CONSTRUCTION WORKING CAPITAL MANAGEMENT.
Working capital is what lets you mobilize a new job, absorb a slow GC, and grow without borrowing. Most subcontractors manage it by accident, building it in good years and spending it in tight ones. A common benchmark is 10 to 15 percent of annual revenue, so a $5M contractor should be holding $500K to $750K.
The number moves for reasons that have nothing to do with whether your jobs made money. A profitable year generates working capital and most of it goes back out as draws, bonuses and equipment before anybody works out what the business needed to keep. Then the next big job mobilizes and the money isn't there. That's not a profit problem, and cutting bids won't fix it.
WHAT IT MEANS.
Working capital is current assets minus current liabilities: what you could turn into cash inside a year, less what you owe inside a year.
Working capital requirements grow with revenue, and not just in dollars. A $3M subcontractor needs less than an $8M subcontractor as a percentage of revenue as well as in absolute terms, because more revenue means more simultaneous mobilizations, more retention held at once, and a longer tail of receivables in play on any given Friday.
WHERE THE MONEY GOES.
It gets distributed instead of retained
A profitable year generates working capital. Most of it gets distributed as owner draws, bonuses and equipment purchases before anyone calculates what the business needs to keep in reserve. The money was real and the year was good. There's just nothing left to fund the next mobilization with.
You don't know the number
Working capital is current assets minus current liabilities. Most subcontractors can't say what theirs is today, because nobody has calculated it and nobody watches it monthly. A number nobody reports is a number nobody manages.
The requirement grows as you grow
Getting bigger raises the requirement faster than it raises the profit that funds it. More jobs active at once means more mobilizations, more retention held, and more receivables outstanding on the same Friday. Growth is the most common reason a profitable contractor comes up short.
WHAT IT LOOKS LIKE IN DOLLARS.
A common benchmark is 10 to 15 percent of annual revenue held in working capital. A $5M contractor should be targeting $500K to $750K. Below that, one slow GC and one mobilization expense in the same month and the line of credit becomes the plan.
RESEARCH FROM OTHER SOURCES.
These figures come from another company's survey, not from SPM's clients. Each one cites the report and the page.
Billd's 2026 National Subcontractor Market Report found subcontractors who included the cost of capital in their bids reported average profitability of 14.6 percent, against 11.7 percent for those who did not, which Billd describes as 25 percent more profitable.
Source: Billd, 2026 National Subcontractor Market Report, page 15 (survey of 623 respondents, published May 13, 2026).
Billd doesn't say whether its profitability figure is before or after taxes, so it isn't comparable to the before tax net profit figures on this site.
HOW IT GETS BUILT ON PURPOSE.
The target is calculated from your trailing twelve months rather than borrowed from a rule of thumb, then held as a floor that distributions get measured against. Draws and bonuses come out of what's above the floor, not out of the floor.
Working capital grows by keeping profit in the business rather than distributing it. That's the only source. Faster collection improves the same number without needing retained earnings at all, which is why the collections work comes first: it costs nothing.
The number is calculated and reported every month for every client, on every tier. It's not a higher-tier extra, because a floor nobody sees isn't a floor.
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. The one-time onboarding fee is right here in the table.
| Last 12 months revenue | Monthly fee | One-time onboarding |
|---|---|---|
| Under $1M | $1,900 to $3,300 | $1,000 |
| $1M to $3.5M | $2,600 to $5,300 | $1,500 |
| $3.5M to $6.5M | $3,800 to $8,300 | $3,000 |
| $6.5M to $9.5M | $5,100 to $11,800 | $4,500 |
| $9.5M to $12.5M | $6,100 to $14,900 | $6,000 |
| $12.5M to $15.5M | $7,400 to $17,650 | $7,500 |
| $15.5M to $18.5M | $9,400 to $22,400 | $9,000 |
| $18.5M+ | Quoted individually | Quoted individually |
The onboarding fee covers migrating your books back to the start of your last taxable year and getting you fully operational in 60 days. It's billed once, with your first invoice. It's the same for all three tiers. Your first month is prorated, and your monthly engagement starts on the first of the first full month.
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. The onboarding fee is right here in the table.
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 and never in a report.
Your bookkeeper still does the books.
Every job shows its margin while it is still open.
Everything in Core, plus the bookkeeping and bank reconciliations done for you, and the job costing and WIP software set up, loaded with your cost codes, and managed every month. Use your own online software, or move to ours and we cover it.
A bookkeeper we choose does the books and reconciliations. No payroll.
You approve, and the money side gets handled.
Everything in Strategic, plus a controller we choose who handles your bills and receivables for you the way an in-house controller would. They call vendors, pay the bills and keep the accounting current. We plan the cash flow first, and you approve every payment because it is your money.
A controller we choose does the payables and receivables. No payroll, no pay applications, no collections.
FREQUENTLY ASKED.
