CONSTRUCTION COMPANY BUDGET GUIDE.
Most construction subcontractors don't build a formal annual budget. They look at last year's revenue and overhead, assume something similar for next year, and manage to whatever comes in. That works until overhead grows faster than revenue, or a slow season drains the reserves, or growth outruns working capital. A real budget has four parts: a revenue plan by month, an overhead budget by category, a job margin target, and a cash flow projection.
The budget's job is to give you something to be wrong against. Nobody hits a construction budget to the dollar because job timing moves, and that's not the point. The point is that when February comes in 20% under plan, you know it in early March instead of at the tax return, and you still have ten months to do something about it. Managing to last year's numbers can't do that, because last year has no opinion about the overhead you signed up for in January.
WHAT IT MEANS.
An annual construction budget is the financial expression of your business plan for the year: projected revenue by month, overhead by category, a job margin target, and a cash flow projection.
WHY THE YEAR GETS AWAY FROM YOU.
You're managing to last year's numbers without a plan for this year
Last year's revenue and overhead look backward. This year's backlog, pipeline, overhead commitments, and capital plans look forward. Managing without a budget means managing to history rather than toward where you're trying to take the business. The budget is the financial expression of your business plan for the year.
Overhead commitments get made without a revenue plan to support them
Hiring an office manager, signing a truck lease, adding a software platform: these commitments usually get made when business is good, without modeling whether the revenue behind them holds up. A budget forces the revenue projection first and then sizes overhead to fit inside it. Most contractors do it in the opposite order and find out in the slow quarter.
You don't know what revenue you need to hit your financial goals
If the goal is to distribute $200K to owners this year while building working capital and covering all overhead, what revenue does that take? The budget answers that question before the year starts. It also tells you whether the goal is reachable off current backlog and pipeline, or whether business development has to happen first.
HOW THE BUDGET GETS BUILT.
The revenue plan is projected revenue by month, built off backlog, pipeline, and your own seasonal history rather than a straight line across twelve months.
The overhead budget is projected G&A by category and by month: staff, facilities, insurance, equipment, vehicles, and software.
The job margin target is the gross profit percentage the year needs in order to cover that overhead and hit the net profit goal.
The cash flow projection is monthly cash in and out, built off the revenue plan, your collection timing, your overhead commitments, and planned distributions.
Top-down means setting a revenue target from your goals and then sizing overhead to produce the net profit you want. That works when revenue is fairly predictable and most of the overhead is discretionary. Bottom-up means starting from committed overhead and signed backlog, calculating the revenue required to hit the profit goal, and then sizing the hole business development has to fill. That fits a contractor with high fixed overhead and an uncertain pipeline better. We use whichever one matches how the business runs.
Executive clients build the annual budget with us at the start of each year: projected revenue by month, overhead by category, job margin targets, and the distribution plan. It gets loaded into ControlQore so actual performance is compared against budget every month and not against prior year alone. When the actuals drift, the variance comes up in the monthly meeting with a specific reason and a recommendation for the rest of the year.
FLAT MONTHLY FEE. NO SURPRISES.
Three tiers, priced by your trailing twelve month revenue. Which one you're in depends on how much of the work you want off your desk. No hourly billing, no payroll, and no add-ons.
| 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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