Learn how to improve cash flow, price jobs for profit, and make smarter financial decisions before the new year.

Your schedule is packed. Your team is busy. But is your business making as much money as it should?

From buying equipment to giving raises, the financial decisions you make at year-end can have a lasting impact on your bottom line.

In this free Masters of Home Service Live session, Paul Maskill from Blue Collar Business Advisors shared eight common financial mistakes contractors and home service business owners make, plus practical advice to help you protect your cash flow and build a more profitable business.

Watch the replay

8 year-end financial mistakes to avoid

You don’t have to wait until January to start making better financial decisions. Here are eight mistakes Paul recommends watching out for and what you can do instead.

1. Buying trucks just to save on taxes

A tax deduction might lower your tax bill, but that doesn’t mean a new truck is a good investment.

Paul shares an example of a contractor purchasing a $100,000 truck to save approximately $17,000 in taxes. While the tax savings sound appealing, financing the truck creates years of monthly payments.

What to do instead: Buy vehicles and equipment when your business needs them and they can help you generate revenue. Review the tax implications with your CPA before making a purchase.

LEARN MORE: Scale Your Fleet Without Killing Your Cash Flow

2. Stocking up on supplies you don’t need

Buying extra materials before year-end might seem like a smart tax move. But supplies sitting on a warehouse shelf or in the back of a truck tie up money you could be using elsewhere.

What to do instead: Keep track of your inventory and buy what you need to complete upcoming jobs. Before making a large purchase, consider how it will affect your available cash.

3. Waiting until tax season to talk to your CPA

If you only check in with your accountant when it’s time to file taxes, you could miss opportunities to plan ahead.

What to do instead: Schedule a year-end conversation with your CPA to review your business structure, financial records, and potential tax planning opportunities.

4. Giving raises without reviewing your numbers

Paying your team well matters. But increasing wages without considering your revenue and labor costs can put pressure on your profit margins.

What to do instead: Review your compensation structure and consider how you can reward great work, recognize performance, and support your business goals.

LEARN MORE: Build a Bonus Program That Makes Your Team Want to Stay

5. Pricing jobs without accounting for all your costs

A technician earning $30 an hour costs your business more than $30 an hour.

You also need to account for payroll expenses, benefits, drive time, materials, and other costs involved in completing a job.

What to do instead: Calculate your true job costs before setting your prices. That way, you can charge rates that cover your expenses and support your target profit margin.

6. Creating a budget you don’t revisit

A budget isn’t much help if you only look at it once a year.

Without regular financial check-ins, it can be harder to spot rising expenses, prepare for slower periods, or make confident decisions about your next investment.

What to do instead: Review your budget, cash flow, and financial forecasts throughout the year so you can adjust your plans as your business changes.

7. Putting off paying yourself more

Growing revenue doesn’t always mean taking home more money.

Paul shares how some business owners earn less after growing their companies because their expenses increase faster than their profits.

What to do instead: Build owner compensation into your financial planning. Make sure your pricing and operating costs support both your business and your personal financial goals.

8. Spending more on marketing before improving your sales process

More leads won’t necessarily mean more profit if you’re missing calls, losing quotes, or not making the most of each job.

What to do instead: Before increasing your marketing budget, look at three numbers:

• Booking rate: How many inquiries turn into scheduled appointments?
• Close rate: How many quotes turn into approved jobs?
• Average job value: How much revenue does each completed job bring in?

Improving these numbers can help you get more value from the leads you’re already generating.

LEARN MORE: Turn a $500 Quote into a $2k Job: Expert Shares Upselling Tips

Financial benchmarks for home service businesses

Paul shares these suggested financial targets to help service business owners evaluate their profitability and cash flow.

Financial metric	Suggested target
Gross profit margin	Around 50%
Net profit margin	15–25%
Office payroll	10–12% of revenue
Cash reserves	3–6 months of fixed operating expenses
Billable field time	Around 50% of paid field hours

These are general targets from Paul’s experience, not universal industry standards. Your ideal numbers will depend on your trade, business size, and the type of work you do.

For example, Paul suggests that remodeling businesses and general contractors may target gross profit margins closer to 40%, compared with approximately 50% for many service-focused businesses.

Start building a more profitable business today

You don’t need to wait for a new year to make meaningful changes to your business finances. Whether you’re reviewing your prices, planning your next hire, or looking for ways to improve cash flow, the first step is understanding your numbers. Watch the full session for practical examples, financial insights, and advice from someone who’s been in your shoes.

Session Q&A

During the live session, home service business owners asked Paul about everything from cash flow and job pricing to hiring employees and getting paid faster. Here are his answers to some of their biggest questions.

Cash flow and financial planning

How much cash should a home service business keep in reserve?

Paul recommends aiming for three to six months of fixed operating expenses in accessible business savings. That includes expenses like rent, software, office payroll, and other bills that still need to be paid when work slows down. Having cash reserves gives your business a financial cushion to handle unexpected expenses, slower seasons, and new opportunities.

Can my business be profitable but still have cash flow problems?

Yes. Your business can show a profit on paper while your bank balance continues to drop. That’s because your profit and loss statement doesn’t tell the whole story. Equipment purchases, loan principal payments, and other cash commitments can affect your available cash without showing up as equivalent expenses on your P&L.

Paul recommends reviewing cash balance trends over time. If your cash balance keeps dropping over a 90-day period, take a closer look at where your money is going.

Where should I keep my business cash reserves?

Paul suggests keeping your reserves somewhere your business can easily access them, such as a dedicated business savings account. A high-yield savings account may help you earn interest, but the priority is having money available when you need it.

What are the most common bookkeeping mistakes contractors make?

According to Paul, one of the biggest mistakes is grouping all employee wages into a single payroll category. Separating field labor from office payroll can give you a clearer picture of your direct job costs and overhead expenses. He also recommends reviewing your balance sheet regularly and tracking marketing expenses by channel, rather than lumping all advertising costs together.

Pricing and profitability

How do I price jobs when hiring my first employee?

Start by pricing your work as though you’re already paying someone else to complete it. Paul explains that many solo contractors set prices based on what they personally want to earn. But when it’s time to hire, those rates may not cover employee wages, payroll expenses, and other business costs. Building those costs into your pricing early can help you grow without putting unnecessary pressure on your cash flow.

Does non-billable technician time count toward job costs?

Yes. Drive time, loading equipment, and other paid hours spent supporting field work still cost your business money, even when you’re not billing a customer directly. Paul recommends including field labor costs in your cost of goods sold so you can better understand what it actually costs to complete jobs.

How do profit margin targets differ for remodelers and general contractors?

Paul suggests that remodeling businesses and general contractors often operate with lower gross profit margins than service-focused businesses. For example, he uses approximately 40% gross profit as a starting target for remodelers and general contractors, compared with 50% for many service businesses.

Because larger projects may require different staffing, materials, and marketing expenses, the right target depends on your business model.

What if my target profit margin makes my prices too expensive?

Before lowering your prices, take a closer look at how you’re communicating the value of your services. Paul encourages contractors to compete on the quality of their work, responsiveness, and customer experience rather than price alone.

Your ideal margin will depend on your trade, local market, and business model. The important thing is understanding your costs and setting prices that support your financial goals.

Hiring, payroll, and owner compensation

How do I know if I can afford to hire another employee?

Look at your workload, revenue, labor costs, and cash reserves before making the decision. For office staff, Paul suggests monitoring payroll as a percentage of revenue. He uses 10–12% as a general target, though the right number will vary by business. For field employees, consider whether you have enough consistent work to support the additional labor costs.

Should I pay technicians hourly, salary, or based on performance?

Paul recommends exploring performance-based compensation, where employees can earn more based on measurable results. The goal is to reward productivity and quality work while keeping labor costs aligned with revenue. Whatever structure you choose, consider employee retention, fair compensation, and applicable employment laws.

Does office payroll include service managers and production managers?

In Paul’s financial framework, yes. Office payroll includes employees who aren’t directly completing revenue-generating field work, such as dispatchers, customer service representatives, office managers, service managers, and production managers.

Tracking these costs separately from field labor can help you understand how much you’re spending to run the business.

How should two business partners pay themselves?

Paul recommends accounting for the market cost of replacing the work each owner performs. For example, if one partner completes field work and the other manages the office, your pricing should eventually support paying employees to perform both roles while leaving room for business profit. How you actually pay yourselves will depend on your business structure and applicable tax rules, so review your compensation plan with a qualified accountant.

Equipment, expenses, and getting paid

Should I buy or lease vehicles for my home service business?

There’s no one-size-fits-all answer. Paul recommends comparing the total cost of each option, including monthly payments, maintenance, repairs, and potential downtime. Leasing may offer predictable payments and warranty coverage, while buying may make more sense for other businesses. Consider the impact on your cash flow and review the tax implications with your CPA.

How can I get customers to pay invoices faster?

Set clear payment expectations before work begins and make it easy for customers to pay when the job is complete. Paul recommends collecting payment on-site when appropriate, rather than waiting days or weeks to send an invoice. With Jobber, you can send invoices from the field, accept convenient payment methods, and automate payment reminders to spend less time chasing outstanding invoices.

The information shared in this session is for general educational purposes only. Paul is not a licensed CPA, financial advisor, or attorney. Financial targets and examples reflect his experience and may not apply to every business. Consult a qualified professional for tax, legal, accounting, or financial advice specific to your situation.