ELECTRICAL CONTRACTOR NET PROFIT BENCHMARKS.
Electrical subcontractors typically net 7.5% to 8.5% at $1M to $10M. The Construction CFO targets 12% net by loading the real overhead rate into every bid and fixing the cost structure underneath, not by underbidding the work.
Net profit is the only number that says a electrical business works, not just that the jobs do. A electrical sub can hold a healthy gross margin and still net near zero if overhead is unmanaged. The numbers below show where a electrical sub should land and the three things that move the number. 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.
Electrical subcontractors at $1M to $5M typically net the lower end of 7.5% to 8.5%, with gross margin in the 25% to 27% band. The Construction CFO targets 12% net by managing overhead and aligning estimating to real job cost, not by cutting price.
How it is calculated: Net profit margin is net income, what is left after every cost including overhead, divided by total revenue. Gross margin tells you if the jobs work; net margin tells you if the business works. A trade can hold a healthy gross margin and still net near zero if overhead is unmanaged.
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 NET.
Overhead is the number that decides it.
Net profit is gross margin minus overhead, and overhead is where most subs lose the money they made on the jobs. Most believe overhead is 10%; the real number is often 25% to 40%. Every point of overhead comes straight off net, so a trade with a fine gross margin nets near zero when overhead is uncalculated and unmanaged.
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.
FREQUENTLY ASKED.
