Archives April 2025

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?