Running a contracting business for five years has left me with some debt—things like equipment financing and credit cards to bridge cash flow gaps.
Now I’m stuck trying to pay down this debt while also needing to invest in growth. Upgrading equipment, marketing, and possibly hiring help for larger projects are all on my radar. It’s tough feeling like I’m constantly choosing between financial responsibility and seizing opportunities.
Take deposits upfront and get stricter with payment terms. I switched to net 15 instead of net 30 and it helped with cash flow immediately.
For growth, focus on jobs that use equipment you already have. I turned down bigger projects for a while and just took more of the smaller ones that paid faster.
Debt payments come first though. Growth means nothing if you’re drowning in interest payments.
Focus on the jobs that pay quick and easy. Skip the fancy stuff until debt is gone.
I went through something similar around year three. Had equipment loans and ran up cards during a slow winter.
What worked for me was treating debt payments like a fixed expense - same as rent or insurance. I calculated exactly what I needed each month to cover minimums plus a little extra, then priced every job to make sure that money was there first.
The growth thing is tricky because you feel like you’re missing out. But I found that being selective actually helped. Instead of trying to land every big project, I focused on the ones where I already had good relationships and knew payment would be solid.
For equipment, I started asking clients upfront if they had budget for specific tools or if they could rent them directly. You’d be surprised how many will say yes when it means getting their project done right.
The marketing stuff can mostly happen for free if you’re willing to put in time instead of money. I spent evenings reaching out to past clients and asking for referrals rather than paying for ads.
Once I cleared the first credit card, that payment went straight to the equipment loan. Snowball effect kicked in and suddenly I had real options again.
Stop taking jobs that stretch your cash flow thin. I learned this the hard way - those big projects that pay at the end will kill you when you’re carrying debt. Instead of equipment upgrades, rent or lease what you need for specific jobs. Let the client pay for it through the project cost. Same with extra help - hire day labor only when the job covers it. The growth will happen naturally once you’re not bleeding money on interest every month. Clean books first, then worry about getting bigger.
Been there with the debt juggling act. Five years in and you’re probably seeing patterns in your cash flow by now.
Here’s what helped me break the cycle:
For the growth stuff, I’d focus on things that don’t require upfront cash. Better client relationships, referral systems, maybe some free networking events.
The equipment and hiring can wait until you’ve got some breathing room. I made the mistake of thinking I needed all the fancy stuff to grow, but most of my best clients came from doing solid work with what I already had.
Once you knock out even one debt completely, that monthly payment becomes your growth fund.
I just do smaller jobs until debt disappears completely.