By Precision Financial Consultant Group LLC
A $3,000 job can be a welcome addition to your calendar. But if you need to buy supplies and pay for help before the customer’s first payment arrives, that job can leave your business short on cash even when you expect it to make money.
Before you send the quote, take a few minutes to map out what you’ll pay and when you’ll get paid. That gives you time to adjust the payment schedule while you’re still discussing the work.
List what you’ll pay before the first customer payment
Write down the costs you’ll need to cover to get started. For a small catering job, that might include ingredients, a rental deposit, and help with prep. Use the dates you expect to pay each bill, then compare them with the date you expect the customer’s first payment to reach your account.
Set aside enough cash for bills you’ve already committed to, too. Money earmarked for rent or payroll can’t cover the new job and those bills at the same time.
Calculate how much cash the job needs from you
Imagine you’ve quoted $3,000 for a catering job. You’ll pay $650 for supplies and $450 for rentals and prep help before the event. If the customer pays after the event, your business covers $1,100 upfront.
If the customer agrees to pay $900 before you place orders, your upfront cash gap drops to $200. The job price stays at $3,000. What changes is how much cash you need to set aside to get started.
Use that number to shape the quote
If the gap is more than your business can comfortably cover, consider asking for a deposit before you order supplies or proposing a payment when you reach a specific stage of the work. You may also be able to schedule purchases closer to when you need them. Put the agreed payment amounts and dates in the quote so both sides know what to expect.
Try this on your next quote: Add up what you’ll pay before the first customer payment arrives, then subtract any deposit you expect to receive before those costs are due. Write down the difference and decide whether you can cover it without using money already set aside for other bills.
If you’d like a second set of eyes on how your quotes affect your cash flow, you’re welcome to book a free 30-minute consultation with Precision Financial Consultant Group LLC at precisionfcg.com. Bring one upcoming job, and we can walk through the numbers together.