EIFS AND STUCCO · ENVELOPE AND STRUCTURE · FIXED BY STEP 01

Your Finish Coat Lot Is Cash You Bought in Week One

You buy the whole building's finish in one production lot and cut the foam profiles to approved shop drawings, then warehouse it for weeks before you can bill a square foot of finish.

WHY IT'S AN EIFS AND STUCCO PROBLEM

Most trades buy material in releases as the work progresses, so the cash goes out roughly when the billing comes in. A finish lot can't be released in pieces without risking a color break down an elevation, and a hot wire cut cornice can't be re-ordered once the scaffold is up. That forces this trade to fund an entire building's material at buyout, typically 4 to 10 weeks before the finish pass starts.

WHAT IT COSTS

The size of it

On a 60,000 SF job, that's six figures of cash under a tarp on a pallet from buyout forward, and it goes into one month's job cost with no revenue beside it.

OVERHEAD AT $1M to $5M

15%

CFOS target 14% for EIFS and stucco.

GROSS MARGIN AT $1M to $5M

23%

CFOS target 25.5% for EIFS and stucco.

NET PROFIT AT $1M to $5M

CFOS target 11.5% for EIFS and stucco.

Acrylic finish is factory tinted in production lots, and two lots of the same color number read differently on a wall. SMA judges color from 10 feet under whatever light is on the building the day of the walkthrough, so you buy the whole job's finish in one lot at buyout and store it. The EPS architectural profiles work the same way, since banding, quoins, cornices, and reveals are hot wire cut to approved shop drawings, made to order, and a re-cut after the scaffold layout is set puts the piece off the joint. Both of the items with real lead time are the two you can't re-order mid job. Your books see a lump material charge in a month with no revenue beside it.

WHAT TO DO

Three moves, in order

STEP 01

Split the buyout material PO on your next job into three lines: finish lot, EPS profiles, and everything else, so the one-lot purchase is visible on its own.

STEP 02

Set up a stored materials line on the pay app for the finish lot and the profiles, attach the supplier invoice and a photo of the lot number on the pallet, and bill it the month you take delivery.

STEP 03

Hold the finish lot and profiles in a materials on hand code and release them to the job as the finish pass consumes them, so gross margin on the early draws isn't fiction.

THE FIX

Step 01: Job cost structure

Seven cost categories and three levels of granularity, built so the estimate and the ledger use the same words.

CFOS-01 · CHAPTER 1

Job cost codes that match how you bid the work

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

BENCHMARKS

EIFS and stucco by revenue band

All 7 bands are published. The CFOS target is beside the figure up to $10M to $25M, and the 4 bands above that are labelled modeled.

ACROSS EVERY TRADE

Cost codes the field ignores

You have 200 cost codes. The crews use four of them, and one is called Miscellaneous.

SAME TRADE

What else costs EIFS and stucco contractors money

EIFS AND STUCCO · CFOS-06

The Lath Inspection Owns Your Crew's Calendar

Lath is done Tuesday, the inspector gets there Friday, and eight skilled plasterers wait three days that never get coded to anything.

EIFS AND STUCCO · CFOS-04

Control Joints You Never Bid a Lineal Foot Price For

The elevations came without control joints, you bid the layout you assumed, and the architect drew the real one at submittal.

EIFS AND STUCCO · CFOS-07

Acceptance Happens Before the Wall Finishes Curing

They walk the building at dusk with a side light, write up shadowing that's gone by mid morning, and that walkthrough is what releases your money.

EIFS AND STUCCO · CFOS-03

You Bid One Mobilization and Paid For Five

Lath, scratch, cure, brown, cure, and finish adds up to five or six trips to the same building, and the bid priced one.

EIFS AND STUCCO · CFOS-01

A Hairline Crack Costs You a Whole Elevation

It's a hairline off a window corner and the industry calls that normal, and you still rent a lift to refinish the elevation to the nearest control joint.

SAME MECHANISM, OTHER TRADES

The same mechanism in other trades

CONCRETE

Eight Tons of Rebar Tagged to a Drawing That Changed

The EOR approved the placing drawings, the fab shop cut and bent to the bar list, and then somebody moved a footing. Now you own bundles tagged to grid lines that no longer exist.

DEMOLITION

Your Breaker Uses Up Tool Steel That Overhead Pays For

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

DRYWALL

Lead-lined board is eight weeks and non-returnable

The imaging room's board is eight weeks out, cut to the shielding drawings, and the deposit is gone the day you release the order.

QUESTIONS

What EIFS and stucco owners ask

Why does my stucco job show a huge material cost before any revenue?

You buy the whole building's finish in one production lot and cut the foam profiles to approved shop drawings, then warehouse it for weeks before you can bill a square foot of finish.

What does it cost?

On a 60,000 SF job, that's six figures of cash under a tarp on a pallet from buyout forward, and it goes into one month's job cost with no revenue beside it.

What do I do first?

Split the buyout material PO on your next job into three lines: finish lot, EPS profiles, and everything else, so the one-lot purchase is visible on its own.

What are EIFS and stucco contractors supposed to be making?

EIFS and stucco has 23% gross margin, 15% overhead and 8% net profit after taxes at $1M to $5M. The all-trade average is 7%, so this trade is 1 point above it. The CFOS target is 11.5%.

Which part of the system fixes it?

The step is number 01, job cost structure. Seven cost categories and three levels of granularity, built so the estimate and the ledger use the same words. It comes from chapter 1 of CONTROL: C.F.O.S. Construction Financial Operating System.

OR HAVE IT HANDLED

Everything on this page is something you can install yourself, and CONTROL is the order to do it in. If you would rather buy the finished result, SPM The Construction CFO does this work for EIFS and stucco contractors as a service. It is a separate firm, Sulphur Prairie Management, LLC, led by the same author.

What a fractional CFO does for EIFS and stucco contractors

AUTHOR

JOSH LUEBKER

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

Wrote CONTROL, the 8 step system behind these figures. More about the author.