32. Frustrated With Slow Seasons? How Saving Helped Us Avoid Debt

Let's talk about the importance of saving when business is good and how Profit First has

helped us even during slower seasons.

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Hey, I'm Shay Toya.

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I've spent more than 10 years in construction, working behind the scenes in marketing,

hiring, and I've seen how overwhelming it can be to grow a business.

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That's how we've learned to build a sustainable business using clear systems, strong

communication, and intentional recruiting.

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If you're ready for better hiring, smarter remarketing, and a business that doesn't fall

apart when you step away, welcome to building better contractor businesses.

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So as a business, there's things that I feel like as a small business we don't talk enough

about.

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The importance of saving, even when business is good.

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Good months can make us feel super comfortable, where it makes us believe it's always

going to be good.

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But unfortunately that isn't always the case.

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We can feel like we're doing all the right things, but for whatever reason, things happen,

life happens, and business slows down.

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The importance of saving before you ever actually need it.

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And so years ago we started following the Profit First principles.

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And if you've never heard of Profit First, it's pretty much paying yourself first before

you take care of everything else.

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And within Profit First, it has caused us to have multiple different accounts for multiple

different things, from taxes to payroll to whatever we needed, which helped us save money.

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Because it didn't allow us to believe we had more money than what we actually had.

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Because there's certain money th that goes to different things.

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So go back to the beginning of the year and for whatever reason, business slowed down,

which lasted about eight months.

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And we knew that it would pick back up.

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But the truth is we just didn't know when.

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This is not financial advice.

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I am not a financial advisor.

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All I'm doing is sharing our personal experience within our organization.

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When business slowed down, our business expenses didn't stop.

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They continued.

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We still have payroll, we still have taxes, we still have vendors, we still have so many

different people that still likes their money.

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But fortunately, because of profit first, we had some reserves.

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And what I would like to say is that savings did not remove the stress.

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It was still there because we were touching our reserves.

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What I can say is that it gave us time.

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It gave us time to figure it out.

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It gave us time where we didn't have to take out any loans, which I'm very grateful for

because that would be a bigger issue today.

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So I just want to share with you guys what what helped us.

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What are the reasons why we didn't have to take out a loan when business slowed down?

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And hopefully my story and our story can help someone else in the future.

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So number one is to save what business is good.

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You don't have to follow the principle of profit first.

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Figure out what works for you.

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Every business is different and every business has different needs.

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So if you're not going to follow profit first, figure out exactly what you're going to do

and follow that and be consistent.

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Don't assume that good months are here to stay.

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Unfortunately you never know.

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You don't know why things just slow down.

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Sometimes there's reasons and sometimes there isn't.

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So my biggest tip that I can give you is to save even during the good times.

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To save and even if it's a small amount of portion, save it.

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Number two, not all money is spendable.

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The biggest factor for us within Profit First is that it shows us.

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When you're putting money in certain areas, it shows us where money should be spent.

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You may receive a check.

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Let's just say you s I'm just gonna put a number out there.

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Just say you received a check for a thousand dollars.

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That a thousand dollars isn't all yours because there's other things that have to be paid

for.

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So having it where it goes into different buckets helps you

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not be like, this $1,000 is mine, but this thousand dollars also has to go to payroll,

also has to go to taxes, any other expenses that you have occurred.

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So and I think with Profit First, the biggest thing that they say, if you've read the book

Profit First, which I do recommend it, they talk about if you start having to take money

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out from certain things, that's just a big indication that you're either not making enough

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Or you're spending too much.

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So that's one great thing of seeing where the money is being pretty much budgeted into

different things.

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Number three, the biggest thing that I can say about profit first, it makes us super

attention of paying yourself first.

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Prioritize profit.

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As small businesses, a lot of times for whatever reason, we prioritize ourselves last.

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A lot of times our people get paid before us.

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But within the profit first principle, you're paying yourself first.

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You're making sure you're okay as a small business.

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Number four, reserves give you options.

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It provides you more time to make decisions.

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Because we had some type of reserves, we may have looked at loans, but we did not take out

the loans, but there were options.

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It was available, but we did not take out the loans because we had reserves.

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It helps you react less.

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You know, when you're in survival mode, you do things that you probably wouldn't do if you

weren't because you're in that area of thought where things aren't going to be okay.

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The truth is things always work out.

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Even if it's not at that time, it will.

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Number five.

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And this was a big indicator for us.

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Debt doesn't have to be the answer.

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Debt doesn't have to be the first answer.

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During this time, we are able to avoid alone.

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And I would like to add

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Debt isn't always bad, but it wasn't our only option and if we would have taken out a

loan, I believe the recovery mode would have been a lot worse.

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So these are just things that just helped us because we did follow the profit first.

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It didn't allow us to not have options.

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And that's the biggest thing I can say through this entire lesson that I've learned.

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My biggest tip for you is don't wait for your business to slow down to start saving.

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By that time

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It's already too late.

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The good months help you prepare for the slower ones, which prepares you for life.

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If things happen and some things that you just there's no control over.

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Having an eight-month slowdown proved to us why it really did matter.

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And like always, let's continue building a better contractor business.

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If you believe that this episode

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Brought you real clarity, be sure to share it with another contractor who also needs it.

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And if you want to keep this conversation going, be sure to join our community of

contractors inside Building Better Contractor Businesses.

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Facebook group.

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This is a community where we talk through the real problems.

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That you are having in your business.

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The link will be found in our show notes.

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And remember, we are not just completing projects, we are building better contractor

businesses.

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I will see you next time.