Starting or scaling your garage door business? Here’s the quick answer:
Set up your purchase order (PO) system, learn how to read a Profit and Loss (P&L) statement, track cash flow monthly, and avoid financial mistakes by reviewing your numbers line by line.
This blog post outlines the exact financial systems we use at Aaron Overhead Doors to stay profitable and sustainable, especially for small and midsize garage door companies.
1. Set Up a Purchase Order (PO) System
Start with Jobber or another solid CRM. Implementing a PO system early lets you track job costs clearly and manage vendor relationships.
Here’s how we did it:
- Create a naming convention using the homeowner’s last name + street number (e.g., Smith123).
- Add suffixes to track multiple orders per job (e.g., Smith123-1, Smith123-2).
This simple move helps with job costing and inventory control, especially when managing multiple vendors.
If you’re just starting and unsure how to structure this, check out Markinuity’s consulting services to get expert guidance tailored to service businesses.
2. Understand Your Profit and Loss (P&L) Statement
Your P&L is your scoreboard.
Here’s the basic structure:
- Revenue (top)
- Cost of Goods Sold (COGS)
- Gross Profit
- Operating Expenses
- Net Profit (bottom)
Tips:
- Meet monthly with your bookkeeper or accountant (not the same thing) and go line-by-line.
- Highlight any expenses that are rising or seem off.
- Compare this month to the same month last year and to last quarter.
Use accrual accounting if you want a clearer picture of future obligations, not just what you paid today.
3. Review Cash Flow Statements Monthly
Don’t confuse cash flow with profit.
Cash flow tells you:
- How much money came in and went out
- When payments are due (especially important for large commercial jobs)
- Whether you can afford big purchases like trucks or expansions
Mistakes to avoid:
- Ignoring upcoming non-recurring expenses
- Using cash flow to justify unnecessary purchases
Real example: We did a big install for the Atlanta Falcons that cost us over $100K before they paid. We used savings, but a line of credit would have worked too. Know your numbers before the job starts.
4. Track KPIs and Segment Reports
Break out your reports by department:
- Residential repair
- Door sales
- Screens
- Commercial
Track:
- Gross and net profit by department
- Inventory turnover
- Accounts receivable days
- Close rates
- Average sale size
Why it matters: You want to know where your profit is really coming from. If you’re running service at a loss but crushing it on screen sales, that’s a red flag.
If you want to align your sales and KPI metrics with your marketing, check out how to start marketing for your garage door business.
5. Use Accrual Instead of Cash Basis Accounting
Cash basis = you only track money when it moves.
Accrual = you track income/expenses when earned/incurred.
Why accrual wins:
- Helps with forecasting
- Shows when bills are due
- Allows more accurate profitability tracking
If you’re serious about growth, move to accrual accounting early and build the right habits.
6. Create a Budget and Compare It Monthly
Create a budget. Stick to it. Compare it to your actual performance monthly.
You’ll be shocked how often spending drifts if you don’t.
Rule of thumb: Don’t spend on anything not in the budget unless it’s life or death. Push to next month and check your cash position first.
7. Be Smart with Loans
We prefer lines of credit over fixed loans.
Good uses:
- Funding growth (new department, showroom, truck)
- Bridging cash flow gaps between large job payouts
Bad uses:
- Covering ongoing losses
- Buying inventory in bulk too early
Pro tip: Only use debt if the ROI is 2x the loan cost.
If you’re not sure whether it’s time to invest in new marketing or systems, browse who Markinuity serves and see if your stage aligns with their business growth support.
8. Watch Out for Scams and Mistakes
If you let someone else pay your bills, implement an approval process for all new vendors or one-time charges. People send fake invoices and staff often pay them by mistake.
We’ve had it happen.
Final Thought
If you’re starting out, get help setting up your financials. Hire someone who knows service businesses. Learn to read your numbers monthly and review them line by line.
This stuff is boring until you realize it’s the difference between staying in business or not.
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