WHY FRAMING CONTRACTORS LOSE MARGIN WITHOUT KNOWING IT.
Framing margin is lost to three specific things: the commodity wrapper, the pace-setter's penalty, and the 18 percent ceiling. Framing subcontractors at $1M to $5M run 18 percent gross and 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.
Framing contractors at $1M to $5M net 5 percent, the lowest floor of the 24 served trades, rising to 7.5 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. Lumber at $487 per MBF with a $440 to $540 expected range and 20 to 30 percent historic intra-year swings, sold inside fixed-price contracts. Without escalation clauses, dated price bases, and disciplined buyout, the framer is an unhedged lumber trader with a nail gun.
THE MATH BEHIND THE MISSING CASH.
The Commodity Wrapper
Lumber at $487 per MBF with a $440 to $540 expected range and 20 to 30 percent historic intra-year swings, sold inside fixed-price contracts. Without escalation clauses, dated price bases, and disciplined buyout, the framer is an unhedged lumber trader with a nail gun.
The Pace-Setter's Penalty
First trade in absorbs every upstream slip and every downstream schedule demand. Acceleration without documented, billed acceleration cost is free overtime donated to the GC's schedule.
The 18 Percent Ceiling
The thinnest gross margin of the served trades leaves zero absorption room. Unpriced specialty framing at $500 to $1,500 per feature and blended wood-versus-steel cost history are how a 5 percent net becomes a loss. (cfos-trade-benchmarking-system) ---
WHAT CHANGES IN THE FIRST 60 DAYS.
| Metric | $1M to $5M | $5M to $10M | $10M to $25M |
|---|---|---|---|
| Gross margin, industry average | 18% | 19% | 20% |
| Gross margin, CFOS target | 22% | 21% | 20% |
| Net profit, industry average | 5% | 7% | 9% |
| Net profit, CFOS target | 10% | 10% | 10% |
| Overhead, industry average | 13% | 12% | 11% |
| Overhead, CFOS target | 12% | 11% | 10% |
Industry figures are Framing 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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