008 crash crushed his peers. Those scars yell: “Don’t lose it all.” At 60, he protects family and a paid-off house, not chasing risks for fun.

Status quo bias keeps John anchored. He cuts costs and skips upgrades. It’s safe, forged in a Midwest upbringing where steady work was king. A high school grad, he banks on grit over books.

Your past isn’t just history: it’s your amygdala programmed through the years.

Bob’s Builder Mindset burns with opportunity bias, a thirst for what’s next. At 42, doubling his firm in a decade sparks overconfidence. A 2015 tech bust honed his bets, not halted them. He’s not reckless: he’s chasing legacy.

Bob’s Sun Belt roots, alive with growth, fuel expansion. His business degree and mentors arm him for 2030’s net-zero jobs. Young kids and a long runway, his life stage, demand building now.

Age and ambition split them. John’s near the end: every dollar’s a shield. Bob’s got decades: growth pulls him. Past experiences cement it. John’s recession nightmares breed caution. Bob’s early wins ignite hunger.

Your brain’s a quiet puppet master, tugging invisible strings.

Region shapes them. John’s Midwest conservatism grips the known. Bob’s bold South thrives on risk. Education tilts it. John’s street-smarts lock in stability. Bob’s training scans the future. Biases like anchoring, John stuck on old losses and Bob on future gains, and framing, John seeing risks as traps and Bob as hurdles, fix their paths.

Your mindset’s a stew of scars, stage, and surroundings. 

John and Bob aren’t right or wrong: they’re wired to respond to threats. But what if your dreams don’t match your mindset? John craving a big exit while pinching pennies, or Bob playing it safe with empire-sized goals? Misalignment breeds stress, missed shots, and a business that stumbles. 

Your choices must sync with your endgame, or you’re boxing your own shadow. Have you ever think about what that endgame looks for you?

You’re halfway through your morning coffee, prepping for the day, when the news drops a bomb: 20% tariffs jack up materials, 15% labor shortages gut your team, 5-6% interest rates choke cash, used homes pile up, new construction tanks. You wanna chuck the remote through the window, but you keep it together. Running a $3-10M construction or trades business? This chaos is your life, and it’s getting ridiculous.

Every move—buying gear, pushing marketing, training for new gigs, or stashing cash—shows your mindset: Extraction Mindset versus Builder Mindset. This split isn’t just for trades; it’s real for any business, from tech startups to corner diners. But we’re dialed in on construction, where 2025’s mess forces you to choose.

Extraction Mindset: Bank Cash, Stay Safe

Take John, a 60-year-old plumber with a $4M company. He’s pure Extraction, grabbing cash for retirement, family bills, debt, or just keeping things steady. He delays vendor payments, saves cash, and risks delays. He hires cheap labor, but tempts rework disasters. He skips marketing and gear upgrades. Cash is king when tariffs eat into your budget.

Extraction’s about quick wins—65-70% of contractors live it, per 2024 ABC data. Plumbing (75%) and HVAC (70%) folks, stuck with 3-5% margins (2023 CFMA), swear by it. Smaller shops ($3-5M, 75%) and older owners (55-65, 80%) are all in, says 2022 NAHB. But it can backfire. John wants a $10M exit but cuts systems (Scenario 1), missing $2M jobs. That mismatch? Total stress.

Builder Mindset: Bet Big, Aim High

Then there’s Bob, a 42-year-old electrician with an $8M business. He’s Builder, betting on growth or a fat sale. He spends on staff training for high-end jobs. He drops on client software for $2M referrals. His play? Eat pain now, cash out big later.

Builders chase 2030’s net-zero rules (30%, 2024 NAHB) and automation (20% cost cuts, 2023 CII). Electrical firms (40% Builder, 2024 NECA), mid-size companies ($5-10M, 35%), and younger owners (30-45, 50%) love it. But bets sting—Bob’s $80K tech upgrade (Scenario 25) could dry up cash if family or debt hits. Chatting with John about cash shortages, he wishes he had more in the bank.

Why Mindset Calls the Shots

Extraction or Builder? It’s about lining up your moves with your goals—retirement, family, debt, stability, or legacy. Get it wrong, like John banking cash but eyeing a big sale, and you’re toast. Age, trade, company size, past wins or flops, and 2025’s pressures shape your mindset. Switching to Builder takes 3-5 years, stacking value through efficiencies or leverage to fund growth.

This series will cover finances, operations, staffing, exits, and trends.

We will go deep, but for now, let’s start sweet and easy: Define yourself, what do you think you are? Are you Extraction or Builder? Then, think of one big decision you made recently (e.g., cut marketing, hire a critical role, or request a loan. Is the decision aligned with your mindset? Is anxiety kicking in already?

In Chiapas, I was up against a wall, my operation was bleeding cash, and without it, we couldn’t finish the homes we’d started.

The constraint wasn’t the angry mob anymore; it was cold, hard cash flow. I had to unclog that pipe to keep the project alive, and what I learned there still drives my work: focus on the one constraint clogging your money flow, fix it, and the rest falls into place.

Here’s how I turned chaos into cash in Chiapas.

I returned flawed materials (shoddy rebar, cracked cement) that were draining our budget, using those flaws to renegotiate costs, prices, and credit terms with suppliers, stretching payments to give us breathing room. I resigned contracts, sticking with partners I could rely on under the new terms. To cut costs, I secured a government infrastructure project to build roads, reducing our need to spend on access routes. Then, I worked with my team to shorten the construction cycle, pushing crews to focus on homes that were nearly done, good enough to collect payments on, bringing in cash fast. By tackling the cash flow constraint head-on, we got paid, kept the project moving, and walked away with enough to take on the next job.

Now, let’s talk about your world, small construction firm owner.

You’re in chaos. Maybe you see crews waiting on a delayed final inspection, stalling your payment, or suppliers taking too long to deliver, holding up your next job. Perhaps you’re so busy you can’t find time to chase new work, leaving your pipeline dry. In the US, 29% of contractors wait 30–40 days to get paid, and 21% wait 41–60 days. Only 15% were paid in full in 2022. The average firm has a Days Sales Outstanding of 90 days: Three months of waiting for cash you’ve earned! That’s your cash flow bleeding out, and it’s killing your ability to keep the lights on.

Here’s the lesson from Chiapas: all these delays are scary if left unattended; they’re all important, but the most harm comes from the main constraint, the one bleeding your cash the fastest. In TOC terms, it’s the weakest link in your chain, choking your money flow speed—how quickly every minute and dollar turns into cash.

For me, it was cash flow tied up in materials and slow collections. For you, it might be inspections, suppliers, or a dry pipeline. Find that constraint, track where your cash is stuck the longest, and where the delays hit hardest. Unclog that pipe first, and the rest will breathe easier.

Take it from Chiapas: zero in on your biggest cash flow killer, and you’ll stop the bleed. Don’t let every delay bury you; find the one that’s hitting hardest and tackle it first.

What’s the worst cash flow snag you’re facing right now? I want to hear your story and share more hard-earned lessons.

If you’re running a small construction firm, you’re likely juggling a dozen fires. Thinking you can fix them all at once is a losing game. You don’t turn chaos into cash by tackling every problem at once. Zero in on the one constraint clogging your cash flow the most—the bottleneck slowing your money flow speed, how quickly your business turns every minute and dollar into cash.

Small construction firms are often in the midst of many challenges, usually waiting for the owner to fix them—crews idle, invoices stuck, materials wasted. You’re burning out, working late nights, and still not seeing the cash you deserve. Trying to fix everything at once—admin, jobs, waste, hiring—spreads you thin and gets you nowhere. Focus on the one constraint that’s slowing your money flow speed the most.

Here’s why one constraint at a time works.

First, it keeps your focus where it matters. Your business is a chain of activities, and the weakest link—your constraint—slows your cash flow the most. Maybe it’s delayed invoicing, keeping cash stuck for 30 days, or chasing low-value jobs that pay slowly. Try to fix all three at once, and you’ll run in circles. Zero in on invoicing, and you’ll unclog the biggest pipe, speeding up your money flow.

Second, it delivers results faster. Tackle one constraint with all your energy and your team’s focus, and you’ll see cash sooner. If delayed invoicing is your issue, focusing on it might cut your time from 5 hours a week to 1, getting you paid 20 days sooner. That’s cash to pay crews and start new work. Attempt to fix everything at once, and you’ll still be stuck.

Third, it creates a ripple effect. Unclog one constraint, and others loosen up. Speed up invoicing, and you’ve got cash to chase high-value jobs, tackling strategic misalignment without even trying. Or negotiate better material orders, cutting waste. One constraint at a time sets off a chain reaction, delivering more cash with less chaos.

Efficiency across the board can be a distraction—optimizing the wrong things, like cutting admin time without addressing why cash isn’t flowing. Focus on speeding up your money flow by tackling one constraint at a time—admin bottlenecks, strategic misalignment, or operational waste.

Your hard work deserves real returns. Go after one constraint, and watch your money flow speed up, your stress drop, and your business lead.

Have you ever tried to play whack-a-mole with improvements, only to find yourself in the same spot—or worse—after a few months?

In the aftermath of a teachers’ mob in Chiapas, Mexico, the only thing spreading faster than gossip is the skepticism of 47 families who don’t trust a single word you say. After facing the angry mob in week one, I’d promised a deep study of their cracked homes—bold words that could’ve been my epitaph if I didn’t deliver.

Week two wasn’t about sipping tequila and patting myself on the back for surviving the inferno; it was about proving I wasn’t full of empty promises.

The teachers’ union had given me a shaky nod after our meeting, but their promise (threat) to come back in a few days if they didn’t see a different pace in finding a solution for them was haunting me.

Like I said before, Trust was the bottleneck—very often is. You don’t fix that with a memo; you fix it with action. I’d learned early in my career that cash collected, not hours worked, is what keeps a construction gig alive. Theory of Constraints isn’t just a buzzword—it’s how I think, how I breathe. Every move I made in Chiapas was about unclogging the pipes to get that cash flowing again.

First step: the study I’d promised. I dragged my building crew back to the teachers’ housing cluster, built on the side of a hill, where storms and winds had weakened the walls. It was a disaster—a landslide waiting to happen, literally.

But the problem wasn’t just the homes; it was the whole operation. I sat down with the remaining staff, no BS allowed, and dug into the records they’d finally coughed up. Turns out, the old Director had executed some pretty shady practices, leaving a paper trail of useless data. Quality was bleeding throughput—every cracked home was a cash drain, not a cash pipe. I needed to fix the homes, sure, but I also needed to fix the system that built them.

I called in my main engineer. The dirtiest language but he knew his business, and the best? He didn’t like the way things were handled before, he didn’t raise his voice because he had a family to feed and also he was too afraid to say something. Afraid of supernatural repercussions (but that is material for another story).

We mapped out a plan to reinforce the foundations, starting with the worst-affected homes. It wasn’t cheap, but it was cheaper than refunding 47 families or letting the protest camp out ‘til the end of time. I went back to the teachers’ leaders, no lukewarm refreshments this time—just straight talk. I just needed support from headquarters to get the resources to fix this.

Stay tuned…

Spread the love, folks—except when you’re stepping into a hornets’ nest in Chiapas, Mexico, and the welcome party’s a mob of pissed-off teachers waving signs like they’re ready to storm the gates. My second week at a construction gig way back, I wasn’t sipping coffee in peace—I was dodging verbal Molotovs from a teachers’ union ready to camp out indefinitely. Their homes, built by my predecessors, were cracking like bad jokes—neighbors waving at each other through the gaps, all on live TV courtesy of Chiapas’s top morning show. Trial by fire? Nah, this was trial by inferno.

The old Director? A lying, corrupt lady who’d turned trust into a ghost town. Staff wouldn’t give me the time of day, let alone straight answers. Day one, I walked into a swamp of deception—sales and accounting hiding data like it was pirate gold. I interviewed every leader that week, no BS allowed.

Took a few to crack beers, broke the ice. By Friday, I fired two rotten apples who thought “no info” was a strategy—sales and accounting got the axe. Trust’s the bottleneck, folks—learned that early, not my first dance.

Then came the mob. Teachers demanded new homes or their money back—yesterday. Impossible, sure, but they threatened to park their protest outside our office ‘til the end of time. I invited their leaders in, poured some lukewarm refreshments, and made a promise that’d make most CEOs sweat: a deep study of their cracked-home mess, solutions in weeks. Bold? Hell yes. Backed by enough scars to know better? You bet.

Why’d they buy it? I told ‘em straight: “I’m not that last lady. She screwed you—your only shot’s trusting me now.” That day, I dragged my building crew to the site—foundations were a disaster, a literal crack-up. Quality was bleeding throughput—cash collected, not hours worked, is what counts, says Theory of Constraints. The mob didn’t care about my TOC playbook, but I did—still do, as a fractional COO unclogging cash pipes.

Week one was about slicing through the lies—staff, mob, all of it. Fired the liars, faced the rage, set the tone. It wasn’t just cracked homes; it was cracked trust. I wasn’t some rookie—I’d tangled with chaos before. You don’t fix that with hugs—you fix it with results.

Stay tuned—Chiapas didn’t break me, it sharpened me.