IRRIGATION JOBS LOOK PROFITABLE. THE BALANCE SHEET IS STILL THIN.
Irrigation 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 irrigation 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 irrigation 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.
The revenue calendar spikes twice: spring startups compressed into weeks, and fall winterizations racing the first freeze, with compressor capacity and crew count capping how many systems fit inside each window. Missing the freeze window converts a $75 service call into a spring repair claim. The seasonal-reserve discipline from the dirt family applies, compressed.
WHAT MOVES MARGIN IN THIS TRADE.
The Orphaned Install
Every system installed without a service agreement attached donates a 30-to-40-percent-gross-margin annuity to whoever answers next spring's call. The agreement signs at install, not at startup.
The Freeze Race
Startups and winterizations compress the year's service revenue into two windows capped by crews and compressors, and a missed blowout becomes a spring repair claim. Window capacity is the business plan.
The Package Seam
Install rides inside landscape and sitework packages where sleeving, routing, and controller scope blur. Boundaries in writing before the trencher moves; the seam always leaks toward whoever documented least. (cfos-job-profitability-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.
IRRIGATION BENCHMARKS.
Irrigation subcontractors at $1M to $5M net 7 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.
