WHAT HAS TO EXIST AT $1M.
A million dollars is where guessing stops working. Below it one person can carry the whole picture in their head and be roughly right. At $1M there are enough concurrent jobs, enough vendors, and enough payroll that the overhead rate loaded into a bid is either measured or it's wrong, and an unmeasured rate is wrong in the same direction on every single job. Four things have to exist: an overhead rate rebuilt from the trailing twelve months, cost codes that mirror the way you estimate, a 13 week cash forecast, and books closed by the tenth of the month. Almost everything else can wait, and knowing what can wait is half the value of the answer.
The failure at this size is rarely a bad decision. It's a decision made from a number nobody checked. A subcontractor under $1M sits below where published trade benchmarks start, so there's no outside figure to compare against and the internal figure is the only one there is. That makes the overhead rate the first thing to rebuild, because it prices every job and it's the number most likely to be understated. Everything downstream of it inherits the error, which is why correcting it first is worth more than anything else on this list.
WHAT IT MEANS.
The financial structure at $1M of revenue is the smallest set of controls that lets a subcontractor price work correctly and see a cash shortfall before it happens: a real overhead rate, job costing built against the estimate, a short cash forecast, and a monthly close on a date.
What doesn't need to exist yet is most of what a contractor at this size gets sold first. You don't need an ERP, a controller, a project management platform, or a department. A correctly configured general ledger with cost codes that line up with the estimate and a weekly cost review beats a misconfigured construction ERP every time, because both produce the same report and only one of them ties to how the work was priced.
You also don't need a full balance sheet program yet, but you should know the four figures it will be judged on later, because they take years to build. The CONTROL standards are working capital at 10 to 15 percent of annual revenue with 13 percent as the number to build toward, a current ratio between 1.3 and 2.0, and debt to equity below 1.0. Working capital is the one to start on at $1M, because it's built out of retained profit and there's no shortcut.
THE FOUR THINGS THAT ARE MISSING.
The overhead rate was never calculated
Pricing gets set from the last similar job plus a feel for the market, and the overhead loaded into the estimate is a number somebody chose once. Rebuilt from the trailing twelve months it's almost always higher, because costs belonging in overhead get coded into job costs and other accounts where nobody looks for them. Every bid since then loaded less cost than the business consumes.
Cost codes don't line up with the estimate
The books are organized the way an accountant would organize them and the work was priced the way an estimator prices it, so the two records can't be compared. That means nobody can tell whether the labor hours came in where they were bid, which is the entire question at this size. Job costing that doesn't read against the estimate produces history rather than control.
There's no forecast, and the books close whenever they close
Cash decisions get made by looking at the account, which reports the past, so a material deposit, a payroll, and a slow general contractor can all hit in the same week without anybody having seen it coming. Numbers that are six weeks old can't change a bid, a payment run, or a hire either, which makes a late close the thing that turns every other control on this page into decoration. The CONTROL standard is closed books and completed bank reconciliations by the tenth of the month, and a 13 week forecast running off that closing position.
WHAT IT LOOKS LIKE IN DOLLARS.
Take a subcontractor at $1.1M of revenue carrying overhead in the estimate at 6 percent when the trailing twelve months says 11 percent. Every bid loads 5 points less cost than the business consumes, so across $1.1M of work that's $55,000 of overhead recovered by nobody. Both percentages in that example are placeholder inputs rather than benchmarks. The real figure comes out of your own trailing twelve months, and the reason it's usually understated is that overhead costs get coded into job costs where nobody looks for them.
Books closed and bank reconciliations done by the tenth of the month, which is the CONTROL standard, is the cheapest control on this page and the one most often skipped. A current ledger is what makes the 13 week forecast a decision tool instead of an estimate, because the forecast starts from the closing cash position. Get the date and the forecast becomes real. Miss it and the forecast is a guess with a spreadsheet around it.
THE ORDER WE BUILD IT IN.
Before the rate can be rebuilt, the accounts have to stop mixing overhead into job costs and other lines. This is unglamorous and it's first, because a rate calculated off a miscoded ledger is a different wrong number rather than a right one. It usually takes a couple of weeks and it only gets done once.
The real rate gets calculated off the corrected accounts and loaded straight into estimating, along with a bid floor. Expect the corrected rate to be higher than the one you had, and expect that to mean declining some work. That's the point. Work that can't carry the real cost of running the business was never profitable, it was just winning.
Job costing gets structured so the cost record can be read against the way the job was priced, code by code. Then labor production can be read separately from material on every job, which is where the margin lives in most trades at this size. This is the structure everything else on the page reports through.
Books close by the tenth with bank reconciliations done, and the 13 week forecast runs off the closing position every month. One is discipline and the other is the decision tool. Together they're what turns a bank balance into a plan, and at $1M they replace roughly everything a contractor thinks they need software for.
THE OUTPUTS, NAMED.
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.
Pricing
| 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.
FREQUENTLY ASKED.
