$365K AR RECOVERED.
LOC PAID OFF.
BUSINESS SAVED.
A $2.3M electrical contractor was losing 8% on every project without realizing it: 26% overhead against an 18% gross profit margin. The business had inherited massive debt from a prior generation. The owner was maxed out, struggling to make payroll, personal assets on the line. Once estimating was aligned to real job costs and overhead was calculated correctly, $365K in AR was recovered, the line of credit went from maxed out to paid off in 30 days, and a 20-year family business was given another 20 years.
Underground electrical work was overpriced, so she was losing bids she should have won. Rough-in electrical was underpriced, so she was winning jobs she should have lost. Once the estimates reflected reality, everything changed.
A $2.3M electrical contractor, a 20-year family business, was in serious trouble. The current owner had taken over and inherited significant debt from the prior generation, who had been supplementing the business out of personal income for years just to keep the doors open. Nobody understood how deep the hole really was.
The line of credit was maxed. Making payroll was a struggle every cycle. Personal assets were on the line. She was determined to make it work. She reached out because she did not understand what was going wrong, only that it was going wrong consistently.
Overhead at 26%, Bidding at 18% GP
Every project she bid was losing 8% before the first nail was driven. She did not know her real overhead. She thought she was making money. She was losing it on every job.
Wrong Work Priced Wrong
Underground electrical was overpriced, so she was losing bids she should have won. Rough-in electrical was underpriced, so she was winning jobs she should have lost because she was making nothing on them.
Outdated Estimating Software
Software that could not update labor costs across an entire project. Missing financing costs, small tools budgets, PM time, superintendent costs. Everything was just markup, and the markup was wrong.
No Job Cost Visibility by Work Type
She had no way to see profitability by work type, by client, or by division. She could not tell which type of electrical work was worth bidding and which was destroying her margins.
The estimating system was rebuilt from scratch. Every line item in every estimate mapped directly to a job cost code. Same language. Same structure. So when a project runs, you are comparing apples to apples as it happens.
Real overhead was calculated: 13% after cutting what was not necessary. The estimates were rebuilt with real overhead, real financing costs, real small tools budgets, real PM and superintendent time. Underground electrical went from overpriced to competitive. Rough-in electrical went from losing money to profitable.
CONTROL Chapter 4: Estimating System. The alignment meeting, how to map every estimate line to a job cost code, and how to rebuild bids around your real costs. Download the alignment meeting blueprint at constructioncfo.net.
Today: $80,000 line of credit with zero balance. Eight projects booked at 23% gross profit. $23,000 in Christmas bonuses paid out. Overhead at 13%. Zero debt. A 20-year family electrical business set up to last another 20 years.
- You are winning some work types consistently and losing others, and you are not sure why
- Your estimate does not match your actuals and you cannot figure out where the difference is
- You have never calculated your real overhead. You just add a percentage and hope
- Your estimating software and your bookkeeping system speak different languages
- You feel like you are making money on the job but the bank account does not agree
By aligning the estimating system to job cost codes and identifying that rough-in electrical work was underpriced. Estimates were rebuilt with correct overhead, financing costs, and PM time. Win rate went up on the right work. AR was collected faster once billing was aligned with what was truly billable.
Before: 26% overhead against an 18% gross profit margin, meaning every project was losing 8% before the first nail was driven. After: 13% overhead. The difference changed everything in the estimates.
Chapter 4 covers the Estimating System: aligning every estimate line item 1:1 to a job cost code. The alignment meeting process, who needs to be in the room, and how to rebuild estimates around your real costs.
The business had inherited significant debt when the current owner took over. Without job costing or estimating alignment, they were winning the wrong work at the wrong prices. Overhead was consuming every dollar of gross profit.
Start with Chapter 3 to calculate your real overhead, then Chapter 4 to align every estimate line item to a job cost code. Most contractors following the CONTROL system see measurable change within 30 to 60 days. SPM The Construction CFO also builds this for you directly at constructioncfo.net.
YOUR ESTIMATE IS LYING TO YOU.
CONTROL Chapter 4 shows you how to align your estimates to your real costs. Get the book.
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