WHY SECURITY SYSTEM CONTRACTORS LOSE MARGIN WITHOUT KNOWING IT.
Security System margin is lost to three specific things: the unpriced asset, the billing illusion, and the divided house. Security System subcontractors at $1M to $5M run 28 percent gross and 6.5 percent net, against CFOS targets at $1M to $5M of 25 percent gross and 10 percent net. All three are measurable, and all three are invisible without job costing that reads against the estimate.
Security system contractors at $1M to $5M net 6.5 percent, rising to 9.5 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. RMR is a balance-sheet asset with a multiple attached: monitoring books trade at 28x to 60x monthly recurring revenue, and a 40-percent RMR mix nearly doubles what a dollar of EBITDA sells for. An integrator who can't state the RMR mix and attrition rate is running a company whose value is being set by someone else's spreadsheet.
THE MATH BEHIND THE MISSING CASH.
The Unpriced Asset
RMR is a balance-sheet asset with a multiple attached: monitoring books trade at 28x to 60x monthly recurring revenue, and a 40-percent RMR mix nearly doubles what a dollar of EBITDA sells for. An integrator who can't state the RMR mix and attrition rate is running a company whose value is being set by someone else's spreadsheet.
The Billing Illusion
"RMR contracts are billing, but nobody can tell you which ones are profitable." Monitoring costs, truck rolls, and platform fees erode accounts silently; per-contract P&L is the only lens that sees it.
The Divided House
Install revenue rides construction terms; monitoring rides subscription terms; the market values them on different multiples. One blended P&L hides which business funds which and misprices both, at exit and every month before it. (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 | 22% | 24% | 25% |
| Gross margin, CFOS target | 25% | 25% | 25% |
| Net profit, industry average | 6% | 9% | 11% |
| Net profit, CFOS target | 10% | 11% | 12% |
| Overhead, industry average | 16% | 15% | 14% |
| Overhead, CFOS target | 15% | 14% | 13% |
Industry figures are Security System 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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