DEMOLITION · CIVIL AND EARTHWORK · FIXED BY STEP 03

The Scale Wants Cash Today, The GC Pays In Sixty Days

Almost everything a demolition job costs goes out in the first two weeks, and the first pay application hasn't even been submitted yet.

WHY IT IS A DEMOLITION PROBLEM

Most trades spend across the full duration and bill along the way. Demolition concentrates its outflow into the opening two weeks and then waits on pay-when-paid terms. No other trade has that ratio of front-loaded cash out to contract value, and the shorter the job, the worse that curve gets.

WHAT IT COSTS

The size of it

You carry ninety plus days of negative cash on a five week job, and the low point hits the week the scale tickets and the float invoices come due together.

OVERHEAD AT $1M–$5M

16%

CFOS target 15% for demolition.

GROSS MARGIN AT $1M–$5M

20%

CFOS target 25% for demolition.

NET PROFIT AT $1M–$5M

CFOS target 10% for demolition.

Fund the job before you take it, and size the hole first. Tipping is a same-day, per-load transaction paid at the scale, and it's usually your largest single cost line. Stack the rest of the front-loaded spend on top: lowbed float charges both directions on every machine, roll-off delivery deposits, permits, utility disconnect fees, temporary fencing, a water truck for dust suppression, and an abatement sub asking for a deposit. Nearly all of that leaves the bank in the first two weeks, while your first pay application goes in at the end of month one and funds 45 to 60 days after that. Ninety plus days of negative cash on a job that's only on site for five weeks is the mechanism behind the AP pile and the near-miss on payroll.

WHAT TO DO

Three moves, in order

STEP 01

Draw a week-by-week cash curve for each job before you sign: tipping, floats, permits, fencing, and subs against projected pay app funding dates. The bottom of that curve is what the job has to borrow.

STEP 02

Open accounts with terms at your two main disposal sites so tipping moves from a card at the gate to a monthly invoice.

STEP 03

Negotiate a mobilization draw covering permits, floats, and abatement deposits, and bill removed quantities at the 20th cutoff so month-one work doesn't wait for a month-two application.

THE FIX

Step 03: Overhead calculation

What indirect cost really comes to at your size, and the rate your estimating template should be carrying.

CFOS-03 · CHAPTER 3

The overhead rate your bid sheet should carry

What this step changes, what it depends on, and how to tell it's installed.

BENCHMARKS

Demolition by revenue band

Every one of the 7 bands carries the CFOS target beside the published figure.

ACROSS EVERY TRADE

You're bidding below your own overhead

If the overhead percentage in your estimating template is lower than what you carry, every job you win loses money before a single hour is worked.

SAME TRADE

What else costs demolition contractors money

DEMOLITION · CFOS-04

Your Bid Locked A Scrap Price The Market Never Honored

You priced the steel credit in February and crossed the scale in October. The market moved and nobody wrote escalation language for it.

DEMOLITION · CFOS-06

Four Clocks Own Your Start Date And You Own None

The machine is on the pad, the crew is standing around, and everyone is waiting on a letter from the gas company. None of the clocks that release your start belong to you.

DEMOLITION · CFOS-07

Demo Goes First And Gets Its Retention Back Last

You work five weeks and wait twenty months for the money. Your retention rides the prime's substantial completion on a building you left before the foundation went in.

DEMOLITION · CFOS-02

Your Breaker Burns Tool Steel That Overhead Pays For

A hammer chews $9,000 of tool steel on one teardown and the job that ate it never sees a dollar of the cost. The margin looks fine and the bank account disagrees.

DEMOLITION · CFOS-06

They Found A Tank A Year After You Demobilized

An old UST turns up under the pad twelve months after your last load left, and every finger points at the contractor who isn't on site anymore.

SAME MECHANISM, OTHER TRADES

The same mechanism in other trades

CONCRETE

Ten Jobs Used Those Forms, One Job Paid for Them

Your yard is full of panels and shoring, every job report says you made money, and the bank account disagrees. The form buy hit job one and jobs two through ten carried none of it.

FLOORING

You bankroll the mill six months before you get paid

The mill wants a check before it ships, the GC won't pay for stored material, and your cash sits in a warehouse for four months waiting on a space that isn't ready.

HVAC

Your biggest PO gets paid months before it can be billed

You wired the deposit in April, paid the balance in July, and in September the unit is still in a leased warehouse with nothing on the pay app to show for it.

QUESTIONS

What demolition owners ask

How do i cover landfill and mobilization costs before the first pay app funds?

Almost everything a demolition job costs goes out in the first two weeks, and the first pay application hasn't even been submitted yet.

What does it cost?

You carry ninety plus days of negative cash on a five week job, and the low point hits the week the scale tickets and the float invoices come due together.

What do I do first?

What are demolition contractors supposed to be making?

Demolition runs 20% gross margin, 16% overhead and 4% net profit before taxes at $1M–$5M. The all-trade average is 7%, so this trade sits 3 points below it. The CFOS target is 10%.

Which part of the system fixes it?

The step is number 03, overhead calculation. What indirect cost really comes to at your size, and the rate your estimating template should be carrying. It comes from chapter 3 of CONTROL: The Construction Financial Operating System.

AUTHOR

JOSH LUEBKER

MASTER ELECTRICIAN · 150+ PROJECTS · $2.1B+ MANAGED

Josh Luebker ran commercial construction projects before he ran the numbers behind them, on data centres, military bases, hospitals, and high-rises. He wrote CONTROL: The Construction Financial Operating System, which is an eight-step framework for commercial subcontractors, and it publishes on October 1, 2026. He is a master electrician who moved into the office and kept the field vocabulary.

Sulphur Prairie Operations LLC maintains the benchmark reference behind these figures. Every edition is reconciled against the newest CFMA survey release before it publishes here. Where a figure changes between editions, the older edition keeps its year in the title so a citation to it stays correct.