Custom Stencils Are Cash Parked On Your Shop Floor
The preformed legends and custom stencils stayed in the shop all season waiting on somebody else's paving date. That's cash tied to a job that hasn't billed.
The general complaint about buying material early doesn't reach this. A preformed thermoplastic legend with a specific arrow and a specific logo, or a stencil cut for one customer's lot, has one home and no resale value. The paving date that governs it belongs to the paving contractor and the weather, and striping is the trade waiting on both.
The size of it
Cash converts into inventory attached to a job that hasn't started billing, and it stays there through the winter. Most books expense it on purchase, so the job it belongs to shows no cost at all and the month you bought it shows a loss you can't explain.
The long-lead risk in striping is in the made-to-order pieces: preformed thermoplastic legends and logos, custom stencils, specialty colored or high-durability systems, and bulk thermoplastic or bead pallets ordered in quantity for one specific package. You order those against a paving date you don't control. When paving slips a month, or slips past the temperature window into next season, the material is already bought, already cut to that job, and there's no other customer's lot it can go on. It stays yours until that job runs.
Three moves, in order
Step 01: Job cost structure
Seven cost categories and three levels of granularity, built so the estimate and the ledger use the same words.
What else costs striping contractors money
The same mechanism in other trades
What striping owners ask
Preformed thermoplastic legends bought early and held in the shop?
The preformed legends and custom stencils stayed in the shop all season waiting on somebody else's paving date. That's cash tied to a job that hasn't billed.
What does it cost?
Cash converts into inventory attached to a job that hasn't started billing, and it stays there through the winter. Most books expense it on purchase, so the job it belongs to shows no cost at all and the month you bought it shows a loss you can't explain.
What do I do first?
Set up a job-specific stored-materials account and post preformed legends, custom stencils, and bulk pallets there on purchase, then release them to the job when the crew uses them.
What are striping contractors supposed to be making?
No survey separates striping, so there is no figure of its own. The nearest comparable trade in the reference is Paving, which runs 20% gross margin, 14% overhead and 6% net profit before taxes at $1M–$5M, with a CFOS target of 10% net. Those are derived figures, not striping's own. Read them as the neighbourhood, and read your own job costing as the answer.
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: The Construction Financial Operating System.
Everything on this page is something you can install yourself, andCONTROL is the order to do it in. If you would rather buy the finished result, SPM The Construction CFO does this work for striping contractors as a service. It is a separate firm, Sulphur Prairie Management, LLC, run by the same author.
Wrote CONTROL, the 8 step system behind these figures. More about the author.