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A contractor hires four new overhead employees and then asks a critical question:
“Can I afford all these positions?”
Without a real budget, the only honest answer may be, “I don’t know.”
In this solo episode of Success Beyond the Brush, Scott Lollar explains how contractors can create an accurate financial roadmap based on their actual revenue, cost of goods sold, operating expenses, seasonality, and growth plans.
Scott walks through his process for exporting financial history from QuickBooks, building the initial budget in a spreadsheet, projecting monthly revenue, and using percentages of revenue to model labor, materials, subcontractors, and other direct job costs.
He also explains how to test future decisions before committing to them. Whether you’re considering a project manager, salesperson, administrator, new shop, or another major expense, your budget should show how that decision will affect the bottom line.
The goal isn’t to create a document that gets filed away. The goal is to create a working financial roadmap that can be reviewed throughout the year, compared against actual performance, and adjusted before a small problem becomes a financial emergency.
In This Episode, We Cover
- Why having money in the bank does not necessarily mean the company is performing well
- The difference between cost of goods sold and operating expenses
- Labor burden, including payroll taxes, insurance, workers’ compensation, benefits, PTO, and retirement contributions
- How to export monthly financial history from QuickBooks into Excel
- Why percentages of revenue are essential when planning labor and direct costs
- How to create realistic monthly revenue goals around seasonal cycles
- How to model future hires before adding them to payroll
- How to calculate the complete cost of adding a shop or facility
- Why a 1% net profit projection requires immediate changes
- The difference between net profit and the owner’s total return on investment
- How to compare projected numbers with actual results throughout the year
- Why inaccurate QuickBooks data makes meaningful budgeting nearly impossible
Key Takeaways:
Start With Reality
A stretch goal can be useful, but it must still be connected to the company’s historical performance and production capacity. A business that has never produced $400,000 in a month needs a clear operational plan before placing that number in the budget.
Account for Seasonality
Revenue should not automatically be divided evenly across 12 months. Contractors need to consider weather, exterior-production cycles, holidays, residential buying behavior, and other recurring fluctuations.
Separate Direct Costs From Overhead
Cost of goods sold includes the costs required to produce a specific job. General company expenses that support the business throughout the year belong in the operating-expense section.
Model Decisions Before Making Them
A new project manager, salesperson, administrator, or facility affects more than one line item. Budgeting allows the owner to see the complete financial impact before making a commitment.
Review the Budget Throughout the Year
Your budget should be reviewed monthly—and sometimes biweekly—against actual results. This gives the company time to adjust revenue, spending, staffing, or expectations before the year is over.
Final Takeaway
A budget is not simply an accounting requirement. It is a decision-making tool.
When your financial data is organized correctly, you can stop making major decisions based on instinct or the current bank balance. You can determine whether the company can afford its plans, identify problems early, and make deliberate adjustments that protect cash flow and profitability.
Is your QuickBooks file accurate enough to guide important business decisions?
Consulting4Contractors helps contractors organize their financial data, understand what the numbers are actually saying, and turn that information into a practical plan for building a successful and profitable company.
Schedule a free strategy call with Scott to get started toward an accurate accounting system.
🔗 Links from This Episode
✨ Free Discovery Call with Scott Lollar
👉 https://consulting4contractors.com/free-strategy-call/
🏗️ Consulting4Contractors Website
👉 https://consulting4contractors.com/
⚙️ Operations Module Demo Video (YouTube)
👉 https://youtu.be/0IUmPWk4GRI
✌️ Operations Module 2.0 Update Video (YouTube)
👉 https://youtu.be/JTHtbLXyMBI
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👉 https://www.instagram.com/consulting4contractors/
👥 C4C Facebook Community
👉 https://www.facebook.com/consulting4contractors/
💼 C4C on LinkedIn
👉 https://www.linkedin.com/company/70241567
📧 Want to Be a Guest?
Send us an email → [email protected]
🎧 Credits
🎙️ Hosts:
Scott Lollar — Founder, Consulting4Contractors
🎵 Production:
Siren Mastering
https://www.sirenmastering.com