Industries
Where Financial Pressure Comes From
Different industries experience financial pressure in different ways.
Understanding how money moves through a particular type of business helps us know where to look — but the cause is rarely as simple as “sales are down”.
Construction and Trades
A construction or trade business can be extremely busy and still experience severe cash pressure.
Margins can disappear through poor estimating, variations, rework, labour overruns, material increases, retentions and delays between doing the work and getting paid.
Growth can create its own pressure because labour and materials often need to be funded before the customer pays.
The question isn’t simply: “How much work have you got?”
“What are you actually making from the work?”
Manufacturing and Engineering
Manufacturing and engineering businesses can carry substantial amounts of cash in materials, work in progress, equipment and labour before an invoice is raised or collected.
Plant and equipment finance can add another layer of fixed commitments.
Small errors in costing, labour recovery, productivity or pricing can be repeated across many jobs before the financial impact becomes obvious.
Transport, Automotive and Field Services
Vehicles and equipment need to be purchased, financed, maintained and replaced.
Fuel, wages, insurance, parts and finance continue regardless of whether every hour or kilometre is being recovered properly from the customer.
The business can have plenty of activity while the assets are failing to produce sufficient return.
Hospitality and Retail
Hospitality and retail businesses deal with a different financial equation.
Wages, rent, stock and other fixed or semi-fixed costs can consume a large proportion of revenue.
Small changes in gross margin, wastage, labour costs, purchasing or customer numbers can have a significant effect on the cash left at the end.
Professional and Service Businesses
Financial pressure can be less obvious in service businesses.
There may be few physical assets or large stock purchases, but pricing, utilisation, labour recovery, debtor collection and uncontrolled overheads can gradually weaken profitability and cash.
A full diary does not necessarily mean a profitable business.
The Numbers Often Lead Us Outside the Numbers
Financial information tells us where pressure is appearing.
Then we need to understand why.
Sometimes the answer is in the accounts.
Sometimes it leads to pricing, quoting, productivity, customers, staffing, purchasing, operations, capacity or the way work is being won and managed.
We follow the information.
Because the objective is not simply to identify that cash is tight.
It is to understand what inside the business is making it tight — and what can be changed.
Talk to us
You don’t need to diagnose the problem before speaking to us. Tell us what is happening, tell us what is worrying you, and show us the numbers. We will start by helping you understand what questions need to be answered.