MECHANICAL JOBS LOOK PROFITABLE. THE BALANCE SHEET IS STILL THIN.
Mechanical 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 mechanical 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 mechanical 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.
Mechanical scope is equipment-dominated, and 2026 lead times are historic: chillers quote 20 to 85 weeks depending on configuration, with commercial chilled-water systems benchmarked at 48 to 60 weeks on customization and material bottlenecks. Deposits go out at release, storage and insurance carry the middle, and the pay application catches up at delivery, if the SOV was written to allow it. The existing equipment-deposit; 2026 gives it teeth.
WHAT MOVES MARGIN IN THIS TRADE.
The Equipment Float
Chillers at 20 to 85 weeks, deposits at release, payment at delivery: the mechanical contractor is a procurement bank unless the SOV bills deposits and stored equipment explicitly. In 2026's lead-time market, the float is the job.
The Three-Shop Contract
Sheet metal, piping, and controls are separate businesses inside one price. Divisional cost codes by discipline are the only way to know which shop earns and which one rides.
The Subsidy Nobody Ordered
Service and construction run opposite cash and margin profiles, and blended books let one silently fund the other for years. The trade's best-in-dataset net ceiling belongs to operators who split the book and manage both on purpose. (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.
MECHANICAL BENCHMARKS.
Mechanical subcontractors at $1M to $5M net 9 percent, against a CFOS target of 11 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.
