By Ryan Joneson, founder of GlassJar
A good spring looks like a good spring. The shop floor is full, the trucks are rolling and the deposits are coming in. Then the season ends, and somewhere in the quiet weeks that follow, the bank account is shorter than anyone expected.
Nothing went wrong. The shows were profitable. The shortfall comes from timing: when clients pay you, when you pay for their builds, and how long the last invoice takes to clear once the show has closed.
A deposit is money you are holding, not money you have earned
When a client pays a deposit in January for a March show, the work hasn’t been done yet. The money is in your account, but it’s owed back in the form of a build, freight and labor that haven’t been paid for. If the deposit is treated as income when it lands, the early months of the year look far richer than they are.
Here’s a hypothetical shop to show how it plays out. The figures are round and invented for illustration, not drawn from any real business. The shop has $50,000 in the bank on January 1 and runs $10,000 a month in overhead. It has three shows in the season, in March, April and May. Each is a $100,000 job that costs $70,000 to build, ship and install.
Each client pays a $40,000 deposit two months before their show. Build costs go out in two halves, the month before the show and the month of the show. The $60,000 balance is invoiced at show close and paid about 60 days later.
| Month | Cash in | Cash out | Bank at month end |
| January | $40,000 | $10,000 | $80,000 |
| February | $40,000 | $45,000 | $75,000 |
| March (Show 1) | $40,000 | $80,000 | $35,000 |
| April (Show 2) | $0 | $80,000 | -$45,000 |
| May (Show 3) | $60,000 | $45,000 | -$30,000 |
| June | $60,000 | $10,000 | $20,000 |
| July | $60,000 | $10,000 | $70,000 |
The three shows bring in $90,000 more than they cost to build. Even so, the account is $45,000 overdrawn in April and still short in May, which is exactly when the shop feels busiest and most successful. The money catches up in June and July, but only after the season has had to be funded from somewhere else.
How and when deposits are recognized as revenue is a question for your accountant. The cash point holds regardless of how they’re booked.
Stage the deposits to match the spending
The shortfall in that example isn’t caused by the shows. It comes from a payment schedule that puts most of the client’s money after your costs instead of alongside them. In effect, your shop is lending each client part of their build.
There are a few ways to close that gap, and each has trade-offs an owner has to weigh against the client relationship and the competition for the job.
A larger deposit at contract covers more of the early design and materials. A progress payment, due before materials are bought or freight is booked, puts the client’s money in the account at the moment the biggest bills land. And a balance due on a fixed date, rather than “after the show”, stops the final payment from drifting.
Run the same three shows with a different schedule: $40,000 at contract, $30,000 before materials are ordered, and the last $30,000 due on a fixed date 30 days after show close. Same jobs, same costs and the same profit. This time the bank balance never drops below $60,000. The difference is entirely in when the money arrives.
None of this is free. A client used to paying the balance after the show may push back, and a schedule that wins the cash argument but loses the job hasn’t helped. Knowing the number lets you decide where to hold firm.
Read the balance sheet before the lull, not during it
The profit and loss statement tells you whether the season made money. The balance sheet tells you what the next few months will feel like. Three lines on it do most of the work.
Deposits held, sometimes labeled customer deposits or deferred revenue, show how much of your cash is already promised to builds you haven’t done. Money owed by clients shows what is still to come in and roughly when. Bills due show what is about to go out.
Look at the first shop at the end of March. The account holds $35,000, which seems fine. But it is holding $80,000 in deposits for the April and May shows, and $105,000 of the costs for those builds is still to be paid. Clients owe $60,000 for the March show, none of it due for two months. Read together, those lines say April will be tight before April arrives.
A quick look at these three numbers in the middle of the busy season gives you weeks of warning. That’s usually enough time to chase a balance, move a payment date or line up short-term cover on your own terms rather than in a hurry.
Before the busy season starts, put these on one page:
- Every show on the calendar, with its deposit, progress and balance dates.
- The month each job’s labor, freight and materials will actually be paid.
- Your bank balance projected month by month through the quiet weeks after the season.
- Deposits held, money owed by clients and bills due, checked once a month in peak season.
- The lowest projected balance, and how you’ll cover it if it goes below zero.
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