TUNNEL JOBS LOOK PROFITABLE. THE CASH IS STILL IN TRANSIT.
Tunnel 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 tunnel 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 tunnel 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.
Payment is based on advanced meters and installed lining against a schedule of values, with owner verification underground. The documentation (survey, ring/segment records, grout takes) backs up every pay item. It's the same documentation gate fiber has, in a pressurized space.
WHAT MOVES MARGIN IN THIS TRADE.
The Baseline Ledger
The GBR states what the bid may assume. The DSC clause allocates what differs. The shift log proves which one happened. Your ground documentation is the trade's second set of books.
The Sleepless Burn
With continuous operations, the daily cost never stops, even when the advance rate does. Code downtime by cause (ground, machine, logistics, owner). That's the only way a stopped-heading claim ever pays.
The Unseen Capital
The machine and plant are project-scale capital, with salvage assumptions built into the bid. Honest cost basis (ownership, refurbishment, residual) sets the price before the ground does.
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.
TUNNEL BENCHMARKS.
Tunnel 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.
