YOU CAN'T HIT A TARGET YOU CAN'T SEE.
Most subcontractors don't know if their gross margin is good or broken because they've never compared it to a trade-specific benchmark. A 22% gross margin is healthy for a concrete contractor and a slow death for an electrical contractor. CFOS Trade Benchmarking sets the right targets by trade and revenue band, and measures every job against them.
The Trade Benchmarking System is Module 5 in CFOS, the Construction Financial Operating System. Benchmarks without trade specificity are useless. A civil contractor and an electrical contractor have completely different overhead structures, margin profiles, and working capital needs. Using the same generic benchmarks for both guarantees that at least one of them is managing to the wrong target. CFOS maintains trade-specific benchmarks across all 24 SPM trades, updated annually, covering gross margin, net margin, overhead rate, and billing velocity targets by revenue band.
WHAT ACTUALLY BREAKS WITHOUT THIS.
Managing to Generic Benchmarks
A subcontractor who reads that "construction companies should target 20% gross margin" and applies that to their SWPPP business is using the wrong number. SWPPP contractors run 28–34% gross margin because their direct costs are lower as a percentage of revenue. Civil contractors run 18–24% because heavy equipment and subcontractors compress margin. Generic benchmarks produce wrong decisions. A SWPPP operator at 22% gross margin isn't doing well. They're bleeding 6 to 12 points.
No Overhead Rate Validation
Overhead rate is the most dangerous number in construction finance because it's invisible and compounding. A concrete contractor estimating at 14% overhead when actual overhead runs 19% is pricing to lose on every single job, and won't find out until year-end. CFOS validates the overhead rate against actual SG&A spend on every client at onboarding and recalibrates it annually. It's not a benchmark exercise. It's an accuracy requirement.
No Performance Standard for Individual Jobs
Without a benchmark, there's no standard a job is measured against, so every job that doesn't blow up is considered a success. A $620K concrete flatwork job that closes at 17% gross margin when the trade benchmark is 26% isn't a success. It's a $55K underperformance. CFOS measures every completed job against the trade benchmark and uses the variance to improve estimating, pricing, and field execution over time.
TARGET RANGES BY TRADE, $1M TO $12M.
These are CFOS working benchmarks for commercial subcontractors. Revenue band matters. Margins compress as volume grows because overhead spreads but competitive pressure increases.
| Trade | Gross Margin Target | Net Margin Target | Overhead Rate |
|---|---|---|---|
| Civil / Sitework | 18–24% | 7–11% | 10–14% |
| Concrete / Flatwork | 22–28% | 8–13% | 12–16% |
| Electrical (Commercial) | 24–32% | 9–14% | 13–18% |
| SWPPP / Erosion | 28–36% | 11–16% | 14–18% |
| Underground Utility | 20–26% | 8–12% | 11–15% |
| Grading / Excavation | 18–24% | 7–11% | 10–14% |
| Masonry | 24–30% | 9–14% | 13–17% |
| Framing / Drywall | 22–28% | 8–12% | 12–16% |
| Structural Steel | 20–26% | 7–12% | 11–15% |
| Paving / Demo | 22–28% | 8–13% | 12–16% |
| Waterproofing / EIFS | 28–36% | 11–16% | 14–18% |
Ranges reflect $1M–$12M commercial subcontractors. Margins compress at higher revenue bands. Overhead rate targets assume no owner compensation in direct costs.
SPECIFIC OUTPUTS. NOT ADVICE.
BEFORE AND AFTER.
FREQUENTLY ASKED.
