GROSS MARGIN DOUBLED.
A concrete subcontractor doing $4.1M a year kept 10.8 percent of revenue after project costs. Twelve months later, on $2.8M of revenue, it kept 22.3 percent, and net profit before taxes went from $156K to $178K. The work was job costing by cost code, a template for every new project, a monthly CEO Report and pricing built from what each job really cost.
Gross margin is the first number that tells an owner whether the price covers the work. At 10.8 percent there was almost nothing left over for the office, the trucks and the owner, so a busy year still ended near zero. Once every job was coded the same way and the owner read the results every month, the bids changed, some work was declined, and the margin on the work that stayed more than doubled.
- Revenue
- $2.8M
- Before
- 10.8 percent gross margin and $156K net profit before taxes on $4.1M of revenue, with no job cost by cost code.
- After
- 22.3 percent gross margin and $178K net profit before taxes on $2.8M of revenue, with every job on the same cost codes.
- Time
- About three months to the first CEO Report, and the twelve months through August 2026 for the margin change.
- Result
- Gross margin from 10.8 to 22.3 percent, and net profit before taxes from $156K to $178K on $1.3M less revenue.
A $2.8M CONCRETE SUB. BUSY YEAR, THIN MARGIN.
A concrete subcontractor doing $4.1M over the twelve months through June 2025, self performing for commercial general contractors. The crews were busy and revenue was high. After project costs, the company kept 10.8 cents of every dollar, and net profit before taxes for the year was $156K.
VOLUME WITHOUT MARGIN.
Every job was priced from the last similar job and a feel for the market. Nobody could say what a pour had cost against what it was bid at, because the costs were not coded the same way from one job to the next.
So the company kept saying yes. Revenue grew, the crews stayed full, and almost nothing was left after the work was paid for. A margin that low means one bad job can wipe out the year.
NO JOB COST BY COST CODE.
Costs went into the books without a cost code structure, so labor, material and equipment on one pour could not be compared with the next, and the estimate could not be compared with either. Overhead read 7 percent of revenue in those books. With job costs and office costs now coded apart, it reads 15.8 percent.
The Job Profitability System was the one that wasn't in place. Without it, the owner could see the bank balance and the backlog, and nothing in between.
WHAT CHANGED, WEEK BY WEEK.
THE NUMBERS, NOT THE FEELING.
Over the twelve months through August 2026 the company did $2.8M of revenue, $1.3M less than the twelve months through June 2025, kept 22.3 percent after project costs against 10.8 percent before, and made $178K before taxes against $156K.
The first CEO Report and cash flow forecast were in use about three months after the work started in April 2025. The margin change shows in the twelve months through August 2026.
ONE BAD JOB, AND THE YEAR STILL HOLDS.
2025 was the year the work changed, and it lost $96K before taxes while the company declined work and rebuilt how it prices. From January to September 2026 the company made $222K before taxes on $1.95M of revenue, an 11.4 percent net margin.
September 2026 was a losing month. One job was underbid, and it cost about $97K. That brings the twelve months through September to $117K before taxes on $2.43M, so the twelve month figure is lower than it was through August. The job cost report showed the loss the month it happened, by cost code, and the estimate behind it is being reviewed.
DOES THIS SOUND FAMILIAR?
Contractors with this problem tend to recognise the same things. Revenue is up and the bank balance stays flat. Every job seems fine when it closes. Bids are priced from the last job and a number in the owner's head, and nobody can say what a yard of concrete cost on the last three pours.
If your gross margin is under 15 percent, the price leaves almost nothing after the work is paid for, and more volume makes it worse.
See how CFOS applies to concrete subcontractors specifically on theConcrete Operating System page, or book a 20 minute call. Nothing gets sold on it and nothing gets proposed.
FREQUENTLY ASKED.
