TUNNEL JOBS LOOK PROFITABLE. THE CASH IS STILL IN TRANSIT.
Tunnel 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 tunnel 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 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 runs on advanced meters and installed lining against a schedule of values, with owner verification underground; the documentation stack (survey, ring/segment records, grout takes) substantiates every pay item. The fiber file's documentation-gate logic in a pressurized environment.
WHAT MOVES MARGIN IN THIS TRADE.
The Baseline Ledger
The GBR states what the bid may assume, the DSC clause allocates what differs, and the shift log proves which one happened. Ground documentation isn't paperwork; it's the trade's second set of books.
The Sleepless Burn
Continuous operations mean the daily cost never pauses while the advance rate does. Downtime coded by cause (ground, machine, logistics, owner) is the only way the stopped-heading argument ever pays.
The Buried Capital
The machine and plant are project-scale capital with salvage assumptions built into the bid. Cost-basis honesty (ownership, refurbishment, residual) decides the price before the ground gets a vote. (cfos-working-capital-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.
TUNNEL BENCHMARKS.
Tunnel 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.
