Let’s get real for a minute — it’s not always your pricing or your job costs that are killing your profits. Sometimes the real profit killer is hiding in plain sight: your operating expenses.

Operating costs are all the things that keep your business running day to day, like rent, office staff, software, insurance, utilities, marketing, trucks, phones — the list goes on. These aren’t directly tied to a job, but they still need to be paid whether you’ve got one job going or ten.

Here’s the problem: when contractors grow, they often accumulate costs faster than they accumulate profit. Maybe you added a new admin or leased an extra truck. Maybe you’ve got subscriptions and tools you’re not even using anymore. Maybe you’re spending $1,000 a month on ads that don’t generate a single lead.

Before you know it, your overhead is bloated and your break-even point is sky high.

Real World Mistake & Lesson: I worked with a general contractor who was grossing $2 million annually. But every time I looked at his numbers, his net profit was razor thin — like 2%. The issue? His operating expenses had crept up to nearly 30% of revenue. He had two office managers when he only needed one, was paying for software he didn’t use, and had a marketing agency that hadn’t delivered a qualified lead in 6 months.

We went line by line through his expenses and cut or renegotiated $120,000 in overhead. That change alone doubled his net profit — without a single extra job sold.

 Pick up your free copy of my new book, “The 7 Minute Conversation-How to Hear the Story Your Small Business Financial Statements Are Telling You-CONTRACTOR EDITION”.  Go to www.7MinuteConversationBook.com

Ready to find out where your cash and profits are really going? Book your free 15-minute Profit and Cash Flow Call with me. No pressure. Just real clarity. I’ll help you see where your money’s hiding — and what to do about it. Schedule at www.CashFlowCallWithLarry.com