ELECTRICAL CONTRACTOR GROSS MARGIN BENCHMARKS.
Commercial electrical subcontractors typically run 25% to 27% gross margin at $1M to $5M and 28% to 29% at $5M to $10M. The Construction CFO targets the upper end of that range, not by cutting price, but by each work type is priced on its own margin, not one blended rate.
Gross margin is where a electrical subcontractor either has room to cover overhead and profit or does not. The benchmark below shows where a electrical sub should land by revenue band, the three reasons the number slips when it slips, and what to check first. Electrical is not one trade; it is rough-in, trim, service, underground, and gear, each with a different labor and material structure. Bid on one blended rate, underground gets overpriced and lost, rough-in gets underpriced and won at no margin. The company stays busy and makes nothing. Pricing each work type on its own real margin is what fixes it.
Electrical subcontractors at $1M to $5M typically run 25% to 27% gross margin while netting 7.5% to 8.5%. The Construction CFO targets 12% net by fixing the cost structure underneath the margin, not by underbidding the work.
How it is calculated: Gross margin is revenue minus direct job cost (material, labor, equipment, and direct job expense), divided by revenue. It is the number that has to cover all overhead before any of it becomes profit. Track it per project and per phase, not just company-wide.
ELECTRICAL BENCHMARKS: WHERE YOU SHOULD BE.
| METRIC | INDUSTRY LOW | SPM TARGET | STRONG | NOTES |
|---|---|---|---|---|
| Gross Margin | 18% | 25–29% | 31%+ | Each work type is priced on its own margin, not one blended rate |
| Net Profit Margin | 4% | 12% | 13% | After real overhead is loaded into every bid; the number that says the business works |
| Overhead Rate | 30% | 14–16% | 10% | Lower is better; most subs assume 10% and run far higher |
| Days Sales Outstanding | 75 | 45 | 30 | Retention and pay-app timing hold the last slice longest |
| Working Capital Ratio | 1.1 | 1.5 | 2.0 | Material and mobilization hit before the first billing event |
WHAT MOVES THE ELECTRICAL MARGIN.
Work types carry very different margins.
Electrical is not one trade; it is rough-in, trim, service, underground, and gear, each with a different labor and material structure. Bid on one blended rate, underground gets overpriced and lost, rough-in gets underpriced and won at no margin. The company stays busy and makes nothing. Pricing each work type on its own real margin is what fixes it.
Material procurement and change orders are controlled.
Top electrical subs price gear and long-lead material procurement into cash terms, track stored-material billing so deposits do not drain cash, and send a change order every time conditions change instead of building the extra work for free. They track labor by work type weekly against the estimate. That control is the difference between a 31% gross margin and a 24% one.
Check work-type margins, gear cash timing, and overhead.
If electrical margin is under 27%, look at whether each work type is priced on its own margin, whether gear deposits and stored materials are billed instead of carried, and what your real overhead is. One electrical sub was losing 8% on every bid because overhead ran 26% against an 18% gross margin and no one had calculated it.
FLAT MONTHLY FEE. NO SURPRISES.
Two tiers based on trailing 12-month revenue. No hourly billing. No payroll. No add-ons. Everything included in the flat monthly fee.
| Revenue | Core Financial | Executive Financial |
|---|---|---|
| Under $1M | $1,900/mo | $2,900/mo |
| $1M–$3M | $2,600/mo | $3,600/mo |
| $4M–$6M | $3,800/mo | $5,500/mo |
| $7M–$9M | $5,100/mo | $6,900/mo |
| $10M–$12M | $6,100/mo | $8,500/mo |
| $13M+ | Quoted | Quoted |
ControlQore billed separately at ~$100/month per $1M in revenue. SPM does not handle payroll.
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