When profit is tight, the first instinct for many contractors is to start cutting. Cancel software. Trim payroll. Delay equipment purchases. Slash everything in sight.

Now, don’t get me wrong — wasteful spending should go. But you can’t shrink your way to success.

There’s a difference between running lean and running scared.

Cutting the wrong expenses — like marketing, quality staff, or essential tech — can actually make your cash problems worse. And too many contractors end up stalling their growth by trimming the very things that could have moved them forward.

Instead, the focus should be on smart spending and high ROI investments.

I worked with a contractor who had a tough quarter and immediately laid off two project managers and paused all advertising. It looked good on paper — expenses dropped by $18K/month. But then the job pipeline dried up, project timelines slowed, and he had to step in and manage 6 crews himself. His revenue plummeted, stress skyrocketed, and within 60 days, he was in worse shape than before. Once we refocused on strategic cuts and smart investments — like using software to streamline scheduling — he stabilized and grew again.

Don’t let fear drive your business decisions.

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