Adam Smith
Senior Contributor
30 years in the trades. Started as a plumbing apprentice in 1995, ran his own 6-person shop through the 2008 crash, sold it in 2018. Writes about the parts of the business they never teach you.
Keeping Your Crew Through the Slow Season Is Costing You
Carrying slow-season employees feels loyal. But if you've never run the actual numbers, you're making a gut decision with your cash reserve.
Your Retainage Is a Loan You Never Agreed To Give
GCs call retainage 'standard practice.' It's not — it's your cash sitting in their account. Here's how to stop financing jobs you already finished.
Your Slow-Pay Customers Are Borrowing From You — Interest Free
Every invoice past 30 days is a loan you never agreed to make. Here's how small trade shops stop funding customers' cash flow with their own.
Being Booked Out 4 Weeks Isn't Success — It's a Warning
Full schedule, empty bank account? Being booked solid might mean your prices are wrong, not that your business is working.
Your Hourly Rate Isn't Protecting You — It's Costing You
Billing by the hour feels fair until you realize it punishes fast techs and rewards slow ones. Here's what T&M is really costing your shop.
Your Cash in the Bank Isn't a Strategy — It's Just Sitting There
Idle cash in your business checking isn't a reserve — it's a liability. Here's how small contractors should actually put working capital to work.
Your Price Increases Should Be Scheduled — Not Panic Moves
Reactive pricing is a sign your business runs on fear. Here's how to build annual price increases into your operation before the pain forces your hand.
You're Taking Too Many Jobs — And Losing Money on All of Them
More booked jobs doesn't mean more profit. Here's why exceeding your real capacity quietly bleeds margin on every job you're already running.
Your Deposit Policy Is a Cash Flow Decision — Not a Trust Issue
Skipping the upfront deposit isn't customer-friendly — it's a slow cash bleed. Here's why every small shop needs a deposit policy and how to enforce it.
Your Cash Reserve Number Is Made Up — Here's the Real One
Three months of expenses sounds smart until you do the math. Here's how to calculate the cash reserve your shop actually needs to survive.
Your Average Ticket Is Too High — Not Too Low
Big jobs feel like progress. They're not. Here's why small shops survive on fast, small, fully-paid work — not monster tickets.
Your Busiest Month Might Be the One That Breaks You
High revenue doesn't mean healthy cash. Here's why your busiest stretch is often when your cash position quietly collapses — and how to catch it.
Your Slow Season Isn't Bad Luck — You Built It
Slow seasons don't sneak up on good shops. If you're scrambling in February, the problem started in July. Here's what to fix before it's too late.
Your Retainage Isn't an Asset — It's a Trap
Retainage sitting on your books isn't money you earned — it's money you lent. Here's why small shops treat it wrong and pay the price.
Your Receivables Aren't Slow — They're Gone
Letting customers pay late feels like loyalty. It's not. Once an invoice hits 60 days, you're probably never seeing that money. Here's why you have to stop.
Your Supply House Terms Are Negotiable — Are You Asking?
Most small shops accept default net-30 terms and never ask for better. That's a cash flow mistake you can fix with one conversation.
Builder Accounts Aren't Steady Work — They're a Slow Trap
Builder accounts look like stable volume. They're actually thin-margin, slow-pay dependency. One builder stalls and your whole shop feels it.
T&M Pricing Feels Safe — It's Actually Killing Your Margins
Time-and-material pricing sounds like protection. It isn't. Here's why T&M is quietly wrecking your shop's margins and customer trust.
The 6-to-10 Employee Wall Is Real — Here's Why It Breaks Shops
Most shops don't see the margin collapse coming until it's too late. Here's what actually breaks when you grow past 5 employees.
Adding That Next Truck Will Probably Break You
More trucks means more revenue — right? Not if your pricing, overhead, and cash reserves aren't built for the jump. Here's what most owners miss.
That Big Commercial Account Will Break Your Small Shop
Big contracts look like a lifeline. But payment terms, retainage, and cash flow lag can sink a small residential shop fast. Here's why to say no.
Stop Stocking Inventory — Your Shelf Is a Cash Trap
Keeping materials on hand feels smart until you do the math. Most small shops lose more in tied-up cash than they save in supplier runs.
Stop Offering Payment Plans — You're Not a Bank
Payment plans feel like good customer service. They're actually an interest-free loan you can't afford. Here's what it really costs your shop.
Stop Running a Tab for 'Good Customers' — It'll Break You
Trusted customers who ask you to bill later aren't showing loyalty — they're using yours. Here's why deferred billing quietly wrecks cash flow.
Your Truck Stock Is Costing You More Than You Think
Carrying too much inventory in your truck kills cash flow and hides shrinkage. Here's how to audit your truck stock and stop bleeding money you don't see.
Retainage Is a Cash Flow Killer — Price It Like One
Retainage looks standard until it's 90 days past substantial completion. Here's how small shops get buried — and how to price for it.
How to Collect When a Customer Won't Pay Final Invoice
Stop chasing calls that go nowhere. Here's the exact sequence small contractors use to collect on unpaid final invoices — including when to file a mechanics lien.
Service Work vs. Install Work: You Can't Run Both the Same Way
Running service calls and installs with the same crew and pricing model is a margin killer. Here's how to separate them before they drain you.
T&M Pricing Is Costing You More Than You Think
T&M feels safe until a customer disputes your hours. Here's why flat-rate pricing pays more, fights less, and how to make the switch without losing jobs.
Start Collecting Deposits on Every Job — Not Just Big Ones
Skipping deposits on small jobs is costing you more than you think. Here's how to require them without losing customers.
The Big Job Trap: Why Large Contracts Kill Small Shops
That big contract looks like a breakthrough. It might be a cash flow death spiral. Here's how to know before you sign.
Your Cash Flow Problem Isn't Collections — It's Your Draw Schedule
Chasing invoices won't fix your cash flow. The real problem is when you ask for money. Here's how to restructure deposits and draws before you start the job.
Why That Big Builder Account Will Bankrupt You
One builder account saved your schedule and killed your cash flow. Adam Smith learned this in October 2008. Here's what he wishes someone had told him.
1099 vs W-2 for Trade Workers: What It Really Costs You
Most small shops default to 1099 subs to save money. A former plumbing contractor explains why that math is usually wrong — and risky.
How to Set Your Service Call Fee (And Not Lose Jobs Over It)
Stop eating trip costs. Learn how to price your service call fee, what competitors charge, and the exact script to sell it to customers.