TILE & STONE JOBS LOOK PROFITABLE. THE BALANCE SHEET IS STILL THIN.
Tile & Stone 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 tile & stone 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 tile & stone 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.
Stone and specialty tile are deposit-heavy, long-lead and often imported. Fabricated countertop slabs, book-matched stone and special-order tile tie up five figures between deposit and install, with breakage and dye-lot risk. The flooring cluster's material-float story applies, and it's harder here. A warehouse can't restock a cracked slab or a short dye lot.
Tile finishes late, and the same retainage math as painting applies. A 5-to-10 percent hold against an 8 percent net floor before taxes means the retainage is bigger than the profit. Visible finish work gets extra punch scrutiny (grout shade, lippage claims under raking light), which adds closeout pressure.
WHAT MOVES MARGIN IN THIS TRADE.
The Inherited Slab
Tile is rigid. A slab that's out of flat, wet or cracked becomes your callback, unless substrate acceptance, prep pricing and test records are in writing before you set. Ask for the FF/FL report and the moisture readings at handoff.
The Slab on the Boat
Deposits go out months early. Material can break or come in the wrong dye lot. No warehouse restocks a cracked book-match. That float is a loan from your own cash. Stored-materials terms and priced attrition allowances pay it back.
The Flood Test Nobody Billed
Wet areas fail at the membrane, and the bill goes to whoever has no test record. A witnessed, photographed, billed flood test before setting costs little. The tear-out it prevents is the most expensive one in the interiors family.
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.
TILE & STONE BENCHMARKS.
Tile & Stone subcontractors at $1M to $5M net 8 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.
