ELECTRICAL: THE ROUGH-IN-TO-TRIM CASH HOLE
Electrical front-loads labor and wire at rough-in, then waits through other trades' work before trim-out and final billing. The middle of the job is a cash desert: cost in the wall, billing milestones still months out.
This page covers one problem. The full picture for this trade, including the other places margin leaks, is on the electrical operating system page.
WHERE THE MONEY GOES.
Covered in full in the quick answer above. The sourced numbers and what controls it are below.
THE NUMBER TO MEASURE IT AGAINST.
Electrical contractors run about % net profit at $1M to $5M, rising to roughly 12% at $5M to $10M. The CFOS target at $1M to $5M is11%, set at 10 percent before taxes or 3.5 points better than your trade's average at your revenue, whichever is higher. A problem like this one lives in the distance between those two figures rather than in a loss on any single job.
Gross margin over the same bands runs % to 27%, against a CFOS target of 11%.
THE SYSTEM THAT FIXES THIS.
Billing, documentation and collections, which is where the days hide.
