WHY DRYWALL CONTRACTORS LOSE MARGIN WITHOUT KNOWING IT.
Drywall margin is lost to three specific things: the flashlight tax, the damage economy, and the middle squeeze. Drywall subcontractors at $1M to $5M run 19 percent gross and 5.5 percent net, against CFOS targets at $1M to $5M of 22 percent gross and 10 percent net. All three are measurable, and all three are invisible without job costing that reads against the estimate.
Drywall contractors at $1M to $5M net 5.5 percent, rising to 8.5 percent by $25M to $50M; the CFOS target at $1M to $5M is 10 percent. The distance between the trade average and the CFOS target isn't a pricing problem in this trade. It sits in the three mechanisms below, each of which moves margin without appearing as a failure on any single job. Finish quality judged under the wrong light becomes free rework. Without contract language fixing the inspection standard (permanent lighting, perpendicular view), every punch walk is a negotiation the sub loses.
THE MATH BEHIND THE MISSING CASH.
The Flashlight Tax
Finish quality judged under the wrong light becomes free rework. Without contract language fixing the inspection standard (permanent lighting, perpendicular view), every punch walk is a negotiation the sub loses.
The Damage Economy
Drywall both absorbs and causes back-charges, and most subs track neither direction. Two untracked flows of $500 and $3,000 hits, job after job, is where the margin between 5.5 percent actual and the 10 percent CFOS target quietly lives.
The Middle Squeeze
Drywall inherits upstream delay with no float and pays for it in overtime and stacked crews. At 19 percent gross margin, the thinnest in the interiors group besides framing, compression cost that's not documented and billed is margin donated to the schedule. (cfos-cash-flow-cycle-system) ---
WHAT CHANGES IN THE FIRST 60 DAYS.
| Metric | $1M to $5M | $5M to $10M | $10M to $25M |
|---|---|---|---|
| Gross margin, industry average | 19% | 21% | 22% |
| Gross margin, CFOS target | 22% | 21% | 22% |
| Net profit, industry average | 6% | 9% | 11% |
| Net profit, CFOS target | 10% | 10% | 12% |
| Overhead, industry average | 13% | 12% | 11% |
| Overhead, CFOS target | 12% | 11% | 10% |
Industry figures are Drywall contractors' AVERAGE for each revenue band, not a floor. The CFOS net profit target is set at 10 percent before taxes or 3.5 points better than your trade's average at your revenue, whichever is higher, and the gross margin target is set at whatever gross margin produces that net profit once your overhead is paid, and never below your trade's own average. Gross minus overhead equals net on every column, so the rows tie out.
| Last 12 months revenue | Monthly fee |
|---|---|
| Up to $1M | $1,900 to $2,900 |
| $1M to $3.5M | $2,600 to $3,900 |
| $3.5M to $6.5M | $3,800 to $5,700 |
| $6.5M to $9.5M | $5,100 to $7,100 |
| $9.5M to $12.5M | $6,100 to $8,500 |
| $12.5M to $15.5M | $7,400 to $11,000 |
| $15.5M to $18.5M | $9,400 to $13,500 |
| $18.5M+ | Quoted individually |
Range reflects the three tiers below. Which one you're in depends on how much of the work you want off your desk. No payroll. No hidden line items.
You stop guessing.
You get the CFO work. Job costing built against the way you estimate, a 13 week cash forecast, monthly WIP, and a meeting every month that ends in decisions rather than a report.
Your bookkeeper keeps doing the books.
You stop touching the books.
Everything in Core, and we run the bookkeeping and the controllership as well. Nobody in your office is answering coding questions or chasing a reconciliation at month end.
We do the books. No payroll.
Every job shows its margin while it's still running.
Everything in Executive, plus the job costing and WIP platform set up, loaded with your cost codes, and managed for you every month. You never have to learn it.
We do the job costing.
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