INTERIORS JOBS LOOK PROFITABLE. THE CASH IS STILL IN TRANSIT.
Interiors 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 interiors 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 interiors 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.
Tenant-improvement work depends on allowances ($15 to $80 per square foot by market and asset class) that reimburse AFTER the work. The contractor gets paid by a tenant. The tenant gets paid by a landlord only on a clean draw package (paid invoices, lien waivers, proof of completion), typically 30 to 60 days after submission. Some deals hold the entire allowance until certificate of occupancy. The published tenant-side advice says it plainly: "you need working capital to float construction, which catches a lot of first-time tenants by surprise." It's harder on their contractors.
The tenant's rent commencement and move-in date are in the contract, and the fit-out schedule works backward from them. Retail TI takes 8 to 16 weeks permit-to-CO and restaurant 12 to 22. Permitting adds 4 to 12 weeks by jurisdiction. Long-lead equipment (switchgear at 18 to 30 weeks) can take longer than the entire construction window. Unseen conditions in existing buildings are why the published contingency norm is 10-to-15 percent.
WHAT MOVES MARGIN IN THIS TRADE.
The Reimbursement Float
TI money goes from landlord to tenant to contractor. It's released 30 to 60 days after a clean draw package, and sometimes only at certificate of occupancy. Build lien waivers and invoice packages as the work happens and you get the draw. Put them together at month end and you pay for the landlord's building.
The Work-Letter Seam
The work letter decides base-building versus tenant scope. The drawings don't. Every seam you don't read (demising walls, panel upgrades, code-triggered base work) turns into unpaid scope. Price the letter, then the plans.
The Lease-Date Vise
Rent commencement is in the contract. Permits take 4 to 12 weeks and switchgear takes 18 to 30. The schedule works backward from a date you never chose. Long-lead procurement and a contingency you hold to are the only slack you have.
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.
INTERIORS BENCHMARKS.
Interiors subcontractors at $1M to $5M net 6 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.
