FLOORING JOBS LOOK PROFITABLE. THE CASH IS STILL IN TRANSIT.
Flooring subcontractors run out of cash 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 flooring contractor research. Most sit 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 flooring 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.
Custom and specialty flooring is ordered against deposits, ships on the mill's schedule, and then must acclimate on site before installation. The sub carries a five-figure material position through freight, storage, and acclimation windows unless deposits and stored-materials billing are in the contract.
Flooring installs at the end, inherits every compression, and can't start until the moisture gate clears, which puts the sub between a GC screaming about the schedule and a slab that's not ready. Installing early to please the schedule is exactly the Moorefield trap.
WHAT MOVES MARGIN IN THIS TRADE.
The Moisture Gate
The slab's readiness, not the GC's schedule, governs the install date, and a floor laid on a wet slab is a six-figure failure with the installer's name on it. ASTM-documented testing, a written sign-off protocol, and testing billed as a line item are the trade's real insurance policy; a $1.3 million settlement over one Best Buy floor proves the stakes.
The Overhead Engine
Flooring earns a 24 percent gross margin and keeps 5 percent, because 15 percent overhead (showroom, warehouse, fleet, estimating) eats the difference. This is the clearest overhead-recovery problem in the 48-trade dataset: the field isn't the leak; the building is.
The Material Float
Deposits out at order, freight and acclimation in the middle, billing at install: the sub banks a five-figure material position on every specialty job unless stored-materials and deposit terms are negotiated up front. (cfos-working-capital-system) ---
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 | Achievable on the days you control: submission timing, complete documentation, follow up in week two. |
| Strong | 30 days | Requires discipline every month, and it's the cheapest capital available to you. |
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 doesn't come from a bank and it costs no interest, which is why we work the cycle before discussing financing anything.
FLOORING BENCHMARKS.
Flooring subcontractors at $1M to $5M net 5 percent, against a CFOS target of 10 percent, set at 10 percent before taxes or 3.5 points better than your trade's average at your revenue, whichever is higher. Working capital should sit at 13 percent of annual revenue, and the monthly close should finish by day 10 so the numbers can still change a decision.
FREQUENTLY ASKED.
