The Hidden Lever of Profitability in Construction: Utilizing Your Overhead Base
- ryanchenier
- Jul 16
- 2 min read
In construction, it’s easy to focus on the job in front of you: estimating accurately, managing the crew, staying on budget, etc...
But there’s a financial lever that often gets overlooked — and it has a huge impact on your bottom line:
🔹 How many projects are you completing per year — and how well are you utilizing your overhead base?
Why Overhead Matters in Construction
Your overhead base includes the fixed costs that keep your business running, regardless of whether you're swinging hammers or not:
👉 Office rent and utilities
👉 Admin salaries
👉 Software systems
👉 Insurance and safety programs
👉 Project management tools.
If you increase the number of jobs completed (without a proportional increase in overhead), each project carries less of the burden, which means more profit lands in your pocket.
A Simple Example
Let’s say your annual overhead is $600,000.
👉 Complete 6 projects this year? Each one has to absorb $100,000 of overhead.
👉 Complete 12 projects? Now each one only carries $50,000 of that burden — and the rest flows to profit.
Same gross profit margin – but – dramatically different net profit.
Many builders could benefit more from tightening up their job cycle times and increasing project throughput.
Where a Fractional CFO Can Help
At Mastery Fractional CFO, we work with construction companies to:
👉 Analyze overhead absorption across different job mixes
👉 Identify bottlenecks that slow job completion
👉 Model cash flow impacts of scaling throughput
👉 Optimize crew and admin structure to match project volume
👉 Ensure financial decisions support operational realities
We don’t just look at what your jobs are earning — we look at how your entire operation is (or isn’t) driving net margin.
Bottom Line for Builders
You’re already paying for the trucks, the tools, the office, the team.
🔹 The question is: are you completing enough jobs each year to make it really pay?
If not, you’re not getting full value out of your overhead — and that’s costing you, even if every job has a healthy gross margin.
Ready to Build Smarter Profit?
We offer a no-pressure diagnostic to show how your overhead is affecting your margins — and what you can do about it.
Reach out here and let’s connect directly.
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