If your business is growing, congratulations! You’ve likely worked long hours, taken risks, and built something real. But growth doesn’t just multiply your wins; it can also expose cracks in your foundation. When you scale, the same systems that once worked smoothly start to strain under new weight. It’s common for cash flow to get tighter, taxes to become more complicated, and decisions that used to be simple can start to feel risky.
For small businesses across Texas, this stage can be both exciting and stressful. The good news is that most growing pains follow predictable patterns. Once you know what to watch out for, you can scale confidently and avoid expensive common financial mistakes.
When revenue starts rising, it’s easy to assume you’re in the clear. But cash flow is where many growing businesses stumble. For example, you may hire more help or order more materials, thinking you can afford it, but only to realize your cash is tied up in invoices that haven’t been paid yet.
A Fort Worth plumbing business might finish ten jobs this month but have to wait 45 days to get paid. A real estate broker might close big listings, but commissions take weeks to hit the account. When this happens, growth looks good on paper, but your cash balance tells a different story.
That’s why cash flow forecasting is crucial. To see your actual cash flow, take a look at what’s coming in and what’s going out over the next few months. If you see tight weeks ahead, talk to your accountant early. Sometimes a simple fix is all that’s needed, you can adjust payment terms, send invoices sooner or time purchases differently.
As you take on more work, not every dollar of new revenue is good revenue. Some services or jobs bring strong profits, while others barely break even once you factor in labor, materials, and overhead.
Many Texas tradespeople and service businesses grow quickly but don’t track margins by job or service line. Maybe your HVAC installs are profitable, but maintenance calls eat up your technicians’ time. Or your insurance team spends hours on low-commission policies that don’t move the needle.
Understanding your true profit margins helps you scale smarter. You can start by reviewing which services deliver the strongest return and focus your energy there. That way, you’ll have the confidence to drop or reprice the ones that consistently drag you down. Remember, business growth only works if each new customer actually contributes to your bottom line.
When you’re small, cash-basis accounting is simple. You record income when it hits your account and expenses when they leave. But as you scale, this system doesn’t show you the full picture. You might look profitable in one month, then scramble the next because you forgot about unpaid bills or work still in progress.
Accrual accounting matches income and expenses to when they’re earned or incurred, not when cash is transacted so it provides a better reflection of your true financial performance. That’s why lenders, investors, and buyers expect to see it as a business matures.
If you’re taking on larger contracts or carrying inventory, it’s probably time to make the switch. Your accountant can help you transition smoothly so you’re not caught off guard at tax time.
For contractors in Texas, job costing is the difference between profitable growth and silent losses. It’s easy to underestimate how much each job really costs, once you factor in travel, overtime, subcontractors or wasted materials.
Imagine a Fort Worth HVAC company that wins ten new installations, the owner celebrates the new business, but the books show that half those jobs barely broke even. Instead of making money, he actually lost money on half those jobs. The problem isn’t the work; it’s the consistent tracking of cost and expenses. Without real-time job costing, you can’t tell which projects are profitable and which are leaking cash.
Modern accounting software can help track costs by job, but it’s only as accurate as the data you put in. By making sure every expense, from fuel to fittings, is coded to the right project, you’ll get clear visibility into where your money is really going.
When your business grows quickly, your cash needs change. You’re paying for more materials and payroll, often before your customers pay you. That gap between cash out and cash in is called working capital, and it’s one of the biggest stress points during growth.
Many Texas businesses “grow broke” by underestimating how much working capital they need. They’re profitable on paper but short on cash because of slow collections or rising costs.
You can get a handle on your working capital by keeping an eye on how long it takes customers to pay (called Days Sales Outstanding) and how quickly you’re turning over inventory. If those numbers start creeping up, it’s a red flag to tighten collections or renegotiate supplier terms before things get too tight.
As your business grows, your tax obligations change, especially in Texas. Once your total revenue crosses the state’s franchise tax threshold of about $2.47 million for 2025, your business must file a franchise tax report with the Texas Comptroller.
It’s an easy one to miss because Texas doesn’t have a personal income tax. Many owners assume that means they have nothing to file at the state level, but that’s not quite true. The franchise tax is a business-level tax, sometimes called a “privilege tax” for the right to operate in Texas. Even if you owe little or nothing, you’re still required to submit a report once you hit the threshold.
If you sell taxable products or services, scaling can also trigger new sales and use tax obligations, especially if you start serving customers in different cities across the Dallas-Fort Worth area. Local rates and filing requirements can vary, so it’s worth reviewing them before you expand.
A Texas-based accountant can help you confirm when you need to file, what’s taxable, and how to stay compliant. Getting it right now saves you from messy clean-ups and penalties later.
Adding staff feels like a natural next step when business is booming, but payroll can quickly become one of your largest expenses and outpace your revenue if you’re not careful.
In the Texas trades, finding skilled labor is tough and expensive. Many contractors bring on help early to meet demand, only to find the work pipeline slows down. The same goes for real estate or insurance teams that add assistants or agents before they’re fully utilized.
Before hiring, make sure the math works. What revenue should each new employee bring in to justify their cost? How long before they reach that target? Your accountant can help you model this out so hiring becomes a confident investment, not a cash flow risk.
Many small businesses in Texas use credit lines or short-term loans to fund equipment, vehicles or renovations. The problem is that those loans often come due way before the asset pays for itself, and that mismatch can drain your cash flow fast.
A simple rule of thumb is to match the loan term to the life of the asset. If you’re buying a service truck that will last five years, use a five-year loan instead of a six-month line of credit.
You should keep short-term debt for short-term needs, like bridging slow collections, as this helps you stay financially stable as you grow.
When your business is small, you can run it by instinct. You know when things are busy or slow, and you can feel when cash is tight. But once you start scaling, intuition isn’t enough.
A simple dashboard or even just a one-page report can help keep you grounded. Your report should track cash on hand, accounts receivable, profit margins, and payroll costs. These numbers tell the story behind your growth and help you make smarter decisions month after month.
If you don’t have one yet, your accountant can help you set it up. Once you start reviewing it regularly, you’ll wonder how you managed without it.
With the right financial systems and guidance, scaling your business doesn’t have to mean sleepless nights and tax surprises.
At Adam Traywick, CPA, we help Fort Worth business owners take control of their finances. We cover everything from cash flow and payroll to tax planning and bookkeeping, so you can grow with confidence.
We understand the local challenges that trades, real estate, and insurance professionals face because we work with businesses just like yours every day.
If you’re ready to take the next step, book a consultation with us.
Let’s sit down and make sure your financial foundation grows as strong as your business.
Until next time!
