Based on: Jan–Dec 2026 vs Jan–Mar 2026
Generated: 4/22/2026, 1:17:40 PM
This contractor finished 2026 with $490,200 in revenue but posted zero profit after $642,393 in combined job costs and overhead — meaning the business operated at a significant loss, spending $152,193 more than it brought in. The first quarter of 2027 is trending in the wrong direction, with a -24.3% margin on $96,177 in revenue, and subcontractor spend has dropped to zero while in-house labor dominates costs. To hit the $793,381 revenue target with a break-even or profitable outcome, the contractor must urgently address cost recovery in estimating, reintroduce strategic subcontractor use, and rebuild volume fast.
The current period (Jan–Mar 2027) annualizes to $384,708 in revenue — 51.5% below the $793,381 annual target and 21.5% below the $490,200 actual full-year 2026 baseline. At this pace, the business will bring in roughly $105,673 less than last year, let alone reach its growth goals. Significant new work must be secured immediately to reverse this trajectory.
In 2026, the business generated $490,200 in revenue but incurred $642,393 in base costs plus $54,429 in overhead, resulting in a net loss of approximately $206,622. The current period annualizes to a -$93,465 loss on base costs alone, before overhead. There is no margin buffer anywhere in the model — every job is being completed below cost recovery.
In 2026, indirect job costs totaled $219,117 — a staggering 44.7% of total revenue — which alone made profitability impossible. In the current Q1 2027 period, indirect costs are recorded at $0, which is either a data timing issue or these costs haven't been captured yet. Either way, the 2026 indirect cost burden must be investigated: if it recurs in 2027, the business cannot survive at current revenue levels.
In 2026, subcontractor labor and materials totaled $301,860 (46.9% of all job costs), suggesting a healthy mix of self-perform and sub-contracted work. In Q1 2027, subcontractor spend is exactly $0, with in-house labor at $87,271 representing 81.5% of all direct costs. This shift could mean the contractor is taking on work without subs to save money, but it also increases labor risk and may signal smaller or different project types.
In Q1 2027, in-house labor of $87,271 represents 90.7% of the $96,177 in revenue — meaning labor alone nearly consumes all revenue before a single dollar of materials, overhead, or profit is considered. In 2026, in-house labor was $244,197 against $490,200 revenue, a ratio of 49.8%. This near-doubling of the labor-to-revenue ratio in Q1 2027 is a critical red flag for estimating accuracy on current jobs.
Overhead came in at $54,429 in 2026 (11.1% of revenue) and is annualizing at $50,059 in the current period — slightly lower than last year, which shows cost discipline. However, the target overhead budget is $78,429, reflecting planned investment in capacity needed to hit $793,381 in revenue. The business needs to grow into its overhead, not cut it further.
Annualizing Q1 2027 results projects $384,708 in revenue, $428,114 in base costs, and $50,059 in overhead — producing an estimated full-year loss of $93,465 on operations alone. This does not yet account for the indirect cost category ($219,117 in 2026) that has not appeared in Q1 data. If indirect costs return at historical levels, the projected loss could exceed $300,000 for the year.
The 2026 data shows the business spent $1.31 for every $1.00 earned — this means every estimate built without accounting for true indirect costs is guaranteeing a loss before work begins. Every future estimate must incorporate the full 2026 cost structure: direct costs at ~86.3% of revenue, indirect costs at ~44.7%, and overhead at ~11.1%, which implies a required markup far exceeding current pricing. Until estimates reflect true costs, more revenue only means more losses.
At $219,117, indirect costs represent the single largest financial problem in 2026 — exceeding even in-house labor. A line-by-line audit of what drove these costs (job-site supervision, idle time, unbilled change orders, warranty callbacks, etc.) is essential before the next estimating cycle. If even 20% of indirect costs ($43,823) can be eliminated or billed through, the business moves meaningfully toward breakeven without adding a single dollar of revenue.
The target plan envisions $285,000 in in-house labor (35.9% of revenue) and $292,000 in subcontractor costs (36.8%), for a balanced 72.7% combined rate — far more sustainable than the current or 2026 actual mixes. Achieving this requires both significantly higher revenue ($793,381) and restoring subcontractor partnerships. The contractor should identify which job types best support this target mix and actively pursue them in the pipeline.