The Mid-Year Look

Somewhere around June every contractor I know, myself included, in years past, starts telling themselves the same lie: I’m too busy to look at the numbers right now.

It’s not really a lie about time. It’s a lie about fear. Busy is the alibi. The real reason is that if you open the books and the year isn’t tracking the way you hoped, you have to do something about it. And it’s June, and the truck needs brakes, and a client is upset about a tile order, and there’s always a version of today that’s more urgent than the spreadsheet.

I get it. There was a stretch of my life where I didn’t look at my numbers because I was afraid of what they’d tell me, and being afraid felt easier than being sure. It wasn’t. The fear didn’t go away by not looking. It just waited for me, and it got bigger.

So this post is an invitation to do the thing that feels harder than it is: sit down, mid-year, and find out where you actually stand. Not where you feel like you stand. Where you stand.

If you ask most owners how the year is going, they’ll tell you about the bank balance, or whether they “feel busy,” or how the last big check felt when it cleared. None of that is where you are. It’s a mood.

Where you are is a combination of two things: what your P&L says you’ve earned so far, and what your Work in Progress actually shows once Cost to Complete is honest. Those two numbers can tell very different stories. A healthy bank balance can be sitting on top of jobs that are quietly underwater, with the gap not showing up until they close out. A thin bank balance can be sitting on top of solid earned profit that just hasn’t been billed yet.

If you’ve been ignoring WIP, mid-year is when that gap is most forgiving to find. You still have time to do something about it. By Q4, the same gap is a surprise you can’t unwind.

This isn’t complicated. It’s four questions, in order, and each one only matters in light of the one before it.

1. What does your P&L say, year to date?

Pull your actual revenue, gross profit dollars, and gross profit percentage for the first half of the year. Compare them to your annual budget, prorated to six months. Don’t adjust for “yeah but” yet. Just look at the number.

2. What does your WIP say you’ve actually earned?

This is the question most owners skip, and it’s the one that matters most. For every job in progress, is your Cost to Complete current and honest? If it’s not, your WIP is decoration, not information. Once it’s current, look at your WIP adjustments on your monthly P&Ls and confirm that the WIP is feeding an accurate adjustment to the P&L.

3. What’s actually in your pipeline for the second half?

Not “what we’re talking to people about.” What’s signed, or close enough to signed that you’d bet your crew’s schedule on it. Map it against your production capacity for the next six months. Is there enough work lined up to keep your crew at the pace your budget assumes. Or is there a gap that needs to be filled by August, not October?

4. What’s your GP/Day run rate, and where does that put you by December 31?

Take your gross profit from your year to date P&L, divide by the calendar days so far this year, and you have your real GP/Day. Compare it to the GP/Day your annual budget requires. If you’re behind, by how much? And is it a pace problem (the jobs are right, but slower than planned) or a pricing problem (the jobs themselves don’t generate enough GP/Day even running at full speed)? Those are different problems with different fixes, and you can’t fix either one without naming it.

Once you have those four numbers, the rest of the year forecast is simple addition, not magic:

Earned GP so far (from P&L) + (Target GP/Day × remaining working days in 2026) = where you’d land if the rest of the year goes to plan.

Compare that to your annual GP goal. If there’s a gap, you now know two things: how big it is, and roughly when in H2 it has to be closed. That’s the difference between a vague feeling that “this year could’ve been better” in January 2027, and a decision you make in July 2026 — about pricing, about pipeline, about a job you say no to, about a conversation you have with your team about pace.

Forecasting isn’t about being right. It’s about not being surprised. Mid-year is the cheapest time all year to trade a surprise for a decision.

This doesn’t take a finance background. It takes an afternoon, your job costing software, your WIP, and your budget. Opened at the same time, on purpose.

If you’ve never done this before, don’t try to make it perfect. Do it once, roughly, and you’ll already know more than you did. Do it every six months, and it stops being scary. Once you start doing it quarterly or monthly it becomes just another thing you do like checking the weather before you frame a roof.

The fear doesn’t go away by avoiding the look. It goes away by taking it.