YOU FUND THREE THINGS. BILLING COMES FOURTH.
Most cash flow advice for subcontractors starts at the invoice. In fiber the money has already left three times by then, and one of those prices tripled in five years while nobody renegotiated the terms around it.
A fiber subcontractor funds three separate things before an invoice exists. Make-ready gets paid up front at a price the pole owner sets. Compliance on publicly funded work, the certificates and the certified payroll and the mapping deliverables, gets carried for months ahead of the revenue it belongs to. Then the closeout audit holds the last payment until the as-builts clear. Fiber subs at $1M to $5M run 18 percent gross and 6 percent net, and the reason that thin number still feels worse than it reads is that all three outflows hit before a single dollar comes back.
None of this is a slow-paying customer or a discipline problem in the office. It's how carrier and publicly funded fiber work is bought, and it's the reason a fiber sub with a full schedule reaches for money that costs 30 percent a year. The fix is knowing which week each outflow hits, which is a forecasting job.
This post covers the money that leaves before you bill. That page covers the 75 to 90 days after you do. Read Fiber Subcontractor Cash Flow for the complete treatment, worked figures included.
WHAT IS MAKE-READY, AND WHY DOES IT COST YOU FIRST?
You sign a carrier master service agreement to place 40,000 feet of aerial fiber. Good unit pricing, a route you've built before, crews you trust. Then the pole owner sends the make-ready estimate, which is the work the utility has to do to its own poles before your strand can attach. Transferring somebody else's cable down a foot. Replacing a pole that can't carry another attachment. You don't do that work, you don't price that work, and you pay for it up front.
That's the first outflow, and it's the one that moved. Make-ready has run up roughly 300 percent over five years on outside-plant work. The unit prices in your MSA did not move 300 percent. So a route that penciled at a reasonable margin three years ago now carries a large up-front payment to a third party who has no reason to hurry, on a schedule you don't control.
Two things follow from that and both are cash, not margin. You've spent real money before a crew shows on site, so there's nothing to bill against it yet. And the pole owner's calendar sets when your crews can start, which means the money can sit out there for weeks while your splicers are on payroll waiting for a route to open.
THE SECOND OUTFLOW IS PAPERWORK ON PUBLICLY FUNDED WORK.
The $42.45 billion BEAD program hit its deployment stride in 2026, and for a lot of fiber subs that's the best backlog they've ever seen. It also carries a compliance load you fund before the revenue clears.
Certificates of insurance at limits above your normal book. Certified payroll every week, which means somebody in the office is producing reports while receivables wait. Mapping and GIS deliverables built as the work goes in. Every one of those is labour and administrative cost you fund in the month it happens, against revenue that clears an approval cycle later.
This is the outflow that gets missed in estimating, because it doesn't look like construction cost. It looks like overhead. So it goes into an overhead rate that was set before the funded work existed, and the bid recovers a fraction of what the compliance really costs to produce.
THE THIRD OUTFLOW IS THE ONE THAT HOLDS YOUR LAST PAYMENT.
Fiber is one of the few trades where the paperwork is the last mile of the job. Carrier and publicly funded contracts both gate payment on as-built documentation and audit-ready closeout: what got placed, where it got placed, spliced to what, mapped to a standard somebody else wrote.
The physical work is finished. The crews have moved to the next route. And the final payment, often the piece that carries the job's whole profit, is sitting behind a document package that nobody is assigned to finish because everybody who could finish it is producing revenue somewhere else.
So the third outflow is the cost of carrying a completed job. You've paid for everything. The customer has what they bought. And the money is waiting on a deliverable that costs a fraction of the payment it's holding.
MOST SUBS MISS THIS: FACTORING IS A SYMPTOM.
One of the search terms fiber contractors bring to this site is fiber contractor factoring. Somebody typed that. It's a business with a full schedule going to look for money that costs 20 to 30 percent a year.
Factoring isn't stupid, and sometimes it's the only thing available on a Tuesday when payroll is Friday. What it is, though, is expensive money bought to solve a timing problem the contract created. Three outflows hit before billing, the closeout gate holds the last payment, and the business fills the hole with the most costly capital it can find.
Here's what to do with that. Before you price factoring, price the three outflows. Total the make-ready you have paid on jobs that haven't billed yet. Total the compliance labour you're carrying on funded work. Total the value of completed jobs sitting behind an as-built package. That number is what you're financing, and in most fiber shops it's larger than the shortfall that sent you looking for a factor in the first place.
WHAT THE NUMBERS SAY ABOUT THE ROOM YOU HAVE.
Fiber subcontractors between $1M and $5M run about 18 percent gross margin and 6 percent net. The CFOS target at that revenue is 24 percent gross and 10 percent net, and closing that distance starts with the three outflows above, plus a collection cycle that most fiber subs run at 75 to 90 days when 45 is achievable.
Six points of gross margin on a $3M fiber sub is $180,000 a year. That's not found by bidding higher on a carrier MSA where the unit prices are set. It's found by charging make-ready through as the pass-through it is, putting the compliance load into the overhead rate that recovers it, and assigning the as-built package to somebody before the crew leaves the route.
THE ONE THING TO DO THIS WEEK.
Build a list of every job where you have spent money and can't yet bill for it, and put a date beside each one for when it becomes billable. Make-ready paid, crews idle waiting on a pole owner, compliance produced, as-builts outstanding. One page, one column of dollars, one column of dates.
That page is a thirteen week cash forecast in its simplest form, and for a fiber sub it usually explains the whole problem in about twenty minutes. You'll see which week runs short before it runs short, which is the difference between planning a draw and taking whatever money answers the phone.
THE SHORT LIST.
FREQUENTLY ASKED.
