FINANCIAL GOALS FOR A SUBCONTRACTOR.
Across construction as a whole, CFMA's 2024 Construction Financial Benchmarker reports 21.8 percent gross profit margin, 11.8 percent SG&A and 6.3 percent net income before taxes across all respondents, with the best-in-class top quartile at 11.9 percent before taxes. An average isn't a goal, and none of those figures belongs to your trade at your revenue, which is what /construction-subcontractor-financial-benchmarks-by-trade sets out band by band. SPM holds one number as a floor whatever the trade: 10 percent net profit before taxes, which is ten cents on every dollar of revenue, or $10,000 on every $100,000 that comes through the business. That floor sits above what the industry averages and below what the top quartile earns, and it's the minimum that makes running the business worthwhile for the owner carrying the payroll, the bonding, and the personal guarantees. Revenue isn't on the list at all, because revenue is a multiplier rather than a goal.
None of these are a switch you flip. They're where a controlled subcontractor ends up after the work gets done, and the work is the same regardless of size: calculate the real overhead rate, build job costing, fix billing and collections, then read the numbers every month. Sixty days to install the system, six months to stabilize, and then the targets come into reach. A $3M sub netting 4 percent and an $8M sub netting 11 percent are on the same road at different mile markers.
WHAT IT MEANS.
A subcontractor's financial goals are a set of ratios and reserves rather than a revenue number: a net profit target of at least 10 percent, gross profit per project that clears the overhead rate for their own trade and revenue band, overhead measured honestly and managed down, a cash floor in the bank, growing working capital, and zero debt.
Revenue multiplies whatever margin you already have, in both directions. At a 10 percent net, a million dollars of revenue is a hundred thousand dollars of profit. At a loss, that same million just speeds up the damage. The right goals are the ratios and reserves sitting underneath revenue, which is gross profit, net profit, overhead, cash, working capital, and debt, and revenue turns into leverage once those are in range.
AIMING AT THE WRONG NUMBER.
Revenue is the goal instead of the ratios underneath it
At a 10 percent net, a million dollars in revenue makes a hundred thousand. At a loss, that same million just speeds up the damage. Chasing revenue before the margin is right is how subcontractors grow themselves broke, and it feels like success right up until payroll week.
Net profit is under 10 percent and nobody knows it
Most subcontractors run a net under 10 percent without knowing, because overhead is uncalculated and job costing is missing. Gross profit is what covers overhead, and net profit is what the business keeps, so if you can't state your overhead rate you can't state your net either. The number exists whether or not anybody reports it.
Overhead is believed to be 10 percent and runs 25 to 40
Most subs believe overhead sits around 10 percent of revenue, and it turns out to be 25 to 40 percent. Knowing the real figure and managing it down toward the benchmark for their own trade and revenue band is often the single largest profit lever in the business, because every point of overhead comes straight off net. Nothing about the work in the field has to change to collect it.
The owner isn't paid a real salary
Paying yourself out of whatever cash is left is a residual. The target is a fixed salary the business can sustain, with draws from profit on top of it, and at the top of the $1M to $12M range that salary runs around $180,000. An owner who can't pay themselves a real wage doesn't yet have a business, they have a job that owns them.
WHAT IT LOOKS LIKE IN DOLLARS.
Ten percent net profit before taxes is the floor SPM holds, whatever the trade and whatever the revenue. That's ten cents on every dollar of revenue, or $10,000 on every $100,000 that runs through the business, and it's not price gouging. It's the minimum that makes running the business worthwhile, because an owner carrying the payroll, the bonding, and the personal guarantees needs more out of it than a savings account would pay.
CFMA's 2024 Construction Financial Benchmarker reports 6.3 percent net income before taxes across all respondents, on 21.8 percent gross profit margin, with the best-in-class top quartile at 11.9 percent before taxes. Jones Maresca and Company's 2025 Performance Benchmarks put specialty contractor gross margin at 15 to 25 percent. Those are whole-industry figures rather than a target for your trade, and a sub at $2M doesn't run the same margin as one at $10M, which is why /construction-subcontractor-financial-benchmarks-by-trade publishes both by trade and revenue band. SPM's 10 percent floor sits between the industry average and the top quartile on purpose: high enough that the business pays the owner for the risk they carry, low enough that a well run sub at any size can hold it.
Jones Maresca and Company put total indirect cost at 8 to 15 percent of revenue for construction as a whole, and CFMA reports SG&A at 11.8 percent across all respondents. Both are descriptions of the market rather than a rate to hold. Most subs believe their own sits around 10 percent and run 25 to 40 percent instead, so the first job is measuring it honestly, and the rate for your trade and band is on /construction-overhead-rates-by-trade. Every point you take out of overhead comes straight off net, which is why this is usually the largest single move available in the business.
For a mature business at the top of the range, that's what the balance sheet reads: a cash floor held at all times, working capital growing so bonding capacity rises with it, and zero debt, meaning no maxed lines of credit and no stacked advances. Those three together are what let an owner sleep through a slow month. They're also what a bank and a surety read first.
That's the owner salary at the top of the $1M to $12M range, paid as a fixed salary the business can sustain, with draws from profit on top of it. The structure counts more than the figure: a wage first, distributions second. Living off whatever cash is left over is how an owner ends up funding the company out of their own household.
A DESTINATION, NOT A SWITCH.
The path is identical whether you're at $3M or $8M: calculate real overhead, build job costing, fix billing and collections, and track the numbers monthly. Sixty days to install the system, six months to stabilize, and then the targets come into reach. A subcontractor at $3M netting 4 percent and one at $8M netting 11 percent are on the same road at different mile markers.
Set goals for margin, overhead, cash, and debt, and treat revenue as the output rather than the input. A subcontractor clearing the gross margin and overhead benchmark for their own trade and revenue band, holding net profit at 10 percent or better, keeping a cash floor, and carrying zero debt is in control of the business whatever the top line says. The goals don't change with size. What changes the business is the discipline to hit them.
The Construction CFO calculates the real overhead rate, builds job costing against the way you estimate, fixes billing and collections, and reports the numbers every month, which together is the system that moves a subcontractor toward these targets. Sixty days to install it. The targets are the destination and the monthly rhythm is how you get there.
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.
FREQUENTLY ASKED.
