1. Stop Putting All Your Eggs in the Project Basket
Every tradie business needs to be broken into at least two segments — ideally three. What does that look like? You might have project work, private residential, and then a third segment like insurance, NDIS, body corporate, or government work.
The rule of thumb: if more than 70% of your revenue is coming from project work, you are going to feel the cash flow pinch. Projects take weeks or months to complete. That's a long time to be waiting on money while your materials costs are going out the door.
"If 70% of your eggs are in the project basket, you will experience cash flow issues."
The fix is to supplement project work with higher-frequency, faster-turnover jobs. The smaller jobs that pay quickly become the thing that keeps the lights on. Your project income then becomes the cream — the bonus on top once you've already hit break even.
Builders, project-based sparkies, plumbers, concreters — anyone with stages of work — we see this pattern constantly. The answer isn't working harder. It's getting the right mix of work in your schedule.
Still feel like you’re cutting back just to stay afloat? Read: Why Budgeting Keeps Tradie Business Stuck (And What To Do Instead).
2. Sort Out Your Payment Terms
This one is straightforward but so many businesses get it wrong.
If you're doing private residential work — mums and dads, domestic customers — you should be invoicing on the day the job is done. Not seven days. Not 14 days. That day.
The longer the gap between finishing a job and getting paid, the harder life gets. You're covering materials upfront, paying staff, and then waiting weeks for the money to land. That's a cash gap that kills businesses.
You need to shorten your cash gap as much as possible. Private residential is the best place to do that.
For commercial work it's trickier, but for B2C — business to customer — there's no reason not to ask for payment on the spot. 30-day terms, 60-day end of month, 14-day terms on residential work? They're leaking your cash flow every single week.
Shorten the gap wherever you can.
3. Use Deposits and Payment Stages
If you're doing bigger jobs — anything worth $5,000 or more — you should be taking a deposit. Full stop.
And if you're running long projects, break your payment stages down as far as you can. We've had building clients create contracts with up to 12 payment stages. More stages means more money, more often. It keeps cash flowing through the whole job rather than landing in one big hit at the end.
If you haven't broken your payment stages down far enough, you're essentially funding your clients' jobs out of your own pocket. That's backwards.
Want to get a proper handle on your numbers? Read: Review Your Finances the Tradie Way.
The Bottom Line
Once you know your break even, you can get really clear on what mix of work you need. You can work out how many days per week — or per month — you allocate to project work versus faster-turnover jobs, and protect your cash flow by design, not by accident.
This stuff isn't complicated. But if you haven't sat down and mapped it out, it's very easy for the schedule to just happen to you — and then wonder why it always feels tight.
Two to three segments. Tight payment terms. Deposits and stages. Get those three things right and the cash flow pressure starts to ease.
Want to Suss Out Where Your Cash Flow Is Leaking?
Book a free call. It's just a yarn — no scary sales pitch. You might walk away with one small tweak that changes everything.
💬 Leave a comment:
What does your current work split look like? Are you heavy on project work, or have you got a good mix going? Drop it below — we'd love to hear.
