WHY FIRE PROTECTION CONTRACTORS LOSE MARGIN WITHOUT KNOWING IT.
Fire Protection margin is lost to three specific things: the pre-permit spend, the inspector's signature, and the blended-book blindfold. All three are measurable, and all three are invisible without job costing that reads against the estimate.
Fire protection contractors at $1M to $5M net 7.5 percent on the SPM 48-trade dataset, matching electrical as the strongest floor in the group, rising to 9.5 percent by $25M to $50M; the CFOS target at $1M to $5M is 11 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. $1,200 to $3,000 of hydraulic calculations and stamped drawings leave the account before a permit exists, and fabricated steel deposits follow. A schedule of values that starts billing at installation makes the contractor the project's design bank.
THE MATH BEHIND THE MISSING CASH.
The Pre-Permit Spend
$1,200 to $3,000 of hydraulic calculations and stamped drawings leave the account before a permit exists, and fabricated steel deposits follow. A schedule of values that starts billing at installation makes the contractor the project's design bank.
The Inspector's Signature
Rough-in, pressure test, final, alarm tie-in: every gate is a billing milestone someone else controls, and the AHJ signs last. Retainage release waits on the one signature the contractor can least accelerate.
The Blended-Book Blindfold
ITM recurs fast and small; contract work pays big and slow. One P&L over both hides which business funds which, and owners price both wrong until the split is on paper. (cfos-job-profitability-system) ---
WHAT CHANGES IN THE FIRST 60 DAYS.
| Metric | $1M to $5M | $5M to $10M | $10M to $25M |
|---|---|---|---|
| Gross margin, industry average | 23% | 25% | 26% |
| Gross margin, CFOS target | 25% | 25% | 26% |
| Net profit, industry average | 8% | 11% | 13% |
| Net profit, CFOS target | 11% | 12% | 14% |
| Overhead, industry average | 15% | 14% | 13% |
| Overhead, CFOS target | 14% | 13% | 12% |
Industry figures are FireProtection 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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