Making Chips Podcast for Manufacturing Leaders The Gold Standard of Shop Finance: Cash Flow, Profit, and Growth, 481
Running a machine shop isn’t just about cutting chips—it’s about managing the numbers that make the whole operation possible. In this Machine Shop MBA episode of MakingChips, the team sits down with Jon Hughes of CLA to tackle one of the most overlooked yet critical parts of shop ownership: financial strategy.
Many shop leaders rise through the ranks of the shop floor without formal financial training. The books often become “just compliance”—something you do because you have to file taxes. But as Jon makes clear, your financial systems can be far more than compliance—they can be a competitive advantage. From managing cash flow to planning for growth and capital expenditures, the way you handle money directly impacts your ability to survive downturns, seize opportunities, and build wealth.
In this episode, we dig into why cash flow is king, what “working capital” really means for a shop, and how to navigate customer payment terms that often feel stacked against smaller manufacturers. They also explore practical strategies for budgeting, forecasting, and job costing—ensuring that every hour and every order drives long-term profitability.
Packed with stories, humor, and battle-tested advice, this episode equips shop owners with the knowledge they need to turn finance into a weapon rather than a weakness. Whether you’re just trying to make payroll or planning your long-term exit, these insights will help you keep making chips—and making money.
Segments- (0:46) Join us at Top Shops 2025 in Charlotte, NC!
- (6:05) Finance as more than compliance: a competitive advantage
- (7:45) Cash flow vs. accrual accounting in day-to-day operations
- (10:40) The profitability vs. cash flow argument
- (14:10) Managing uncertainty and strengthening the balance sheet
- (15:09) Working capital defined: how much is enough and how to measure it
- (18:15) Current ratio explained and what “healthy” looks like
- (22:15) Owner compensation: salaries vs. distributions and tax implications
- (23:48) Achieve RASRAM by checking out the SME Autoblok catalogue
- (25:28) Strategies for managing receivables, payables, and customer terms
- (31:08) Invoicing hygiene and avoiding clerical delays in payments
- (32:40) Following up on overdue invoices and staying proactive
- (36:32) Adjusting pricing to offset extended payment terms
- (38:45) Budgeting and forecasting as part of long-term financial strategy
- (44:56) Job costing and the 80/20 rule of profits and losses
- (48:10) Building financial review cadences and making finance a competitive advantage
- (50:20) Grow your top and bottom line with CliftonLarsonAllen (CLA)
- Join us at Top Shops 2025 in Charlotte, NC! Use code MAK20 for 20% off
- Funding Your Dream Shop: Creative Ownership Strategies You Haven’t Heard Yet
- Profits Aren't Everything, They're the Only Thing
- Business Model Generation
- Achieve RASRAM by checking out the SMW Autoblok catalogue
- Grow your top and bottom line with CliftonLarsonAllen (CLA)