WHY PRECAST CONCRETE CONTRACTORS LOSE MARGIN WITHOUT KNOWING IT.
Precast Concrete margin is lost to three specific things: the concrete warehouse, the idle bed, and the re-cast change. All three are measurable, and all three are invisible without job costing that reads against the estimate.
Precast concrete contractors at $1M to $5M net 6 percent on the SPM 48-trade dataset, rising to 9 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. Cost is incurred at casting; construction terms pay at delivery and erection. Every finished piece in the yard is working capital, and stored-materials billing is the clause that decides who finances the gap.
THE MATH BEHIND THE MISSING CASH.
The Concrete Warehouse
Cost is incurred at casting; construction terms pay at delivery and erection. Every finished piece in the yard is working capital, and stored-materials billing is the clause that decides who finances the gap.
The Idle Bed
Plant capacity is beds and moulds, and unit cost rides their utilization; equipment breakdown is the documented top variance source. A plant without bed-day cost rates is a factory pricing by feel.
The Re-Cast Change
A late design change on precast isn't a saw cut; it's a scrapped piece, a re-booked bed, and a resequenced erection. Design-freeze gates and re-cast-priced change orders are the trade's survival clauses. (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 | 22% | 23% | 24% |
| Gross margin, CFOS target | 24% | 23.5% | 24% |
| Net profit, industry average | 7% | 9% | 11% |
| Net profit, CFOS target | 10% | 10.5% | 12% |
| Overhead, industry average | 15% | 14% | 13% |
| Overhead, CFOS target | 14% | 13% | 12% |
Industry figures are PrecastConcrete 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. The gross margin and overhead figures for this trade are derived from the nearest comparable trade in the same dataset, and were not measured directly.
| 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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