Why Fiber Contractors Run Out Of Cash
Fiber and telecom infrastructure subs run out of cash because the work comes in bursts, gets billed time and materials, and the rate charged is usually built on the busiest month of the year instead of honest annual utilization. Add in carrier payment terms and skilled labor that has to be paid whether or not there's a project running that week, and the bank account swings wildly for reasons that feel random but aren't.
Fiber contractors tend to be good at the work and confused by the money. Crews are skilled, carrier relationships are solid, the phone rings with more work. And the bank account still does something that doesn't make sense. Here's why.
Reason One: T&M Billing Comes In Bursts
A carrier rollout can mean six straight weeks of overtime, followed by three weeks of nothing while the next phase gets scoped. Time and materials billing captures what you did during the busy stretch, but it doesn't account for what it costs to keep a trained crew ready during the slow stretch. Overhead doesn't pause just because the work does.
Reason Two: The Rate Was Never Built On Real Utilization
Most fiber contractors set their T&M rate based on what feels competitive, or what they charged last year plus a little. Almost none of them calculate their true annual overhead and divide it across realistic full-year billable hours. The result is a rate that works fine in a busy month and quietly loses money the rest of the year. One $2.4M fiber sub found a single month where project costs came to $141,000 against $144,000 in revenue. Almost nothing left before overhead even hit.
Reason Three: Carrier Payment Terms
Major telecom carriers are not small clients, and they don't move fast. Payment terms can stretch well beyond the 30 to 45 days that's already standard in commercial construction, which means the cash gap between doing the work and getting paid for it is often wider here than in other trades.
Reason Four: Skilled Labor Doesn't Scale Down
You can't lay off a certified splicer for three weeks and rehire them when the next job starts. That labor cost keeps running through the slow stretches, and if it's not built into your overhead calculation, it shows up as a mystery expense every quarter instead of a planned cost of doing this kind of work.
The Fix
Build your T&M rate off true annual overhead divided by realistic utilization, not your best month. Track job costing separately from overhead so you can see, in real time, which jobs and which months are structurally profitable. And where possible, layer in contracted, predictable billing like structured cabling work alongside the T&M carrier work, so the business isn't fully exposed to the burst-and-lull cycle.
Why does a fiber contractor's cash flow feel random?
Because T&M billing captures the busy stretches but doesn't account for overhead and skilled labor costs that keep running during the slow stretches between carrier phases.
How do carrier payment terms affect fiber contractor cash flow?
Major telecom carriers often take longer than the standard 30 to 45 days seen in commercial construction, widening the gap between doing the work and getting paid for it.
Can a fiber contractor fix this without turning down carrier work?
Yes. The fix is usually rebuilding the T&M rate around true annual utilization and adding job costing visibility, not walking away from carrier relationships.
Does structured cabling work help fiber contractors with cash flow?
It can. Contracted, predictable billing from structured cabling work offsets some of the volatility from burst-driven T&M carrier work.
Former commercial construction project manager and master electrician. Managed 150+ projects totaling $2.1B+ — Google data centers, military bases, hospitals, and high-rises. CONTROL is built on what actually works in the field.
Josh founded Sulphur Prairie Management (The Construction CFO) to be the fractional CFO for commercial subcontractors.