There is a book titled Profit First. This might help you a bit. It helped me in a similar situation.

This seems like a classic working capital optimization case. How are your AR, AP and inventory holding up?

Not sure what’s up with the answers you have received so far.

The correct answer is most likely the difference between cash flow and profit.

If you run a business that has inventory, it is possible to have a profit, but negative cash flow.

This occurs when you inventory levels at the end of the period are higher than at the beginning of the period - in which case the profit has been spent on higher inventory levels.

Profit = (price * volume) - cost. Price sometime is hard to change adjust and might not mkae that much difderence. Volume, a lot of time you cant control. That leave 1 thing lefr, cost which you havr 100% control. Look over your expense. Start cutting cost, shopping around. Do you need all the employees? Can you do with 1 or 2 less? What if you do a little more, can u remove 1 person? Some people run a business that does 2m or 4m and lose money or break even. While some people does the exact same business, but can get a 10-15% profit. Its all due to expense think price before spending something. Spending isnt just a write off, its money out of your pocket

Working capital + capital expenditures are the likely culprits. Interest payments, and taxes are likely secondly potential drains as well.

First, if you are based in the US, reach out to your local SCORE chapter for a free business mentor. Local SBDC groups also offer this. Amazing resource and the folks in my local Seattle chapter are outstanding operators and genuinely enjoy helping local business owners.

Next, have you joined an industry peer group or owner best practices group? I’m in a best practices group of 15 business brokers and it has been invaluable. If you are not part of a group - start one - either locally or online, does not matter. The impact on your business, and your personal ability to overcome business challenges, can be profound.

Many small business owners pay little attention to pricing. Have you mystery shopped your competition in the last 6 months? Are you chasing revenue? Do you need to drop unprofitable accounts?

I’m a former business accountant with years of experience advising small businesses on profitability. No-strings-attached, I’ll go over your books with you on a Zoom call and figure out what is going on.

I have a different perspective here. First, why are you running 2 different businesses? Running a business is very demanding and stressful, and it’s the rare entrepreneur who can run 2 at the same time equally well. If you’re struggling to make money, my advice would be to focus on one business and let the other one go. You said in another comment that one of them is more profitable. Focus on growing that one and stop wasting resources on the less profitable one. It’s a lot easier to grow one business than it is to operate 2 businesses at the same time, as it just means fling more of what you’re already doing, hiring more of the same positions. You can realize economies of scale at larger volumes than you can at smaller volume

One of the things you could consider is combing the two companies into one company. Probably having the restoration company absorb the janitorial. They are so close in function that it makes a lot of sense.

Read Profit First

If you’re an LLC you shouldn’t be on payroll. If you’re S Corp then you should be on payroll.

Id like to ask a serious question, how does own come to run a 45 employee company and not have a basic grasp on accounting and bookkeeping. Curious bc I am running a small construction company and would be absolutely out of business in no time flat if I didnt have an iron grip on the numbers. OP must be doing something right despite his current struggles…or is it daddys company? Just kidding, an Earnest question thanks. One book i can absolutely say is a gem is Linda Cases remodelers guide to making and managing money. I know its about remodeling but the financial management seems to be applicable in many other service industries.

How do you have a profit if you can’t pay taxes?

Profit is whatever money your company has left after taxes and expenses including your own salary.

I don’t understand what you expect a bunch of strangers to tell you lol It’s your business- you should have access to your financial records. Make a spreadsheet with your revenue and expenses…should become fairly obvious.

I’ve been there. Was making over six figures in revenue but barely scraping by each month, sometimes not able to draw a paycheck. It’s obvious you’re doing something wrong. Could be a lot of things. Main culprits that hit me:

I wasn’t charging enough. I had clients that wanted the cheapest possible service. Those tend to be very bad clients. You don’t make much money upfront and if they complain/want rework, you’re actually losing money. Find these bad clients and fire them as soon as possible.

Bad sales. You need to be out there selling and looking for better/more profitable accounts. Figure out your most profitable type of client and find MORE like that. When money is tight you feel like you need to work with anyone for any amount and that just makes matters worse. The only way to fire bad clients is having better clients ready to go and for that you need sales.

Bad advice. You need to find other business owners to network with. Just like this sub, but in person. Join that chamber of commerce, cleaning business association, go to events etc. I even found this podcast about cleaning businesses https://youtu.be/oiatXFvh3g4?si=7nRs_UAsMNyGcE2K Find a way to talk to more experienced and successful business owners and ask them for help.