FIBER CONTRACTOR OVERHEAD RATE.
Fiber splicing contractors doing $1M–$5M should target 11–13% overhead. Most run 15–19% because T&M rates are built on peak-month utilization instead of annual averages, between-job overhead has no billing bridge, and splicing equipment depreciation runs through overhead instead of per-project cost codes. One client had $141K in costs against $144K revenue in a single slow month.
Fiber splicing has a utilization problem that most contractors have never quantified. The T&M rate was built when the crew was busy. It does not cover overhead when work slows down. SPM documented a fiber client with $141,000 in project costs against $144,000 in revenue in January 2026 — almost nothing left before overhead hit. The rate was wrong. It was built on the wrong assumptions. The overhead rate was the symptom. The T&M pricing model was the cause.
WHAT OVERHEAD ACTUALLY IS FOR FIBER SUBS.
Overhead for a fiber contractor includes your estimating team, project coordinators, office rent, vehicles not assigned to a job, software subscriptions, insurance, and every other dollar that leaves the business regardless of whether you have active work. The overhead rate is what you must recover from every bid before you make a dollar of profit.
Most fiber contractors understate their overhead because direct job expenses get absorbed into overhead and certain ownership costs never make it into the calculation at all. When the rate is wrong in your estimate, every bid is mispriced from the start.
FIBER OVERHEAD BENCHMARKS — WHERE YOU SHOULD BE.
| METRIC | INDUSTRY LOW | SPM TARGET | STRONG | NOTES |
|---|---|---|---|---|
| Overhead Rate | 15% | 11–13% | 19%+ | T&M rates built on busy-month utilization assumptions do not cover overhead during slow months — overhead spikes between bursts |
| Gross Margin | 18% | 22–25% | 27–29% | T&M work comes in bursts; overhead does not stop between jobs — gross margin is volatile without structured cabling work to stabilize |
| Net Profit Margin | 5.5% | 7–10% | 11.5% | Honest utilization-based T&M rates covering overhead in slow months are the single biggest net margin lever for fiber subs |
| Days Sales Outstanding | 55 days | 35–45 days | 30 days | T&M fiber work billed monthly instead of weekly — TiePoint case: $141K in project costs against $144K revenue in January 2026 alone |
3 REASONS FIBER OVERHEAD STAYS TOO HIGH.
T&M RATES BUILT ON BUSY-MONTH UTILIZATION
A fiber splicing contractor sets their T&M rate based on what the crew produces in a busy month. 22 billable days, full crew utilization, strong throughput. The rate covers overhead at that utilization level. Then January comes. Work slows. The crew works 12 billable days. The rate was built for 22. Overhead does not drop with utilization. The T&M rate covers overhead at 100% utilization and leaves it exposed at everything below. This is the exact problem SPM documented with a TiePoint Fiber client: January 2026 showed $141,000 in project costs against only $144,000 in revenue — almost nothing left before overhead hit. The fix is a T&M rate built on realistic annual utilization — not peak-month assumptions — so overhead is covered at 60% utilization, not just at 100%.
BETWEEN-JOB OVERHEAD ABSORBED WITHOUT BILLING BRIDGE
T&M fiber work comes in bursts driven by carrier deployment schedules, infrastructure build-outs, and splicing emergencies. Between bursts, the overhead does not stop. Splicers need to be paid. Vehicles need to be insured. Splicing equipment, OTDRs, and fusion splicers need to be maintained. When the burst ends, overhead accumulates at full rate against minimal revenue. Most fiber subs have no retainer structure, no minimum monthly commitment in carrier MSAs, and no billing bridge for slow periods. The overhead rate for the year reflects the full carry cost divided by actual billing volume — which is lower than peak-month billing makes it appear. The result is an overhead rate 3–5 points above what the owner believes.
SPLICING EQUIPMENT DEPRECIATION AND MAINTENANCE IN OVERHEAD
A fusion splicer costs $8,000–$22,000. An OTDR runs $5,000–$18,000. A fiber microscope is $1,500–$4,000. The equipment wears, requires calibration, and eventually needs replacement. Most fiber subs run these costs through equipment overhead as a general expense. But they are project-enabling costs that belong in the job cost structure — either as a daily equipment rate charged to specific projects or as a Direct Job Expense on large deployments. When splicing equipment depreciation runs through overhead, the rate inflates. When it is built into the T&M rate or charged per-project, the overhead rate drops and the T&M rate becomes more defensible to carriers.
WHAT CHANGES WHEN THE RATE IS CORRECT.
REAL OVERHEAD CALCULATION
SPM builds your overhead rate from actual financials — calculating it against realistic annual utilization, not peak-month assumptions. The T&M rate you build from the real overhead rate covers costs at 60% utilization.
UTILIZATION-HONEST T&M RATE
SPM rebuilds your T&M rate from annual overhead divided by realistic billable days, not peak-month assumptions. The rate covers overhead at 60% utilization so slow months do not compound into a cash crisis.
SPLICING EQUIPMENT COST CODES
SPM builds equipment cost codes for fusion splicers, OTDRs, and test equipment — allocated per project as a daily rate or Direct Job Expense. That cost moves from overhead to job cost and is recovered through billing.
MONTHLY OVERHEAD TRACKING
ControlQore tracks overhead monthly. When utilization drops and the rate spikes, you see it in real time and can make proactive decisions — not reactive ones — about crew deployment and pricing.
FLAT MONTHLY FEE. NO SURPRISES.
Two tiers based on trailing 12-month revenue. No hourly billing. No payroll. No add-ons.
| 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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