PRECAST CONCRETE JOBS LOOK PROFITABLE. THE BALANCE SHEET IS STILL THIN.
Precast Concrete 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 precast concrete 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 precast concrete 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.
Precast is manufacturing. You cast elements in erection sequence, cure them, finish them and store them in the yard weeks or months before they ship. You pay for them at casting. Construction terms pay you at delivery and erection milestones. A yard full of finished pieces is your cash in concrete. Stored-materials billing, with the insurance, marking and inspection provisions the owner will demand, is the most important cash clause in the trade.
Deliveries go in crane order, pieces get checked against tickets and damage gets documented at the gate. Erection puts the plant's months into the site's days. One floor per week is the published pace on multi-storey work. Standby (site not ready, crane down, permit-delayed loads) costs plant schedule and field cost at once.
WHAT MOVES MARGIN IN THIS TRADE.
The Concrete Warehouse
You pay for a piece when you cast it. Construction terms pay you at delivery and erection. Every finished piece in the yard is your cash, and the stored-materials billing clause decides who pays for the wait.
The Idle Bed
Your plant capacity is beds and moulds, and unit cost follows how much you use them. Equipment breakdown is the top documented source of variance. Without bed-day cost rates, you're pricing by feel.
The Re-Cast Change
A late design change on precast can mean a scrapped piece, a re-booked bed and a new erection sequence. Design-freeze gates and change orders priced at re-cast cost are the clauses that protect you.
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.
PRECAST CONCRETE BENCHMARKS.
Precast Concrete subcontractors at $1M to $5M net 7 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.
