The Smart Contractor
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#022

He Hit £2M Revenue and Had No Idea If He Was Making Money

Read time -
4 minutes

Steve (not his real name) grew his construction business 167% in 12 months.

From £750K to £2M.

He was aiming for £1.5m, but actually hit £2m, beating his projections by 33%.

On paper, he looked like a hero.

But when I asked him about his profit margins, he said something that stopped me cold:

“I’m working 80 hours a week. If I’m being honest, I don’t actually know whether I’m making any money or not.”

Think about that. £2M in revenue. No idea about profit.

And here’s the terrifying part – this is more common than you think.

It’s not just about not knowing your numbers.

It’s about what happens when your revenue explodes faster than your systems can handle.

If you’re growing fast and don’t have proper visibility, you could be losing money on half your jobs and wouldn’t know until it’s catastrophic.

When Growth Outpaces Control

I see this pattern constantly with construction businesses between £500K and £3M.

They achieve explosive revenue growth while their financial infrastructure remains at startup level.

Here’s what Steve had:

  • A bookkeeper who was “learning”
  • Software that was “okay, but not great”
  • Annual accounts that came 6+ months late
  • Zero monthly management accounts
  • Zero cashflow forecasting
  • Zero visibility into project profitability

For 19 years, Steve built without a foundation.

When growth accelerated, the cracks became chasms.

Why This Happens

1. Revenue Can Mask Deteriorating Margins

When money’s flying in, it feels like you’re doing well.

But if your margins are shrinking on each job, fast growth actually accelerates your path to a cash crisis.

Steve could have been:

  • Underpricing jobs to win them
  • Letting material costs eat into margins
  • Paying overtime without tracking it against job budgets
  • Taking unprofitable work just to keep the team busy

Without visibility, all of these look the same - a busy business with money moving around, but no proof of profit.

2. You’re Making Million-Pound Decisions on Gut Feel

When Steve evaluated new opportunities, he didn’t know what he could actually afford.

  • Should he hire that QS? → Unknown.
  • Take that £200K job? → Unknown.
  • Buy new equipment? → Unknown.
  • Expand to a new region? → Unknown.

Every decision was “stabbing in the dark” – his accountant’s words.

That’s not leadership. That’s gambling.

3. Operational Chaos Takes Over

Without systems, Steve was trapped in a cycle of overwork.

He clocked 70–80 hour weeks doing the same things over and over:

  • Chasing information from his bookkeeper
  • Piecing together job costs from multiple sources
  • Guessing at cashflow for the next month
  • Constantly worrying if he was actually making money

It’s not just inefficient – it’s unsustainable.

And it had real personal costs:

  • Weight gain
  • High stress
  • No time to work on the business
  • Family barely saw him

That’s not growth. That’s survival.

The Real Cost of Delay

Steve delayed fixing this for 2–3 years.

His business coach had been telling him:

“You need a new accountant.”

His answer?

“I’ve just sat on it and sat on it.”

What did that delay cost him?

  • Years without strategic visibility
  • Decisions made blind
  • Missed opportunities he couldn’t evaluate
  • Personal health deterioration
  • Constrained growth (despite higher revenue)

The cost of the above missed opportunities could easily run into £££’s of pounds.

The Turning Point

Eventually, Steve hit his limit.

In his own words:

“It’s been 19 years of running a business with no foundation, and it’s now got to a point where it’s like, I’m almost drowning in it.”

That admission changed everything.

He finally stopped patching symptoms and started building systems.

The Fix

When Steve finally admitted he was drowning, that was the shift.

He didn’t have a fix overnight – but he stopped pretending everything was fine.

For the first time, he’s now rebuilding his financial foundations properly: getting monthly visibility, sorting his systems, and working towards full control.

He’s still in the thick of it, but now there’s a plan – and that’s the difference.

Because once you decide to face the numbers, everything changes.

I’ll share an update on Steve’s journey in a few months – because what matters most now is that he’s finally building on solid ground.

The Lesson

When visibility is missing, revenue becomes a misleading headline.

You can look successful and still be bleeding profit.

You can’t scale what you can’t see.

You can’t improve what you can’t measure.

You can’t lead strategically while operating blind.

Steve grew 167% without visibility.

That wasn’t success – that was luck.

And luck runs out.

What To Do If You’re in the Same Boat

If you’re making £500K+ and Steve’s story hits home, here’s where to start.

This Week: The Visibility Tests

The Profit Visibility Test

Answer these now:

  • What was your actual profit margin on your last project?
  • What’s your cashflow position 12 weeks from now?
  • Which of your services are most profitable?
  • What’s your true cost of labour (including overheads)?

If you can’t answer at least three, you’re flying blind.

The Decision Test

Think about your last major decision – hiring, new kit, new contract.

Did you have data, or just a “feeling” based on the bank balance?

If it’s the latter, you’re gambling.

This Month: Get Systems in Place

1. Monthly Management Accounts

At minimum:

  • Monthly P&L
  • Project-level profitability
  • 12-week cashflow forecast
  • Simple dashboard

Essential for businesses turning over £500K+ – non-negotiable.

2. Basic Job Costing

Track the following costs:

  • Quoted amount
  • Actual labour hours
  • Actual material cost
  • Actual profit margin

Do it for every job. Patterns emerge fast.

3. Weekly Financial Pulse

Every Monday (10 mins):

  • Current cash position
  • Money in / out this week
  • Any red flags

Ten minutes. Huge clarity.

Next 90 Days: Build the Infrastructure

If your current accounting setup isn’t giving you visibility, it won’t suddenly improve.

You’ve outgrown it.

Steve learned that the hard way.

He tried to “fix” what was broken – it didn’t work.

The breakthrough came from starting fresh:

  • Modern software
  • Outsourced finance team
  • Monthly management accounts
  • Strategic accountant partnership

That’s when growth became controlled – not chaotic.

Bottom Line

Steve’s business grew by 167%, but for years, he was guessing.

He doesn’t need more sales.

He needs visibility.

And as he builds that, everything will change – stress, control, and profitability.

So here’s the truth:

If you can’t see what’s happening in your business financially, you’re not scaling.

You’re drifting.

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