Profitable Painter Podcast
Profitable Painter Podcast is a rich resource for anyone interested in starting, running, and scaling a professional painting business, offering valuable insights, strategies, and interviews with industry leaders. Through case studies and in-depth discussions, we deliver a vivid picture of the painting industry, with a disclaimer that any financial or tax information is general and not a substitute for professional advice.
Profitable Painter Podcast
Cash Flow First
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We share four cash flow plays that keep a painting business liquid while it grows fast. From legal deposit limits to payroll timing and progress billing, we design the money flow so cash shows up when work happens.
• cash survival moves for low bank balance
• collecting receivables and raising legal deposits
• progress payments tied to milestones
• paying subs after customer payment
• payroll timing to increase float
• stacking vendor terms with business credit
• operating legally under capped deposits
• employee model deposits covering CAC and labor
• down-sell strategy for testimonials
• subcontractor model funding current and next job
Click the video on the screen now to watch how much you should be making in your painting business
This episode was originally recorded as a video for YouTube.
If you hear me say things like “in this video” or reference visuals, don’t worry —
the content still works perfectly in audio form.
And if you ever want to watch the video version, you can find it on the
Profitable Painter YouTube channel.
https://www.youtube.com/@BookkeepingForPainters
If your painting business is busy but your bank account feels like it's always on life support, this video is for you. Most painting contractors don't fail because they're unprofitable, they fail because they run out of cash before the profit shows up. Today I'm going to walk you through four cash flow plays that let you scale without ever running out of money, even when you're growing fast. And this video is especially for you if you're super low on cash right now and need to know what to do this week, not next quarter. Two, you're in a state with legally limited deposits like California, Nevada, Maryland, Maine, or Massachusetts, and you're not sure how to manage cash legally. Or three, you're trying to scale with employees or subcontractors, and payroll keeps stressing the business. These are the exact plays we use with painting businesses when cash gets tight or growth starts stressing the business. So let's get into it. Hey, I'm Daniel Honan. I'm a CPA and former painting business owner. For the last 10 years, I've helped hundreds of painting contractors grow from startup to multi-million dollar businesses. And here's what I've learned. Cash flow is almost always the bottleneck before systems, people, and before marketing. So think of this video as a cash flow playbook. Each play starts with a situation, and if that situation sounds like you, run the play. Quick note before we dive in. If you want a more structured breakdown of budgeting, pricing, cash flow, and taxes, I wrote a book called Profitable Painter that walks you through the exact financial frameworks we use with our private clients. You can get a free copy. It's usually 20 bucks on Amazon. All you gotta do is click the link in the description and just cover the shipping. Now let's fix your cash flow. Play number one, DEF CON 1 cash flow play. Situation. You have less than one month of overhead costs as cash in the bank. If this is you, nothing else matters. You're in cash survival mode. Here's the play. Step one, collect every dollar of accounts receivable. This is not the time to be polite. Overdue invoices should already be paid. Cash you've earned but haven't collected is the most expensive loan you're giving out. Step two, raise deposits to the legal limit. If your state allows a 30, 40%, or 50% deposit, take it. Deposits aren't greed. They're working capital. Step three, install progress payments. Weekly progress payments, phase-based, mile-based, if work is happening and cash isn't moving, you've built a broken system. Step four, pay subs after you get paid. If a subcontractor gets paid faster than your customer pays you, your cash flow will always be upside down. Step five, change payroll timing. If legally allowed in your state, pay employees on the 1st and the 15th, not weekly. That alone can buy you two extra weeks of float. Step six, stack vendor float. Use vendor accounts like Sheryl Williams or Benjamin Moore for 30 days, then pay with a business credit card. That's another 30 days of interest float. This play isn't elegant. It's about survival. Once you have oxygen, then you can scale. Play number two, deposits legally limited play. Here's the situation. Your state caps deposits like California, Nevada, Massachusetts, Maryland, or Maine. If this is you, you don't panic. You get smarter. Step one, collect the maximum legal deposit. Whatever the law allows, take that. Step two, keep a card or ACH on file. Every customer, you have them sign a payment authorization form, no exceptions. That way, you never have to chase money. You just charge them when you complete the work. Step three, charge progress payments aggressively, daily if needed, or phase-based, milestone-based. Bottom line is you're not waiting until the end of the job to get paid. You get paid as the value is delivered. This is especially helpful for painting businesses in California and Nevada, where you're limited to 10% or$1,000, whichever is less, as a deposit. This one change alone dramatically reduces accounts receivable, stress, cash crunches. And this is how you legally operate and keep cash moving. Play number three, scale with employees. Here's the situation. You're scaling fast with employee painters. Employees are not the cash flow enemy. Bad deposits are. Now here's the play. Your deposit needs to cover two things your customer acquisition costs, which is your marketing plus your sales cost, and your employee labor. For most employee-based models, that usually means about a 50% deposit. If it doesn't cover those two things, you're financing payroll with hope. You can downsell strategically. For example, you might say something like this to your potential customer. We'll do a 40% deposit down instead of 50% if you agree to a video testimonial after the job, assuming that you're happy. So if they have some hesitancy about a 50% deposit, you can just simply do a down sell if they promise to do a video testimonial. So you preserve your cash and build marketing assets. That upfront cash covers customer acquisition cost, direct labor, and lets you scale crews without cash strain. This is how employee-based painting businesses grow without payroll anxiety. Plan number four, scale with subcontractors. Here's the situation: you're scaling fast with subcontractors. This is the fastest cash flow positive model in painting if you do it right. Step one, collect a 30% deposit or higher. And that deposit should cover your customer acquisition costs for the job and the customer acquisition costs for the next job. Step two, pay subs after you get paid. Always. If you flip on this, you will permanently struggle with cash. Step three, front marketing with owner cash. If deposits fund your customer acquisition costs, you're no longer floating growth on your credit card. This is why a well-run sub model often feels flush with cash. So let's recap the plays. Play one, cash emergency. You collect, delay, float, and survive. Play two, deposit limits. If you're in Nevada, California, Massachusetts, Maine, Maryland, you get a payment authorization form and you do progress payments aggressively. Play number three, scaling with employees. Deposits should fund your customer acquisition cost and your payroll up front. Play number four, subcontractors. Deposit should fund your customer acquisition costs for this customer that you're getting and the next customer. Cash flow isn't luck. It's designed. Most painters don't have a revenue problem, they have a timing problem. If this video helps you understand how to control your cash flow, the next step is knowing how much you should actually be making in your painting business. In the next video, I break down how much you should be making in your painting business based off the revenue and the roles you play in your business. Click the video on the screen now to watch how much you should be making in your painting business. Fix the timing, and the money starts to behave.
