How Ignoring Cash Flow Is Draining Profits

Jason Phillips: [00:00:00] Welcome to the Contractor Freedom Podcast. I'm your host, Jason Phillips. This show exists to help small business owners like you escape the tyranny of Contractor Freedom and enter the bliss of Contractor Freedom so you can have the Time, Money, and Freedom to Live Your Life With Purpose Beyond Your Business.As a certified human behavior consultant in DISC personality styles and motivators, I'll be sharing with you skills for life, love, leadership, and business. I'll also be connecting you with experts that can help you scale your business and your life. So if you want to build the business and life of your dreams, then you are in the right place.Let's go.Jason Phillips: Hello, Contractors! Welcome to the show today. We've got a very special show for you, and right here with me, we have Mr. Daniel Honan of Bookkeeping for Painters, and Daniel spoke at our Contractor Freedom Summit, and just delivered a, I'm just going to say, a pile of knowledge that I think was really eye [00:01:00] opening toward for so many of the contractors.Now, daniel, he's, he is, by the way, he is a former business owner and military intelligence officer. I don't know if we might have to get into that or not. He has an MBA, a degree in accounting and he used, he, he used to run, do cold calling. appointments, manage crews, run payroll, and with just all of that experience he's created this back end for painters to help save them time and money by just running an efficient business and allowing you to focus, on the on the sales and production side.Daniel, I just want to say thank you so much. Welcome to the show, man and I'm Glad you're glad you're here with us today. And so Let's get into it. But man, tell us a couple of things. Where are you right now? And what is, what is bookkeeping for painters and what made you start the company?Daniel Honan: Yeah thanks Jason. I'm really happy to be here excited to be here. And right now I'm in Nicaragua that's where I'm, I work out of doing some advanced tax strategies we can get into maybe. But no I'm really passionate about helping painting business owners and closely related trades know their numbers and what they mean.And I've been in [00:02:00] their shoes I've had to run a painting business and it, it was chaos, at least for me trying, that was my first business I ever ran and I did it in college and I definitely didn't have, a good grasp on my numbers and what they meant. So I definitely felt that pain of not knowing, how much money do I have?Can I afford things? What are my margins? Am I doing good or not? I try to help folks get clarity in their business so they can make decisions to get their business to the next level. And then we also along with that, once they get nice and profitable, We try to help them solve the issue of taxes, because if you hit any level of success in your business, your biggest expense is going to be taxes, so we try to help them protect their profits through proactive taxJason Phillips: So when you say, Daniel, when you say, know your numbers, can we talk about what that means? Cause there's so many, different types of numbers. And, when you say know your numbers, what are you referring to?Daniel Honan: Yeah, it's a great question, and it's a big one. There are many you could go with. I like to start with gross profit. [00:03:00] That's an important number. Maybe the most important. Because if you don't have your gross profit down, and just to define what that is, gross profit is your revenue, what you've produced in revenue, minus any direct costs, so that would be gross I'm sorry, any direct costs, so that would be direct labor, so painters on the job site,...