FROM 3AM
PAYROLL MATH TO
$750K APPROVED.
It was three in the morning. The owner of a $7.1M turnkey civil contractor was awake, staring at the ceiling, doing the math in his head again. Two lines of credit maxed out. An SBA loan. A personal guarantee against his house. He had just closed on a big project. The work had gone well. He had $172,000 outstanding from the last project. Payroll was $47,000 a week and it was due Friday. He had $8,000 left in his bank account. He had one more LOC draw left. After that there was nothing. His wife knew. His kids did not. His team did not. He had been in construction for over a decade. Running the financial side of a business was a complete mystery. Within 90 days both LOCs and the SBA loan were paid off. $310K in overdue receivables hit the bank in the first month. The business was approved for a $750K loan he could not access before. $300K sits in the bank as a floor. House still his.
This is where most subcontractors live. Not the same situation, but the same feeling. The constant math. The sleepless nights. The weight of it on you and maybe your spouse. Trying to figure out if you are going to make it to Friday. You can win all the work you want. If you do not understand the financial operating system of your business, you are one uninformed decision away from losing everything.
This turnkey civil contractor was the kind of operator other contractors look at and assume is doing well. He had only been running his business for a year and a half. Growing fast. Five million dollars in work in his second year. He had been in construction for over a decade. He had worked for other companies. He knew the trade inside and out. He could build anything, manage crews, win bids.
Running the financial side of a business was a complete mystery. He thought winning more work meant more money. So he took everything he could. Five million dollars in work in his second year. He maxed out his line of credit to fund it. Then the delays started. A client held a retention check longer than expected. A project ran over. Labor costs went up. Suddenly he was not just maxed out. He was overextended. The next project was already starting.
Vendors were calling every day wanting anything he could pay them. He had $172,000 outstanding from the last project. Payroll was $47,000 a week and it was due Friday. He had $8,000 left in his bank account. He had been told for a month that a check was coming Friday. It was supposed to clear tomorrow. He still did not see it. He had one more draw left on his line of credit. One more. After that, there was nothing.
The Business Was Winning Faster Than It Was Collecting
Growth from $500K to $5M happened operationally. The financial systems stayed at $500K scale. Cash flow was managed by intuition and credit. Not by a real forecast.
$310K Was Sitting in Overdue AR
Pay applications had been approved. GCs had signed off. The money just was not being chased. Every collections call only happened when payroll was at risk. Then it stopped until the next crisis.
34 Pieces of Equipment, Untracked
This is a $7.1M civil business doing concrete, earthwork, utilities, curb and gutter, grading, clearing. 34 pieces of equipment. 14 trucks. None of them tracked individually for job costing. They were estimating equipment at one all-in hourly rate that did not match the real cost.
No Forward Visibility
The owner had no idea what cash position would look like in 4 weeks, let alone 13. Every Monday started with a calculator trying to figure out if Friday's payroll was going to hit.
- 13-week cash flow forecast: updated every Friday. AR aging in. AP due out. Payroll, equipment, vendor commitments. The owner finally saw the next 90 days clearly. CONTROL Chapter 7.
- Equipment cost basis on every piece: all 34 pieces of equipment and 14 trucks calculated individually. Daily, weekly, monthly rates. Separate billing for equipment, fuel, and labor. Balance sheet up $779,000 in 3 months. CONTROL Chapter 2.
- Strategic pause on new work: slowed the pace of new bids for two months to let receivables catch up. Operational discipline as a financial strategy.
- SOV restructuring: rebuilt schedules of values on active projects to front-load recoverable costs into early pay apps. CONTROL Chapter 4.
- Billing process overhaul: standardized pay app timing. Collections routine that runs on schedule instead of panic. Notice of nonpayment ready at day 40. CONTROL Chapter 6.
- Clean books for the bank conversation: CEO report with 13 months of data. GP trending, overhead trending, AR aging. The documentation the bank needed to see.
First 30 days. $310K in overdue receivables hit the bank. The collections discipline alone changed the cash position. Two months of pause on new work let the existing pipeline collect.
Days 30 to 90. Both LOCs paid off. SBA loan paid off. The same business that was days away from merchant cash advances three months earlier was completely free of revolving debt.
The bank conversation. With clean books and a documented 13-week forecast, the bank approved a $750K loan. Capital that had been unavailable just months before. The personal LOC secured against the house was paid off and closed.
Going forward. $300K sits in the bank as a floor. The 13-week forecast runs weekly. The work coming in is the work that was always coming in. What changed was the financial infrastructure underneath it.
WANT IT INSTALLED FOR YOU?
CONTROL teaches you how to build the system yourself. The Construction CFO, a service of Sulphur Prairie Management, builds and runs it for you. Same system. Same outcomes. From $1,900 per month. 60-day onboarding.
The owner of a $7.1M turnkey civil contractor was awake at 3am, staring at the ceiling, doing the math in his head again. Two lines of credit maxed out. An SBA loan. A personal guarantee against his house. He had $172,000 outstanding from his last project. Payroll was $47,000 a week and due Friday. He had $8,000 left in his bank account. He had one more LOC draw left. After that, nothing. His wife knew. His kids did not. His team did not.
From $500K in year one to $5M in year two. He had been in construction for over a decade. He knew the trade. He could build anything, manage crews, win bids. Running the financial side was a complete mystery. He thought winning more work meant more money. So he took everything he could. He maxed out his line of credit to fund it. Then delays started. A client held a retention check. A project ran over. Labor costs went up. Suddenly he was overextended, and the next project was already starting.
Pay applications were going out. Follow-up was inconsistent. We systematized the collections process. Weekly AR review. Escalation timing. Notice of nonpayment ready at day 40. We ran it through every active GC relationship. $310K had been sitting in AR for 45 to 90+ days. Discipline collected it within 30 days.
Clean books and a 13-week cash flow projection changed the conversation with the bank. The same business that could not get approved for new credit three months earlier had cash flow visibility documented enough to support the new loan. The financials were the same. The visibility was different.
The same contractor had 34 pieces of equipment and 14 trucks, none tracked individually for job costing. They were estimating everything as one all-in hourly rate. A skid steer at $450 an hour sounded reasonable. The real cost was $979 a day, $200 to mobilize, 8 gallons of fuel an hour, plus $47 an hour for the operator. Once equipment cost basis was installed, the fleet got downsized, equipment was charged separately from fuel, and the balance sheet was up $779,000 in 3 months.
