STOP Checking Your Bank Account Like This

Andy
And this is where most tradies get stuck because you’re looking at one thing and making decisions based on something completely different.

Ange
You’re confusing profit with cash flow, and if you don’t understand the difference, you’ll keep working your guts out without actually getting ahead. 

Andy
So in today’s episode, we’re breaking it down, why your profit isn’t showing up in the bank and what you need to understand to actually take control of your money.

You’re listening to The Tradie Show. This is the podcast for trade business and contracting bosses like you who wanna lead with confidence, make more profit, and create a better lifestyle. 

Ange
We’re your hosts, Andy and Angela Smith, husband & wife team and co-founders of Lifestyle Tradie. Are you ready to have some fun?

Andy
Hell yeah!  All right, let’s cut to the chase. When was the last time your business worked for you instead of running you into the ground? If you’re sitting there thinking, “Yep, that’s me,” then we need to talk. I’m Andy Smith, and I’ve been where you are: long hours, cash flow nightmares, no control. Does any of this sound familiar? But here’s the thing, you don’t have to keep living like this. There’s a way out, and it starts with a gameplan call. It’s just 10 minutes. We’re going to identify the bottlenecks holding your business back and map out a clear, straightforward plan to get you moving forward. Think of it as your shortcut to make more profit, more control, and more time to actually enjoy your life. And if you’re stuck with cash flow issues, team headaches, or just feel like you’re drowning in endless work, well, guess what? I’ve got your back. So here’s what you need to do. Head to lifestyletradie.com.au, hit the big green gameplan call button, or just scroll down on your phone. Listen, if a 10-minute call could save you hours of headaches, why wouldn’t you take it? Make the move. Let’s turn things around and get your business working for you, not against you. Hell yeah!

All right, it’s time to kick things off with some hell yeah wins from our amazing Lifestyle Tradie members. Hell yeah! These are the legends who’ve been smashing it in their businesses, proving that small changes can lead to massive results, and hopefully these give you some inspo on what you can do in your business. Ange, what have we got this week? 

Ange
Okay, got some great hell yeahs to share today, Andy. First up, a big shout-out to Amanda, who runs an electrical company in Melbourne with her husband, Matt, and she shares, “This is our first week of having two vans out on the road and Matt off the tools and in the office.”

Andy
Yes, that’s a big hell yeah. It’s always great when you get that opportunity to step back and work in the office and look at the business. They didn’t mention Ange, they recently bought a commercial space as well for their business. 

Ange
Yes, absolutely. 

Andy
So who’s next? 

Ange
Okay, next up is Yuan, who operates a garden and landscaping business in Brisbane. He’s been a member with us for 12 months and he shares, “I sent a quote to one of my existing clients. The total amount was paid immediately before she even replied to me with an approval message, and we haven’t even done the job yet. I love having a customer relationship like this. It feels even better than an A grade customer.” Hell yeah! 

Andy
That is a hell yeah. I absolutely love that. And last but not least, who is up next? 

Ange
Okay, this one’s awesome. This is Tarum, who owns a plumbing business in Perth, WA. He writes, “I had eight days off work and only spoke to the crew twice.” 

Andy
Yeah, that’s a great hell yeah. Being able to take holidays without the crew ringing you time and time again is a huge win, and that’s what we’re all about here, helping tradies like you take control, make changes, and see the wins rolling.

All right, let’s get into it because this is a big and very important one, and I reckon if you’re listening right now, there’s a good chance you’ve felt this before. You’re busy, you’re working hard, there’s money coming through the business, but somehow there’s just never quite enough sitting in the bank. And the frustrating part is this: you can’t quite put your finger on why. 

Ange
Now, most tradies, when they’re in this situation, they start guessing. They say things like, “Oh, we need more work,” or, “We need to charge more,” or, “We need to cut costs.” And sometimes those things are true, but a lot of the time that’s actually not the problem.

Andy
The real problem is this. You’re looking at your bank account and assuming that tells you how your business is performing. And guess what, everyone? It doesn’t. Your bank account is not your profit. It’s just a snapshot of your cash at that point in time. 

Ange
And that cash is made up of a whole mix of things. Some of it is actually yours, but a lot of it isn’t. You’ve got GST sitting in there that belongs to the ATO. You’ve got supplier bills coming. You’ve got wages about to go out. You’ve got tax just around the corner. 

Andy
So when you open your banking app and you see a number, that number is not telling you, “This is what I’ve made.” It’s telling you, “This is what happens to be sitting here in this bank account right now.” And that’s a massive difference. 

Ange
So let’s break this down in a simple way so that everyone understands it. There are two completely different things at play here in your business, profit and cash flow. 

Andy
Profit answers one question: did we actually make money? And cash flow answers a different question: when does that money move? 

Ange
And this is where things get messy, because in business, money doesn’t move in a straight line. You might do a job today, but not get paid for seven days, even 14, or maybe 30 days. 

Andy
You might buy materials this week, but not pay for them until next month.

Ange
You might do a heap of work this month, but your BAS doesn’t hit until next quarter. 

Andy
So what ends up happening is this. You can be making profit, but the cash hasn’t landed yet. 

Ange
Or the cash has landed, but the expenses haven’t hit yet, and that’s why things feel out of sync. 

Andy
The thing is, when you’re on the tools, everything feels immediate. You do the work, you expect to get paid, you see money come in, you assume it’s yours. 

Ange
But your business doesn’t run like that. It runs on timing, and once you start to understand this, you realize something pretty quickly. Your bank account is actually always lying to you. 

Andy
Not intentionally. 

Ange
No . 

Andy
But it’s only showing you one piece of the puzzle.

Ange
Okay. So let’s do this practically. Let’s say you do a job for $1,100. Looks great, right? Money hits your account. You’re thinking, “Beautiful. We made money.” 

Andy
But let’s actually break that down. Out of that $1,100, there’s GST, materials, wages, overheads, tax. 

Ange
And by the time you strip it all back, your actual profit might only be a couple of hundred bucks.

Andy
But here’s the kicker. Those expenses don’t all leave the account at the same time. Some go out today, some go out next week, some next month, and some in three months.

Ange
So your bank balance goes up, then slowly comes down as all those costs catch up. 

Andy
And that’s exactly why your profit and your bank balance don’t line up.

Ange
Now, here’s where this becomes a problem, because if you don’t understand this, you start making bad decisions. 

Andy
You see money in the account, and you think, “We’re doing so well. Let’s spend some of it.” So you buy a new ute, you hire someone, you spend money on marketing. Let’s go buy more tools.

Ange
Oh, but then a few weeks later, the bills hit, and suddenly you’re under pressure.

Andy
Now you’re chasing cash, you’re stressed, and you’re thinking, “What the hell went wrong?” 

Ange
But you know what? Nothing went wrong. You just made a decision based on cash instead of understanding profit and timing. 

Andy
Now, this is where it really starts to mess with your head as a business owner because your bank account starts dictating how you feel, right? One week you open it and you think, “We are the king of the world, and we are absolutely flying.” There’s money in there. Things feel under control. Then a week or two later, you check it again, and you think, “What the hell just happened? Where did all the money go?” 

Ange
Oh, now suddenly you’re stressed. You’re second-guessing everything, and you’re thinking the business is struggling. But nothing actually changed in the business. The only thing that changed was the timing of the money. 

Andy
Every trade business runs on cycles. You’ve got weekly expenses like fuel, maybe fortnightly wages, monthly bills, quarterly tax, and they don’t come out evenly. They stack. 

Ange
Yes. So you’ll have weeks where everything hits at once, and that’s when your bank account drops hard.

Andy
Then a week later, you’ve got payments coming in again, and it goes back up. So your bank balance looks like an absolute roller coaster. Up, down, swinging, turning around. It is up and down like you wouldn’t believe. 

Ange
So if you’re using that as your main indicator, you’re going to react like that too. When it’s high, you feel super confident, but when it drops, you start to panic.

Andy
And you end up with a stop-start business. No consistency. You’re just reacting to everything. 

Ange
So let’s talk about what you need to do instead. You need to stop asking how much is in the bank account right now, and you need to start asking what’s actually going on underneath this number. 

Andy
Because there are three things every business owner needs to understand. Profit, are we actually making money? Cash flow, when is the money coming in and going out? Position, meaning what do we own and what do we owe? 

Ange
Most tradies only look at one, being the bank account. 

Andy
So what’s the big lesson in all of this? Cash flow keeps you alive. You can be profitable on paper, but if the cash stops, the game is over.

Ange
Yes. Ouch. And there’s things hitting your bank account that don’t even show in profit. I’m talking about things like loan repayments, equipment finance, even drawings for some. So you think you’re making money, but your bank account is actually still getting drained. 

Andy
This is why we need more visibility. At the most basic level, you need to map it out. What money is coming in, what money is going out, and when it’s happening, literally week by week. 

Ange
And when you do that, something powerful happens. You stop guessing, and you are now empowered to ask two key questions. Wanna share what they are? 

Andy
I do. Question one, what is my next low point?

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And what you need to do here is have a look at your bank balance and see when it’s gonna dip to its lowest. Because if you can see that coming in advance, you’ve got time to do something about it.

Ange
Yes, absolutely. You can actually bring cash forward, you can actually delay spending, and you can plan ahead instead of reacting when it’s too late. 

Andy
And the second question is: What free cash do we actually have? Not what’s sitting in the account today, but what’s actually available once everything is accounted for.

Ange
So that’s the money you can safely use to hire, invest, and grow without putting yourself under pressure. 

Andy
Okay, so let’s bring this back full circle, because profit still matters. We all know that. Income minus expenses. That’s it. But if you want more profit, you’ve got two levers. Either increase revenue or decrease expenses.

Ange
And here’s the key. Profit tells you what to do next, but cash flow tells you how fast you can do it. 

Andy
You might know, hey, guess what? We need to hire another tradie. That’s your next move, right? But cash flow answers, can we afford that right now? 

Ange
And you might know that we should spend more money on marketing, but the cash flow then tells you, do we have the room to do it safely?

Andy
Most tradies, you either focus only on cash and never grow, or you focus on profit and you grow too fast and you get burnt. 

Ange
Yes. So the smart operators understand both. They make decisions based on profit and pace those decisions based on cashflow. 

Andy
And when you get this right, everything changes. 

Ange
Okay. So Andy, for those listening and thinking to themselves, “Yep, that’s me”, what do you suggest that they do this week?

Andy
So starting this week, the very first thing you’re gonna do is stop using your bank account as your scoreboard. 

Ange
Agreed. 

Andy
That number is not telling you how your business is performing. It’s just telling you what happens to be sitting in that account right now. 

Ange
Okay, great point. What’s next? 

Andy
Second, pull up your P&L, and next to each line ask yourself, when does this actually affect my bank account? Like with materials, most people might pay that at the end of the month. With wages, you might pay that weekly. With rent, you might pay that monthly, or you might even pay it quarterly. Just write the timing next to each line of when the money comes in or leaves the account. Because once you see that everything hits at different times, you’ll understand why nothing lines up.

Ange
Love that. And third? 

Andy
Yeah, you just wanna separate your money. Set up a GST account, set up a tax account, and move that money out as it comes in. So what’s left in your main account is actually closer to what you can use. 

Ange
Yes. And I would add, look a few weeks ahead, like what’s coming in and what’s going out, so you’re armed with the reality of what to expect with your cash flow.

Andy
Yeah. The thing is, a lot of people see money in their account, and the actual money in the account isn’t theirs. It’s the tax person’s or it’s someone else’s. So, and this is what it all comes down to, right? Profit tells you if you’re actually making money, but cashflow tells you if you’ve actually got it.

Ange
Yes. And when you understand the difference, you stop guessing, you stop stressing, and you finally start feeling in control of your business again. 

Andy
It’s Tradie Dilemma time, brought to you by Buy4Tradies, the buying group helping tradies like you save serious coins on materials, fuel, vehicles, tools, and other services. If you’re not using it, you’re probably paying too much. This is our Q&A segment where you let us know what you’re having trouble with in your business, and we’ll give you our best advice to sort it out. 

Ange
Okay. So today we have a question from Frank, who owns an air conditioning business in the Sunshine Coast, and he writes, “Hey, Andy and Ange. I’ve had my business for 12 years, a team of six. I’m not on the tools anymore, but I do drop in from time to time. That said, I’d love the team to step up more and take responsibility. So as a business owner, should I be the one to mentor the team or get another person to do it?” 

Andy
Well, it’s your business, mate, and I all believe everything starts with you. So if you want them to take on more responsibility, you’ve got to look back and think, “Well, what have I done to help them take more responsibility in the past?” It sounds like over those 12 years you’ve always been the guy that wore all the hats and taken all the responsibility. Now it’s a chance to look at your team of six and think, is there a leading hand there? Is there someone that really wants that extra responsibility? And then it’s about training them to really step up. You may need to go out on site and work with them more. You may need to help them with some leadership skills. But all those things in your head, when you come up with these entrepreneurial ideas like most of us business owners do, you pull that leading hand aside and you have a chat with him and you say, “Hey, this is what I’m thinking I’m gonna introduce with the business. What are your thoughts? What do you think?” And you teach him how to lead, and then as the both of you, you have a meeting, you drag your team in, and you talk about what those next steps are, then you can step back and the team leader takes control. I really believe that you as a business owner should be the one that mentors your leading hands, your experienced people, and your tradies, and I think you are the best person for the job.

Ange
Yes. Great response. Couldn’t agree more. Thanks for writing in with your question, Frank. And remember, if you want Andy and I to answer your most challenging question, then send it our way to podcast@lifestyletradie.com.au. 

Andy
So if there’s one thing you wanna take away from today, it’s this: Just because you’re making profit doesn’t mean you’ve always got cash.

Ange
And if you’re only looking at your bank account, you’re never getting the full picture. 

Andy
The shift is simple. Understand your profit and understand your cash flow, because when you do, you stop reacting to what’s in your bank today, and you start making decisions based on what’s actually happening in your business.

Ange
And if this episode hit home for you and you’re thinking, “Yeah, I need to get a better handle on this,” then that’s exactly what we help tradies do. 

Andy
So if you want clarity on your numbers, your profit, your cashflow, and what your next move should be, then book a game plan call with me. I’ll walk through your business and show you exactly where you’re at.

Ange
Okay. That’s it for today’s episode of The Tradie Show. Catch you at the next one. 

Andy
Hell yeah! Subscribe to The Tradie Show, wherever you get your favorite podcasts. Rate and write us a review or for more information about Lifestyle Tradie, head to lifestyletradie.com.au.