WHY EXCAVATION CONTRACTORS LOSE MARGIN WITHOUT KNOWING IT.
Excavation margin is lost to three specific things: production blindness, the ground lies, and one bucket, one margin. Excavation subcontractors at $1M to $5M run 21 percent gross and 5.5 percent net, against CFOS targets at $1M to $5M of 23 percent gross and 10 percent net. All three are measurable, and all three are invisible without job costing that reads against the estimate.
Excavation 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. Excavation sells cubic yards per hour. When production rates aren't tracked per operator, per machine, per soil class, the estimate and the field never reconcile, and losing jobs look identical to winning ones until the money is gone.
THE MATH BEHIND THE MISSING CASH.
Production Blindness
Excavation sells cubic yards per hour. When production rates aren't tracked per operator, per machine, per soil class, the estimate and the field never reconcile, and losing jobs look identical to winning ones until the money is gone.
The Ground Lies
Soil class changes, rock shows, groundwater rises, and quantities move; the cost is spent before the change order is signed. A $630K excavation subcontract at the Fifth Circuit proves the fight is real. Documentation and unit-price discipline are the difference between a claim and a donation.
One Bucket, One Margin
A single utility strike can erase a job's profit through repair bills, fines up to $10,000 for repeats, and GL sublimits that cap below the damage. The locate, the tolerance zone, and the hand-dig are financial controls, not just safety rules. (cfos-cash-control-system) ---
WHAT CHANGES IN THE FIRST 60 DAYS.
| Metric | $1M to $5M | $5M to $10M | $10M to $25M |
|---|---|---|---|
| Gross margin, industry average | 21% | 23% | 24% |
| Gross margin, CFOS target | 23% | 23% | 24% |
| Net profit, industry average | 7% | 10% | 12% |
| Net profit, CFOS target | 10% | 11% | 13% |
| Overhead, industry average | 14% | 13% | 12% |
| Overhead, CFOS target | 13% | 12% | 11% |
Industry figures are Excavation 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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