ELEVATOR JOBS LOOK PROFITABLE. THE CASH IS STILL IN TRANSIT.
Elevator subcontractors have no cash left for reasons specific to how the work is built and billed, on jobs that are making money. The three that cost the most in this trade are below, taken from elevator contractor research. Most are at 75 to 90 days from finishing work to holding the money, and 45 days is achievable.
Cash and profit are measured on different clocks. Your profit and loss records revenue when you invoice and costs when you incur them, while the bank account only knows what cleared. Labour goes out weekly and collects 45 to 90 days later, minus retention. That distance is what a growing, profitable elevator company funds out of pocket, and it widens as you grow. The specific things that widen it in this trade are what the rest of this page is about.
WHERE IT LEAKS OUT.
Full-maintenance pricing bets that the unit's callback rate stays below the rate priced in. Aging equipment, abused door systems and construction-debris shutdowns change the actuals. The published owner-side analysis shows the other side (authorization delays turning one repair into three visits). For the contractor, the lesson is to track callbacks per unit. A portfolio priced flat across unit ages has its best cars paying for its worst.
New installation and modernization projects work on general contractor terms. That means long equipment leads, hoistway-readiness dependencies (the elevator crew idles when the shaft, pit or power isn't ready), pay apps and retainage. The site-readiness claims steel contractors file and the equipment float mechanical contractors track both apply here.
WHAT MOVES MARGIN IN THIS TRADE.
The Annuity Underneath
Maintenance contracts at $500 to $1,200 per unit per month recur and compound. They're why elevator has one of the best net-profit floors in the 48-trade dataset. Track per-unit contract P&L and you own an asset. Skip it and you own a route.
The Proprietary Wall
OEM controllers, $10,000 diagnostic tools and obsolescence declarations decide what an independent can service. Every proprietary install makes that list shorter. Your plan starts with a map of what you can maintain.
The Flat-Priced Portfolio
Full-maintenance pricing is an actuarial bet. Price a portfolio flat across unit ages and the best cars pay for the worst. Track callback rates per unit and reprice at renewal. That's underwriting for this trade.
DAYS SALES OUTSTANDING.
Ninety days is weak, 45 is the target, 30 is strong. Nothing else moves cash faster.
| Position | Days | What it means |
|---|---|---|
| Weak | 90 days | Roughly three months of work funded out of your own pocket. |
| Target | 45 days | You can get here on the days you control. Bill on time, send complete paperwork, and follow up in week two. |
| Strong | 30 days | Takes work every month. It's the cheapest money you can get. |
Moving from 90 days to 45 frees roughly annual revenue divided by 365, times 45 days. At $4M that's about $493,000. At $8M it's about $986,000. That money costs no interest and needs no bank. So we fix billing and collections before we talk about financing.
ELEVATOR BENCHMARKS.
Elevator subcontractors at $1M to $5M net 9 percent, against the CFOS net profit target, set at your trade's net profit average at your revenue plus 3.5 points, never below 10 percent, before taxes. The working capital target is 13 percent of annual revenue, and the monthly close should finish by day 10 so the numbers can still change a decision.
FREQUENTLY ASKED.
