Know your runway before slow season hits—calculate exactly how many weeks your business survives on current cash reserves, what your break-even revenue is, and how much buffer you need to stop losing sleep in January.
A contractor who did $180,000 in revenue last year can still run out of money in February. Revenue is what you billed. Cash is what's in your account on the day you need to pay your truck insurance. These are different numbers, often by 30–60 days. The gap between invoicing and collection is where contractors get into trouble — especially after a strong fall season when customers are slow to pay over the holidays. Track your accounts receivable aging weekly, not monthly. If your average collection time is creeping from 21 days to 35 days, your effective cash is decreasing even if sales are growing. Chase invoices like work orders — with the same urgency.
In a busy month, fixed costs feel invisible — they're 20% of revenue and barely register. In a slow month at 40% revenue, those same fixed costs are now 50% of revenue. The math changes completely. Truck payment: $650. Insurance: $400. Phone, software, subscriptions: $200. Just these three items total $1,250/month — and they're due whether you did $500 or $50,000 in work. The contractors who survive slow seasons have either (1) built a cash reserve that covers 2–3 months of fixed costs, or (2) structured their business so fixed costs are low enough that even a bad month doesn't threaten survival. Audit your fixed costs annually — cancel anything that doesn't directly generate revenue or protect you from liability.
Every trades business should maintain a minimum cash buffer equal to 2 months of total expenses — fixed + variable + owner draw. This isn't a savings account. It's operational insurance. With a 2-month buffer, a slow January doesn't become an emergency. You don't take jobs at below your rate because you need cash this week. You don't make decisions from fear. Build this buffer during your best months — summer and fall revenue should be partially redirected into a separate account labeled "buffer," not spent on equipment or drawn out. When the buffer hits 2 months, you've bought yourself the ability to be selective. Most contractors never get there because they don't separate buffer money from operating money. Open a second account. Name it "Slow Season Survival." Move 10% of every deposit into it from May through October.
The Trades Business Starter Kit includes a cash flow tracking spreadsheet, break-even calculator, slow-season pricing strategy guide, and service agreement template. Guide from $19 — Complete Kit with all 19 templates, $49.
Get the Business Kit — $19Cash flow problems kill profitable businesses. This calculator shows how long your company can survive without new revenue coming in, based on your fixed costs, variable costs, and current cash on hand. Use it before slow season to see your runway, set a reserve target, or decide whether you need a line of credit before the gap hits.