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How do I fix cash flow in my plumbing business?

Answered by Potty Talk - The Podcast for Plumbing Business Owners with Richard Behney · Sep 17, 2026

Most plumbing companies that feel broke aren't short on work. They're short on price, visibility, and discipline with the money that does come in. On Potty Talk, host Richard Behney (The Million Dollar Plumber) breaks the problem into three causes, undercharging, no visibility, and zero cash management, and gives a five-move framework to fix them: an honest hourly rate, flat-rate pricing, weekly number tracking, and cash flow buckets.

Busy but broke is a pricing problem first

Richard's opening argument is that owners misdiagnose the problem. They think they need more calls, so they spend on marketing, add a truck, and end up just as tight at the end of the month. His view is that revenue isn't the issue for most shops. Cash flow is, and it hides under three separate mistakes.

The first is undercharging. If your rate was set by looking at what the guy down the road charges, it's almost certainly too low to cover your real costs. The second is no visibility: you don't know your numbers week to week, so you find out about a bad month after it's over. The third is zero cash management, which means every dollar sits in one account and gets spent on whatever's due next.

Each of those needs its own fix. Adding more jobs on top of a broken price only makes the hole bigger faster.

Work out your Honest Hourly Rate before anything else

Move one in Richard's framework is the Honest Hourly Rate. This is the rate you actually need to charge for every billable hour once you account for all of your time, all of your overhead, and a real profit. Not the rate that feels fair, and not the rate that wins the most bids.

The host explains that the number has to include the hours you don't bill: drive time, quoting, callbacks, admin, and the hours you spend running the company. Most owners price as if they bill eight hours a day when the truth is closer to half that. When you divide your true costs by the hours you can actually sell, the rate jumps, and that's the honest one.

On a previous episode Richard put it plainly: customers expect to pay for the full cost of the service, including overhead and future investment in the business. Charging less means you can't afford good equipment or good people, and the customer ends up worse off too.

Sell flat-rate prices, not hours

Once you know your honest rate, Richard's second move is to stop quoting hourly to customers at all. Flat-rate pricing means each repair or install has a fixed price built from your honest rate plus materials and a margin. The customer approves a number up front, and a fast tech is rewarded instead of penalized.

This also removes the argument at the kitchen table. Hourly billing invites customers to watch the clock and question every minute. A flat price shifts the conversation to the result. Richard's framing across the show is that the customer pays for everything the business needs to deliver the job, and flat-rate is the cleanest way to present that.

For a small shop the practical step is to build a price book for your 30 or 40 most common jobs, price each one from the honest rate, and stop improvising quotes in the driveway.

Look at the numbers every week, then split the cash

Moves three and four address visibility and cash management. Richard wants owners tracking their numbers weekly, not at tax time. Revenue, jobs closed, average ticket, and what's in the bank. A weekly habit catches a slow month while there's still time to do something about it.

Then come cash flow buckets. Instead of one account that everything drains from, you move money into separate buckets as it comes in: taxes, payroll, operating expenses, profit, and savings for the next truck or a slow winter. The point, as the show notes put it, is to stop you from spending tomorrow's money today.

It sounds like extra admin, but it's a few transfers a week. What it buys you is knowing exactly what's safe to spend, which is the difference between feeling broke and being in control.

"starting with the Honest Hourly Rate, flat-rate pricing, weekly number tracking, and cash flow buckets that stop you from spending tomorrow's money today."

Cash flow is one of four systems, not a one-time fix

Two weeks before this episode, Richard released a companion piece on the four systems every plumbing business needs: scheduling, pricing, people, and lead flow. The cash flow framework lives inside the pricing system, and it only holds up if the others do too. Great prices with no lead flow won't fill the calendar. Great lead flow with a bottlenecked owner burns out fast.

His test is simple. If every price, every schedule, and every hire still has to go through you, the company can't run without you, can't be sold, and can't be handed down. Fixing cash flow is the first step toward that, because once the money works, you can afford the people and tools that take the rest off your plate.

"you don't own a plumbing business, you own a job."

People also ask

How do I calculate an hourly rate for my plumbing business?

Add up every cost of running the business, including your own pay, overhead, and a profit target, then divide by the hours you can actually bill in a year, not the hours you work. Richard calls the result the Honest Hourly Rate, and it's usually higher than owners expect.

Is flat-rate pricing better than hourly for plumbers?

Richard says yes. Flat-rate gives the customer a firm price up front, removes clock-watching, and rewards efficient technicians. The prices are still built from your honest hourly rate underneath.

What are cash flow buckets?

Separate accounts or allocations you move money into as it arrives, such as taxes, payroll, operating expenses, and profit. They keep you from spending money that's already spoken for.

Based on the August 31, 2026 episode of Potty Talk, "5 Ways to Make More Money Today," hosted by Richard Behney, with additional context from his August 17, 2026 episode "The 4 Systems Every Plumbing Business Needs."