Plenty of contractors are busy. Fewer know which of their jobs are actually making money. This one had a full order book, a good reputation and thin margins it couldn't explain, because by the time the numbers landed, the job was already done.
It's a familiar shape in trades and contracting. The work comes in, the crews go out, the invoices follow, and the profit is whatever's left when the dust settles. The estimate was a number on a page, not a budget anyone tracked. Labour on the tools ran without a live cost against it. Cost overruns surfaced in the year-end accounts, long after the chance to act on them had passed.
This is a structure problem, not an effort problem. And on thin margins it's expensive, because there's no fat to absorb the jobs that quietly go backwards.
The situation
Winning the work, losing the visibility
The business was a commercial and government electrical contractor, solid pipeline, capable people, the kind of operation that wins tenders and delivers them. What it didn't have was project-level financial control. There was no way to see, while a job was live, whether it was tracking to plan or bleeding margin.
For a contractor, pricing starts with estimating discipline that prices work to a defendable margin, then cost to complete tracking so the estimate becomes a live budget. Ajility installs both; it does not do quantity surveying. Three gaps drove it. Estimating had no discipline behind it. Prices went out without a consistent method or a margin you could defend. There was no cost-to-complete, so once a job was underway, no one could say what it would cost to finish or whether the budget still held. And labour cost on the tools (the single biggest variable in electrical work) ran without a weekly view, so overruns compounded for weeks before anyone saw them.
Winning work and making money are two different disciplines. A full order book hides a multitude of sins. You can be busy, growing and going backwards at the same time. Without project-level numbers, you don't find out which jobs paid until the financial year tells you, and by then the money's already spent.
Add to that a cost base that had grown faster than the structure underneath it. Overhead sat at 11% of sales, heavy for a contractor running on thin margins, and a direct drag on every job before a single hour was costed.
What we installed
Project-level financial control, end to end
The fix wasn't a new accounting package or a tighter spreadsheet. It was an operating discipline, four moving parts that turn a job from a guess into a managed budget, plus the structural work of taking weight out of the cost base.
It starts with estimating discipline: a consistent method that prices work to a defendable margin, so the number that wins the job is the number the job is built to. That estimate then becomes the live budget. Cost-to-complete reporting tracks each job against it in real time, so a slipping margin shows up while there's still time to correct it. Weekly labour-cost reporting puts the biggest variable (hours on the tools) under a live view, every week, not at year-end. And a lean restructure of the cost base brought overhead back in line with the size of the business.
The point isn't the tools. It's the loop. Estimating sets the budget, cost-to-complete watches the budget, weekly labour-cost reporting catches the biggest leak early, and a lean cost base keeps the whole thing affordable. Run them together and a job that's drifting shows up while it's still on site, when a conversation with the foreman, a tightened scope or a redeployed crew can still change the outcome. Run them apart, or not at all, and you're reading the result after the money's gone.
It also changes who can act. When the numbers are live and in plain sight, the project manager and the supervisor on the tools can see the same picture the owner sees. Margin stops being a back-office calculation and becomes something the people closest to the work can protect, day to day. That's the difference between a business that reacts to its results and one that manages them.
You can't manage a margin you can't see. Get it in front of the people running the job, every week, and the job changes.
What happened to the margins
Visibility, then control, then profit
The first move was the cost base. A lean restructure took overhead from 11% of sales to 6.6%, roughly 40% lighter. That alone changes the maths on every job, because a leaner overhead means more of each dollar of revenue survives to the bottom line.
Then the project disciplines went to work. With estimating tightened, cost-to-complete live and labour costed weekly, jobs stopped slipping unnoticed. Margin that used to leak away (under-priced scope, blown labour, overruns nobody caught in time) got protected at the source. Gross profit rose 6 percentage points.
The two effects stack. A leaner overhead plus a healthier gross margin flows straight through to the bottom line: net margin improved 10 percentage points. Same business, same crews, same market, a different operating discipline underneath it.
These outcomes were delivered by Adam in salaried operating roles before Ajility was founded, not as Ajility engagements.
What this means for you
If you can't cost a live job, you're flying blind
None of this required more revenue. It required control over the revenue already coming in, which is what Ajility performance and margin discipline delivers. That's the part most contractors underrate: the margin you're chasing with more work is often already sitting inside the jobs you're running, leaking out because no one can see it move.
It's worth being clear about the order, too. The cost base came first because it's the fastest lever and it's fully inside your control. You don't need a client, a tender or a good run of weather to take weight out of overhead. The project disciplines came next because they protect every dollar of revenue from that point on. Done in that order, the early win funds the patience the structural work needs, and the founder sees the model proving itself inside the first block rather than on faith.
The honest test is simple. Pick a job you're running right now. Can you say, today, whether it's tracking to its estimate or going backwards? Can you see this week's labour cost against budget? If the answer is "we'll know when it's done," you don't have a pricing problem or a market problem. You have a visibility problem, and it's costing you margin on every job, quietly, right now.
The good news is that it's structural, which means it's fixable. The performance and margin discipline levers (estimating discipline, cost-to-complete, weekly labour-cost reporting) and a cost base sized to the business aren't exotic. They're the engine room of a contractor that keeps the margin it earns, and the packages and pricing page sets out what installing them costs, and they can be installed without adding a single job to the order book.
Questions founders ask
Common questions
When does a trade or contracting business need a general manager?
- Usually when the owner is still quoting, scheduling and chasing debtors while trying to win work, and jobs close before anyone knows their margin. A GM or fractional operator who owns job costing and the weekly schedule frees the owner to sell.
How should an electrical contractor report labour cost per job?
- Book hours to jobs daily at true cost, including on-costs, travel and non-productive time, and report hours against budget weekly rather than at month end. Labour is the biggest variable in electrical work, so it needs the shortest feedback loop.
What gross margin should an electrical contractor be making?
- It varies with the mix of service, maintenance and project work, so a single benchmark misleads. More useful is whether each job holds its quoted margin; measure that first, then test your estimating assumptions against the results.
What overhead percentage is normal for a contracting business?
- It depends on size and work type, so test it against your own margins rather than a benchmark. In the electrical case on this site, delivered in a salaried role before Ajility, overhead fell from 11% to 6.6% of sales.
How can a trades business improve estimating accuracy?
- Use one consistent estimating method, price from tested cost rates, and feed quote to actual results from finished jobs back into those rates. The estimate should become the live budget the job is managed against.